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Routes to Global Markets

Table: The International Competitive Posture Matrix. Source: Adapted from Gogel and Larreche

 

The four quadrants are described below:

Kings: Mostly large global corporations in a strong competitive position with an effective global strategy.

Barons: Companies with strong products and limited geographic coverage. Expansion to foreign markets is attractive to them.

Commoners: Companies with relatively weak products on domestic markets. Before undertaking geographical expansion, it is advisable for commoners to improve their product portfolio.

Crusaders: Because they have already expanded geographically with a relatively weak range of products, these companies are vulnerable. Their challenge is to improve and further develop their product portfolio.

The path from commoner to king can either go through the crusader stage (e.g., Microsoft) or the baron stage (e.g., SAP). Companies in the baron, commoner, or crusader stage can leverage the services of EmpraGlob to help expand their presence.

We are in the middle of the transformation from the industrial age to the information age. Our world, in particular the world of business, is being increasingly influenced by globalization and a global exchange of goods and services. The desire to exchange goods on the global market is as old as humankind itself. Nevertheless, it has taken thousands of years for global integration to become reality. The reason for this, besides improved logistics and reduced political barriers, lies in advances in information and communication technology (ICT).

The emergence of a more open world economy and the growing exchange of information increase the interconnection and interdependency among economies across the globe. The markets are becoming increasingly complex. As mature economies become saturated, the competitive pressure increases, and growth becomes difficult to sustain. At the same time, it becomes essential for emerging countries to gain broader access to markets in the industrialized and service-oriented countries.

The need for managers to develop skills and strategies to respond to these challenges and opportunities affects firms of all sizes. However, many small or mid-size firms—and even some larger ones—fail to exploit the potential of global markets, or else they do so only to a limited extent. Before pointing out reasons and solutions, let us first look briefly at major corporations in the context of globalization.

For major corporations, globalization drives company development and serves as a basis for maximizing organizational performance. Additional customer value can be delivered and economies of scale can be achieved. When possible, standardized marketing programs and processes can be introduced, taking local needs into consideration. One of the challenges in developing such a global marketing strategy is to decide which aspects of global activity to standardize and which to adopt locally. This combination of a global marketing concept and local market adaptations is called global-local marketing—glocal marketing, for short. In addition to global marketing, factors of corporate success include global culture, global account management, global customer service, global e-business, global procurement, global operations, and global finance.

Historically, global operating enterprises have grown from a domestic base. If a local operating company wants to expand internationally, the strategic options will be determined by the level of geographic development and product strength. This can be illustrated with the help of the international competitive posture matrix, shown above.

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