Going Global

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Going Global by Mind Map: Going Global

1. The Going Global Environment

1.1. Why firms go International

1.1.1. Triggers of Export Initiation

1.1.1.1. Internal Triggers

1.1.1.1.1. Perceptive Managers

1.1.1.1.2. Internal Change events

1.1.1.1.3. Inward/Outward Internationalization

1.1.1.2. External Triggers

1.1.1.2.1. Market demand

1.1.1.2.2. Competiting Firms

1.1.1.2.3. Role of Trade Associations

1.1.1.2.4. Role of Experts/Consultants

1.1.2. Initiation of Internationalization

1.1.2.1. Internationalisation motives

1.1.2.1.1. Proactive motives

1.1.2.1.2. Reactive motives

1.1.3. Internationalization Barriers

1.1.3.1. Insufficient financial resources

1.1.3.2. Insufficient Knowledge

1.1.3.3. Lack of Foreign Market contacts

1.1.3.4. Lack of Productive capacity for Foreign Markets

1.1.3.5. Lack of Foreign Channels of Distribution

1.1.3.6. Management Emphasis on Domestic Markets

1.1.3.7. Cost due to Higher export manufacturing costs/Distribution costs/Finance costs

1.2. Theories of Internationalisation

1.2.1. Historical Background

1.2.1.1. Traditional Marketing Approach

1.2.1.2. Life cycle Concept

1.2.1.3. Dunning's eclectic approach

1.2.1.3.1. Ownership Advantages

1.2.1.3.2. Locational Advantages

1.2.1.3.3. Internationalization Advantages

1.2.2. Uppasala Internationalization model

1.2.3. Transaction Cost Theory

1.2.4. Network model

1.2.5. Internationalization of SMEs

1.2.6. The concept of Born Globals

1.2.7. Internationalization of services

1.3. The Environment of International Trade

1.3.1. Theories of economic development

1.3.1.1. Import Substitution model

1.3.1.2. Export Led Growth

1.3.2. The International Trade system

1.3.3. Multilateral Institutions

1.3.3.1. Role of the WTO

1.3.4. Protectionism

1.3.4.1. Old Protectionism

1.3.4.1.1. Import Duty

1.3.4.1.2. Import Ban

1.3.4.1.3. Quotas

1.3.4.2. New Protectionism

1.3.4.2.1. Negotiations

1.3.4.2.2. Bilateral Trade Restrictions

1.3.4.2.3. VERs

1.3.4.2.4. Anti-Dumping Legislation

1.3.5. Regional Trade Areas

1.3.5.1. FTAs

1.3.5.2. Customs Union

1.3.5.3. Common Markets

1.3.5.4. Economic Union

2. Understanding your company

2.1. Understanding the Strategic position of the firm

2.1.1. Organization’s Background and Profile

2.1.2. Analysis of the internal strategic capability

2.1.3. Analysis of the External Environment

2.1.4. Industry Profiling

2.1.4.1. Industry Analysis Checklist

2.1.5. Global Readiness

2.1.5.1. Suitability of products/Services for Internationalization

2.2. Company resources and Capabilities

2.2.1. Characteristics of the International firm

2.2.1.1. Goals & objectives

2.2.1.2. Size of the firm

2.2.1.3. Location

2.2.1.4. Technology and Innovation

2.2.1.5. Products and services

2.2.1.6. Access to resources

2.2.2. Management of the International firm

2.2.2.1. Attitudes to Company Growth

2.2.2.2. Style of Managers

2.2.2.3. Aspirations, commitment and expectations of Mangers

2.2.3. Company resources in the Business System

2.2.3.1. Ability to earn profits

2.2.3.1.1. Successful CA over Rivals

2.2.3.1.2. Attractiveness of the Industry

2.2.3.2. Sources of CA

2.2.3.2.1. Ability to reduce costs

2.2.3.2.2. Ability to differentiate in ways customers appreciate

2.3. Market Analysis

2.3.1. Market segmentation

2.3.2. Target Market Selection

2.3.3. Trends and Drivers

2.3.4. Buyer Behaviour

2.3.5. Competitor Analysis

2.3.6. Estimate of Annual Sales

3. The Search for New Markets

3.1. The Search for new markets

3.1.1. Identify high potential country markets

3.1.1.1. Gradual Elimination

3.1.1.2. Indexing and Ranking

3.1.1.2.1. Use of Variables to estimate market potential

3.1.1.2.2. Selection of criteria/variables to rank the countries

3.1.2. Market evaluation

3.1.3. Indicators of Globalisation

3.1.3.1. How good are the Country Fundamentals?

3.1.3.2. How open is it to Foreign Trade

3.1.3.2.1. Globalization Index

3.1.3.2.2. KOF index of Globalization

3.1.3.3. How is it doing in terms of International Trade?

3.1.3.3.1. Main suppliers

3.1.3.3.2. Main customers

3.1.3.4. Features of Globalization

3.1.3.4.1. Reduction of Trade Barriers

3.1.3.4.2. Integration of Financial Markets

3.1.3.4.3. FDI

3.1.3.4.4. Role of MNEs

3.1.3.4.5. Simultaneous competition in markets

