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Chapter11TheAsiaPacificRegion©McGraw-HillEducation.Allrightsreserved.Authorizedonlyforinstructoruseintheclassroom.

NoreproductionorfurtherdistributionpermittedwithoutthepriorwrittenconsentofMcGraw-HillEducation.LearningObjectives11-1 Thedynamicgrowthintheregion11-2 TheimportanceandslowgrowthofJapan11-3 Theimportanceofthebottom-of-the-pyramidmarkets11-4 Thediversityacrosstheregion11-5 Theinterrelationshipsamongcountriesintheregion11-6 ThediversitywithinChinaDynamicGrowthintheAsiaPacificRegion1of141996financialcrisisinleadingAsianeconomiesTightmonetarypolicy,appreciatingdollar,decelerationofexportsallcontributedtodownturnDespitecrash,AsiafastestgrowingregioninworldGrowthfastestforlastthreedecadesProspectsforcontinuedgrowthareexcellentSourceofnewproducts,technology,vastconsumermarketsDynamicGrowthintheAsiaPacificRegion2of14TheGreaterChinaReferstotwoseparatepoliticalunitsthatdividedin1949People’sRepublicofChina(PRC)TaiwanorRepublicofChina(ROC)BothclaimedtheotherasitsterritoryPoliticallydifficultandmilitarilydangerousdisputepersistsMoredirecttradebetweentwoin21stcenturyHelpseasethehistoricaltensionofEastAsiaDynamicGrowthintheAsiaPacificRegion3of14ThePeople’sRepublicofChina(PRC)MostimportantnationalmarketasidefromU.S.DramaticeconomicandsocialchangesinChinaEventsin2000hadprofoundeffectonChina’seconomyAdmissiontotheWorldTradeOrganizationU.S.grantingpermanentnormaltraderelationstoChina(PNTR)Bestthoughtofasgroupofregions,notsinglecountryChina’sdiversity,size,andpoliticalorganizationmakesthisnecessaryDynamicGrowthintheAsiaPacificRegion4of14ThePeople’sRepublicofChina(PRC)continuedChinafastemergingascompetitoringlobalmarketsMustovercomeissuestoreachfullpotentialHumanrightsandlegalsystemmajorissuesinChinaEnvironmentaldeclineassociatedwithfastgrowthDemographicdisasterassociatedwithone-childpolicyDiscriminationagainstthosemovingfromruraltourbanareasForeignDominanceofAutoIndustryinChinaChinahasbeenpressingbureaucratstobuylocallybrandedcars.ThemarketshareofChinesebrandshasplummetedthiscenturyfrommorethan65percentin2000tojust45percent.Europeanbrandsgarnerabout20percentofthemarket,Japanese15percent,American11percent,andKorean8percent.Volkswagen(includingitsAudiluxurysedans,picturedhereparkedoutsidetheNationalPeoplesCongress)dominatestheotherforeigncarmakers,followedbyHyundaiandToyota.AlmostalltheforeigncompaniesaredeeplyinvolvedinjointventureswithChinesepartners.©StephenShaver/UPI/NewscomDynamicGrowthintheAsiaPacificRegion5of14HongKongRuledbyBritishfor155years;revertedtoChinain1997Becamespecialadministrativeregion(SAR)ofPRC“Onecountry,twosystems”HongKongeconomystrongFreelyconvertibledollar,foreignexchange,securitiesmarketsStockmarketprimarysourceofcapitalforsomeofChina’slargeststate-ownedenterprisesDynamicGrowthintheAsiaPacificRegion6of14Taiwan,theRepublicofChina(ROC)Mainland-TaiwaneseeconomicrelationsimprovingBothhaveenteredtheWorldTradeOrganizationManyrestrictionsended;directtradeimplementedThreedirectlinks:transportation,tradeandcommunicationsTradebenefitsbothcountriesRisingcostsinTaiwan;ChinaofferscheaplaborandengineeringTaiwan’stechpowerhousesalsoseekaccesstoChina’smarketDynamicGrowthintheAsiaPacificRegion7of14JapanFastgrowthin70sand80sEconomyslowedabruptlyinthe1990sFourpossibleexplanationsFaultyeconomicpoliciesIneptpoliticalapparatusDisadvantagesduetoglobalcircumstancesCulturalinhibitionsDynamicGrowthintheAsiaPacificRegion8of14JapancontinuedFaultyeconomicpoliciesStockmarketcrashin1990slastedwholedecadeSomethinknationbecameoverconfident,riskywithfinancesThepoliticalexplanation“One-partysickness”GovernmentcontrolledbybureaucracyDynamicGrowthintheAsiaPacificRegion9of14JapancontinuedGlobalcircumstanceshavehurtDeclineinconsumerpurchasingpower2011earthquakeandtsunamihadlong-lastingeconomicimpactsIncreaseddemandforoilimports,resultingfromdestructionofenergyinfrastructure,hascausedtrade-deficitPopulationisshrinkingComplexlanguageDynamicGrowthintheAsiaPacificRegion10of14JapancontinuedTheculturalexplanationUnifiedeffortafterWorldWarIIfornationalrecoveryAfterachieved,thenationnolongerhadacommongoalCulturalvalueofstructure;notadaptingtoglobalizedcompetitionDynamicGrowthintheAsiaPacificRegion11of14IndiaGainedindependencein1950;hadpooreconomicgrowthGrowthconstrainedbytraditionalinsularpoliciesImportsubstitutionsandanaversiontofreemarketsAnti-businessattitudesandwidespreadcorruptionNowIndiahasembarkedonprofoundtransformationManyeffortstobecomeactiveinglobaleconomyInformationtechnologyboomManyIndiancompaniesexpandingoperationsabroadDynamicGrowthintheAsiaPacificRegion12of14IndiacontinuedFive-pointagendaImprovingtheinvestmentclimateDevelopingacomprehensiveWTOstrategyReformingagriculture,foodprocessing,andsmall-scaleindustryEliminatingredtapeInstitutingbettercorporategovernanceDifficultbusinessenvironmentHightariffsInadequateprotectionofintellectualpropertyAnti-businessattitudesWidespreadcorruptionandbriberyProtectionismofIndianIndustryDespiteworld-classscientists,theIndianpharmaceuticalindustry(withitsownershiprestrictions,pricecontrols,andweakintellectualpropertyrestrictions)doesnotbenefitfrominnovationsandinternationalinvestmentscomparedwithmoreopenemergingeconomiessuchasChina.©rkl_foto/ShutterstockDynamicGrowthintheAsiaPacificRegion13of14TheFour“AsianTigers”HongKong,SouthKorea,Singapore,andTaiwanFastestgrowingeconomiesinregionduring1980sand1990sOftendescribedasthe“EastAsianmiracle”FirstcountriestomovefromdevelopingtoindustrializedstatusMajorinfluenceintradeandeconomiesofworldExpandingactivitytootherpartsofAsiainparticularDynamicGrowthintheAsiaPacificRegion14of14VietnamEconomyandinfrastructurewasinshamblesafterWarCountryispoisedforsignificantgrowthBilateraltradeagreementwithU.S.ledtoNTRstatusU.S.tariffsonVietnameseimportsdroppedsignificantlyPopulationof91millioniseducatedandhighlymotivatedGovernmentiscommittedtoeconomicgrowthDeliveryinVietnamVietnamhasveryfewcars;motorbikesdeliveralmosteverything,includingmooncakes,inHanoi.©HoangDinhNam/AFP/GettyImagesBottom-of-the-PyramidMarkets(BOPMs)

C.K.PrahaladintroducedconceptofBOPMs4billionpeoplewithannualincomebelow$1,200HistoricallyignoredconsumergroupPerceivedlackofresources(bothmoneyandtechnology)MisconceptionaboutinappropriatenessofproductsandservicestypicallydevelopedforaffluentconsumersMarketsnowviewedascommerciallyviableIndustriescanevolvewithexternalsupportundercertainconditionsInfrastructureinIndiaSeeingtheroughweaveoftrafficonthestreetsofoldDelhi,India,youlikelycanunderstandtheneedfortheelevatedexpressways.TheintroductionofTataMotor’snew$2,500car,theNano,willonlymakecongestionworse.Thecountryjustraisedthenationalspeedlimitfrom80kphto100kph,spurredbyaroadsrevolution,thecenterpieceofwhichisthe3,650-milegoldenQuadrilateralhighwaylinkingDelhi,Mumbai(Bombay),Chennai(Madras),andKolkata(Calcutta),themostexpensivepublicworksprojectinthenation’shistory.However,wewonder:Howwillthetrafficpolicekeeptheubiquitoussacredcowsoffexpresswayon-ramps?