international stages and orientations'

INTERNATIONAL STAGES AND ORIENTATIONS: 

INTERNATIONAL STAGES AND ORIENTATIONS A GROUP PRESENTATIONS BY , FINAL YEAR M.COM STUDENTS MANASAGANGOTRI SHRUTHI.D SHAHSHIDHAR SHALINI SHOBHA SANDEEP

INTRODUCTION: 

INTRODUCTION BUSINESS TRADE WANTS INTERNATIONAL TRADE INTERNATIONAL MARKETING INTERNATIONAL BUSINESS 17 CENTURY 18 CENTURY 19 CENTURY 20 CENTURY 16 CENTURY GLOBAL TRANSNATIONAL MULTINATIONAL DOMESTIC INTERNATIONAL

ETHNOCENTRIC: 

ETHNOCENTRIC The word ethnocentrism derives from the Greek word "ethnos", meaning “nation” or “people,” and the English word center or centrism. ” In this context, ethnocentrism is the view that a particular ethnic group’s system of beliefs and values is morally superior to all others. Ethnocentrism is characterized by or based on the attitude that one’s own group is superior to others. The ethnocentric attitude is found in many companies that have many nationalities and culture groups working together. It is a natural tendency for people to act ethnocentrically because it is what they feel comfortable with. It is based on past experiences and learned behaviors and norms.

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Ethnocentric  Orientation Overseas operations are viewed as secondary to domesticoperations. A means of disposing of surplus domestic production. Overseas operations are conducted from  home- countrybase-strong reliance on export agents. Domestic product-mix without major modifications for the overseas markets. International marketing characterized by Extensionstrategy. Cultural factors in overseas markets are overlooked for instance most Indian handicrafts exporters hardlyappreciated the market difference and need for adaptationof marketing strategy A number of Indian products sold abroad such as dresseslike salwar  ± kurta, Saries and  food  items such as  dosa  mix, idli mix vada mix, sambhar  mix, gulab jamoon   mix, papad  and  Indian sweets are primarily targeted  at  Indian population abroad

Benefits: 

Benefits Simple organization Greater communication and control

Costs: 

Costs Ineffective Planning due to poor feedback Subsidiary ‘valuable’ executive flight Fewer innovations Inability to build a high caliber local org. Lack of flexibility and responsiveness

POLYCENTRIC: 

POLYCENTRIC Polycentrism can be defined as a host country orientation; which reflects host countries goals and objectives with respect “to different management strategies and planning procedures with regard to international operations. ”Under a polycentric perspective, a company’s management team believes that in international business practices local preferences and techniques are usually found most appropriate to deal with the local market conditions.

Polycentric Orientation: 

Polycentric Orientation Polycentric approach is highly market oriented Each market is considered unique in terms of its market environment. Local marketing techniques are best suited to deal with local market conditions. Subsidies are established in overseas markets. Environment of each market is considered while formulating marketing strategy. Emphasis is put on local laws, custom and culture and great care is taken to understand the local way of doing business. Marketing is characterized by Ad aptation strategy

BENEFITS: 

BENEFITS Intense exploitation of local markets Better sales due to better-informed local management More initiative for local products More host government support Good local managers with high morale

COSTS: 

COSTS Waste due to duplication Localization costs of “universal” products Inefficient use of home-country experience Excessive regard for local traditions at expense of global growth

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Characteristic features Ethnocentrism Polycentrism 1) Management orientation Home country orientation Host country orientation 2) Perception of the market Domestic market is superior. Focuses on the similarities between the home and the foreign markets Foreign markets are extensions of domestic market Each national market is distinctive Focuses on the differences between the home and foreign markets 3) Marketing strategy Extension of domestic strategy to foreign markets Localization

Regiocentric Approach: 

Regiocentric Approach Regiocentric or regional orientation is defined as a functional rationalization on a more than one country basis. The marketing firms here segment the markets on the basis of regional similarities.

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Thinks of exporting to the neighboring countries of the host country Considers regional environment Regions are consistent with some natural boundaries Regional autonomy in decision making Staff move with in the designated region, rather than globally

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Advantages: More economical & manageable Help the firm to move from a purely ethnocentric or polycentric approach to a geocentric approach Provide some importance to local conditions Disadvantages: Produce federalism at a regional rather than a country basis & constrain the firm from taking a global stance Staff’s career advancement still limited to regional headquarters, not the parent country headquarters

Geocentric Approach: 

Geocentric Approach The entire world is just like a single country Select the employees from the entire globe Independence to subsidiary companies Focus on world oriented approach Does not show a bias to either home or host country The sole goal is to globally unite both headquarters & subsidiaries Product differentiation, diversifying functions & R & D It attempts to balance both global integration & local responssiveness

