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Marketing in Global Economy

Marketing in Global Economy Vision. There's a word that hearkens back to the early '80s, at least in current management thinking. Yet despite its presence in the leadership vocabulary for more than two decades, many companies are today struggling to draft the right vision for a hyperactive, global business environment. This paper is intended to offer an overview of some of the aspects of conducting business globally and aims to identify ways in which businesses can tap the gains of this process, while remaining realistic about its potential and its risks. Specific topics will include: 1) technology challenges; 2) gaining a foothold in new markets; and 3) conducting business with different cultures. Finally, real world business examples will be used to amplify the discussion. No other technological advancement has enhanced global business in the last 10 years like the Internet. The Internet has made accessible foreign marketplaces that for years were expensive and difficult to access. If an organization builds the right site, you can easily attract visitors from around the world. Obviously, however, this site can't be written predominantly in English and marketed with an American spin. If a company from the United States wants to be seen by all, their operations have to reach international consumers. Currently, 63 percent of Fortune 100 Web sites are stuck in the past, i.e., they are only written in English, according to Forrester Research (Internet World, 2001). Going global does not merely mean translating English sites into foreign languages. First and foremost, organizations must think globally and tackle their challenges head-on. Companies are faced with obstacles like coping with organizational challenges, increasing their speed to market, finding efficient management content tools, and maintaining a consistent global/international brand. Although outsourcing to accomplish the aforementioned challenges is a viable option through web-based consultant firms such as GlobalSight or Uniscape, a company may choose to handle the task internally. Embark, an international education opportunity facilitator, builds partnerships with international portals to bring higher education content and tools to local audiences in order to promote learning in the United States. By developing an Internet network, Embark brings the classroom to global students while benefiting the larger interests of institutions and even entire countries. Its approach is twofold: First, it establishes international partnerships; second, it forms relationships with ministries of education around the world that promote study in their countries (Internet World, 2001) . The Internet has also sired offspring technologies such as Intranets, Extranets, e-business and e-commerce. According to Yip (1995), the first and most important step in finding international markets is to select the geographic markets in which to compete. In deciding geographic preference one should consider market attractiveness, potential competition and ways in which to adapt to local conditions. The choice of product should be a primary consideration when it comes time to conducting business in foreign countries. One pitfall that must be avoided is selling a common consumer product/service. There will be a lot more competition within the target markets as well as with other competitors. A high-quality, well-priced product in a solid market niche will have a better chance of succeeding in foreign markets. Gaining a substantial market foothold in the international arena is not an easy task. A company needs a solid strategy. Generating global business is not easy to do. Clement Joly, managing partner at Raymond Chabot Grant Thornton consulting firm, recommends several successful approaches. First, Joly recommends that organizations go and explore the target country a number of times before embarking on any business venture. First impressions may be positive, but an organization needs to analyze the situation over time. In subsequent trips, other opportunities could be analyzed. Gathering essential material and talking with other domestic firms doing business in the country, even if they're in a different sector, will be able to tell you at what stage problems arose or suggest people who could help you. Another important issue that cannot be overlooked is the payment of invoices. Even before a company starts thinking of setting terms of payment, it needs to determine if your potential customers have any money. Often, companies unwittingly embark on discussions with people who have no financial means. One of the first things to ask outright is "Where's the money coming from?" In very poor countries, there are a lot of people who think that businesses in Western countries are extremely rich and that they're going to give them the money. This is a delicate issue when it comes time to start negotiating ( CMA Management, Jul/Aug 2001). The hotel chain Days Inn is an example of how to put into practice Joly’s recommendations. With the fall of the Iron Curtain and the dismantling of many national economic barriers, a new breed of European traveler has developed, who, in turn, has created a new demand for budget hotel accommodations throughout the continent. This has generated new opportunities for franchised hotels in Europe. While