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Global Market Strategies

Global Market Strategies. The Internationalization of U.S. Business. Many U.S. Companies are now foreign owned. Companies with only domestic markets have found it difficult to sustain customary rates of growth. Many companies are increasingly seeking foreign markets. “Buy American” Quiz.

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Global Market Strategies

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  1. Global Market Strategies

  2. The Internationalization of U.S. Business • Many U.S. Companies are now foreign owned. • Companies with only domestic markets have found it difficult to sustain customary rates of growth. • Many companies are increasingly seeking foreign markets.

  3. “Buy American” Quiz • Sak’s Fifth Avenue • Burger King • Michelin • Shell • Seagrams • Bonwit Teller • Hardee’s • Firestone • BP • Jack Daniels • Foodline • BiLo

  4. Foreign Acquisitions of U.S. Companies U.S. Companies Foreign Owner Bestfoods (foods) U.K. Ben & Jerry’s (ice cream) U.K. Alpo (pet food) Swiss Pillsbury (food) U.K. Burger King (fast food) U.K. Random House (publishing) Germany Chrysler (autos) Germany TV Guide (magazine) Australia New York Post (newspaper) Australia LA Dodgers (sports) Australia Arco (gasoline) U.K. CompUSA (retailing) Mexico Seagram (alcoholic beverages) France SOURCE: Adapted from Kuri Badenhausen. “Name Game”, Forbes. Jul 24, 2000

  5. Top 10 U.S. Players in the Global Game Foreign Revenues ($ Mil) Foreign Revenues (% of Total) Foreign Profits (% of Total) Foreign Assets (% of Total) Company ExxonMobil IBM Ford Motor General Motors General Electric Texaco Citigroup Hewlett-Packard Wal-Mart Stores Compaq Computer 115,464 50,377 50,138 46,485 35,350 32,700 28,749 23,398 22,728 21,174 71.8 57.5 30.8 26.3 31.7 77.1 35.1 55.2 13.8 55.0 62.7 49.6 N/A 55.3 22.8 54.1 N/A 58.0 8.2 101.4 63.9 43.7 44.2 38.0 47.4 45.2 41.0 51.5 36.0 28.2 1-4 SOURCE: Adapted from Brian Zajac, “Global Giants”. Forbes, July 24, 2000 Irwin/McGraw-Hill

  6. International Marketing Defined • International Marketing is the performance of business activities that direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit. • Marketing concepts and principles stay the same, but the environment changes.

  7. The International Marketing Task 7 Foreign environment (uncontrollable) 1 Economic forces Political/legal forces Domestic environment (uncontrollable) 2 7 Competitive structure Political/ legal forces Competitive Forces (controllable) Cultural forces Environmental uncontrollables country market A Price Product 3 Channels of distribution Promotion Environmental uncontrollables country market B 6 Level of Technology Geography and Infrastructure Economicclimate Environmental uncontrollables country market C 4 5 Structure of distribution

  8. Environmental Adaptation • Adjusting to a country’s culture (uncontrollable environment) is critical. • Consider and adjust your frame of reference (self-reference criterion). • Avoid cultural errors by being aware of cultural relativism--marketing strategies and judgments are based on experience, and experience is interpreted by each marketer in terms of his/her own culture.

  9. Being Globally Aware • To be Globally Aware is to be:Objective Tolerant of Cultural Differences Knowledgeable of:CulturesHistoryWorld Market PotentialsGlobal Economic and Social Trends

  10. Entry Strategies • Exporting • The Internet • Contractual Agreements • Joint Ventures • Direct Foreign Investment • Strategic International Alliances

  11. Trends in Global Business • Internationalization of U.S. Markets • Internationalization of U.S. Business • Growth of Regional Trade Areas • Move toward free market system by countries in Latin America, Asia, Eastern Europe • Large Emerging Markets such as Argentina, China, South Korea, Poland, India • Evolving global middle income households • GATT and World Trade Organization

  12. Possible Regional Trade Groups in the 21st Century  Western Hemisphere Free Trade Areas (WHFTA) Canada to Argentina  Asia-Pacific Economic Cooperation (APEC) Pacific Rim Countries including U.S.  U.S./Canada/Mexico/Japan  South American Free Trade Area (SAFTA) Andean Pact and Mercosur  Chinese Economic Area (CEA) Hong Kong, Taiwan, Coastal Provinces of So. China  U.S./European Union  Many possibilities of Republics of Russia, Baltic States

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