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Reading 20- International marketing- The Global market place (Triggers…
Reading 20- International marketing- The Global market place
Transnational company
multinational firm that has power to coordinate and control operations in more than one country
A global firm
firm operating in more than one country- gains
R&D, production, marketing and financial adv in its costs and reputation, not available to domestic competitors.
sees the world as one market place
operating in a global market place
risks:
Possible economic and government instability
different legislation
trade barriers
diverse cultural practices and preferences
Triggers that prompt firms to expand across national boundaries
Saturated domestic markets
Limited opportunties in the domestic market
Small domestic markets
Larger markets essential for businesses to survive- eg IT firms
low-growth domestic markets
Economic recession
Customer drivers
serve global customers- airlines
Competitive forces
Compete against global firms intruding their domestic market
Cost factors
gain from lower labour costs
raw material
energy
Portfolio balance
The macro environment
Trading environment
socio- cultural considerations
understand a country's language, history, religion and social conventions
technological
Economic
income distribution
employment level
economic developments
exchange rates diff and stability
transport plus communication infrustrcture
Political and legal
vary in political stability
level of regulation
attract companies
Ethical
consider potential risk of ethical issues in less developed countries
Subcontracting- child labour, working conditions and pollution etc
Micro-environment
market attractiveness
market size and growth rate
Competition
strength
volatility
costs of serving the market
distribution and control, labour, marketing expense
profit potential
market excess
capabilities
skills
resources
product adaptation
competitive advantage
Jobber and Ellis-Chadwick (2013)