This paper is presented on the above topic for the course _____ taught by Professor _______.
No company today can claim to be a perfectly domestic company due to escalating competition faced by it from international firms. A company is unable to escape from this competition irrespective of its participation in international business. The market has been globalized now and requires clarification for the terms like global market and marketing. The concept of globalization considers the whole world and views it as one market and it is based on the identification of cross-cultural differences and similarities. This concept of global marketing is based on the belief that culturally adapted strategies of marketing are required for every foreign market so as to cope with prevalent cultural differences.
Internationalization and International Marketing
Economically internationalization can be defined as a process of enterprise involvement in international markets which is rapidly increasing due to globalization (Susman & Gerald, 2007). In simple terms, internationalization can be viewed as designing products and services in a manner that meets the user requirements in multiple countries or are easily adaptable. International Marketing refers to the application of principles of marketing to multiple national markets in order to exchange goods and services worldwide with the hope of penetrating and reaching out to the consumers in those nations.
Advantages, Disadvantages and Challenges of Global Expansion
The benefits of global expansion are attributed to the accessibility to new range of customers and new competitive relationships created between corporations which in turn help in serving needs of the customers by providing better or at least equal services. According to Gereffi (1999), competitive firms are able to maintain similar quality levels at lower prices by offering more competing values for their products. This is because the firms feel extensive pressure as a result of competitions compelling them to efficiently manage their existing resources. Firms can use standardized process for producing products which are sold to consumers of different countries without any requirement of modification. Another advantage of global expansion is global value chains that play crucial role in operational success of manufacturing firms (Leavy, 2004) since it helps in spreading out the failure risk related to one manufacturing unit. In addition to the above, global expansion also helps firms in creating global financial links. Apart from the advantages, the general trend of disadvantages of global expansion concentrates on its social influence and impact peoples’ values, traditions and cultures (Sliwa, 2007). Corporations have social responsibility for monitoring the influence of their activities on societal norms and people’s values. An absence of regulatory framework for monitoring business practices is considered o be the main disadvantage of global expansion. Although the firms’ practices are subject to the legal and social laws of the country in which they operate yet their employees often exposed to such activities.
Even though the firms are privileged by the trends of global expansion but they are at the same time equally threatened by it because of dramatically increasing competition in the global market. The firms even after having knowledge of the performance of a specific market segment cannot out-compete others i.e. the performance of the firms don’t depend on the productivity of one market (Abeles, 2001). Moreover, historical presence of firm in the market does not assure its continuous growth. Firms are challenged to find innovative ways of productions so as to outperform their competitors. Various other factors like culture, political framework, religion, economic landscapes etc. also pose strict challenges for success of any business venture. Impact of culture on international marketing can be estimated by probing various aspects of the culture.
Case Study: Fisherman’s Friend lozenges
Initially developed for Fleetwood fishermen and sailors who used to work in extreme weather conditions of North Atlantic, Fisherman’s Friend lozenges is available now worldwide in over 100 countries as strong sweet or medicated confectionery. Around 14lb of lozenges per month were made by the company for local consumption for an entire century. However, the company expanded its market to Lancashire and Yorkshire with the joining of Doreen Lofthouse. After that, the company expanded to UK also and then overseas.
The success of the company lies behind its promotion scheme-different for different countries. Although the traditional promotional concept was used for advertising in UK but promotional themes for overseas were quite different. The commercial advertisement in Italy showed a girl who after eating lozenge breathed so deeply that her blouse buttons pop off; the Denmark TV commercial showed a man breathing fire, the Philippines ad consisted of butterflies fluttering against pastel shades with gentle music in the background. The company exports about 95% of its total production. Recently a new campaign has been announced by the company switching from TV advertising to an aggressive below-the-line marketing technique. This campaign is focused on in-person brand marketing for its two new flavors- Fresh and Feisty.
The aim of this study was the examination of global expansion strategy by discussing its advantages, disadvantages and the challenges posed by it to the firms. We have also analyzed economic benefits of international marketing along with their impact on social values and norms. Thus we can conclude that even though global expansion might benefit corporations in several ways but they are also exposed to social threats. This is because the notions and status of change in a firm’s identity affects its relationship with the society.
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