Chap 7 Strategy for competing in international markets

This week we continue with chapter 7 which is mention about strategies for competing in international markets. From this chapter what i learn is we can understand the primary reasons companies choose to compete in international markets. Second, learn how and why market conditions across countries influence a company's strategies. Third, learn the five majors strategies options for enter foreign markets and gain familiarity with three main strategies approach for competing. Next, understand how multinational companies are able to use international operations to improve overall competitiveness.

Why some companies decide to enter foreign market???To get a lot of profit??I think this is one of the reasons but actually it have five majors reasons. First, to gain access to new customers, achieve lower costs through economics of scale, experience, and increase purchasing power, further exploit its core competencies. Next to access to the resources and capabilities located in foreign markets.  And last to spread its business risk across a wider market base. And why the company compete across national borders makes strategies making more complex?? This is because different countries have different home country advantage in different industries. Second, there are location based advantage to conducting particular value chain activities in different parts of the world. Third, different government policies, tax rates, inflation rates, and others economics conditions make the general business climate more favorable in some countries than in others. Fourth, companies face risk due to adverse shifts in currency exchange rates when operating in foreign markets. And finally, differences in buyers tastes and preferences present a challengers for companies concerning customizing versus standing their products and services.

When an organization has made a decision to enter an overseas market, there are a variety of options open to it. These options vary with cost, risk and the degree of control which can be exercised over them. The simplest form of entry strategy is exporting using either a direct or indirect method such as an agent, in the case of the former, or counter trade, in the case of the latter. More complex forms include truly global operations which may involve joint ventures, or export processing zones. Having decided on the form of export strategy, decisions have to be made on the specific channels. Many agricultural products of a raw or commodity nature use agents, distributors or involve Government, whereas processed materials, whilst not excluding these, rely more heavily on more sophisticated forms of access. These will be expanded on later.

Having done all the preparatory planning work (no mean task in itself!), the prospective global marketer has then to decide on a market entry strategy and a marketing mix. These are two main ways of foreign market entry-either by entering from a home market base, via direct or indirect exporting, or by foreign based production. Within these two possibilities, marketers can adopt an "aggressive" or "passive" export path.

Entry from the home base (direct) includes the use of agents, distributors, Government and overseas subsidiaries and (indirect) includes the use of trading companies, export management companies, piggybacking or counter trade. Entry from a foreign base includes licensing, joint ventures, contract manufacture, ownership and export processing zones. Each method has its peculiar advantages and disadvantages which the marketer must carefully consider before making a choice.

During our tutorial class also discuss about case study Piping hot dogs-a case of a Malaysian franchise-

First of all we need to know what the strategies that uses in this business. What are the structure, the rivalry, and also need to analysis our competitive pricing strategy. There have three solution which is buyer stage, factor condition and related and supporting industry. Okay first, we have 5 stage level of ages for know the buyers which is :

1. Baby/todlers
2. 12-15 years old
3. 15-23 years old
4. 24-25 years old
5. 45 and above

We need to know how the ages can influences the buying process.

Next, what is factor condition? We need to look at the price and what the ingredient or raw materials that were use in produce the hot dogs whether in  lower or high price. From where they get the chicken and how the chicken deliver to Malaysia.


And finally what the related industry does make the similar business? For example, Ramly nuggets, Ayamas brand and so on also produce the same things. But what is special in this Nineteen O One Sdn Bhd they use Halal ingredients and also get the HALAL certificate from JAKIM. So Muslims people didn't worry to buy because today many cases that involve HARAM ingredients while in making hot dogs. So as a consumer we need to be more careful in buying hot dogs. We also need to look at the opportunity and threat that the company use. The company use their own recipe, re branding and also super brand, and also use different packaging that different from the others. They use red and green plastic packaging to make them is interesting and attract customers. Thats all..:)