The porter’s diamond
This week I learned about crucial marketing concepts through global marketing as a concept and strategy that organizations use to expand internationally smoothly. With the increased use of emerging technologies, business organizations are finding it easy to go global since they can get customers through the use of platforms like Facebook, Twitter, and Instagram as marketing tools (Shoham, 2018). Additionally, global marketing can be done to achieve offensive or defensive goals. The offensive goals primarily help the organization maximize total sales and revenue, catalyze growth and profits, improving its market position, among others. On the other hand, defensive goals are primarily meant to help the organization deal with competition in the industry, gaining technological innovations in other countries, taking advantage of any differences in operational costs, strategies to deal with foreign companies in the market, among others.
The porter’s diamond is a tool used to explain some industries in a country are more competitive internationally than others (Peter & Donnelly, 2018). The framework comprises the following four key factors. First is factor conditions, which help in knowing a nation’s ability to turn their natural resources to a competitive advantage. The second factor is the demand conditions. Thirdly is related and supporting industries within the country that are internationally competitive. The last element entails the company strategy, structure, and rivalry.
There are various problems that organizations face while entering a foreign market. First is the issue of culture (Peter & Donnelly, 2018). Bearing in mind that different countries have people that embrace different cultures and ways of doing things, this can be problematic to an organization. Therefore the organization must be culturally sensitive and understand the culture of its new customers. The second problem is political instability that ends up affecting the business environment. Political instability can be caused by government factors, social unrest, or any other national issues. Additionally, import restrictions affect global companies if the country they operate from imposing restrictive quotas and tariffs. Other problems that companies face while entering new markets include exchange control, ownership restrictions, and unfavorable economic conditions.
Global marketing strategies have greatly catalyzed companies to become multinationals in the long run (Shoham, 2018). There are two types of multinational firms. First are multi-domestic companies that use different strategies in various foreign markets. Second, are global companies who take the world as one market. Additionally, different factors affect global strategy. These factors can be categorized into external or internal. External factors include market, economic, competitive, and environmental factors.
On the other hand, internal factors are culture, people, structure, and management processes. Among the key factors that organizations ought to consider when it comes to global marketing research include population characteristics, ability, and willingness of consumers to buy products. Other factors to be considered by multinational companies include Global product, distribution, pricing, and advertising strategies.
Lastly, global organizations can use various growth and entry strategies to implement global marketing (Peter & Donnelly, 2018). Companies ought to consider multiple factors before adopting a specific approach too. These factors include market opportunities, firm capabilities, degree of risk, and level of market commitment and involvement. These various strategies have merits and demerits, too, and an organization ought to consider them before adopting a specific method. Among the different strategies that organizations use when it comes to global marketing include Exporting, Licensing, franchising, and joint venture, strategic alliances, and direct ownership.
References
Peter, P., & Donnelly, J. (2018). A preface to marketing management (14th Ed.). New York: McGraw-Hill Education.
Shoham, A. (2018). Global Marketing, Standardization. Journal of Global Marketing, 9(1-2), 91-120. doi: 10.1300/j042v09n01_05