3.1.3.4.6. Interdependence of all dimensions of Globalization

3.1.3.4.7. Compression of Time and Distance

3.1.3.4.8. Multiplication of Free Trade agreements

3.2. Global Market Opportunity Assessment

3.2.1. Estimating demand in emerging markets

3.2.2. Process for Assessing global markets

3.2.2.1. Organizational Readiness to Internationalize

3.2.2.1.1. What do we gain from going Global?

3.2.2.1.2. Is going Global consistent with other company goals, now or in future?

3.2.2.1.3. What demands will this place on firm?

3.2.2.1.4. What is the Basis of the firm's CA?

3.2.2.2. Suitability of Firm Products and services for Foreign Markets

3.2.2.2.1. Do we sell well in Domestic Markets?

3.2.2.2.2. Cater to Universal Needs

3.2.2.2.3. Address a specific need?

3.2.2.2.4. Address an emergent need

3.2.2.2.5. Product Potential

3.2.2.3. Country Screening Process

3.2.2.3.1. FDI

3.2.2.3.2. Sourcing potential

3.2.2.4. Industry/Market Potential Assessment

3.2.2.4.1. Size of the Industry

3.2.2.4.2. Trends in the Industry

3.2.2.4.3. Tariffs and Non Tariff Barriers

3.2.2.4.4. Standards and Regulation

3.2.2.4.5. Availabilty of Distribution Channels

3.2.2.4.6. Industry Specific Market potential Indicators

3.2.2.5. Choose Foreign Partners

3.2.2.6. Estimate firm's Company Sales Potential

3.2.3. Practical Market potential Analysis

3.2.3.1. Trend Analysis

3.2.3.2. Monitoring Industry specific Indicators

3.2.3.3. Monitoring Key Competitors

3.2.3.4. Following Key Customers into Markets

3.2.3.5. Tapping Into Supplier Networks

3.2.4. Choosing overseas Partners

3.3. Perform an in-Depth Market Analysis of the two best markets

3.3.1. Contacts in markets

3.3.2. Market and Company Sales Potential

3.3.3. Country Entry Conditions

3.3.3.1. Import Regulations

3.3.3.2. Foreign Direct Investment (FDI) Regulations

3.3.4. Financial and Market Entry Conditions

3.3.5. Determining the best Target Market Country

3.3.6. Market Segmentation

3.3.6.1. Selection of Target Market

3.3.6.2. Target Market Size and Trends

3.3.6.3. Buyer Behaviour

3.3.6.4. Competitive Analysis

3.3.6.4.1. Identification of Direct Competitors

3.3.6.4.2. Identification of Indirect Competitors

3.3.6.4.3. Identification of Future Competitors

4. Creating an Entry Strategy

4.1. Entry modes

4.1.1. Strategies to Choose entry modes

4.1.1.1. Transaction cost Approach

4.1.1.2. Factors influencing choice of entry modes

4.1.1.2.1. Internal Factors

4.1.1.2.2. External Factors

4.1.1.2.3. Entry Mode Desirable Characteristics

4.1.1.2.4. Transaction Specific Behaviour

4.1.2. Market entry by Alliances

4.1.2.1. Nature of alliances

4.1.2.2. Marketing Partnership agreements

4.1.2.3. Selecting an alliance partner

4.1.2.4. Evaluation of Alliances

4.1.2.5. Licensing as an entry mode

4.1.2.6. Franchising

4.1.2.7. Joint Ventures

4.1.3. Market Entry by Acquisition & Direct Investment

4.1.3.1. Foreign Direct Investment

4.1.3.1.1. Motives for FDI

4.1.3.2. Evaluation of FDI and Acquisition

4.2. Product Market Strategy

4.3. Target market

4.4. Pricing Strategy and Plan

4.5. Promotional Strategy and Plan

4.5.1. Global Marketing Budget

4.6. Distribution Strategy and Plan

4.6.1. Distribution decisions

4.6.2. External determinants of Channel decisions

4.6.3. Structure of Channel

4.6.4. Managing Logistics

4.6.5. Implications of the Internet for Distribution

4.6.6. International retailing

4.7. The financial strategy

4.8. Organization of Global Marketing Functions

4.8.1. Creating the Functional Structure

4.8.1.1. International Divisional Structure

4.8.1.2. Product Divisional Structure

4.8.1.3. Geographic Structure

4.8.1.4. Matrix Structure

4.8.1.5. Global Account Management Organization

4.8.2. Design of a control System

5. The Global Marketing Management System

5.1. Module 3 In depth Market Analysis

5.1.1. Objective

