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INTERNATIONAL BUSINESS MANAGEMENT _IBM__ BUS 600

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INTERNATIONAL BUSINESS MANAGEMENT _IBM__ BUS 600 Powered By Docstoc
					INTERNATIONAL MARKETING
      MANAGEMENT:
     NATURE & SCOPE
                      By
        Elisante Ole Gabriel (Tanzania)
              Chartered Marketer
egabriel@edenconsult.net, www.olegabriel.com
              +255-784-455-499
    KEY AREAS TO BE COVERED
§ Nature and Scope of International Business
§ International Business Environment
§ International Markets entry strategies
§ The Role of World Trade Organisation
§ Management Tools for International
  Business
§ International Payment systems & Risks

                elisante_gabriel@yahoo.com,
                        0784-455-499           2
 NATURE & SCOPE OF IMM
§ Deriving from the word ‘International’ it
  suggests that IBM is about managing
  business between nations.
§ These nations could be separated by
  ‘geographical’ or ‘Political’ boundaries.
§ Think of Tanzania & Malawi Vs Tanzania &
  Kenya at the scenario when we shall have
  the EACM (East African Common Market)

              elisante_gabriel@yahoo.com,
                      0784-455-499          3
              Globalization

This is a concept considering the whole world as one
  huge homogeneous market. Globalisation is hinged
  on a number of assumptions. It is however on two
  major dimensions:

• Globalization of production

• Globalization of markets



                  elisante_gabriel@yahoo.com,
                          0784-455-499                 4
 Domestic marketing and international marketing decisions

                                               Overseas Environmental
                                             Challenges (Uncontrollables)

                                                   Domestic Environmental             Political
                                                        Challenges
Marketing                                            (Uncontrollables)
Challenges
                                      Economic                                  Legal
in country Y                                                                             Competitio
                   Economic                           (Controllables)                    n
                                                         Product
           Marketing
           Challenges
           in country X
                                           Place      Consumer          Price

                               Political                                              Socio
                                                                                      Cultural
  Marketing                                            Promotion                            Legal
  Challenges
  in country Z                        Competition                  Infrastructure


                                                                                Logistics
                                 Geography

                              elisante_gabriel@yahoo.com,
                                      0784-455-499                                                  5
 Reasons for entering international
             markets
• growth
• profitability
• achieving economies of scale
•Achieving economies of scope (re-usability)
• risk spread
• access to imported inputs
• uniqueness of product or services
• marketing opportunities due to life cycle
• spreading R&D cost

                  elisante_gabriel@yahoo.com,
                          0784-455-499          6
          Key issues in export growth
• Developing a proactive approach to international
 trade
• Promoting Foreign Direct Investments
• Promoting Competitiveness
• Simplification of procedures
• Encouraging large-scale manufacturers
• Reducing transaction costs
• Infrastructure development




                    elisante_gabriel@yahoo.com,
                            0784-455-499             7
    Identifying opportunities in international
                    markets

•    Extreme focus product strategy

•    Products-country matrix strategy

•    Growth-share matrix of exports

•    Market focus strategies




                  elisante_gabriel@yahoo.com,
                          0784-455-499           8
          MODES OF ENTREING
       INTERNATIONAL MARKETS
This is an institutional mechanism by which a firm
makes its products or services available for consumers
in international markets.
• Mode of entry is determined by:
   - the ability and willingness of the firm to commit
    resources
   - the firms’ desire to have a level of control over
    international operations
   - the level of risk the firm is willing to take

                      elisante_gabriel@yahoo.com,
                              0784-455-499               9
    Modes of international market entry
            Production in home country
Exports: production is carried out in home country and
finished goods are shipped to the overseas markets for
sale
indirect exports: process of selling products to an
export intermediary in the company’s home country who
in turn sells the products in the overseas markets
direct exports: process of selling the firm’s products
directly to an importer in the overseas market




                   elisante_gabriel@yahoo.com,
                           0784-455-499                  10
                    Modes (contd)

complementary exporting: use of distribution channels
of an overseas firm to make the product available in the
overseas market

provide offshore services: This is to support the overseas
clients with the help of information and communication
technology




                    elisante_gabriel@yahoo.com,
                            0784-455-499                 11
                       Modes (contd)
               Production in a foreign country
• contractual entry modes
international licensing: process by which a domestic
company allows a foreign company to use its intellectual
property and specific business skills for a compensation
(royalty)

international franchising: transfer of intellectual property
and other assistance over an extended period of time with
greater control compared to licensing


                     elisante_gabriel@yahoo.com,
                             0784-455-499                  12
                        Modes (contd)
overseas turnkey projects: conceptualize, design, install,
construct, and carry out primary testing of manufacturing
facilities or engineering structures for an overseas client
organisation
types : built and transfer (BT), built, operate, and transfer
(BOT), built, operate, own (BOO)
international management contracts: a company
provides its technical and managerial expertise for a
specific duration to an overseas firm



                      elisante_gabriel@yahoo.com,
                              0784-455-499                      13
                     Modes (contd)

international strategic alliance: the relationship between
two or more firms that cooperate with each other t o
achieve common strategic goals but do not form a
separate company

international contract manufacturing: a contractual
arrangement under which a firm’s manufacturing
operations are carried out in a foreign countries




                    elisante_gabriel@yahoo.com,
                            0784-455-499                     14
                       Modes (contd)

                 Investment entry modes

assembly in overseas markets: refers to exporting various
components of the product in completely knocked down
(CKD) condition and assembles them overseas

international joint ventures: equity participation of two or
more firms resulting into formation of a new entity



                      elisante_gabriel@yahoo.com,
                              0784-455-499                     15
      Factors for selecting partners for
                 cooperation
• The alliance partner should have some strength which

 can be translated into business values for the alliance

• The alliance partners should be committed to

 cooperative goals

• It is preferable that the alliance partner should have

 multi-cultural business environment


                     elisante_gabriel@yahoo.com,
                             0784-455-499                  16
                   Factors            (contd)


          Wholly owned foreign subsidiaries
• To have complete control and ownership of
 international operations a firm opts for foreign
 direct investment through:
1. acquiring a foreign company and all its resources in
  a foreign market (acquisition)
2. the establishment of production and marketing
  facilities by a firm on its own from scratch (green field)


                   elisante_gabriel@yahoo.com,
                           0784-455-499                   17
   Factors affecting the selection of entry
                    mode
                   External factors
• Market size
• Market growth
• Government regulations
• Level of competition
• Level of risk
   • political
   • economic
   • operational
• Production and shipping costs

                   elisante_gabriel@yahoo.com,
                           0784-455-499          18
Factors affecting the selection of entry
            mode       (contd)



                Internal factors
• Company’s objectives

• availability of company resources

• level of commitment

• international experience

• flexibility


                 elisante_gabriel@yahoo.com,
                         0784-455-499          19
                                              Finally

           Benefits of IMM
§ More opportunities
§ Avenue for learning new concepts and
  challenges
§ Possibility of developing a global brand
§ A room to benefit from economies of scale &
  scope
§ Spread of risks … AND
§ Wider scope for innovation and creativity.
                elisante_gabriel@yahoo.com,
                        0784-455-499                    20

				
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posted:9/5/2013
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