Service Strategy

Service firms to a large extent have done their strategic decision in an ad hoc manner based on
emerging tendencies and spontaneous opportunities. They often neglect their strategic thinking.
Questions as which competitive domain the firm was operating, which client they served and did
not serve, which core service they offered and did not offer and how the firm could expect.
Elements of Global service strategy:

1. Defining Global vs. Multi local strategies:

Modern technological and communication advances have made it easier than ever for businesses
to market their products and services internationally. Before new market entry, a company should
conduct a thorough cross-cultural analysis to compare key similarities and differences between
country markets. The results of the cross-cultural analysis and the type of product offered will
determine the appropriate international strategy -- global or multi-domestic.

Global Marketing Strategy

A global marketing strategy assumes all consumers in all countries or geographic regions are the
same. This strategy is best suited for standardized products such as copy machines and Coca-
Cola, where there is little to no need for product differentiation. Coca-Cola, for instance, can be
found all over the world, and is easily identified as such. Global marketing has distinct
advantages, allowing for centralized management and coordination of critical business functions,
such as human resources, finance and product development.

Multi-Domestic Marketing Strategy

A multi-domestic marketing strategy assumes consumers in different countries or geographic

regions differ drastically from one another. Products are tailored for each market, based on
consumer wants and needs. A multi-domestic marketing strategy is ideal for highly differentiated
products, such as laundry detergent and candy, or any other product dictated by local preferences.
Decision-making control is decentralized because management must be able to respond on a
local level.

Ex: McDonalds,

Transnational strategy

An international business structure where a company's global business activities are

coordinated via cooperation and interdependence between its
head office, operational divisions and internationally located subsidiaries or retail outlets. A
transnational strategy offers the centralization benefits provided by a global strategy along with
the local responsiveness characteristic of domestic strategies. Companies with transnational
strategies operate their businesses in multiple locations globally. These companies often have
offices in the countries where they do business that coordinate with a central office in order to
operate more efficiently.

Ex: Nokia, Ford India, Nike India, HUL

2. Global market participation Strategy:

The management selects countries in which to market its services not just on the basis of
standalone attractiveness; it also considers the potential of each market to contribute to
broader globalization benefits. There are different choices of how to enter each
international market

– exporting, licensing, strategic alliances, and foreign direct investment

3. Delivering global products: The firm offers a standardized core product or service that
requires a minimum of local adaptation.

4. Global location: The value chain is broken up across different countries; with management
adopting a strategy of creating supplementary services in one country or limited numbers of
countries for worldwide delivery, rather than duplicating each activity in many different
countries. Looking at another way, we would say that in a given location, the flower of service is
pieced together with individual petals imported electronically from around the world.
Technology allows information based petals to be delivered in real time to the service site from
anywhere with good telecommunication links.

5. Global marketing: management employs a consistent marketing approach around the world,
although not all elements of the marketing mix need to be identical. Typically, corporate designs
identical and advertising themes and execution are recognizably similar. Market positioning;
however, may vary somewhat in the light of local competitive offering.

6. Global competitive moves: These are integrated across countries. The same type of move is
made in different countries at the same time or in some systematic sequence. In highly
competitive industries, a competitor may be targeted in one country in order to drain the
resources that it was planning to apply in another country or vigorous marketing campaign.
Foreign Market entry Decision:

One of the most crucial steps a firm or organization ever takes is the decision to introduce a
product a service to a foreign market. Having made the decision to venture into world market,
the next crucial step is determining the foreign market entry strategy.
Market entry method level of Co-operation:
1. wholly owned strategy:

A company whose common stock is 100% owned by another company, called the parent
company. A company can become a wholly owned subsidiary through acquisition by the parent
company or spin off from the parent company. In contrast, a regular subsidiary is 51 to 99%
owned by the parent company. One situation in which a parent company might find it helpful to
establish a subsidiary company is if it wants to operate in a foreign market. This arrangement is
common among high-tech companies who want to retain complete control and ownership of
their technology.

Wholly owned subsidiaries allow the parent company to retain the greatest amount of control,
but also leave the parent with all the costs and risks of full ownership. When a lesser number of
costs and risks are desirable, or when it is not possible to obtain complete or majority control, the
parent company might introduce an affiliate, associate or associate company in which it would
own a minority stake.

