example- student focus group guide

01/10/2012

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Svend Hollensen

GLOBAL MARKETING 5th Edition

4 Development of the firm’s international competitiveness

Hollensen, Global Marketing 5e, © Pearson Education 2010 4-2

Learning objectives

¦ D e f i n e t h e c o n c e p t ‘ i n t e r n a t i o n a l competitiveness’ in a broader perspective from a macro level to a micro level

¦ Discuss the factors influencing the firm’s

international competitiveness ¦ Explain Porter’s traditional competitive-based

five forces model.


Learning objectives (2)

¦ Explore the idea behind the ‘competitive triangle’

¦ Analyse the basic sources of competitive

advantage ¦ Expla in the s teps in compet i t ive

benchmarking


Development of a firm’s international competitiveness

¦ M a c r o l e v e l : A n a l y s i s o f n a t i o n a l competitiveness

¦ Meso level: Competition analysis in an industry ¦ Micro level: Value chain analysis

Hollensen, Global Marketing 5e, © Pearson Education 2010

Figure 4.1 Development of a firm’s international competitiveness


Analysis of national competitiveness (Porter diamond,1990)

Firm strategy, structure, and rivalry

Chance

Factor conditions

Related and supporting industries

Demand conditions

Govern- ment

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Factor conditions in Porter’s diamond

¦ Climate ¦ Physical infrastructure ¦ Natural resources ¦ Educational system ¦ Human resources ¦ Technological infrastructure ¦ Capital


Demand conditions in Porter’s diamond

¦ Nature of home demand ¦ Size of home demand ¦ Economies of scale ¦ Transportation costs ¦ Buyer sophistication


Porter’s (1980), five forces model

Market Competitors

Intensity of rivalry

New entrants

Suppliers Buyers

Substitutes

Market level Industry level


Determinants of market competitiveness

¦ Concentration of industry ¦ Rate of market growth ¦ Structure of costs ¦ Degree of differentiation ¦ Switching costs ¦ Exit barriers


Bargaining power of suppliers will be high if:

¦ Supply is dominated by a few companies ¦ Products are unique ¦ High switching costs ¦ Forward integration is possible ¦ Backward integration is unlikely


Bargaining power of buyers is high if:

¦ Buyers are concentrated and/or purchase in large volumes

¦ Backward integration is likely ¦ Products are standardized ¦ Many suppliers exist ¦ Buyers earn low profits ¦  Industry product is unimportant to quality

of buyer’s products, but price is important

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Threat of substitutes

Buyer’s willingness to substitute

Relative price and performance of substitutes

Costs of switching


New Entrants: Barriers to entry

¦ Economies of scale ¦ Product differentiation and brand identity ¦ Capital requirements in production ¦ Switching costs ¦ Access to distribution channels


Value chain analysis (Porter, 2001)

R&D Production Marketing Sales & services

R&D Production Marketing Sales & services

Customer

Perceived value/ price A

Perceived value/ price B

Relative cost Firm A Firm B


What is this?

The ______ consists of a customer, the firm, and a competitor. The winning of the customer’s favour depends upon the perceived value offered compared to the relative costs between the firm and the competitor.


What is this?

What term refers to a firm’s cost position as it relates the configuration of the activities in its value chain versus that of the competitors?


What is this?

What term refers to value chain activities in which the firm is regarded as better than its competitors?

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What is this?

What term refers to a technique for assess ing re la t i ve marke tp lace performance compared with main competitors?


Competitive Benchmarking profile


Blue Ocean Strategy: Kim and Mauborgne (2005)

¦ Red Oceans : Tough head- to -head

competition in mature industries often results in bloody red oceans of rivals fighting over a shrinking profit pool.

¦ Blue Oceans: The unserved market, where

competitors are not yet structured and market is relatively unknown. Here it is about avoiding head-to-head competition.


What is this?

What term refers to tough head-to-head competition in mature industries which often results in nothing but fighting over a shrinking profit pool?


What is this?

What term refers to unserved markets, where competitors are not yet structured and the market is relatively unknown?