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Forces that push an organization to the geocentric notion of managing MNC Competition For effective target Growing World markets

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Advantages: Better quality of products & services worldwide utilisation of resources Higher global profits It makes sense for firms pursuing either a global or transnational strategy Disadvantages: High communication & travel costs Educational costs at all levels Time spent in consensus decision making Too wide distribution of power

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Selection of suitable orientation depends on following factor: Size of the firm Experience in overseas market The nature of the product Company’s objectives & the specific market situation The size of the potential market

DOMESTIC : 

DOMESTIC The stage-one company is domestic in its focus,vision, and operations. Its orientation is ethnocentric. This company focuses upon domestic markets, domestic suppliers, and domestic competitors. The environmental scanning of the stage-one company is limited to the domestic familiar, home-country environment. The unconscious motto of a stage-one company is: “If it’s not happening in the home country, it’s not happening.” The world’s graveyard of defunct companies is littered with stage-one companies that were sunk by the Titanic syndrome: the belief, often unconscious but frequently a conscious conviction, that they were unsinkable and invincible on their own home turf

INTERNATIONAL: 

INTERNATIONAL The stage-two company extends marketing, manufacturing, and other activity outside the home country. When a company decides to pursue opportunities outside the home country, it has evolved into the stage-two category. In spite of its pursuit of foreign business opportunities, the stage-two company remains ethnocentric, or home country oriented, in its basic orientation. The hallmark of the stage-two company is the belief that the home-country ways of doing business, people, practices, values, and products are superior to those found elsewhere in the world. The focus of the stage-two company is on the home-country market.

INTERNATIONAL V/S DOMESTIC: 

INTERNATIONAL V/S DOMESTIC APPROACH GEOGRAPHIC SCOPE OPERATING STYLE ENVIRONMENT FOREIGN EXCHANGE RATE EXPORT-IMPORT PROCEDURE HUMAN RESOURCES MARKETS AND CUSTOMERS TARRIFS

MULTINATIONAL: 

MULTINATIONAL The focus of the stage-three company is multinational or in strategic terms, multi- domestic. The orientation of this company shifts from ethnocentric to polycentric. . A polycentric orientation is the assumption that markets and ways of doing business around the world are so unique that the only way to succeed internationally is to adapt to the different aspects of each national market In stage-three companies, each foreign subsidiary is managed as if it were an independent city-state The subsidiaries are part of an area structure in which each country is part of a regional organization that reports to world headquarters. The stage-three marketing strategy is an adaptation of the domestic marketing mix to meet foreign preferences and practices.

Global : 

Global strategic departure The global company will have either a global marketing strategy or a global sourcing strategy, but not both Global companies plan activities on a global basis. By operating in more than one country benefits from savings or economies on activities such as R&D, marketing, operations and finance are achieved which may not be available to domestic companies

GLOBAL: 

GLOBAL Stage and Company Global Strategy Global Model Centralized Hub View of the world Global Markets Or resources Orientation Mixed Orientation Key Assets All in home country except marketing and sourcing Role of Country units Marketing and Sources Knowledge Marketing and sourcing developed jointly and shared

Transnational : 

Transnational A Transnational Corporation (TNC) differs from a traditional MNC in that it does not identify itself with one national home An example of a TNC is Nestlé who employ senior executives from many countries and try to make decisions from a global perspective rather than from one centralised headquarters.

Transnational: 

Transnational Stage and Company Transnational Strategy Global Model Integrated Network View of the world Global markets and resources Orientation Geocentric Key Assets Dispersed, Interdependent and Specialized Role of Country units Contributions to companies worldwide Knowledge All functions developed jointly and shared Stage and Company Transnational Strategy Global Model Integrated Network View of the world Global Markets and Resources Orientation Geocentric Key Assets Dispersed Interdependent and Specialized Role of Country units Contributions to company worldwide Knowledge All functions developed jointly and shared Key Job Best person selected regardless of nationality

Attributes of a Transnational Company: 

Attributes of a Transnational Company Looking forward to Global markets & resources Special labs located different location but will work on the same project. Role of each country is to contribute company world-wide. Best Person is selected regardless of nationality. R&D is part of integrated worldwide R&D plan and is decentralized.

TO CONCLUDE……………………………: 

TO CONCLUDE…………………………… STRATEGY MODEL VIEW OF THE WORLD ORIENTATION KEY ASSETS ROLE OF COUNTRY UNITS KNOWLEDGE

Thank you: 

Thank you