Exporting:

 Construction, design, and engineering

 Banking and financial services

 Insurance services

 Legal and accounting services

 Computer and data services

 Teaching services

Piggy-back: A low cost market entry strategy in which two or more firms represent one
another’s complementary (but non-competing) products in their respective markets.”
Ex. A restaurant partners with a hotel to offer a special weekend package with dinner and
an overnight stay and they share the cost of a mailer.

Licensing: This term refers to a written agreement entered into by the contractual owner of a
property or activity giving permission to another to use that property or engage in an activity in
relation to that property. The property involved in a licensing agreement can be real, personal or
intellectual. Almost always, there will be some consideration exchanged between the licensor
and the licensee.

Licensing agreements can be an intangible but valuable asset in industries such as technology,
biotechnology and publishing. These agreements are a large part of intellectual property law,
particularly in terms of enforcement of copyrights, trademarks and patents.

Joint venture: A business arrangement in which two or more parties agree to pool their
resources for the purpose of accomplishing a specific task. This task can be a new project or any
other business activity. In a joint venture (JV), each of the participants is responsible for profits,
losses and costs associated with it. However, the venture is its own entity, separate and apart
from the participants' other business interests.

Although JVs represent a great way to pool capital and expertise and reduce the exposure of risk
to all involved, they do present some unique challenges as well. For instance, if party A comes up
with an idea that allows the JV to flourish, what cut of the profits does party A get? Does the
party simply receive a cut based on the original investment pool or is there recognition of the
party's contribution above and beyond the initial stake? For this and other reasons, it is estimated
that nearly half of all JVs last less than four years and end in animosity.

Unitech & telenor = Uninor

Strategic Alliance: An arrangement between two companies that have decided to share
resources to undertake a specific, mutually beneficial project. A strategic alliance is less involved
and less permanent than a joint venture, in which two companies typically pool resources to
create a separate business entity. In a strategic alliance, each company maintains its autonomy
while gaining a new opportunity. A strategic alliance could help a company develop a more
effective process, expand into a new market or develop an advantage over a competitor, among
other possibilities. For example, an oil and natural gas company might form a strategic alliance
with a research laboratory to develop more commercially viable recovery processes. A clothing
retailer might form a strategic alliance with a single clothing manufacturer to ensure consistent
quality and sizing. A major website could form a strategic alliance with an analytics company to
improve its marketing efforts.

Hero Honda
Turnkey services: A type of system that can be easily implemented into current business
processes. A turnkey solution is immediately ready to use upon implementation and is designed
to fulfill a certain process such as billing, website design, training or content management.

For example, a company looking to implement an online billing feature on its website can use
third-party providers to process each transaction and handle all the technical issues surrounding
this complicated process. The use of a turnkey solution in this case allows the company to avoid
the headaches of programming the tool in house and the approvals associated with developing a
billing system from scratch.

Mergers and Acquisitions - M&A'

A general term used to refer to the consolidation of companies. A merger is a combination of two
companies to form a new company, while an acquisition is the purchase of one company by
another in which no new company is formed. An example of a major merger is the merging of
JDS Fitel Inc. and Uniphase Corp. in 1999 to form JDS Uniphase. An example of a major
acquisition is Manulife Financial Corporation's 2004 acquisition of John Hancock Financial
Services Inc.
The term M&A also refers to the department at financial institutions that deals with mergers and
acquisitions.

 A merger can happen when two companies decide to combine into one entity or when
one company buys another. An acquisition always involves the purchase of one company
by another.

 The functions of synergy allow for the enhanced cost efficiency of a new entity made
from two smaller ones - synergy is the logic behind mergers and acquisitions.

 Acquiring companies use various methods to value their targets. Some of these methods
are based on comparative ratios - such as the P/E and P/S ratios - replacement
cost or discounted cash flow analysis.

 An M&A deal can be executed by means of a cash transaction, stock-for-

stock transaction or a combination of both. A transaction struck with stock is not taxable.

 Break up or de-merger strategies can provide companies with opportunities to raise

additional equity funds unlock hidden shareholder value and sharpen management focus.
De-mergers can occur by means of divestitures, carve-outs spinoffs or tracking stocks.

 Mergers can fail for many reasons including a lack of management foresight, the inability
to overcome practical challenges and loss of revenue momentum from a neglect of day-
to-day operations.
Organizing for Global Marketing and Global Customers

Implementing the global strategies of companies creates several important organizational issues.
A key issue is the degree to which products and marketing strategies and programs are
standardized across domestic and international markets, as compared to being adapted to local
market requirements. Of critical importance is the development of global customers—for
example, in retailing and in the IT and automotive sectors.