(left):©Thirteen/Shutterstock;(right):©AmitBhargava/BloombergNews/GettyImagesAsiaPacificTradeAssociations1of5PreparationfornexteconomicleapCountriesoncedependentonU.S.andEuropeanmarketsGrowthdrivenbytrade,investment,technology,andaidedbyothersinregionTradeagreementsASEANASEAN+3APECAsiaPacificTradeAssociations2of5AssociationofSoutheastAsianNations(ASEAN)HadproblemsunifyingeconomiesofmembernationsAllmembersoncehadsimilarproductsandresourcestoexportIntra-ASEANtradehampered;nodemandforcommonproductsMostearlygrowthcamefromtradeoutsideofASEANMembersnowhavefastestgrowingeconomiesinregionAsiaPacificTradeAssociations3of5AssociationofSoutheastAsianNations(ASEAN)continuedFourcausesofvigorouseconomicgrowthformembersGovernments’commitmenttoderegulation,liberalization,andprivatizationoftheireconomiesDecisiontoshifteconomiesfromcommoditybasedtomanufacturingbasedDecisiontospecializeinmanufacturingcomponentsinwhichtheyhaveacomparativeadvantage(whichcreatedmorediversityintheirindustrialoutputandincreasedopportunitiesfortrade)Japan’semergenceasamajorprovideroftechnologyandcapitalnecessarytoupgrademanufacturingcapabilityanddevelopnewindustriesAsiaPacificTradeAssociations4of5ASEAN+3CreatedafterAsianfinancialcrisisof1997to1998EastAsiafeltletdownwhentheWestdidnothelpduringcrisisWantedtobecomemoreself-sufficientASEANmembersplusChina,Japan,andSouthKoreaForeignandfinanceministersfromeachcountryMeetafterannualASEANmeetingGoaltoprotectAsiancurrencyfromfutureattackTalksofcreatingcommonmarketacrossallofAsiaAsiaPacificTradeAssociations5of5Asia-PacificEconomicCooperation(APEC)Formedin1989IncludesallmajoreconomiesaroundthePacificRimplustheU.S.andCanadaProvidesformalstructurefordiscussionofgoalsFreeandopentradeandincreasedeconomiccollaborationSustainregionalgrowthanddevelopmentStrengthenmultilateraltradingsystemReducebarrierstoinvestmentandtradewithoutdetrimenttoothereconomiesAFocusonDiversityWithinChina1of8Mutuallycompetitive,complementaryeconomic“warringstates”inChinaAmongthemarefouruniqueregionaleconomiesNortheastChina:industrialheartlandBeijing-TianjinITcorridorShanghaiandtheYangtzeRiverDeltaPearlRiverDeltaRegion-basedstrategicchoicesimpactsubsidiaryperformanceinChinaExhibit11.7AMapofGreaterChinaAFocusonDiversityWithinChina2of8NortheastChina:LongtimeIndustrialHeartlandIncludesLiaoning,Jilin,HeilongjiangIndustrialandtechnicalcenterofcountryin1970sand1980sNownotasdominant;greatindustrialgrowthinotherregionsCausedbyChineseshiftfromcommunismtowardmorefree-enterpriseorientationProximitytoindustrialneighborsaregionaladvantageGoodsandideasflowfromJapan,SouthKorea,andRussiaAFocusonDiversityWithinChina3of8Beijing-TianjinRegionof35millionpeopleHoststhousandsofITandhigh-techcompaniesHighqualityofhighereducationCentralplanninghasmadeitacenteroftwothingsPoliticsResearchanddevelopmentAFocusonDiversityWithinChina4of8ShanghaiandtheYangtzeRiverDeltaMajorindustrialrenaissanceoverpasttwodecadesDeclineintextileandheavymanufacturingindustriesIncreaseinautomobileandotherhigh-techindustriesShanghaiisaregionaltradeandfinancialcenterAidedbyChina’seconomicgrowthandaccessiontotheWTOYangtzeRiverDeltaprovidesbroadbaseofindustriesandeconomicresourcesAFocusonDiversityWithinChina5of8PearlRiverDeltaIncludesverylargecities,includingHongKongShenzhenleadstheeconomyofregionAboomtownborderingHongKongChina’sfirstSpecialEconomicZone,1980Populationgrewfrom300,000to7millionAmanufacturingbaseforawiderangeofindustriesAFocusonDiversityWithinChina6of8TheOtherBillionReceiveabout10percentofcentralgovernmentbudgetAmountstolessthan$100perpersonforroads,water,powersupplies,schools,andhospitalsEconomicdividecontinuestowidenUnrestincountrysideflaresupaseconomicdividewidensPoorinfrastructurecauseschallengesfordistributersCompaniesmustbecomeresourcefulAFocusonDiversityWithinChina7of8DifferencesinBusinessNegotiationStyleswithinTheGreaterChinaNortheasternnegotiatorsForthright,honest,andplainspokenBeijingareaBureaucraticsloth,imperialistperspective,lackofcreativityShanghaiareaShrewd,outgoing,bigtalkersandspenders,creativethinkersThePearlRiverDeltaEntrepreneurshipandspontaneity,honestandforthrightHongKongMostlybilingual,humilityandindirectionTaiwanConservative,autocraticdecision-makingstyleAFocusonDiversityWithinChina8of8MarketingOpportunitiesinTheGreaterChinaChinesemarketishugeandgrowingfastExtremedifferencesineconomicwell-being,cultures,andpoliticalstructuresacrosslandU.S.exportstoChinaIndustrialproductsandservicesmoredesired;doesnotrequireasmuchculturalnuanceConsumerproductsrequiremorein-depthstrategiesandculturalknowledgeChapter12GlobalMarketingManagement:PlanningandOrganization©McGraw-HillEducation.Allrightsreserved.Authorizedonlyforinstructoruseintheclassroom.

NoreproductionorfurtherdistributionpermittedwithoutthepriorwrittenconsentofMcGraw-HillEducation.LearningObjectives12-1 Howglobalmarketingmanagementdiffersfrominternationalmarketingmanagement12-2 Theneedforplanningtoachievecompanygoals12-3 Theimportantfactorsforeachalternativemarket-entrystrategy12-4 TheincreasingimportanceofinternationalstrategicalliancesGlobalMarketingManagement1of4Standardizationversusadaptation1970sGlobalizationversuslocalization1980sGlobalintegrationversuslocalresponsiveness1990sTrendtowardlocalizationSoftDrinkMarketinIndiaThecompetitionamongsoftdrinkbottlersinIndiaisfierce.HereCokeandPepsicombinetoruintheviewoftheTajMahal.NoticehowtheredofCokestandsoutamongitscompetitorsinthepicture.Ofcourse,nowCoca-ColahaspurchasedThumsUp,aprominentlocalbrand—thisisastrategythecompanyisapplyingaroundtheworld.ButtheredisasubstantialcompetitiveadvantagebothonstoreshelvesandinoutdooradvertisingofthesortcommoninIndiaandotherdevelopingcountries.We’renotsurewhoborrowedthe“monsoon/thunder”slogansfromwhom.©JohnGraham©JohnGraham©JohnGrahamAdaptationbyMattelItemsintheDisneyPrincesscollectionareondisplayattheLicensingInternationalshowatNewYork’sJavitsConventionCenter.Mattel’sstrategicresponsetoBratzandDisney’sethnicallydiverselineswastwofold.First,itsuedBratzownerMGAwithanintellectualpropertyrightsclaim.Thelawsuitlastednineyears,andafederalappealscourtawardedonlylegalfeestoMGA—nodamages.Inresponse,MGAplansmorelegalactionregardingBratz’slossofbrandequityduringtheyearsoflegalmachinations.Second,MattelboughttherightstoproducethePrincessdolls.TheDisneyPrincesseshavebeensellingwellduetoMattel’smarketingefforts.