Svend Hollensen

GLOBAL MARKETING
4th Edition

1 Global marketing in the firm

 Learning objectives
Characterize and compare the
management style in SMEs and LSEs
Identify drivers for global integration and
market responsiveness
Explain the role of global marketing in the
firm from a holistic perspective

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 Learning objectives (2)

Describe and understand the concept of

the value chain
Identify and discuss different ways of
internationalizing the value chain

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 Structure of
Global Marketing 4e

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 Internationalization

Firms must decide whether to stay at

home or strengthen the global position
Globalization reflects trend of buying,
selling, and distributing products in many
countries and regions of world

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 Figure 1.1
Nine strategic windows

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 EPRG framework
of business activities

Ethnocentric

Geocentric Polycentric

Regiocentric

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 What is this?

The firm’s commitment to coordinate its

marketing activities across national
boundaries in order to find and satisfy
global customer needs better than the
competition is known as ______.

Global marketing

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 What is this?

What term refers to the development

and selling of products or services
intended for the global market, but
adapted to suit local culture and
behaviour (think globally, act
locally)?
Glocalization

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 Figure 1.2 Knowledge transfer

Core global business strategy

(HQ)

Internationalizing the strategy

Feedback
Country Country Country Country
Feedback

A B C D

Transferring global know-how and ‘best practices’

between countries with feedback to HQ

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 Figure 1.3
Convergence of orientation

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 LSEs and SMEs
Resources Risk taking
Formation of strategy/ Flexibility
decision making Economies of scale
processes and scope
Organization Use of information
sources

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 Figure 1.4
Intended and emergent strategy

Int
en
str ded De
libe
ate rate
gy stra
teg
y

Realized
Unrealized
strategy strategy

te gy
n t stra
e
erg
Em
Source: Mintzberg, 1987, p. 14. Copyright © 1987 by the Regents of the University of California. Reprinted from the California
Management Review, Vol. 30, No. 1. By permission of the Regents.

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Figure 1.5 Incremental change
and strategic drift

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 Figure 1.6 Entrepreneurial
decision-making model

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 What is this?

When accumulated volume in

production results in lower cost price
per unit, _____ occur.

Economies of scale

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 Finding economies of scale

 Reducing operating costs per unit and spreading

fixed costs over larger volume due to
‘experience curve effects’
 Pooling global purchasing gives the opportunity
to concentrate global purchasing power over
suppliers
 Building of centres of excellence by using larger
scale and focusing talent in one location

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 What is this?

When resources can be reused

from one business/country in
additional business/countries, _____
occur.

Economies of scope

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 Production orientation
vs marketing orientation

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 Global coordination

Global Market
integration responsiveness

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Figure 1.7 Global integration/
market responsiveness grid

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 Forces for global
coordination/ integration
 Removal of trade  Worldwide markets
barriers  Global village
 Global customers  Worldwide
 Relationship communication
management  Global cost drivers
 Standardized
worldwide technology

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 Forces for
market responsiveness

Cultural differences
Regionalism/ protectionism
Deglobalization trend

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 Figure 1.8 7-S framework

Structure Strategy

Shared
Systems Style
Values

Skills Staff

Source: ‘McKinsey 7S Framework’ from In Search of Excellence: Lessons from America’s Best Run Companies by Thomas J. Peters
and Robert H. Waterman, Jr. Copyright © 1982 by Thomas J. Peters and Robert H. Waterman, Jr. Reprinted by permission of
HarperCollins Publishers, Inc.

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 Figure 1.9 The value chain
Support activities

Firm infrastructure
Human resource management
Technology development
Procurement

Inbound Outbound Marketing

Operations Service
logistics logistics and sales

Primary activities

Upstream value activities Downstream value activities

Source: Reprinted with permission of The Free Press, a division of Simon & Schuster Adult Publishing Group, from Competitive Advantage: Creating and Sustaining Superior Performance by Michael E. Porter. Copyright © 1985, 1998 Michael E.
Porter.

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 Figure 1.10
A simplified value chain

Research Sales
Production Marketing
and development and service

Upstream Downstream

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 Figure 1.11 Strategic pyramid

1. Strategic

2. Managerial

3. Operational

Research Sales
Production Marketing
and development and service

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 Figure 1.14 Value shop
and the service chain

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 What is this?

What term refers to an extension of

the conventional value chain,
where the information
processing itself can create
value for customers?

Virtual value chain

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 Figure 1.15 Virtual value chain
Physical value chain

Sales
R&D Production Marketing Value
and service

Organize,
Define
select, Synthesize Distribute
information Value
gather information information
problem
information

Virtual value chain

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 Creating value
by using information

Managing risks

Reducing costs

Offering products and services

Inventing new products

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 For discussion (1)

What is the reason for ‘convergence

orientation’ in LSEs and SMEs?
How can an SME compensate for its lack
of resources and expertise in global
marketing when trying to enter export
markets?

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 For discussion (2)

 What are the main differences between

global marketing and marketing in the
domestic context?
 Explain the main advantages of
centralizing upstream and decentralizing
downstream activities?
 How is the ‘virtual value chain’ different
from the ‘conventional value chain’?

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 Nivea: A case study

 Which degree of ‘market responsiveness’

and ‘global coordination/integration’ does
Nivea represent?
 Will Nivea be able to cross borders without
any adaptation? If not, which elements
should be adapted?
 Which marketing problems does Nivea
anticipate, when penetrating the US
market?

Requires web access

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