Marketing Management Of International Trade

1. Marketing Management Of International Trade October - December 2011 Ing. Ilona Bergquist, MBA

2. LESSON 5: SHARING KNOWLEDGE, MANAGING PLANS • Unit 1: Creating & Leveraging Knowledge • Models for creating and leveraging innovation • Ways to make knowledge sharing most effective • Unit 2: Managing Business Plans • Process, NPD, P&L

3. LESSON 5: SHARING KNOWLEDGE, MANAGING PLANS CENTRAL, LOCAL AND TRANSNATIONAL INNOVATION • Center-for-global innovation model: • New opportunity sensed and created in the home country … implementation involved driving the innovation through subsidiaries whose role is to introduce it in the local market (i.e. Intel’s creation of Pentium, Pfizer’s Lipitor) • Risk of market insensitivity and the resistance of local management to what they view as inappropriate new products / processes. • Local-for-local innovation model: • Subsidiary-based knowledge development, responding to local opportunities, using own resources and implementing in local market • Suffers from needles differentiation and “reinventing the wheel” caused by subsidiaries trying to protect their autonomy New transnational innovation processes: • Locally leveraged: • Local resources and capabilities are available to company and units worldwide • Can be threatened by the “non-invented-here” syndrom

4. LESSON 5: SHARING KNOWLEDGE, MANAGING PLANS CENTRAL, LOCAL AND TRANSNATIONAL INNOVATION • Globally linked: • Pools resources and capabilities of many different units at both parent company and subsidiary level to jointly create and manage activity • The downside tends to be high coordination cost required to link the widely dispersed assets and resources into an effective integrated network VW New Beatle came out of DetroitDesign done in California, development and engineering done in Germany.

5. LESSON 5: SHARING KNOWLEDGE, MANAGING PLANS CENTRAL, LOCAL AND TRANSNATIONAL INNOVATION • Making central innovations effective (Japanese became the champions) • Gaining the input of subsidiaries into centralized activities – linkages among local managers and HQ • Ensuring that all functional tasks (R&D, marketing…) at the center are linked to market needs • Managing the transfer of responsibilities – ensuring personal flow, e.g. transferring people from center to local divisions • Making local innovations efficient (older European companies are the champions) • Empowering local management (organizations with decentralized system) • Linking local managers to corporate decision-making process (necessary to make it effective for the company as a whole) • Strong cross-functional integration in subsidiaries 1. Founded in 1891, need to expand, but many barriers (poor transport, communication, war) led to building national organization with high degree of autonomy 2. Many of best managers spend most of their careers in national operations at subsidiaries, which has important influence on their attitudes and org. relationships – open to innovationideas from other countries

6. LESSON 5: SHARING KNOWLEDGE, MANAGING PLANS CENTRAL, LOCAL AND TRANSNATIONAL INNOVATION • Making transnational processes feasible and effective • Productcoordinators - diferentiationof roles (Unilever – in Europe: Product coordinators with direct line responsibility for all operating companies X in LA, national management still has line-management role and product coordinators only as advisors) • Interdependence of units – resources are dispersed and specialized, good interpersonal relationships among managers in different units) ERICSSON – sending 50 – 100 engineers and managers between HQ and subsidiaries • Modes of control and coordination of information /knowledge – transferring personnel with relevant knowledge and forums for free exchange • Meetings, webinars, intranet, divisions workshops

7. LESSON 5: SHARING KNOWLEDGE, MANAGING PLANS • Unit 1: Creating & Leveraging Knowledge • Models for creating and leveraging innovation • Ways to make knowledge sharing most effective • Unit 2: Managing Business Plans • Process, NPD, P&L

8. LESSON 5: SHARING KNOWLEDGE, MANAGING PLANS MANAGING BUSINESS PLANS • Can be created according to: markets (countries), product units, customer segments TYPICAL PROCESS: • Setting up business goals (sales, market share, distribution, # of new customers…) • Planning of activities (base business, innovation) • Initial sales forecast (updated monthly – react quickly to changing demand or any logistical issues). Frequent communication with sales people to get early signs of issues. • Financial plan (P&L, updated monthly) • Implementation of plans • Monitoring of: • Market share • Shipments • P&L situation If actual sales are lower than forecast (budget), special promo activity may be needed to move inventory from the stores • Measuring KPIs

9. LESSON 5: SHARING KNOWLEDGE, MANAGING PLANS Example of P&L

10. LESSON 5: SHARING KNOWLEDGE, MANAGING PLANS Typical NPD process

11. LESSON 5: SHARING KNOWLEDGE, MANAGING PLANS • Customer relationship management (CRM) • Focused on the needs of customer and creating a long-term relationship (loyalty) with the customer • Products and services are established to ensure: High value for the customer …. Leads to high value for the companyMeeting / exceeding customer expectations on product and service level -> Repeat purchase and WOM • Note: Transaction focused marketing exists in selling products for one-time use (i.e. suveneers, one-time use cameras…)

12. LESSON 5: SHARING KNOWLEDGE, MANAGING PLANS • Requirements for manager transferring abroad: • High motivation to be successful in foreign market, and selling / persuasion capabilities • Confidence, but also listening skills and appreciation for local situation • Knowledgeable of the business and overall market • Able to handle challenges • Language skills (but more important, to be able to close the business) • Leveraging opportunities • Able to understand the customer well • Able to build, mange and motive teams

13. LESSON 5: SHARING KNOWLEDGE, MANAGING PLANS • Final case studies presentations: • Nike Labor Practices • Stella Artois, Global Branding • P&G Japan: The SK II Globalization Project • Acer, Inc.: Taiwan’s Rampaging Dragon • Exam dates: • 19th December, 2011 at 5 pm • 10th January, 2012 at 5:30 pm