Marketing Issues In Pakistan - Globalization Issues Articles by shitingting

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									Marketing Issues in Pakistan




                Week 5: Globalization
                            Marketing Issues in Pakistan




  Globalization Issues
Part 1: “Competing with Giants: Survival
   Strategies for Local Companies in
         Emerging Markets” HBR


Part 2: “Going Global: Lessons from Late
              Movers” HBR
                            Marketing Issues in Pakistan




Globalization Issues
Part 1: “Competing with Giants: Survival
   Strategies for Local Companies in
         Emerging Markets” HBR
                                                    Marketing Issues in Pakistan




Survival Strategies: Competing with Giants
   For local companies, a global competitor is a
    death sentence

    –   How can they overcome and take advantage of their
        differences with competitors from advanced
        countries?

            Relying on Govt. to reinforce trade barriers
            Subordinate partner to a multinational
            Selling out and leaving the industry
                                                  Marketing Issues in Pakistan



Survival Strategies: Competing with Giants
   Aligning Assets with Industry Characteristics
    –   Bajaj and Honda Example
    –   Key questions:
            How strong are the pressures to globalize?
            How internationally transferable are your company’s
             assets?
    –   some industries have enormous sunk costs and
        recovery is only possible from multiple markets
            a single set of rules govern the competition worldwide
            customer accept standardized products
            in some areas its not possible
                                                     Marketing Issues in Pakistan



Survival Strategies: Competing with Giants
   Aligning Assets with Industry Characteristics

    –   Like bajaj, most ‘emerging’ market companies have
        assets that give them a competitive advantage
        mainly in their home market.
            distribution network
            relationships/political affiliations
            expertise in distinctive products that appeal to local tastes
            these competitive assets can be basis for expansion into
             other markets-transferable
                               Marketing Issues in Pakistan




Survival Strategies: Competing with Giants
                                                 Marketing Issues in Pakistan



Survival Strategies: Competing with Giants
   Defending Strategy: low pressures to globalize/ high
    customization


     –   concentrate on the advantages they enjoy in their
         home market – Jahwa pg 122
             Jahwa: Target BoPM: competing on price

     –   Knowing product formulations, branding, and pricing
         strategies long before they enter the market

     –   Beefing up local distribution channels

     –   Grupo Industrial Bimbo-tiendas
                                                   Marketing Issues in Pakistan



Survival Strategies: Competing with Giants
   Extending Strategy low pressures to globalize/transferability
    –   Using transferable assets at home as a platform to
        go global
    –   Most effective when seeking analogous markets
            Common cultural and linguistic heritage

    –   Jollibee Foods:
            rival menus, customized to local tastes – fast food
            Hong Kong, Middle East and California

    –   Expatriate communities can be an attractive target
        market: Asian Paints Example
    –   Televisa
                                                 Marketing Issues in Pakistan



Survival Strategies: Competing with Giants
   Dodger Strategy high pressures to globalize/high customization
    –   Rethinking the business model or sell out or side
        step




            Skoda?
            Russian Computer Maker Vist. Distribution, Service and
             Warranties
            Offer product that complement multinational products
                                                       Marketing Issues in Pakistan



Survival Strategies: Competing with Giants
   Contender Strategy
    high pressures to globalize/high transferability

     –   If the assets are transferable then they can become full-fledge
         multinational companies
             Acer of Taiwan
             Samsung of Korea
     –   most contenders are in commodity sector: low cost

     –   invest in advanced machinery and resources

     –   become a part of a consortium: Sundaram and GM and stay
         independent as well.

     –   Find a vital niche if lacking resources

     –   Raba and Cemex examples
                          Marketing Issues in Pakistan




Globalization Issues
Part 2: Themes Extracted From: “Going
Global: Lessons from Late Movers” HBR
                                      Marketing Issues in Pakistan




Going Global
   Why do companies from third world countries
    fail to establish themselves when they go
    global?

   Why is it so hard to compete with international
    giants – the triad in an international context?

   Is it the simply country of origin effect?
                                          Marketing Issues in Pakistan




Going Global: Lessons Learned
   The profitable a segment, more sophistication

   Companies enter the least sophisticated one

   It’s the paralysis of will
    –   managers either lack confidence in their organization
    –   They lack the courage to commit, crippled by the
        vision of being a second-class citizens
                                                    Marketing Issues in Pakistan

Going Global: Lessons Learned
   Example
    –   Ranbaxy moved from low profit segment to high margin
        business of selling branded generics
            required building new customer relationships
            Brand image and different distribution channels
            US and Europe; R&D for new drug discoveries
            Capitalizing on significant Cost Advantages
            Break free from the stereotype
                                          Marketing Issues in Pakistan

Going Global: Lessons Learned
   The Psychological Barriers

    –   They are locked in a prison of local standards which
        are far apart from international standards

    –   Management is either unaware of global competition
        or in a limbo to capitalize on it.

    –   Limited knowledge of the dangers of exposure to the
        global competition making them blind or overconfident
                                                Marketing Issues in Pakistan

Going Global: Lessons Learned
   The Lessons
    –   Push from Home
           Shock or Challenge the Company from its Nest

           Samsung managers content with local success unaware of
            negative brand perceptions abroad
           ‘Bargain Sale’ in the US: The moment of Truth
            A major turnaround was needed

           Leap of Faith

           Investing far ahead of consumer demand
           Innovation at par or more than that of the western companies
                                                 Marketing Issues in Pakistan

Going Global: Lessons Learned
   The Lessons
    –   Pull from Abroad
           Have overseas Units rather expatriates

           Having credibility, experience, contacts and confidence

           Regional or segment managers having considerable
            experience and knowledge in the field
                                                  Marketing Issues in Pakistan

Going Global: Lessons Learned
   The Lessons
    –   Devising Strategies for Late Movers
            First Mover Advantages:

            Learning Curve
            Patents
            Preemption and bench-marking
            Switching Costs and Buyer Choice
            Strong brand name or Brand Equity (if successful)

            Benchmark and Sidestep
            Ill equipped to match benchmarks
            Learn to hone the core competencies and innovate

            Confront and Challenge
              –   Create a new business model: Aussie Hardy company
                                                         Marketing Issues in Pakistan

Going Global: Lessons Learned
   The Lessons
    –   Learning How to Learn
            The global marketplace is information based and
             knowledge intensive: Must know how to learn. How?

            Protect the Past
               –   Fully exploit resources and capabilities

               –   Close cooperation between the parent organization and
                   overseas subsidiaries
                      Training at home; learning the basic business model

                      Relying on information from home

                      Using home country professionals to deliver the value
                                                       Marketing Issues in Pakistan

Going Global: Lessons Learned
   The Lessons
    –   Learning How to Learn

            Build the Future
               –   Entering into a partnership with a foreign company

               –   Building own brand image and marketing for its unique value
                   proposition


            Having leaders to build the brand and lead the organization
               –   Unshakeable belief that their company would succeed in the
                   global market place

               –   Openness to new ideas

								
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