Topic 2 - Global Business Expansion Flashcards
(36 cards)
What are home grown products?
Home grown products are created, produced, and marketed within their country of origin.
What are benefits of home grown products?
1) Business Development:
Home grown businesses have the opportunity to build internal capabilities such as communication systems, administration processes, and continuous improvement strategies. This creates a strong domestic foundation before international expansion.
2) Economic Growth:
These products contribute to the growth of local industries by creating employment opportunities, boosting local supply chains, and generating tax revenue.
3) National Identity & Cultural Connection:
Consumers often associate home-grown brands with national pride and heritage, increasing customer loyalty and brand value. For example, Billabong’s association with Australian surf culture built a strong emotional connection with its local and international consumers.
4) Sustainability & Ethical Sourcing:
Local production often involves shorter supply chains and eco-friendly practices, making the product more sustainable and appealing to ethically conscious consumers.
5) Government Support:
Programs like Austrade and the Export Market Development Grant (EMDG) provide financial assistance and strategic guidance to help Australian businesses grow their global presence.
6) Market Differentiation:
Australian-made or local branding serves as a unique selling point, especially in competitive global markets where authenticity and quality are valued.
What is foreign expansion feasibility?
Foreign expansion feasibility refers to how realistic and sustainable it is for a business to enter and succeed in a new international market. Businesses must consider multiple internal and external factors.
What are the factors to consider before expanding globally?
1) Level of consumer demand
2) Consumption patterns
3) Competitor activity
4) Country/region-specific PEST factors
What is meant by level of demand by consumers?
The level of consumer demand refers to whether there is a strong interest and need for the business’s product or service in the new market.
- Market research is essential to identify if consumers in the target market want or need the product.
- Businesses should tailor marketing and product strategies to suit local needs and preferences.
What is meant by consumption patterns?
Consumption patterns describe the habits and behaviours of consumers such as how they shop, what they value, and how often they purchase certain products.
- Influenced by age, lifestyle, income, technology use, and cultural values.
- Businesses must adjust product formats, pricing, or delivery models to align with these behaviours.
What is meant by competitor activity?
Competitor activity refers to the presence, strength, and strategies of other businesses in the same industry within the target market.
- Few or weak competitors make it easier to enter the market.
- Established competitors with strong brand loyalty or local ties make entry more challenging.
What are impacts of competitor activity on domestic businesses?
1) Increased Competition:
- Global brands entering local markets challenge domestic businesses.
- E-commerce giants like Amazon force local retailers to innovate or closure.
2) Greater Product Variety at Lower Costs:
- Consumers benefit from a wider range of goods at competitive prices.
3) Global Supply Chain Dependence:
- Over-reliance on global trade was evident during COVID-19, causing supply chain disruptions and shortages of essential goods.
What are PEST factors?
PEST analysis is a framework used to evaluate the external environment of a market or country that can affect business success.
Political: Laws, regulations, trade barriers.
Economic: Currency rates, inflation, labour availability.
Social: Language, lifestyle, cultural attitudes.
Technological: Innovation, mobile/internet penetration.
What is standardisation?
Standardisation involves using a consistent marketing strategy globally.
What is adaptation?
Adaptation involves modifying parts of the marketing mix (product, promotion, pricing, place) to suit local cultures, expectations, and legal requirements.
What are the different types of standardisation or adaption to the marketing mix?
1) Corporate slogan
2) Product name
3) Product features
4) Positioning
What is a corporate slogan?
A corporate slogan is a short, memorable phrase that communicates a company’s brand message and identity.
How can a corporate slogan be standardised and adapted?
Standardised: Builds brand consistency across all markets.
Adapted: Tailored to local languages and values.
What is an example of a corporate slogan?
KFC’s original slogan “Finger-Lickin’ Good” was mistranslated in China as “Eat your fingers off.”
What is a product name?
The product name is the official title under which a product is marketed and sold. Names must be easy to pronounce and appropriate in local languages.
How can a product name be standardised and adapted?
Standardised: Maintains global recognition.
Adapted: Adjusted to prevent offensive or confusing translations.
What are product features?
Product features include design, packaging, ingredients, or technical specifications that may need to change depending on the region.
How can product features be standardised and adapted?
Standardised: Consistent across all markets.
Adapted: Modified to suit local tastes, laws, or needs.
What is positioning?
Positioning is how a product is perceived in the mind of the consumer, especially in comparison to competitors.
How can positioning be standardised and adapted?
Standardised: Consistent identity across markets.
Adapted: Adjusted to match local values or social norms.
What is an example of positioning?
McDonald’s is positioned as affordable and convenient. In China, KFC is positioned as a more family-oriented dine-in experience.
What are business ethics?
Business ethics are the principles and moral values that guide business conduct and decisions. Global businesses must consider the social, environmental, and economic effects of their actions.
What are the 3 types of ethics that are considered in business?
1) Environmental Responsibility
2) Outsourcing
3) Use of Offshore Labour
