Another disadvantage is that they have to hire additional staff to help launch their companies in the global markets they expand into. Opportunity Cost of Capital: The internet has forever changed the way you can market, reach and sell to customers.
If you currently have a global demand or can create one for your product or service, it may be worthwhile to consider a global marketing strategy.
Building relationships with vendors: What is global strategy? Build Some Global Relationships In addition to Advantages and disadvantages of global strategy network for your products and services, a global marketing strategy gives you and your company some global networking opportunities.
This is explored in the separate section on this website: Incorporating localization into your marketing strategy, which is the practice of customizing your efforts to individual markets within a country or international region, recognizes that each international locale has different needs and could boost sales.
For other models like the Lexus, Toyota still exports directly from its major production plant in Japan. In addition, some customers like to purchase products and services that have a global image. Diversifies Your Business When you tap into an international market, it helps to offset any losses that you might suffer during an economic downturn on the domestic front.
Crisis Management Crisis management is important to any company but is more challenging on a global basis. Main Disadvantages When entering the global market, businesses need to be aware that the gains may not be seen in the short term. Also, companies need to know the regulations and tax laws in foreign countries, which takes time and money, and they may need to hire professionals in those countries to help with legal and financial issues.
These examples particularly relate to low cost country specific sourcing but the scope and definition of global sourcing is not limited to low cost nations. The business resources needed to sell internationally might typically include a sales team, brochures of products in various languages and an office team to handle sales orders back in the home country.
Higher the distance from vendor, higher will be the transportation expense. Importantly, competitive advantage is developed largely on a global basis.
Travel expenses are sure to increase for the administrative staff, as they will now be expected to travel all over the world to oversee their business outlets in other countries. Consequently, it becomes imperative on the part of retailers to assure the quality of imported goods through insurance, agreement with vendor or otherwise.
For example, buying merchandise from China is significantly lower than the cost from New York to India. Other writers argued that there could be costs in adapting products to match local tastes, local conditions like the climate and other local factors like special laws on environmental issues.
However, it still has local brands like Walkers Crisps in the UK. Financial Risk Although diversification is always beneficial, the disadvantage of setting up your business on the international front is that it can still be an expensive investment.
It might be better to manufacture products for other companies that then undertake the expensive branding.May 06, · Supporters of globalization have made the case that it is good because it has brought low priced imported goods, but they have not matched the decline of wages in the middle class and will not offset the loss of many family wage jobs.
Globalization is like being overwhelmed by a snow avalanche. It is important to alter the marketing mixed and marketing strategy to suit local tastes, meet special market needs and consumers non-identical requirements (Vrontis and Thrassou,). Advantages and Disadvantages of Standardization Standardization and international uniformity has many advantages.
ADVERTISEMENTS: Global sourcing is a procurement strategy that aims to take advantage of global efficiencies for the delivery of goods and services.
For MNCs, it has become a strategic sourcing in today’s competitive setting. Nokia and Microsoft, for example, have entered into a broad global strategic alliance where they plan to combine assets and develop innovative mobile products on an unprecedented scale.
By using their complementary strengths and expertise, these potential competitors thus ensure their mutual survival in the new global mobile. Q1.
Discuss the advantages and disadvantages of standardization strategies and adaptation strategies in a global environment. Standardization is the process by which a company makes it methods, especially its production processes, uniform/identical throughout its organization.
If you currently have a global demand or can create one for your product or service, it may be worthwhile to consider a global marketing strategy. Plan carefully to ensure the advantages and benefits outweigh the disadvantages and risks.Download