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L6: Globalisation of Local Brands (Reasons for global strategy (Obtain…
L6: Globalisation of Local Brands
Reasons for global strategy
Obtain global innovation
Access to low-cost labour/materials
Access to national incentives
Cross-subsidation
Dodging trade barriers
Access to strategic markets
Obtain scale economies
Create global associations
Conflicting pressures
Replicate parent company or tailor organisation to local customs
International
No local adaptation; Support of parent company
Global
Achieve economies of scale
Multinational
Focus on national differences
Transnational
Network integration and customisation to local needs
Matrix: Market attractiveness and competitive strength
Expansion Strategy
Sequential entries
Waterfall model (entering one foreign market after the other)
Simultaneous entries
Sprinkler model: Entering numerous foreign markets (nearly) simultaneously
Internationalisation dependent on 'psychic distance' between home and host country
Language
Education
Business practice
Culture
Exit decision
Reasons to exit/divest
Sustained losses
Difficulties to crack market
Volatility
Premature entry
Ethical reasons
Intense competition
Resource allocation
Barriers to exit
Fixed costs of exit
Damage to corporate image
Disposition of assets
Singal to other markets
Long-term opportunities
Diffusion of innovation
Innovators
Early adopters
Early majority
Late majority
Laggards
Rate of Adoption: Product characteristics
Compatibility
Observability
Trialability
Complexity
Differential advantage
Product Replacement
Butt-on product replacement
Low/High Season Switch
Roll-in, Roll-out
Downgrading
Splitting Channels
Product Replacement
Sell-off
Specials
Teasing/leaking
Fudging
Takeaways
Global: Not just selling across markets but also leveraging ideas and capabilities
Product strategy requires 'fit' with organisational context
Diffusion and expansion strategies
Leverage ideas and capabilities from other markets
Fit between product (SK-II) and organisational context (P&G)
Compression of R&D and PLC cycles due to globalisation, competition, automation and disruption