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Chapter 14 : Global Strategic Planning Learning Objectives: Understand Globalization of markets Globalization drivers Understand the strategic planning process * Understanding and adjusting the core strategy * Formulating global marketing strategy * Global marketing program development * Implementing global program * Localizing global marketing

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Domestic International Global marketing Global marketing evolution : Globalization drivers - Marketing factors - Cost factors - Environmental factors - Competitive factors Strategic planning models - BCG (Boston Consulting Group) model - Ansoff’s model - GE model

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Business Portfolio Models A. Boston Consultin Group (BCG) Model Star ? Cash cow Dog Marketing Growth Rate Lo Lo Hi Hi Market Share – Growth Matrix

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B. Ansoff’s Product-Market Development Model Market Penetration Product Development Market Development Diversification Existing Product New Products ExistingMarket NewMarket

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C. G.E Strategic Planning Model Strong Average Weak Business Strength Industry Attractiveness High Medium Low Business Strength Index Industry Attractiveness Index * Market Share * Market size * Price Competitiveness * Market Growth * Product Quality * Industry Profit Margin * Customer Knowledge * Amount of Competition * Sales Force and Effectiveness * Seasonality * Geographic Advantage * Cost Structure * Others * Etc.

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THE STRATEGIC PLANNING PROCESS Assessment and adjustment of core strategy (market / competitive analysis, internal analysis) Formulation of global strategy (choice of target countries, segments and competitive strategy) Development of global marketing program Implementation (organization structure, control)

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UNDERSTANDING AND ADJUSTING THE CORE STRATEGY The SBU : Based on product- market similarities - Similar needs or wants to be met - Similar end user customers to be targeted Similar products or services used to meet needs of specific customers Analysis is the first step - Market analysis - Competitor analysis - Internal analysis Formulating global marketing strategy starts with a series of decisions - Country-market choice - Choice of competitive strategy - Segmentation choices

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Country- Market choice - Concentration - Diversification Factors in country selection - The stand-alone attractiveness of the market - Global strategic importance of the market - Possible synergies offered by the market Choice of competitive strategy alternatives - Cost Leadership - Differentiation - Focus Basis for global market segmentation - Environmental variables (Economics, Geographic, cultural, ….) - Marketing-mix (Product, Price, Promotion, Distribution) variables

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Global marketing program development decision - Degree of standardization in the product offering - Marketing program beyond the product variable - The location and extent of value-adding activities - Competitive moves to be made The marketing approach to globalization “ Think globally but act locally ” The location of value-added activities - Pooling production - Exploiting factor costs or capabilities - Strategic alliances - Concurrent engineering

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Competitive moves Cross-subsidization (Resources accumulated in one part of the world used to fight competition in another part) Implementing global marketing strategy Success is based on a balance between local, regional/global concerns The challenges of global marketing and the pitfalls to be avoided Insufficient research The tendency to over standardize Inflexibility in planning and implementation The “Not-Invented-Here” (NIH) syndrome Localizing global marketing Achieving balance between local and global managers at headquarter

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The management process Enhancing the global transfer of communications Personnel interchange to gain experience aboard HQ should coordinate and leverage resources Permit local managers to develop their own programs within defined parameters How to avoid the NIH syndrome Ensure local managers participation in development of global marketing strategies Encourage local managers to be creative Product portfolio with local, regional/global brands Decentralization of marketing decisions

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EMERGING GLOBAL ORGANIZATION STRUCTURES Global account management Changes in the corporate culture for going global Planning and executing programs on a world wide basis Product choices for individual markets and regions Make decisions between single segments and multiple segments

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