5.1.1.1.   The objective of Module 3 is to identify the best Target Market country for the company and its products/services by using the following procedure:       1. Select the top two countries based on the country scores in Module 2.      2.Develop business contacts who are familiar with the identified Target Market countries:   Agents/Distributors/ Government agencies/ Trade associations and organizations/ Banks      3.Determine the Market Potential along with the company's sales potential in each country.      4. Develop a profile for the top two (2) competitors in each country. For each competitor include an assessment of Product Attributes and benefits, Market Share, sales, Market Positioning, and competitor strengths and weaknesses.      5.Analyze in detail the current market-entry conditions for each country.      6.Analyze the existing financial and market conditions in each country to determine whether they are favorable for your particular product/service.      7.Select the market with the highest potential by ranking each country using the following five categories: Quality and strength of your contact in each country./Degree and level of market competition in each country./Highest market and company sales potential in each country/ Most favorable market entry conditions in each country. / Most favorable financial and market conditions in each country.      8. Briefly state your conclusion and recommendations for Phase 3.    9.Generate your Module 3 Report.  

5.1.2. Module 3 Process

5.1.2.1. 3.1 Contacts An in-depth market analysis and an estimate of potential sales in any country market is difficult without first making contact with those who are more familiar with the Target Market(s). Potential agents and/or distributors, U.S. and foreign governments, and associations and organizations can all be helpful in bringing the company's product/service to a new country marke

5.1.2.1.1. Select 2 Countries from Module 2

5.1.2.2. 3.2 Market and Company Sales Potential

5.1.2.2.1. 3.2 a) Total Market Potential (TMP) Estimate total Market Potential (TMP) in the country for the product: · TMP = a x b x c (Where TMP = Total Market Potential) a = Number of potential (eligible/qualified) consumers: b = Frequency of purchase on an annual basis: c = Selling price of the product (£)

5.1.2.2.2. 3.2 b) Company Sales Potential (CSP) Estimate company sales potential (CSP) for the product: · CSP = Total Market Potential (TMP) x Desired Market Share %

5.1.2.3. 3.3 Competitive Analysis

5.1.2.3.1. 3.3 a) Market Competition Analyse 2 main competitors in each of the top 2 countries based on the following

5.1.2.4. 3.4 Country Entry Conditions

5.1.2.4.1. 3.4 a) Import Regulations Evaluate each item on a scale 1 – 5, 1 being least favorable and 5 being most favorable.

5.1.2.4.2. 3.4 b) Foreign Direct Investment (FDI) Regulations

5.2. Module 1 Company Situation Analysis

5.2.1. Objective

5.2.1.1. The objective of Module 1 is to conduct an in-depth situation analysis of a company by following the procedure below:      1. Choose an industry and a company within the industry.   2. Select a specific Product Line/service of the chosen company if more than one Product Line/service is available. If you choose a retail establishment, decide on the merchandise mix that will be included in the overseas operation, along with the number of stores that will be opened during the first, second and third year of international operation.     3. Conduct an internal analysis of the company.      4. Determine the international involvement, if any, of the company.     5.Evaluate the performance of the chosen industry and identify the trends in the industry.  6. Determine the company's readiness to do business in the international arena.    7. Conduct a S.W.O.T (Strengths, Weaknesses, Opportunities and Threats) analysis of the company.     8. Briefly state your conclusion and recommendations for Module 1.  9. Generate your Module 1 Report

5.2.2. Module 1 Process

5.2.2.1. 1.1 Company Analysis

5.2.2.1.1. 1.1 a) Company Background

5.2.2.1.2. 1.1 b) Company Mission Statement

5.2.2.1.3. 1.1 c) Sales and profit for the last three years

5.2.2.1.4. 1.1 d) Company’s corporate-level strategies Briefly describe the company's scope, diversification of products and the markets for those products and global involvement strategies:

5.2.2.1.5. 1.1 e) Product line/service or strategic business unit If the company chosen has more than one product line/service or more than one strategic business unit, select one of them, and briefly describe it:

5.2.2.1.6. 1.1 f) Company’s business-level strategies What is your company's business level strategy (Cost Leadership- low price, product/service differentiation , focused differentiation- niche, other? Explain:

5.2.2.2. 1.2 International Involvement

5.2.2.2.1. 1.2 a) Is the company involved internationally?