Value Innovation at Formule 1 ¦ Which of the factors that the budget hotel

industry took for granted should be eliminated? ¦ Which factors should be reduced well below

the industry standard? ¦ Which factors should be raised well above the

industry standard ¦ Which new factors (that the industry had

nevered offered) should be developed? ¦ Read Kim and Mauborgne (2005)

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Video Case Study: NIKE

¦ http://wps.pearsoned.co.uk/ema_uk_he_hollensen_globmark_5/170/43546/11147796.cw/index.html

4-28


References ¦  Hollensen, S, (2011), ‘Global marketing’, Pearson

Education Limited, Essex, UK

¦  Doyle, P. (2008), Value-Based Marketing: Marketing Strategies for Corporate Growth and Shareholder Value, 2nd Edition. John Wiley & Sons.

¦  Kim, Chan. W., Mauborgne, R. (2005), Blue Ocean Strategy. Harvard Business School Press, Boston, Mass

¦  Porter, M.E. (1980) ‘Competitive Strategy’, Free Press,

New York.


References

¦  Porter, M.E. (1990, 1998) The ‘Competitive Advantage of Nations’, Free Press, New York.

¦  Porter, M.E. (2001), ‘Strategy and the Internet’, Harvard Business Review, March 2001, pp. 62-78.

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Svend Hollensen

GLOBAL MARKETING 5th Edition

6 The Political and Economic Environment



¦ Discuss how the political/legal environment will affect the attractiveness of a potential foreign market.

¦ Distinguish between political factors in the

home country environment and the host country environment.

¦ Describe the major trading blocs.



¦ Define regional economic integration and identify different levels of integration.

¦ Discuss the benefits and drawbacks

associated with regional economic integration.


Aspects of the political/ legal environment

Home country environment

Host country environment

General international environment


The home country environment

¦ Promotional activities (sponsored by governmental organizations)

¦ Financial activities ¦ Information services ¦ Export-facilitating activities ¦ Promotion by private organizations ¦ State trading


Kinds of information typically available

¦ Economic, social, political data on individual countries

¦ Summary and detailed information on aggregate global market transactions

¦  Individual reports on foreign firms

¦ Specific export opportunities

¦ Lists of potential overseas buyers, distributors and agents for various products in different countries

¦  Information on relevant government regulations

¦ Foreign credit information

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Major types of political risk in the host country environment

Ownership risk

Operating risk

Transfer risk


Effects of political risk

¦ Import restrictions ¦ Local-content laws ¦ Exchange controls ¦ Market control ¦ Price controls

¦ Tax controls ¦ Labour restrictions ¦ Change of

government party ¦ Nationalization ¦ Domestication


Economic Environment ¦ Market size & Market growth: 2 milestones

¦ They depend on many factors such as economy, politics, culture, history, etc.

¦ But all of these are closely related to a country’s main economic activity.


Types of economic activity

Primary Secondary Tertiary


Figure 6.3 Forms of economic integration in regional markets Source: from Czinkota/Ronkainen. Global Marketing, 1E. © 1996 South-Western, a part of Cengage Learning, Inc. Reproduced by permission. www.cengage.com/permissions


Regional Economic Integration §  Free Trade Area e.g. NAFTA 1994 (US, Canada

and Mexico) - No barrier between members - Each member maintains its own policies to non-members

§  Customs Union e.g. Benelux Countries 1921 - Free Trade Area + - Common trade policy with respect to non-members

§  Common Market e.g. EEC 1958-1993 - Customs Union + - Mobile labour, capital, and technology

§  Economic Union (27 states as of 02/10/12!) - Common Market + - Harmonisation of monetary policies, taxation, & gov. spending

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Major trading blocs

European Union Association of

South East Asian Nations (ASEAN)

Asia Pacific Economic

Cooperation (APEC)

North American Free Trade Area

(NAFTA)



Video Case Study: Globalization

¦ http://wps.pearsoned.co.uk/ema_uk_he_hollensen_globmark_5/170/43546/11147838.cw/index.html

4-45


References

¦  Hollensen, S, (2011), ‘Global marketing’, Pearson Education Limited, Essex, UK

example- student focus group guide

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