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Unformatted text preview: n industries of standardized, commodity type product that serve universal needs Meaningful differentiation on nonprice factors is difficult Major competitors are based in lowcost locations Consumers are powerful and face low switching costs Liberalization of world trade and investment environment
Examples of industries with cost pressures Commoditytype products which usually serve universal needs e.g.. Bulk chemicals, petroleum, steel, semiconductor chips Industries which locate in lowcost locations e.g. tire industry PRESSURES TO BUILDING AN PRESSURES TO BUILDING AN INTERNATIONAL STRATEGY
►PRESSURES FOR LOCAL RESPONSIVENESS Differences in consumer tastes & preferences ► North American families like pickup trucks while in Europe they
North are viewed as a utility vehicle for firms
are Differences in infrastructure & traditional practices ► Consumer electrical system in North America is based on 110
Consumer volts; in Europe on 240 volts
volts; Differences in distribution channels ► Pharmaceutical sales in Japan and Britain are radically different
Pharmaceutical than the U.S. style “high pressure” type of selling; acceptance of
the “supermarket” varies considerably from country to country
the HostGovernment demands ► Health care system differences between countries require
Health pharmaceutical firms to change operating procedures
pharmaceutical LOCAL RESPONSIVENESS vs. LOCAL RESPONSIVENESS vs. STANDARDIZED PRODUCTS
Theodore Levitt: (“The Globalization of Markets,” HBR May/June 1983) ► ► ► Globalization and technology have b...
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This document was uploaded on 02/26/2014.
- Spring '13