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Success in International Markets

Success in International Markets. BBB4M. A free market means that business can make a profit. This means that business people are allowed to keep some of the money they make. The excess that the business people keep is called profit .

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Success in International Markets

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  1. Success in International Markets BBB4M

  2. A free market means that business can make a profit. • This means that business people are allowed to keep some of the money they make. • The excess that the business people keep is called profit. • Profit is what drives most business’ in today’s society. • Profit is usually re-invested in order to purchase new technology, provide growth opportunities, pay off debt, etc. Competition in a Free Market

  3. Competition is a defining characteristic of the structure of the market. • Perfect competition • many small companies that offer similar products/services • no one company can gain market control. • government regulation exists to prevent market dominance • Ex. Agriculture , Farming Competition Market Structures

  4. 2) Monopolistic competition • Large number of companies, each with an opportunity for some degree of market control. • Offering similar products that are slightly altered. • Claim to have superior products/services because of brand name, packaging. • Ex. Old Navy, Kelsey’s, American Eagle Market Structures

  5. Oligopoly • a market with a small number of large companies. • each has a substantial amount of market share. • Ex. Cable/Phone companies, Pepsi/Coca-Cola • Monopoly • Market where a single company has 100% of market control. • Ex. Bell Canada as an ISP for years before other companies had the ability to provide internet. Market Structures

  6. Wide selection of goods/services offered. • Better service is provided. • Products are of better quality (pressure from competitors). • Affordable prices. • Improved customer service. • Continuous improvements in R & D, advancement in technology. Benefits of Competition

  7. Products/services that are very similar are in direct competition with one another. • This means that the consumer determines which is the better option. • Products/services that are not similar in nature and usually compete for an individuals discretionary income are considered to be in indirect competition with one another. Direct vs. Indirect Competition

  8. Identify 3 examples of direct competition • Identify 3 examples of indirect competition Developing Examples

  9. Businesses Use the Same Methods when competing in International Markets, but to be successful, businesses need to tailor their competitive efforts to foreign markets. • Market Research is the most important strategy when competing in International Markets. Competing in International Markets

  10. We will look at Marketing Factors in more detail in the next Unit, but will briefly describe a few in this Unit. • 1) Promotion: Domestic promotions may not translate in foreign markets. • 2) Distribution & Logistics: the placement of the product/service can be very difficult. Oftentimes,companies use a Distribution company to sell their products internationally. How will the product get there? What shipping methods are best and what are the costs? • 3) Quality: Ensuring the quality is the same internationally and that there will be means of achieving this. Factors and Challenges

  11. 4) Pricing: Pricing foreign products competitively requires specialized knowledge. Company must know the Tariffs, interest rates, standard of living, taxes, etc. In that market in order to price the product where they can earn a profit. • 5) Design: Some international markets have very different packaging and design regulations and this needs to be considered. 6) Laws: Every country has different laws and this will affect how the Business operates Internationally. Factors Continued

  12. For companies to be successful, they should strive to gain a Competitive Advantage • Competitive Advantage • Developing the ability to outperform rivals • Cost and quality • Knowledge and speed • Barriers to entry • Financial resources • Sustainable Competitive Advantage • Developing the ability to outperform rivals for an extended period of time – long term • Too difficult or costly for others to mimic Competitive Advantages

  13. Identify a competitive advantage the each of the following companies/organizations has over its rivals: • Walmart • Nike • Apple • Toms • IKEA • Kraft foods • Google Think About These Companies

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