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Business Marketing Strategies for Global Markets. Chapter 8. Capturing Global Advantage. What are RDEs? Why are they important?. Sources of Global Advantage. Three major types of advantages Cost advantages Market access advantages Capabilities advantages. Cost Advantages.
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Capturing Global Advantage • What are RDEs? • Why are they important?
Sources of Global Advantage • Three major types of advantages • Cost advantages • Market access advantages • Capabilities advantages
Cost Advantages • 20-40% savings in landed costs • What are landed costs? • Lower Operating Costs • Wage differences • Business process outsourcing • Lower Capital Costs • Capital and equipments costs • 30% savings • Hidden costs
Market Access Advantages • Access to Growing Markets • China • Following customers
Capabilities Advantage • Gain knowledge and skills • China and India • How does this help? • Improve R&D • Address unmet consumer needs • Tailor products to local market
To Outsource or not to Outsource? • THAT is the question • To outsource: • To not outsource:
International Market Entry Options • Exporting • Contracting • Strategic Alliances • Joint Venture
Market Entry Options • Exporting • Goods are produced ___________ • Sales are made through __________________ • Lowest commitment and risk • Disadvantages
Market Entry Options • Contracting • Two types • Licensing • What can be licensed? • Advantages • Disadvantages • Management contracts • Turnkey operations
Market Entry Options • Strategic Alliances • “Collaborations among partners involving the commitment of capital and management resources with the objective of enhancing the partner’s competitive positions.” • Advantages • Disadvantages
Market Entry Options • Joint Ventures • Why? • Advantages • Disadvantages • Choosing a Mode of Entry • Factors
Multidomestic v. Global • Multimdomestic • Global
International Strategy and the Value Chain • Primary activities • Upstream • Downstream • Competitive Advantage • Downstream • Upstream • Coordination • Configuration
General Framework • Build a Unique Competitive Position • Emphasize a Consistent Positioning Strategy • Establish a Clear Home Base for Business • What’s a home base? • HP • Leverage Product Line Home Bases at Different Locations
General Framework • Disperse Activities to Extend Home Base Advantages • Purchase from cost-effective vendors • Improve market access • Tap competitive advantages in other places • Coordinate and Integrate Dispersed Activities • Establish clear global strategy • Develop info and accounting systems • Encourage personal relationships • Rely on incentive systems