there are plenty of four and five-star accommodations at the high end and one-star hotels at the low end, mostly independents, there is a shortage of economy and mid-priced hotels. There also is a lack of amenities. While many independent European hotels offer little more than a bed and a bathroom (sometimes a communal facility), U.S. hotels offer the convenience of Internet access, free continental breakfast, in-room coffee maker, an easy-to-use reservations system and many other amenities. This has not gone unnoticed by the millions of international travelers. More and more European travelers are looking for quality mid-priced hotels that provide value-added room services including data ports, a large area to work, , microwave, refrigerator, clock radio and hairdryer. These amenities are standard at the new Days Inns' Days Business Place hotels in such places as The Prague in the Czech Republic (Franchising World, May/Jun 2001). According to Parker (1996), three main challenges in dealing with different cultures exist for corporations desiring to conduct global business. 1) Social responsibility. The raising globalization in economy creates a tendency towards a redistribution of power and responsibilities between governments and corporations. There are growing expectations for businesses to adapt roles previously played by governmental entities. On the government side, the resources saved hereby provide the opportunity to reallocate resources in education, training, and other modes of knowledge creation. On the corporate side again this means adopting roles which governments have played previously. As ethics varies according to culture, firms have to find a balance between what is acceptable in different cultures. This involves not tolerating business practices that are illegal in other countries, which involves dangerous work for the population, or which might be harmful to the environment. Also, customers pressure large corporations to tackle human right issues. 2) Organization strategy. In creating sustainable competitive advantage in a global world, strategies must be informed of political, legal and social as well as economic considerations. Corporations should apply an overall strategy to co-ordinate and integrate dispersed operations and diversification in order to provide higher customer and shareholder value in their diverse markets. 3) Organization structure. Global organizations need to develop relationships with their interest groups and manage these relationships well in order to create efficient and productive networks. Internally, this means that organizations with high organization structures will have to flatten their pyramids and implement cross-functional ways of thinking. One organization that has successfully adapted to cultural barriers is Global Tech of Des Moines, IA. According to there founder and CEO, Mike Shojaat, “We provide service beyond expectation. Our focus is always service, service, service. It doesn't matter if you're global or domestic. You have to serve the customer." (Des Moines Business Record). Going from Des Moines, Iowa, to the rest of the world takes building infrastructure, getting together the right people and understanding the various countries' cultures. As for infrastructure, Global Tech has alliances with companies based in Europe and Asia, which gives Global Tech access to an additional 700 consultants. Global Tech also employs a diverse group of people: Indian, Yugoslavian, Russian, French, Nigerian, Pakistani, and Iranian. Having that many different cultures represented in a single company helps when going out around the globe. Global Tech management believes that recognizing differences in cultures is crucial to global business. For instance, Shojaat feels the culture of Southeast Asia is different than in Europe or in the United States. In many Asian countries business relationships take cultivating. It's not a one-meeting-handshake deal. It can take upwards of a year before the relationship is mature enough to start talking real business (Des Moines Business Record, 2001). As evidenced by advancement in technology, communications, and simple observation, one can deduce that not only conducting business globally is a reality, it is a necessity. From major multi-million dollar corporations to mid-size firms, organizations cannot afford to allow competitors to out-pace them in establishing international business relationships. There is considerable revenue potential for conducting business outside the domestic arena. By following the lead of other successful companies and avoiding the stumbling blocks mentioned in this discussion, organizations can take advantage of prospective untapped worldwide business. Bibliography: References Baran, S. (2001, April 01). A small, small world. Internet World. Bhatia, R. (2001, May/June). Economy lodging demands spur new markets around the globe. Franchising World. Vol. 33, Issue 4. Demers, J. (Jul/Aug 2001). Exploring new markets. CMA Management, , Vol. 75 Issue 5. Des Moines Business Record. (2001, February 5). It’s a small world. Parker, B. (1996). Evolution and Revolution: from International Business to Globalization. Handbook of Organization Studies, Sage: London. Yip, G. (1995). Total Global Strategy: Managing For Worldwide Competitive Advantage, New Jersey: Prentice-Hall.

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