Global Marketing

Part 4 Focusing on the Customer: Marketing Growth Strategies

PowerPoint Presentation by Charlie Cook The University of West Alabama
Copyright 2006 Thomson Business & Professional Publishing. All rights reserved.

Small Businesses as Global Enterprises

Globalization
The expansion of international business, promoted by converging market preferences, falling trade barriers, and the integration of national economies
Size does not limit a firms international

activity, and small companies often become global competitors to take advantage of their unique resources.

Copyright 2006 Thomson Business & Professional Publishing. All rights reserved.

173

Before Going Global

Decide if firm is up to the task of globalization. Study the different cultures, trading systems, and political and business practices in foreign markets.
North American Free Trade Agreement (NAFTA)

European Union (EU)

Be prepared to modify products to meet design specifications that may vary from country to country.
Copyright 2006 Thomson Business & Professional Publishing. All rights reserved. 175

Forces Driving Global Enterprises

Exhibit 17.2
Copyright 2006 Thomson Business & Professional Publishing. All rights reserved. 176

Strategy Options for Global Firms

Exporting
Selling products in the home country to customers in another country Trade mission
A trip organized to help small business owners make direct contact with potential buyers abroad and learn about cultural and regulatory obstacles in foreign markets

Importing
Selling goods produced in another country to buyers in the home country

Copyright 2006 Thomson Business & Professional Publishing. All rights reserved.

1710

Strategy Options for Global Firms (contd.)

Foreign Licensing
Allowing a company in another country to purchase the right to manufacture and sell a companys products in international markets Licensee
The company buying the licensing rights

Licensor
The company selling the licensing rights

Royalties
Fees paid by the licensee to the licensor for each unit produced under a licensing contract

Copyright 2006 Thomson Business & Professional Publishing. All rights reserved.

1711

Strategy Options for Global Firms (contd.)

International Franchising
Selling a standard package of products, systems, and management services to a company in another country

Copyright 2006 Thomson Business & Professional Publishing. All rights reserved.

1712

Strategy Options for Global Firms (contd.)

International Strategic Alliances
A combination of efforts and/or assets of companies in different countries for the sake of pooling resources and sharing the risks of an enterprise

Copyright 2006 Thomson Business & Professional Publishing. All rights reserved.

1713

Country Risk Rankings Map

Source: Paul Pedzinksi and Andrew Newby, Risk Improvement Defies Politics, Euromoney, Vol. 35, No. 419, March 2004, pp. 128134.

Exhibit 17.5
1715

Copyright 2006 Thomson Business & Professional Publishing. All rights reserved.

Challenges to Global Business

Political Risk
The potential for political forces in a country to negatively affect the performance of businesses operating within

Economic Risk
The probability that a government will mismanage its economy and thereby change the business environment in ways that hinder the performance of firms operating there
Exchange ratethe value of one countrys currency relative to that of another country

Copyright 2006 Thomson Business & Professional Publishing. All rights reserved.

1716

Assistance for Global Enterprises

Analyzing Markets and Planning Strategies
Small Business Administration resources
Office of International Trade U.S. Export Assistance Centers (USEACs) Publications Opportunities in Exporting SBA Guide to Exporting

Department of Commerce
International Trade Administration

Speak to a recent returnee Visit the foreign country

Copyright 2006 Thomson Business & Professional Publishing. All rights reserved.

1718

Assistance for Global Enterprises (contd.)

Connections With International Customers
Trade Leads Trade Missions Trade Intermediaries
An agency that distributes a companys products on a contract basis to customers in another country Export management companies Export trading companies Export agents, merchants, or remarketers Piggyback marketers
Copyright 2006 Thomson Business & Professional Publishing. All rights reserved. 1719