Consider the challenges faced at P&G in organizing for its rapid international expansion in both
developed and emerging markets, described in the GLOBAL APPLICATION.

Global Application

Global Organization at P&G

Many strategic alliances involve global relationships. Expanded use of various types of alliances
is expected to continue, particularly as a way of competing internationally. The effectiveness of
the alliance depends on how well operating relationships are established and managed on an on-
going basis, and how well the partners can work together. These principles are highly relevant to
the organizational change involved in globalizing.

It is clear that international experience and proven capabilities will increasingly be required for
executive advancement in the 21st century.51 The global marketing strategy context underlines the
importance for the market-driven company of nurturing and retaining superior management
talent. International experience promises to become increasingly important to marketing
executives’ career development.

Organizing for global marketing strategies is examined followed by a discussion of the

importance of appropriate organizational designs for managing relationships with global
customers. Much of the earlier material in the chapter applies to international operations. This
discussion highlights several additional considerations.

Organizing for Global Marketing Strategies

The important distinction in marketing throughout the world is that buyers differ in their needs,
preferences, and priorities. Since such differences exist within a national market, the variations
between countries are likely to be greater. Brands like Budweiser beer and Levi’s jeans have
significantly different market positions in international markets compared to those they occupy
in the United States. Global market targeting and positioning strategies create several marketing
organizational issues.

Business Functions
Global decisions concerning production, finance, and research and development are often more
feasible than making the marketing decisions that span these markets. Marketing strategies often
require sensitivity to cultural and linguistic differences. Foreign currencies, government
regulations, and different product standards further complicate buyer-seller relationships. The
important issue is recognizing when standardized marketing strategies can be used and when
they must be modified.

Organizational Issues

The marketing organization selected for competing in national markets is influenced by the
marketscope (e.g., single-country, multinational, or global strategy), and by the market entry
strategy (export, licensing, joint venture, strategic alliance, or complete ownership). The
adoption of a global strategy using joint ventures, alliances, or complete ownership presents the
most complex organizational challenge.

The marketing organization design in international operations may take one of three possible
forms: (1) a global product division; (2) geographical divisions, each with product and functional
responsibilities; or (3) a matrix design incorporating (1) or (2) in combination with centralized
functional support or instead a combination of area operations and global product
management.52The global form corresponds to rapid growth situations for firms that have a broad
product portfolio. The geographic form is used to obtain a close relationship with national and
local governments. The matrix form is utilized by companies reorganizing for global
competition. An example of a combination organization design is shown in

Coordination and Communication

Organizing marketing activities to serve international markets creates important coordination and
communication requirements. Language and distance barriers complicate organizational
relationships. For many companies, growing emphasis on effective global teamwork is replacing
traditional concepts of domestic versus international divisions. Many of the constraints to
organizing globally have lessened, even for companies with a limited international involvement.
Enabling technology provided by the Internet and collaboration software facilitates the operation
and management of global teams.

For example, to reflect the growing internationalization of its business, in 2007 PepsiCo
restructured its business to break down the divisions between its North American and Latin
American businesses. The new PepsiCo Americas Beverages and Americas Food divisions aim
to link developed and developing markets to share brands and best practices. PepsiCo becomes
one of the first major U.S. consumer products companies to link up its operations in the United
States/Canada with those in Latin America, although it is expected this type of realignment will
become more common.
Organizing for Global Customers

A major challenge for many companies is the growing importance of global customers, who
expect to buy on a global basis and to receive favorable treatment across all their worldwide
locations. This challenge is illustrated by the growth of global retailing businesses and the
development of global account management organizations.

The Growth of Global Retailers

In the consumer goods sector, the growth of global retailers has been substantial. In consumer
packaged goods, Ahold (Netherlands), Carrefour (France), and METRO (Germany) each operate
in more than 25 countries. Aldi (Germany), Auchan (France), Rewe (Switzerland), Tesco (United
Kingdom), and Wal-Mart each operate in 10 or more countries. Similar globalization trends are
apparent in industries as diverse as apparel, chemicals, entertainment, financial services, and
personal computers. Powerful global customers expect coverage, speed, consistent and high-
quality service, and extraordinary attention from their suppliers that reflect their buying power.
These expectations require suppliers to provide a single point of contact, uniform terms of trade,
and worldwide standardization of products and services.54

Global customers demand more uniform and transparent global prices from suppliers. In 2000,
British supermarket Tesco acquired a small supermarket chain in Poland called Hit. Hit was
obtaining better prices from its suppliers than was Tesco. The lack of a logical worldwide pricing
structure allows global customers like Tesco to demand retrospective discounts when they
discover anomalies.

