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Global Marketing Management A European Perspective

Global Marketing Management A European Perspective. Production Abroad and Strategic Alliances. Warren J. Keegan Bodo B. Schlegelmilch. Production Abroad Licensing Franchising Joint Ventures Subsidiary/Acquisition Demands on Strategic Alliances Co-operative Strategies in Japan: keiretsu

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Global Marketing Management A European Perspective

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  1. Global MarketingManagementA European Perspective Production Abroad and Strategic Alliances Warren J. Keegan Bodo B. Schlegelmilch

  2. Production Abroad Licensing Franchising Joint Ventures Subsidiary/Acquisition Demands on Strategic Alliances Co-operative Strategies in Japan: keiretsu Beyond Strategic Alliances Summary Overview

  3. Be aware of market entry and expansion alternatives involving production abroad Know how and when to engage in licensing, franchising, joint ventures or establishing subsidiaries Be cognisant of strategic alliances (problems and success factors) Learn about the key characteristics of Japanese keiretsu and their effects on competition Be aware of new forms of strategic alliances (virtual enterprises) Learning Objectives

  4. Production Abroad Licensing Franchising Joint Venture Subsidiary/Acquisition keiretsu Virtual Enterprise Production Abroad and Strategic Alliances: Important Concepts

  5. Production Abroad Ownership and Control

  6. Contractual arrangement where one company (the licensor) makes an asset available to another company (the licensee) in exchange for compensation The licensed asset may be a patent, trade secret or name Risks for the licensor: Limited form of participation (licensor is not fully involved) Limited control Licensee develops own know-how and can turn into a competitor Licensing

  7. Franchising is a special form of licensing Franchisor is provided with an entire business concept (product and marketing package, managerial know-how) Franchisor has extensive influence on the franchisee`s operations, but commits few financial resources Internationally uniform brand image Franchising

  8. Company run by two or more partner firms Risk is shared and different value chain strengths are combined Influence depends on degree of ownership Good opportunity to build on local know-how JV finds greater acceptance by local authorities Joint Ventures

  9. A subsidiary represents the most extensive engagement abroad is subsidiary Subsidiary is either established through the creation of a new facility or the acquisition of an existing firm Company has complete decision power and control Investor achieves greater flexibility In many countries majority or 100% ownership by foreign companies is forbidden Wholly-owned Subsidiaries/Acquisition

  10. Competitive collaborations that offer significant advantages Characteristics: Participants remain independent following to the formation of the alliance Participants share the benefits of the alliance as well as control over the performance of assigned tasks Participants make ongoing contributions in technology, products and other key strategic areas Demands on Strategic Alliances

  11. Two or more companies develop a joint long-term strategy The relationship is reciprocal Transfer of resources between partners Partner must know their core strength and be able to defend their position When in new markets, partners must retain identities Global Strategic Partnership

  12. Mission Strategy Governance Culture Organisation Management Success Factors of Alliances

  13. CFM International/GE/Snecma- A success story AT&T/Olivetti - A Failure Boeing/Japan - A Controversy Case Examples of Partnership

  14. Interbusiness alliance or enterprise group, where different companies or company groups are intertwined A keiretsu operates in a broad spectrum of markets keiretsu executives can sit on each other`s boards and share information Foreign competitors interpret keiretsu relations as cartels which dominate the market and restrict competition The most famous keiretsu are Mitsui and Mitsubishi Co-operative Strategies in Japan:Keiretsu

  15. Information, communication technologies and globalisation have fostered new forms of strategic alliances: Relationship enterprise Groups of firms in different industries will be held together by common goals that encourages them to act like a single firm Virtual corporation Multiple co-operations which are employed only when needed Beyond Strategic Alliances

  16. Companies can choose among a wide range of alternatives, when participating in foreign markets Licensing can increase the bottom-line with little investment Joint ventures offer opportunities to share risk and combine value chain strengths Ownership requires substantial resources, but offers full control Co-operative strategies include global strategic partner-ships, the Japanese keiretsu or the virtual enterprise Summary

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