2 imm - nature & scope

8/2/2019 2 Imm - Nature & Scope

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INTERNATIONAL MARKETINGMANAGEMENT:

NATURE & SCOPE

ByElisante Ole Gabriel (Tanzania)

Chartered [email protected], www.olegabriel.com

+255-784-455-499
mailto:[email protected]://www.olegabriel.com/http://www.olegabriel.com/mailto:[email protected]


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[email protected],0784-455-499 2

KEY AREAS TO BE COVERED

Nature and Scope of International Business

International Business Environment

International Markets entry strategies

The Role of World Trade Organisation

Management Tools for International

Business International Payment systems & Risks


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NATURE & SCOPE OF IMM

Deriving from the word International it

suggests that IBM is about managingbusiness between nations.

These nations could be separated bygeographical or Political boundaries.

Think of Tanzania & Malawi Vs Tanzania &

Kenya at the scenario when we shall havethe EACM (East African Common Market)


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Globalization

This is a concept considering the whole world as one

huge homogeneous market. Globalisation is hinged

on a number of assumptions. It is however on two

major dimensions:

Globalization of production

Globalization of markets


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Competition

Consumer

MarketingChallengesin country Z

MarketingChallengesin country Y

MarketingChallengesin country X

Place

Promotion

Price

(Controllables)

Product

Legal

SocioCultural

Competition

Political

Economic

Infrastructure

Domestic EnvironmentalChallenges

(Uncontrollables)

Political

Overseas EnvironmentalChallenges (Uncontrollables)

Legal

LogisticsGeography

Economic

Domestic marketing and international marketing decisions


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Reasons for entering internationalmarkets

growth profitability

achieving economies of scale

Achieving economies of scope (re-usability) risk spread

access to imported inputs

uniqueness of product or services marketing opportunities due to life cycle

spreading R&D cost


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Key issues in export growth

Developing a proactive approach to international

trade

Promoting Foreign Direct Investments

Promoting Competitiveness

Simplification of procedures

Encouraging large-scale manufacturers

Reducing transaction costs

Infrastructure development


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Identifying opportunities in international

markets

Extreme focus product strategy

Products-country matrix strategy

Growth-share matrix of exports

Market focus strategies


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MODES OF ENTREINGINTERNATIONAL MARKETS

This is an institutional mechanism by which a firmmakes its products or services available for consumersin international markets.

Mode of entry is determined by:

- the ability and willingness of the firm to commit

resources

- the firms desire to have a level of control over

international operations

- the level of risk the firm is willing to take


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Modes of international market entry

Production in home country

Exports: production is carried out in home country andfinished goods are shipped to the overseas markets forsale

indirect exports: process of selling products to anexport intermediary in the companys home country whoin turn sells the products in the overseas markets

direct exports: process of selling the firms productsdirectly to an importer in the overseas market


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Modes (contd)

complementary exporting: use of distribution channels

of an overseas firm to make the product available in the

overseas market

provide offshore services: This is to support the overseas

clients with the help of information and communication

technology


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Production in a foreign country

contractual entry modes

international licensing: process by which a domestic

company allows a foreign company to use its intellectual

property and specific business skills for a compensation

(royalty)

international franchising: transfer of intellectual property

and other assistance over an extended period of time withgreater control compared to licensing

Modes (contd)


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overseas turnkey projects: conceptualize, design, install,construct, and carry out primary testing of manufacturingfacilities or engineering structures for an overseas clientorganisation

types : built and transfer (BT), built, operate, and transfer(BOT), built, operate, own (BOO)

international management contracts: a companyprovides its technical and managerial expertise for a

specific duration to an overseas firm

Modes (contd)


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international strategic alliance: the relationship between

two or more firms that cooperate with each other t o

achieve common strategic goals but do not form a

separate company

international contract manufacturing: a contractual

arrangement under which a firms manufacturing

operations are carried out in a foreign countries

Modes (contd)


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Investment entry modes

assembly in overseas markets: refers to exporting various

components of the product in completely knocked down(CKD) condition and assembles them overseas

international joint ventures: equity participation of two or

more firms resulting into formation of a new entity

Modes (contd)


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Factors for selecting partners forcooperation

The alliance partner should have some strength which

can be translated into business values for the alliance

The alliance partners should be committed to

cooperative goals

It is preferable that the alliance partner should have

multi-cultural business environment


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Wholly owned foreign subsidiariesTo have complete control and ownership ofinternational operations a firm opts for foreign

direct investment through:

1. acquiring a foreign company and all its resources in

a foreign market (acquisition)

2. the establishment of production and marketing

facilities by a firm on its own from scratch (green field)

Factors (contd)


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Factors affecting the selection of entrymode

External factorsMarket size

Market growth

Government regulations

Level of competition

Level of risk

political

economic operational

Production and shipping costs


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Internal factors

Companys objectives

availability of company resources

level of commitment

international experience

flexibility

Factors affecting the selection of entrymode (contd)


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Benefits of IMM

More opportunities

Avenue for learning new concepts andchallenges

Possibility of developing a global brand

A room to benefit from economies of scale &scope

Spread of risks AND Wider scope for innovation and creativity.

Finally

2 imm - nature & scope

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