5.2.2.2.2. 1.2 b) Competitors

5.2.2.2.3. 1.2 c) Method(s) of international involvement  Find all that apply to your competitiors and your company

5.2.2.2.4. 1.2 d) How is the international function organized? Organization of the Export Function

5.2.2.2.5. 1.2 e) International experience

5.2.2.3. 1.3 Industry Analysis

5.2.2.3.1. 1.3 a) To analyze the competiveness of the industry, use Porter’s five forces framework. Mention the impact each force has on competition, profit potential, and demand for the product/service. Be brief and to the point! 

5.2.2.3.2. 1.3 b) What were the industry’s sales and growth rates in the last two year?

5.2.2.4. 1.4 Target Market Profile

5.2.2.4.1. 1.4 a) Describe the end user of the product/service Include gender, age, income, education, life style, etc. How often does the end user purchase the product (daily, weekly, monthly, other)? Explain:

5.2.2.4.2. 1.4 b) Is the end user of the product in the foreign market the same as in the domestic market? Explain 

5.2.2.5. 1.5 Product Profile

5.2.2.5.1. 1.5 a) Is the product/service a consumer or industrial good/service?

5.2.2.5.2. 1.5 b) What are the key advantages and disadvantages of the product/service?

5.2.2.5.3. 1.5 c) What is the selling price of the company’s product/service?

5.2.2.5.4. 1.5 d) How does your company’s product compare to competition in terms of quality and price?

5.2.2.5.5. 1.5 e) What is the technology level of your company’s product/service?

5.2.2.5.6. 1.5 f) What stage of the product life cycle is the company currently in?

5.2.2.5.7. What stage of the product life cycle is the industry currently in?

5.2.2.6. 1.6 Global Readiness

5.2.2.6.1. Why the process?

5.2.2.6.2. Questions to determine Global Readiness Each questions are ranked from 1-5, 1 being least favourable and 5 being most favourable to globalization

5.2.2.6.3. Global Readiness Score

5.2.2.7. 1.7 Strengths, Weaknesses, Opportunities, Threats

5.2.2.7.1. 1.7 a) List the company’s strengths (internal factors).

5.2.2.7.2. 1.7 b) List the company’s weaknesses (internal factors).

5.2.2.7.3. 1.7 c) List the company’s threats (external factors).

5.2.2.7.4. 1.7 d) List the company’s opportunities (external factors).

5.2.2.8. 1.8 Conclusion and Recommendations

5.3. Module 2 Global Market Search selecting country markets

5.3.1. Objective

5.3.1.1. The objective of Module 2 is to identify high potential country markets for the purpose of exporting or manufacturing products in the selected markets by following the procedure below: 1.Research and select countries. These are the country markets which you will analyze and evaluate throughout Module 2. Select the criteria that are essential in determining high potential country markets for your company's product(s)/service(s). 2.Determine the relative importance (weight) of each criterion on a scale of 1-100. 3.Enter the values for each criterion selected. 4.Briefly state your conclusion and recommendations for Module 2. 5.Generate your Module 2 Report.

5.3.2. Module 2 Process

5.3.2.1. 2.1 Country Selection

5.3.2.1.1. 2.1 a) Research and select a minimum of two(2) and maximum of ten(10) countries, then pick those countries from the drop-down menu.

5.3.2.1.2. 2.1b) State the reasons for selecting these countries

5.3.2.2. 2.2 Criteria Selection

5.3.2.2.1. Purpose: The purpose of selecting criteria is to identify the country with the highest market potential for the company’s product/service. The criteria listed are quantifiable and can be measured objectively.

5.3.2.2.2. Criteria Selection: To include criteria in the analysis, check the box in the “Include” column that corresponds with the criteria. Values for the selected criteria will be entered in Module 2.3.However, while selecting criteria, keep in mind the relationship each criterion has with its’ value. If the criterion has a positive relationship with the value selected, check the box directly next to that criterion. If the criterion has a negative relationship with the value selected, leave the box next to the criterion blank. For example, a country with high import duties (tariffs) is unfavorable; therefore, the relationship between that criterion and the value given to that criterion is negative.

5.3.2.2.3. Scores GMMSO will automatically assign a score to each selected criterion.Negative relationships will be assigned lower scores, while positive relationships will be assigned higher scores.

5.3.2.2.4. Criteria

5.3.2.3. 2.3 Country Evaluation

5.3.2.3.1. 2.3 a) Country Score For each of the Criteria selected add the year, value and unit After selecting and evaluating each country, the system will score and rank each of the countries.

5.3.2.3.2. 2.3 b)If you decide not to conduct business in the highest ranking country listed above, explain your reasoning

5.3.2.4. 2.4 Conclusions and Recommendations

6. Documents for International Trade

6.1. The Harmonized System

6.2. Incoterms

6.3. Documents for Foreign Trade

6.4. Methods of International payment

6.5. Export Insurance

6.6. Checklist for Export operation

7. Useful resources and databases

7.1. Databases in International Business

7.2. Glossary of Terms

7.3. Case Studies