REGIOCENTRIC ORIENTATION

WHAT IS REGIOCENTRIC ORIENTATION???

• Regiocentrism is a transitional phase between polycentric and geocentric orientation.

• Firm accepts a regional marketing policy covering a group of countries which have comparable market characteristics.

• Operational strategies are formulated on the basis of the entire region rather than individual countries.

• The company views the similarities and differences between regions.

REASONS FOR MAKING USE OF A REGIOCENTRIC APPROACH• Facilitates the interaction taking place between

local national executives transferred from operations in the region to regional head office, and executives transferred from the parent company to the regional headquarters.

• Shows some level of sensitivity towards local conditions in the host-country

• Can be utilized as a transitional step where the multinational organization wishes to develop from a purely ethnocentric or polycentric approach to a geocentric approach

Nike Inc. , the world's largest athletic-shoe maker on

march 20, 2009 said, it is reorganizing its brand into six

geographies.

The new regions include:

 North America

Western Europe

Eastern/Central Europe

Greater China

Japan and emerging markets

"Nike is saying that Western Europe customers are different from Eastern Europe customers. And China is also different from the rest of Asia. "

By the new structure, emerging markets include:KoreaSouth East Asian countriesAustraliaBrazilIndia China, Taiwan and Hong Kong are groupedunder the Greater China region.

NIKE’S SUBSIDARIES

• Grew from “single product, single market” to ”multiple brands, multiple markets”

• Subsidiaries:

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Has four main divisions and subsidiaries:

The North Atlantic Group

The Diversified Group

The Stationary Products Group

The International Group.

The International Group makes and markets Gillette's personal-care, shaving, and stationery products and staffs operation throughout the world (excluding North America and Western Europe)

The International Group is made up of three geographic groups:

Africa

Latin America

Middle East

Eastern Europe

Asia Pacific

In international operations, Gillette relies on managers from a particular geographic region to handle things in and around that location. The regiocentric approach also guides the manner in which training is set up.

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Toyota is a recognized brand, a reliable automobile maker and has a huge brand image, so Toyota is prepared for internationalization and position itself as “Mature”.

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STRATEGY Toyota uses the Adaptation approach: Some cars are similar from a region

to another and some others are not offered in certain regions. Even with the 4 similar products, prices are different and more adapted with the economic situation of the specific country.

To follow this idea : Toyota is implanted in all continents such as:

Asia (33 countries)

North America (4 countries)

Caribbean (21 countries)

Latin America (21 countries)

Europe (41 countries)

Africa (48 countries)

Oceania (16 countries)

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Toyota is offering the same products in North American continent, the same products to

countries within Europe or to countries within Asia; as the economy of the countries included

in those regions may be similar.Toyota uses the hybrid segmentation : i.e

Toyota agrees that different countries have different standards, that consumers across the

world have different responses to product.

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Toyota has great strategy that works; products are adapted to local demand, but prices are more or less adapted to each regions; with differences.

Toyota could improve its strategy by being more adapted to the local demand and work deeply on that to remain the leader brand and increase its sales around the world.

Toyota has great strategy that works; products are adapted to local demand, but prices are more or less adapted to each regions; with differences.

Toyota could improve its strategy by being more adapted to the local demand and work deeply on that to remain the leader brand and increase its sales around the world.

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HSBC is one of the largest banking and financial services organizations in the world, with well-established Businesses in Europe, the Asia-Pacific region, the Americas, the Middle East

and Africa.

They use a Regiocentric approach. Their motto is “The world’s local bank”. It reflects in their HR policies.

They hire from local work force. More than 90 percentages of their 580 employees are from Bangladesh.

HSBC provides

• Custody• Hexagon• Clearing and Personal

Financial Services• Investment Banking

and Services.

• Corporate Banking• Payments and Cash

Management• Trade Services• Treasury• Institutional Banking

The business was restructured into four product lines:Global Markets, Global Banking, Global TransactionBanking, and Group Investment Businesses.

Goodyear international, the tire major, too

operates on regiocentric basis, where its regional

offices handle and coordinate some of the activities

of Asian-Pacific countries, Europe forms another

region, while the other parts of the world are

divided into Latin America, Middle East and Africa,

North America also serves as a separate region.

ADVANTAGES & DISADVANTAGES• Advantages are that the approach is adaptable to fit

the company and product strategies, when regional expertise is needed there are natives of the region that can be hired, and parent-company nationals who have ready access to corporate sources of information can be brought in if product knowledge is crucial.

• A disadvantage is that managers from the region may not understand the view of managers at headquarters and also corporate headquarters may not employ enough managers with international experience, which could result in poor decisions.

Recruitment AND Selection OF EMPLOYEES

REGIOCENTRIC STAFFING POLICY• Regional Strategic

Orientation• Regional employees

selected for key positions from HCNs and TCNs

ISSUES:• Problems of using

home or host country nationals can be avoided

• An executive adapting to one language and culture can adapt to another more easily

• Potential cost savings