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1.3 Comparison of the global marketing and management styles of SME and LSE
LSE = per the EU definition, LSEs are firms with more than 250 employees. Although LSEs
account for less than 1% of companies, almost one-third of all jobs in the EU are provided by LSEs
SME = occur commonly in the EU in international organizations. The EU categorizes companies
with fewer than 50 employees as small and those with fewer than 250 as medium. In the EU,
SMEs compromise 99% of all firms.
Sharing 80% of their parts and they used the EU leader because of his expertise with similar sized
cars.
Saving money due to 2008/2009 = new imperative. Ford refused to give a single picture to each
country. Instead, coming up with a similar landscape that can be appreciated by all countries
Removing duplication ~5m saved
Industry Globalism:
A single player cant change the industrys degree of globalism.
In the case of high degree of industry globalism there are many interdependencies between
markets, customers and suppliers, and the industry dominated by a few large, powerful players
(global), whereas the other end (local) represents a multidomestic market environment where
markets exist independently of one another.
Ultimately,
Unless you are mature in preparedness (high skill), it probably means you are not doing well at
home No reason to expand outside.
Maybe #7 is the majority of start-ups in IT: Not enough skill for global but market is big.
Ethnocentric: the home country is superior and the needs of the homes country are most relevant.
Controls are highly centralized and the organization and technology implemented in foreign
locations will be largely the same as in the home country.
Polycentric (multidomestic): each country is unique = target in different way. More adapt = goal of
more profit. Control is highly decentralized among affiliates and communication between
headquarters and affiliates is limited.
Regiocentric: World consists of regions, Asia, Europe, ME&A. Emphasis = Within region not across
them
Geocentric: world is smaller and smaller; global product concept with small local adaptations.
Global marketing is defined as the firms commitment to coordinate its marketing activities across
national boundaries in order to find and satisfy global customer needs better than the competition.
This implies that the firm is able to:
o Develop a global marketing strategy, based on similarities and differences between markets;
o Exploit the knowledge of the headquarters (home organization) through worldwide diffusion
(learning) and adaptations
o Transfer knowledge and best practices from any of its markets and use them in other
international markets.
Key terms:
Coordinate marketing activities = coordinating and integrating marketing strategies and implementing
them across global markets, which involves centralization, delegation, standardization and local
responsiveness
Find global customer needs= involves carrying international marketing research, analyzing market
segments: and seeking the similarities and differences in customer groups across countries
Satisfy global customers= adapting products, services and elements of the marketing mix to satisfy
different customer needs across countries and regions
Being better than competition = assessing, monitoring and responding to global competition by
offering better value, lower prices, higher quality, superior distribution, great advertising strategies
Think globally but act locally (glocalization) = the development and selling of products or services
intended for the global market but adapted to suit local culture and behaviour
Key element in knowledge management is the continuous learning from experiences. The aim of
knowledge management as a learning-focused activity across borders is to keep track of valuable
capabilities used in one market that could be used elsewhere, so that firms can continually update
their knowledge.
Example: Helly Hanson- Geo-targeting tech
HH used tech to lead cx into their stores when it realized that Germany was gonna rain, its
frontpage changed automatically into raingear.
The global integration/market responsiveness grid: the future orientation of LSEs and SMEs
Two elements:
Forces for national responsiveness (local)
Forces for globalizing (global)
Assumes that LSE and SME are learning from each other.
o LSE (very global) are moving Right: becoming more localized.
o SME (very local) are moving up: becoming more global focused.
o Result = High local and high global
1.7 The value chain as a framework for identifying international competitive advantage
Activities:
Inbound logistics: receiving/storing input (inventory)
Operations: transformation into final product
Outbound logistics: distribution channel
Marketing & Sales: consumers/usuers are made aware of the product/service
Service: after-sale, CRM, relationship management etc.
Support activities:
Firm Infrastructure: quality control, internal motivation, etc
HR Management: staff and talent
Technology and R&D: tech systems
Procurement: buying raw material
Value = how much the customer is willing to pay for (perceived value).
Value chain = Cost + Value drivers. profitable if value it gives > costs to produce it
Competitive advantage:
o Providing comparable buyer value more efficiently than competitors (lower cost)
o Performing activities at comparable cost but in unique ways that create more customer value than
the competitors are able to offer and command a premium price (differentiation)
o The firm might be able to identify elements of the value chain that are not worth the costs. These
can then be unbundled and produced outside the firm (outsources) at a lower price.
Value:
o Primary activities:
Physical creation of the product + Sale + transfer + After sale
o Support activities:
Helps make the primary activities run better.
A simplified version of the value chain
Internal linkages: between activities within the same value chain, but perhaps on different planning
levels within the firm
Your decisions about the value chain elements will affect your profit
You need the right structure to serve the right customer.
They are all interdependent and a clear top objective makes the business run better.
External linkages: between different value chains owned by the different actors in the total value
system. A single company rarely does everything: from design to final customer sale. Form bonds
with X & Y
o Understand when to add external players (a specialized retailer) into your value chain
o To either reduce costs or reach a specific customer group.
Value shop = a model for solving problems in a service environment, similar to workshops. Value
created by mobilizing resources and deploying them to solve a specific customer problem.
Idea: model for solving customer problems in a service environment
Value network = the formation of several firms value chains into a network, where each company
contributes a small part to the total value chain.
Problem-finding
Problem-solving
Choice
Execution
Control evaluation
Deploy assets (people, knowledge, skills) to solve specific problems such as curing an illness.
Shops are there to identify, find a solution, execute and evaluate results. Its a specialized problem
solving unit.
Value shops are kinda like consulting engagements: facilitated by technology: intranets,
conferencing, etc.
Value networks are composed of multiple companies that specialized in one part of the chain.
Combining the product value chain and the service value chain:
Hard services where production and consumption can be separated. Ex: microsft excel
Soft services the customer is part of the value creation: haircut
If you want to enhance the value of the product then you should design products that actually work
with your service.
This means adding support into the product itself: i.e how iphones have a call genius button
In the moment of truth, the seller represents all the functions of the focal companys product and
service value chainat the same time
Mass customization:
Mass customization can be viewed as collaborative efforts between customers and manufacturers
to jointly search for solutions that best match customers individual specific needs with
manufacturers customization capabilities. This combines the low unit costs of mass production
process with the flexibility of individual customization.
One of the best ways to create customer value!
o Serving customers uniquely and locking cx in.
Intangible service of helping customers figure out EXACTLY what they are and solution.
ALSO an experience while you solve it. beginning of a relationship + partnership
Augmented reality:
A live view of a physical, real-world environment whose elements are augmented (or
supplemented) by computer-generated sensory input such as sound, video, graphics, or GPS data.
AR technology allows consumers to virtually interact with three-dimensional product visualizations
displayed on users screens.
Form of experiential marketing not only on 1 product but rather an entire experience!
AR has most impact on pre-purchase stage. = put the product in their hand and its a cool story to
share!
o Using tech to get the customer to visualize themselves using it.
At each stage of the original value chain, we use information. Not only to improve but result in more
coordination too. This information can help us to design new products or to improve existing ones.