Global Account Management Structures

We considered earlier the challenges of managing strategic customer relationships and channel
strategy However, the growth in importance of global customers has led many suppliers to
develop specialized organizational units and processes to manage their relationship. Global
account management is “an organizational form and process in multinational companies by
which the worldwide activities serving one or more multinational customers are coordinated
centrally by one person or team within the supplier company”

In some companies, global account managers have been developed in parallel to strategic
account management functions Procter & Gamble, for example, has established global customer
development teams to present a single face to the global customer. P&G’s global customer teams
operate in parallel with the company’s business units and country organizations, in a form of
matrix. The customer teams have specialists in IT, retail merchandizing, finance, sales, supply
chain, marketing, and marketing research. The teams manage relationships with global retailers
and develop joint plans with them, as well as working with business units and country managers
to deliver against strategic goals for the customer in each product category and geographic
location.
Global account management teams are multi-functional and can only operate effectively by
addressing cross-functional coordination and communication around the strategy development
for the global customers. Global account managers frequently report to very senior levels of the
organization. Effective organizational responses to the global customer and becoming extremely
important in a wide range of companies.

Recent Trends of international marketing of services

• Off-shoring Service

• Social Changes (e.g., affluence, lack of time, desire for experiences)

• Manufacturers offer service

• Advances in IT (e.g., speed, digitization, wireless, Internet)

• Growth of chains and franchising

• Pressures to improve productivity and quality

• More strategic alliances

• Innovative hiring practices

Off shoring - What is off shoring?

Off shoring is a type of outsourcing. Offshoring simply means having the outsourced business
functions done in another country. Frequently, work is off shored in order to reduce labor
expenses. Other times, the reasons for off shoring are strategic -- to enter new markets, to tap
talent currently unavailable domestically or to overcome regulations that prevent specific
activities domestically.

India has emerged as the dominant player in off shoring, particularly in software work. Three
factors came into play to make this possible. First, in the 1970s the Indian government put in
place regulations that mandated that all foreign ventures have Indian majority ownership.
Fearing government takeover, many large U.S. corporations, such as IBM, departed, leaving
India in the position of fending for itself to maintain its technical infrastructures. This quickly
forced the creation of schools to train students in technology.

Next came the global ubiquity of the Internet and massive telecommunications capacity, which
enabled companies to get computer-based work done seemingly anywhere, including India.

Third, as the year 2000 approached, organizations hired service providers to update their legacy
program code. Much of this work was handled in India, where English was commonly spoken,
where there was a large and highly trained population of software engineers, and where labor
costs were much lower than in developed countries. Y2K work proved the merits of an offshore
labor force, and companies have continued tapping the talents and skills (and cost savings) made
available by Indian offshore service providers. Major companies working as off shoring service
providers in India include Tata Consultancy Services (TCS), Infosys and Wipro.

Russia, Ireland, Czechoslovakia and Poland have also surfaced as popular off shoring
destinations for specific types of software expertise.

The Philippines, which has a highly literate and educated population, as well as language and
cultural affinities with the United States, has become a popular off shoring region for call center
and customer support work.

Social Changes: Social changes as income level of people is increasing day by day, lack of time,
increase in innovators etc. are influencing organizations. Demand is increased rapidly for
different services. That is why companies are looking for more options for potential customers &
that is pushing companies to start their operations internationally or globally.

Manufacturers offer services: „Servitization‟, a trend among manufacturing firms to extend

the scope of their product offerings into services, has captured a majority of industrial firms in
developed economies. While proponents argue that servitization brings strategic and economic
benefits to customers and providers alike, recent findings indicate that servitizing firms can
encounter hurdles that may lead to an overall performance decline, the so-called „service
paradox. The integrated nature of the service business model allows the firm to transcend
substitution effects, resulting in reciprocal growth dynamics at the level of revenues. Additional,
positive effects on (future) product sales stem from increasing levels of customer intimacy. In
terms of profitability, findings reveal a positive effect of servitization while simultaneously
signaling a moderating impact of the investment required to scale up service activities. These
findings not only suggest the importance of carefully considering business models in terms of
complementarities, substitution effects and their net impact but they also suggest pathways to
sustainable growth for servitizing manufacturing firms.

