COMPETITIVE ENVIRONMENT
Competitive environment, managing
transportation, inventory, product plans &
schedules, & information flows are critical to
satisfying customers & creating competitive
advantages.
Conduct of international operations depends on
companies' objectives & means with which they
carry them out.
Operations affect & are affected by physical &
societal factors & competitive environment.
Increase in government focus on FDI & as a result,
increased openness of country with local
competitive environment.
Marketing is not only much broader than selling it
also encompasses entire company’s market
orientation toward customer satisfaction in a
competitive environment.
Key point is many companies constantly under
competitive pressure to move forward both
reactively (responding to changes in market &
competitive environments) & proactively
(anticipating change).
In a hypercompetitive environment, a firm
competes :-
Basis of price;
Quality.
• Timing.
• Know-how.
• Creating strongholds in markets it operates in
(entry barriers).
• Financial resources to outlast its competitors.
Linking R&D & operations with marketing
provides enormous direct & indirect benefits to
companies operating in a highly competitive
environment.
Marketing ensure R&D & manufacturing are
aware of marketing strategy, competitive
environment & global implications.
Nature of competitive situation in local market is
another driver.
Dominance of Kellogg Co. as a global player in
ready to-eat cereal market was key motivation for
creation in early 1990s of Cereal Partners
Worldwide.
A joint venture between Nestle & General Mills.
Partnership gained some market share (compared
to combined share of Nestle & General Mills prior
to linkup) in some markets, though mostly at
expense of lesser players like Quaker Oats &
Ralston Purina.
Similar acquisition by SABMiller, one of world’s
largest beer brewers, of Colombia-based Bavaria
in $7.8 billion deal brought company near-
monopoly control in 4 South American countries:
Peru, Colombia, Ecuador & Panama.
In highly competitive environments, rapid
penetration of global markets allows licensor to
define leading technology standard & rapidly
amortize R & D expenditures.
Research in Motion (RIM), Canadian maker of
BlackBerry device, has entered numerous
software-licensing agreements with competitors
eg Nokia & Palm to establish its software
architecture as platform of choice for wireless
communication tools.
Due to differences in cultural or competitive
environment, same product used to offer benefits
or functions that dramatically differ from those in
home market.
New product acceptance highly influenced by
competitive environment.
It is higher in less concentrated.
Less heavily promoted.
Less advertised categories.
Categories with more intense innovation rivalry
Competitive Climate - Differences in competitive
environment explain why a company offers certain
product lines in some countries but not in others.
On the other hand, in very competitive
environments, local nationals provide important
links to local business community & play key
strategic role in gaining business.
Global competitive pressures force MNCs to
implement structures that facilitate quick
decision-making & alertness.
In industries where competition is highly
localized, a decentralized structure where most of
decision making is made at country-level is
appropriate.
MNCs often benefit from mechanisms that allow
company leverage its global knowledge base.
Rapidly developing countries competitive
environment does not always live up to this
premise.
Promote domestic production & exports
Create /save jobs
Boosting overall wealth of nation
Help raise national income if firms that gain fast
move advantage are domestic rather than foreign
enterprises
Strategic policy
Promote domestic production & exports
Create /save jobs
Boosting overall wealth of nation
Help raise national income if firms that gain fast
move advantage are domestic rather than foreign
enterprises
Strategic policy
Target technologies important in future & use
subsidies to support development work aimed at
commercializing those technologies
National security
Legal/political stability.
Medium term economic growth dynamics.
Computer operational government regulators.
Infrastructure.
