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Introduce the chosen organisation and then analyse the scope and key concepts of international marketing.
Unit 40 Assignment guideline
Your report should include the following specific tasks and should be answered in the context of your organisation as much as possible: -
❖ Introduce the chosen organisation and then analyse the scope and key concepts of international marketing.
Chose an organisation and explain its profile briefly. Define International marketing
Scope of international marketing
Imports and exports: Bringing or sending goods and services across the border from and to other countries respectively.
Joint Ventures: Agreement between two entities to work together and increase their bottom lines (profits). A new entity may be formed.
Strategic Alliances: Two companies undertaking a project but maintaining own independence. Companies working together to achieve a specific objective(s).
Foreign Direct Investments: Investing in another country, i.e by starting a business in own name in another country.
Franchising: Two organisations, franchisor and franchisee working together. The franchisee uses franchisors name, logo, processes to run its business for a fee to the franchisor. • The franchisor does the marketing tasks.
Licensing: Legal agreement for use of trademark or technology. Limited in scoped compared with a franchising agreement.
❖ Discuss the rationale for an organisation to want to market internationally and describe the various routes to market it can adopt.
Market saturation at home: Many companies at home and therefore market is shrinking.
Changes to taste and fashion abroad: The market needs something new, and an opportunity is seen Profit: A company may move if there are prospects of higher profits than in the local market.
Growth: Company sees an opportunity to grow and serve newer clientele
Technological advancement Technological improvements i.e the power of the internet:
Websites like Amazon and Ebay, or company’s website. Introduce the chosen organisation and then analyse the scope and key concepts of international marketing.
Competition: Intense competition at ‘home’ may force a company to seek markets elsewhere.
Regulatory framework: Government may support companies to move to other market.
Chinese government has supported Chinese companies to sell outside China.
Improving brand and image – Spinoff effect: If by being seen to sell in other markets, the image and reputation of the company may improve.
Power of Monopoly: A monopoly is a market structure where one company controls the market.
Competitive Advantage: A company may move to other markets to be the first hence control the market as the first entrant.
Diversification: A company may venture into a new market using a new operation i.e moving into a totally new business line. For instance, a company in the transport sector may open a hotel in another country.
Follow customers : In situations where one or some of the customers have moved to other countries, there may be a reason to follow those customers in order to retain them.
❖ Evaluate the opportunities and challenges that marketing internationally presents to an organisation.
Image of the company is enhanced
Cushion from problems in local market
Different in employment laws: laws governing wages and employment may significantly differ. For instance, Health and Safety laws may be stringent in ‘Host’ country than they are in ‘Home’ country.
Corruption and Impunity: Some countries have high levels of impunity and corruption, these may delay entry and setting up duration.
Bureaucracy and Bottlenecks: In some countries, barriers may exist at official level, thus disrupting the plans for entry / or lead to abandonment of the plan altogether
Human rights issues: Human rights situation in the ‘Host’ country might be a major ethical dilemma.
Environmental concerns: In some countries, laws on pollution are disregarded for employment’s and job creation`s sake
❖ Evaluate the key criteria and selection process to use when considering which international market to enter.
When seeking to venture into a foreign market, the following steps can be considered (Cateora et al, 2020);
Step 1: Country identification This involves conducting a general overview of your potential new market
General aspects may include cultural similarity, for instance UK and USA share the same language, while Cuba and China have the same ideology – Communism
Step 2: Preliminary Screening Screening of the identified countries should be performed.
Ranking may be done on the basis of certain variables
For example currency stability or demands for entry (in some countries, a foreign company must part be owned by locals)
Step 3: Conducting In-depth screening The countries that have made it to this stage are considered feasible for market entry.
It is crucial to look at local conditions which includes marketing mix variables
Step 4: Final selection A final list of potential countries is made.
There should be a critical look at the competitors (local or foreign) in the country.
The company can consider the situation in the potential country in comparison with the country(ies) it operates in (if it already operates in other countries).
It is important to draw lessons from other countries (where applicable).
Lastly, conduct a final score and where possible, plan a visit can be made to the country(ies)
Step 5: Experience Visitation should be made to the country to have a feel of the culture and business environment.
❖ Explain, using examples, the different market entry strategies, including the advantages and disadvantages of each.
Shared costs reduce investment needed, reduced risk, seen as local entity
Higher cost than exporting, licensing, or franchising; integration problems between two corporate cultures
Sharing of risk and ability to combine the local in-depth knowledge with a foreign partner with know-how in technology or process
Joint financial strength
May be only means of entry and
Partners do not have full control of management
May be impossible to recover capital if need be
Disagreement on third party markets to serve and
Partners may have different views on expected benefits. Introduce the chosen organisation and then analyse the scope and key concepts of international marketing.
May be the source of supply for a third country.
Licencing and Franchising
Fast entry, low cost, low risk
Less control, licensee may become a competitor, legal and regulatory environment (IP and contract law) must be sound
Foreign Direct Investment
Gain local market knowledge; can be seen as insider who employs locals; maximum control
High cost, high risk due to unknowns, slow entry due to setup time
Import and Export
Fast entry, low risk
Low control, low local knowledge, potential negative environmental impact of transportation
Apply the market evaluation criteria, entry strategies and make recommendations for your organisation.
Make 3 suggestions for your company to consider
Choose one of the strategies given above i.e Franchising, Joint Venture, Licensing etc.