Advancement in IT: Advancement in IT has increased the reachability of organizations. Now

companies can target customers of different countries very easily. Advancement in IT is
beneficiary for both customer and service provider both. Through advancement in IT, companies
are facing heavy competition & on the other hand customers are getting more variety and
options. So it has increase the demand globally & organizations are trying to grasp this
opportunity as much as they can.
Growth of chains and franchising: Demand is increasing for different services from various
countries, so organizations are seeing it as an opportunity & trying to utilize this opportunity as
much as they can. Big food chains, retail giants and other goods and service providers are
increasing the number of franchise in different countries to full fill the requirements of different
customers.

Pressures to improve productivity and quality: As mentioned earlier that, increase in demand
of different services grabbing the attention of major service providers. This surely is increasing
the competition among the major players. To sustain in heavy competition companies need to
provide quality and cost effective services. Companies must be up to the mark in terms of
efficient productivity and excellent quality to sustain in the market.

Innovative Hiring Practices:

Company structure is changing more than ever, so it should come as no surprise that innovative
hiring practices are replacing less efficient, old-fashioned approaches.
Zappos.com, a massively successful online shoe retailer, has achieved great commercial success
and garnered a lot of attention for their standout hiring process. The company's approach focuses
on sussing out an applicant's true enthusiasm and commitment to the job, which is evaluated by
offering potential hires a generous cash incentive to reject an offer of employment. This is the
company's way of assessing an applicant's true intentions, and seeks to weed out those who aren't
truly interested or committed to the brand. Though a seemingly expensive approach to hiring, the
tactic seems to save money for the brand in the long run, as the training process for those who
are hired is quite elaborate.

Principal Driving Force in Global Marketing of Services

Several factor driven and influence the globalization of firms:

Types of globalization drivers:
1. Market drivers:

Market globalization drivers-common customer needs, global customers, global channels,

transferable marketing, and lead countries-depend on the nature of customer behavior and the
structure of channels of distribution. These drivers affect the use of all five global strategy
levers. Common customer needs represent the extent to which customers in different countries
have the same needs in the product or service category (or the group of products and services)
that defines an industry. Many factors affect whether customer needs are similar in different
countries. These factors include whether differences in economic development, climate, physical
environment, and culture affect needs in the particular product or service category as well as
whether the countries are at the same stage of the product life cycle.i Common customer needs
particularly affect the opportunity to use the global strategy levers of global market participation,
global products and services, and global competitive moves. Common needs make it easier to
participate in major markets because a few product varieties can serve many markets. Thus few
different product offerings need to be developed and supported. Japanese automotive companies
have been particularly successful at exploiting common needs when they first entered world
automotive markets. Toyota, Nissan, and Honda chose to focus on fundamental needs common
to all countries-such as reliability and economy-rather than to focus on peripheral differences-
such as styling. The underlying commonality of needs meant that their highly standardized
global products were quite acceptable in most countries. Common needs also allow the
sequenced invasion of markets with highly standardized products-again, a successful approach of
many Japanese companies in different industries.

Other factors:

• Common customer needs

• Global customers

• Convergence of lifestyles and tastes

• Organizations beginning to behave as global consumers

• Growth of global and regional channels

• Establishment of world brands

2. Competition Drivers: Competitive globalization drivers- high exports and imports,

competitors from different continents, interdependence of countries and globalized competitors
raise the globalization potential of their industry and spur the need for a response on the global
strategy lever.

The most basic competitive driver is the level of exports and imports of both final and
intermediate products and services. The more trade there is between countries the more do
competitors come from different continents or countries. Because their differing backgrounds
spur different objectives and approaches, global competition among rivals from different
continents tends to be more severe.

Competitors are globalized to the extent that they use the global strategy levers of global market
participation, global products and services, global location of activities, global marketing, and
global competitive moves. When a business competitors use global strategy to exploit industry
globalization potential, the business needs to match or preempt these competitors. These moves
include expansion into or within major markets, being the first to introduce a standardized
product or the first to use a uniform marketing program. Competitors pursuing a global strategy
place pressure on the industry as a whole to globalize. For example, competitors that push
globally standardized products or use globally uniform marketing will influence customers to
find global products and marketing more acceptable.

The need to preempt a global competitor can be the spur to increased market participation. In
1986 Unilever, the Anglo-Dutch consumer products company, sought to increase its participation
in the American market by launching a hostile takeover bid for Richardson-Vicks, a U.S.-based
multinational manufacturer of toiletry and health care products. Unilever’s global archival,
Procter & Gamble, saw the threat to its home turf and outbid Unilever to capture Richardson-
Vicks. With Richardson-Vicks European system P&G was able to greatly strengthen its
participation in Unilever’s base markets in Europe. So Unilever’s attempt to expand
participation in a rival’s home market backfired to allow the rival to expand participation in
Unilever’s home markets.

Other Factors:

• High two-way trade / cross-border FDI

• Global competitors

• Increased ownership of corporations by foreign acquirers

3. Technology Drivers:

Faster and cheaper technology in the digital global economy of the Internet era has broken the
national barrier of time and space, thus, integration of national markets have been facilitated with
ease.

4. Cost Drivers:

Cost Globalization drivers-global scale economies, steep experience effects, sourcing

efficiencies, favorable logistics, differences in country costs, high product development costs,
and fast-changing technology-depend on the economics of the business. These drivers
particularly affect the use of the global activity location lever, as well as the global market
participation and global product lever. Global scale economies reduce the threat of the entry,
particularly from potential entrants that are national companies. Where global scale economies
apply, it will not be possible for an entrant to achieve competitive economic scale by entering a
single national market. A non multinational will find it very difficult to get started in such an
industry. In the disposable syringe industry, the minimum economic size in production has been
estimated to be 60% of the combined market in the United States and Japan. As a result, national
competitors play little role in this industry that is dominated by multinational companies like
Becton Dickinson (U.S.) and Terumo (Japan). Conversely, where economies are not at a global
scale, an entrant can start in a smaller country-market and gradually build the experience that
will allow it to export to larger markets. That is why the U.S. market has become so vulnerable
to imported personal computers and other products that can be effectively manufactured in low
volumes.

Differences in country costs can provide a strong spur to globalization. Factor costs generally
vary across countries, and more so for particular industries. The availability of the particular
skills also varies. Concentration of activities in low-cost or high-skill countries can increase
productivity and reduce costs. But managers need to anticipate the danger of training future
offshore competitors

Other Factors

• Continuing push for economies of scale

• Accelerating technological innovation

• Advances in transportation

• Emergence of newly industrialized countries with productive capability and low labor
costs

• Increasing cost of product development relative to market life

5. Government Drivers:

Government globalization drivers favorable trade policies, compatible technical standards,

common marketing regulations, government-owned competitors and customers, and host
government concerns depend on the rules set by national governments, and affect use of all
global strategy levers.

Host governments affect globalization potential in a number of major ways: import tariffs and
quotas, non-tariff barriers, export subsidies, local content requirements, currency and capital flow
restrictions, ownership restrictions, and requirement on technology transfer. Government’s
exercise of these trade barriers makes it difficult for companies to use the global levers of global
market participation, global products and services, global activity location and global marketing
and affects the need to use the lever of global competitive moves.
Favorable trade policies, by definition, increase the threat of foreign entry. Japan’s agreement to
eliminate the quota on American beef enabled many U.S. producers to enter the coveted Japanese
market. U.S. trade representatives convinced Japan to replace the quota, which was equivalent to
a tariff of almost 400%, with a tariff of 70% in 1989 and a tariff of 50% three years later.
American beef may become as successful in Japan as American credit cards, which benefitted
from a similar removal of restriction in the late 1970s.

Other Government Factors:

 Reduction of tariff barriers

 Reduction of non-tariff barriers
 Decline in role of governments as producers and consumers
 Privatization in previously state-dominated economies
 Shift to open market economies from closed communist systems in Eastern Europe

Assessing Industry Globalization Potential

Customer
Drivers
• Common customer needs
• Global customers
• Location of strategic resources • Global channels
• Differences in country costs • Transferable marketing know-how
• Potential for economies of and global brands
scale, innovation, flexibility
• Cost of shipping (value/bulk)

Cost Industry Government

globalization
Drivers Drivers
potential
• Trade policies
• Technical standards
• Regulations
• Global competitors
• Competitors leveraging
global position (i.e. cross
subsidizing).
Competitive
Drivers
Professor Jeff Dyer
i