1. The authors describe a four-phase process for global expansion. What are the four phases?
* In the initial entry phase, firms must establish a foothold in different foreign markets. Country markets of interest are identified as bases for future expansion. Strategic decisions are then made regarding how and when to enter the specific markets. Efforts to maximize international economies of scale are evaluated, paying particular attention to production, advertising and branding.
* Through efforts with local market expansion, firms promote sales from each country-specific base. New products and services are developed, or existing products and services are tailored to meet the ...view middle of the document...
Globalization has introduced a dramatic change in the frequency, context and means in which people from different cultural backgrounds interact. Global expansion strategies must consider diverse sources of market growth and opportunity, specific to each country market. Cross cultural differences may manifest in areas such as customer demands, the nature of competition, and the market infrastructure in emerging markets. Firms must develop a more complex, multifaceted approach to designing different strategies for a broad array of diverse and rapidly growing markets. This requires a local focus with greater reliance on local talent.
3. In what ways is it more challenging to market to developed countries (like England) as compared to emerging markets like Chile?
Battles for market share in developed countries has culminated from increased growth, market saturation, and decreased demand for products and services. This is further compounded by slow or negative economic growth and high rates of unemployment due to the decline of the industrial sector, high levels of consumer debt, and aging populations. Intense competition and market segmentation has led to increased costs for firm’s Marketing and R&D divisions; limiting economies of scale.
Numerous firms have identified emerging countries as ideal investment markets; international expansion into these countries has the potential to allow firms to enjoy the advantages of high growth rates in terms of population and GDP per capita.
Companies from large emerging market countries such as China, India, and Brazil are becoming key competitors in the world market; their firms are able to leverage the advantages of the home country’s low resource and labor costs. Firms from developed countries must respond with strategies that move their operations into the home markets of these firms in an effort to take advantage of their opposition’s competitive advantages.
4. What are some differences between the various strategies...