©RichardDrew/APImagesGlobalMarketingManagement2of4MarketSegmentationFindingmostefficientmethodimportantMoresothanstandardizationversusadaptationdebateSelectingsegmentationvariablesBestcompaniesavoidjustusingcountrybordersClimate,language,mediahabits,incomeallimportantvariablesInternetallowsformorespecificsegmentationGlobalMarketingManagement3of4TheNestléWay:EvolutionNotRevolutionInternationalcompanyalmostfromstartin1866GoalisdominateallofitsmarketsFourmainpointstosummarizeitsstrategyThinkandplanlongtermDecentralizeSticktowhatyouknowAdapttolocaltastesGlobalMarketingManagement4of4BenefitsofGlobalMarketingKnowledgehelpsscaleproductionandmarketingeffortsformultinationalbusinessesGlobaldiversityinmarketingtalentleadstonewapproachesacrossmarketsImprovedcoordinationandintegrationofmarketingallowsfortransferofknowledgeacrosscountriesGivesmarketersaccesstotoughestcustomersFinancialbenefitsfromdiversityofmarketsPlanningforGlobalMarkets1of9PlanningSystemizedwayofrelatingtothefutureManageimpactofexternal,uncontrollablefactorsEffectsonfirm’sstrengths,weaknesses,andobjectivesFormulationofgoalsandmethodstoachievethemCommitmentofresourcestocountrymarketAllowsforrapidgrowthofinternationalfunctionPlanningforGlobalMarkets2of9CorporateplanningLongterm,generalizedgoalsforenterpriseaswholeStrategicplanningConductedathighestlevelsofmanagementProducts,capital,research,long-andshort-termgoalsTacticalplanningConductedlocally;addressesmarketingandadvertisingActionsandallocationofresourcestoimplementstrategicplanninggoalsinspecificmarketsPlanningforGlobalMarkets3of9CompanyObjectivesandResourcesImportanttodefineobjectivesforglobalsuccessClarifiesorientationofdomesticandinternationaldivisionsPermitsconsistentpoliciesMightnotmatchforeignmarketopportunitiesChangetheobjectivesAlterthescaleofinternationalplansAbandonforeignmarketPlanningforGlobalMarkets4of9InternationalCommitmentRequiredforsuccessfulinternationaloperationsManagersmustdeterminewillingnesstocommitInvestfinancesandpersonnelformanagementDeterminationtostayinmarketlongenoughforprofitPlanningimpactsdegreeofcommitmentDegreeofcommitmentimpactsstrategiesanddecisionsPlanningforGlobalMarkets5of9ThePlanningProcessFirst-timeforeignmarketerDetermineproductstodevelopandinwhichmarketsIdentifylevelofresourcecommitmentAlreadycommittedcompaniesAllocateeffortandresourcesamongcountriesandproductsChoosenewmarketsegmentsandproductstodevelopandoldonestoabandonSystematicprocesswithfourphasesPlanningforGlobalMarkets6of9Phase1:PreliminaryAnalysisandScreeningEvaluatepotentialofforeignmarketsAnalyzeenvironmentinwhichcompanyplanstooperateCompanyandcountryneedsmustbematchedPlanningforGlobalMarkets7of9Phase2:DefiningTargetMarketsandAdaptingMarketingMixAccordinglyPotentialtargetmarketsidentifiedandanalyzedfurtherMarketingmixevaluatedineachtargetmarketAnalysisanswersquestionsaboutadaptationArethereidentifiablemarketsegmentsthatallowforcommonmarketingmixtacticsacrosscountries?Whichcultural/environmentaladaptationsarenecessaryforsuccessfulacceptanceofthemarketingmix?Willadaptationcostsallowprofitablemarketentry?PlanningforGlobalMarkets8of9Phase3:DevelopingtheMarketingPlanOccursoncetargetmarketoptionsarenarrowedMarketingplandevelopedforspecificmarketsBeginswithasituationalanalysisCulminatesinselectionofentrymodeandspecificactionprogramEstablisheswhatistobedone,bywhom,how,andwhenIncludesbudgetsandexpectationsforsalesandprofitsAfter,companymaydecidetonotentermarketPlanmayrevealthatobjectivesandgoalscan’tbemetPlanningforGlobalMarkets9of9Phase4:ImplementationandControlPlanningprocesscontinuesevenafterimplementationEvaluationandcontrolsystemRequiresperformance-objectiveactionUtilizingaplanningprocessandsystemEncouragesconsiderationofallvariablesthatimpactsuccessProvidesbasisforviewingallcountrymarketsandtheirinterrelationshipsasanintegratedandglobalunitAlternativeMarket-EntryStrategies1of5FourbroadmodesofforeignmarketentryExportingContractualagreementsStrategicalliancesDirectforeigninvestmentExhibit12.2AlternativeMarket-EntryStrategiesCompaniesmostoftenbeginwithmodestexportinvolvement.Assalesrevenuesgrow,thefirmsoftenproceedthroughthestepsshowntowarddirectforeigninvestment.Jumptolongdescription.AlternativeMarket-EntryStrategies2of5ExportingDirectexportingCompanysellstocustomerinanothercountryIndirectexportingCompanysellstoimporterordistributorinanothercountryTheInternetIIM:InternationalInternetMarketingDirectsalesMayinvolveestablishingofficeinforeigncountryParticularlyusedforhigh-techandbigticketindustrialproductsAlternativeMarket-EntryStrategies3of5ContractualAgreementsLong-termassociationbetweencompaniesNonequity;justameanstotransferknowledgeorskillsGenerallytechnology,processes,trademarks,skillsTwomaincategoriesLicensingFranchisingAlternativeMarket-EntryStrategies4of5ContractualAgreements:LicensingRightsgrantedtoforeigncompanyPatentrightsTrademarkrightsRightstousetechnologicalprocesses;aidsinproductionanddistributionofimportedproductsAmeanstoestablishfootholdinforeignmarketNolargecapitaloutlays;lowerriskFavoredbysmallandmedium-sizedcompaniesAlternativeMarket-EntryStrategies5of5ContractualAgreements:FranchisingSkillcentralizationandoperationaldecentralizationFranchiserprovidesstandardpackageofproducts,systems,managementservicesFranchiseeprovidesmarketknowledge,capital,andpersonalinvolvementinmanagementKeyfactorsthatinfluencesuccessMonitoringcosts(basedonphysicalandculturaldistances)Theprincipal’sinternationalexpenseThebrandequityinthenewmarketExamplesofFranchisesMaybetheycanhelpyoufindahomewithaviewoftheBlackSeahereattheCentury21officeinIstanbul,Turkey.Weknowthey’llbehappytosellyouapieceofchickenfromtheColonel’splaceinEilat,Israel,justacrosstheRedSeafromAqaba,Jordan.©JohnGraham©JohnGrahamStrategicInternationalAlliances1of5RelationshipestablishedbytwoormorecompaniesCooperateoutofmutualneed,shareriskinachievingsharedgoalFirmsenterSIAsforseveralreasonsOpportunitiesforrapidexpansionintonewmarketsAccesstonewtechnologyMoreefficientproductionandinnovationReducedmarketingcostsStrategiccompetitivemovesAccesstoadditionalsourcesofproductsandcapitalStrategicInternationalAlliances2of5InternationalJointVenturesTwoormorecompaniescreateaseparatelegalentityAcknowledgedintentbypartnerstoshareinmanagementBetweenlegallyincorporatedentities,notindividualsEquitypositionsheldbybothpartnersStrategicInternationalAlliances3of5ConsortiaDevelopedtopoolfinancialandmanagerialresourcesHelpstolessenrisksSimilartojointventuresexceptfortwothingsTypicallyinvolvealargenumberofparticipantsFrequentlyoperateinacountryormarketinwhichnoneoftheparticipantsiscurrentlyactiveStrategicInternationalAlliances4of5DirectForeignInvestmentReasonstoinvestinforeigncountryCapitalizeonlow-costlaborAvoidhighimporttaxesReducehighcostsoftransportationtomarketGainaccesstorawmaterialsandtechnologyGainmarketentryStrategicInternationalAlliances5of5DirectForeignInvestment:FactorsAffectingStructureandPerformanceTiming;firstmovershaveadvantagesbutaremoreriskyThegrowingcomplexityandcontingenciesofcontractsTransactioncoststructuresTechnologyandknowledgetransferDegreeofproductdifferentiationExperiencesandculturaldiversityofacquiredfirmsAdvertisingandreputationbarriersOrganizingforGlobalCompetition1of3StructureofGlobalOrganizationsDevisingstandardisdifficult;manyvariablesUsuallystructuredaroundoneofthreealternativesGlobalproductdivisionsGeographicaldivisionsAmatrixorganizationconsistingofeitherofthesearrangementswithcentralizedsalesandmarketingrunbyacentralizedfunctionalstaff,oracombinationofareaoperationsandglobalproductmanagementFigure12.4SchematicMarketingOrganizationPlanCombiningProduct,Geographic,andFunctionalApproachesAcompanymaybeorganizedbyproductlinesbuthavegeographicalsubdivisionsundertheproductcategories.Bothmaybesupplementedbyfunctionalstaffsupport.Thisfigureshowssuchacombination.Modificationsofthisbasicarrangementareusedbyamajorityoflargecompaniesdoingbusinessinternationally.Jumptolongdescription.OrganizingforGlobalCompetition2of3LocusofDecisionMajorelementsoforganizationalstrategyWheredecisionswillbemadeWhowillmakethedecisionWhichmethodwillbeusedtomakedecisionManagementpolicymustbeexplicitabouttheseelementsOrganizingforGlobalCompetition3of3CentralizedOrganizationsExpertsavailableatonelocationAbilitytoexercisehighdegreeofcontrolonbothplanningandimplementationphasesCentralizationofallrecordsandinformationDecentralizedOrganizationsDelegateresponsibilitiestoregionalmanagersDirectday-to-daycontactwiththemarketLackofbroadcompanyviewAppendixofImageLongDescriptionsAppendix1Exhibit12.2AlternativeMarket-EntryStrategiesThefourmodesofmarketentryarelistedfromleasttomostamountofcontrolinvolved.1.Exporting:includingtheInternet,exporter,importer,distributor,anddirectsales.2.Contractualagreements:includinglicensingandfranchising.3.Strategicalliances:includingjointventuresandconsortia.4.Directforeigninvestmentorownership.Returntooriginalslide.Appendix2Exhibit12.4SchematicMarketingOrganizationPlanCombiningProduct,Geographic,andFunctionalApproachesInthissampleorganization,thecompanypresidentoverseesthevicepresidentofmarketing.Thevicepresidentofmarketingoverseesadirectorofpassengercarmarketingandadirectoroftruckmarketing.Eachdirectorisresponsiblefordistributionmanagersinthreeseparatecontinents;Europe,Africa,andSouthAmericaforexample;andeachdistributionmanageroverseesadvertisingandsalesefforts.Ineachproductline(passengercarsandtrucks)aresearchdepartmenthelpswithadvertisingefforts.Returntooriginalslide.Chapter13ProductsandServicesforCustomers©McGraw-HillEducation.Allrightsreserved.Authorizedonlyforinstructoruseintheclassroom.

NoreproductionorfurtherdistributionpermittedwithoutthepriorwrittenconsentofMcGraw-HillEducation.LearningObjectives13-1 Theimportanceofofferingaproductsuitablefortheintendedmarket13-2 Theimportanceofqualityandhowqualityisdefined13-3 Physical,mandatory,andculturalrequirementsfor

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