The Global Local Dilemma Businesses

The Global Local Dilemma
Businesses, firms, organisations etc. are ever growing in this day and age this is the result of globalisation which see organisations expanding beyond its local or regional location. The global local dilemma relates to the extent to products and services may be standardised across national boundaries or need to be adapted to meet the requirements of specific national markets.
As these organisations grow their products to international markets they have to consider the two approaches of standardization and adaptation in order to formulate their global product strategy. Following the increase in globalization, companies still struggle to decide as to which product strategy to employ in the different markets. In making such a decision, three main schools of thought have been discovered over the last decades as observed by Doole and Lowe (2008); Horska ?, E., Ubreziova, I. and Kekäle, T. (2007); and Keillor, Hausknecht and Parker (2001). These mainly advocate product standardization, adaptation or indeed combining both strategies.

ENTRY MODES/ STRATEGIES
(Albaum G. &., 2008) Mentioned that, a market entry strategy consists of an entry and a marketing plan.

According to (Hollensen S. ,2007) Export entry modes occur when the firms manufacture the products in the domestic market or a third country and then transfer to the foreign market with direct or indirect ways.16 Under export entry mode there are three major types: Indirect export, direct export and cooperative export.
2.4.1
Indirect export
This export mode is suitable for those firms who have limited recourses to export. Small and medium sized firms who want to have
a
trial
in
a
new
market can use this mode of entry. In this
mode
,
the manufacturing or the host firm does not take direct responsibility
for
exporting ac
tivities.
Export house, broker,
piggyback
and
the
trading
company
performs these activities, often without
the manufacturing
firm’s
involvement in the foreign sales of its products. In this process, the firm
cannot study and develop the foreign market and then lose opportunities to grow its business i
n
the
new
market.
Figure
2
.
The p
rocess
of Indirect export.
(Hollensen
S. ,
2007)
States
that the export

buying agent is a representative of foreign buyers who
reside
in the
exporter’s
native country.
For exporter it is the easiest way to
export
because prompt
payment is usually guaranteed in the exporters native country, what takes all responsibilities refer
movement of goods away.
2.4.2
Direct export
Direct export is another market entry strategy in which
manufacturer sells its product directly to
an
intermediary
in the targeted foreign market. The host firm is directly involved in all the activities like
handling, documentation, physical delivery, and pricing policies, with the product being sold to
agent
s and distributors. In this export mode, the firm has more control
o
ver
how to sell, whom to
17
sell and where to sell. More research and market strategy is necessary to minimize the risk. Trade
restriction and cultural difference can be its drawbacks whereas
, the exporter who
is
representing
firm has better understating of
the
local
market and its legislation that helps to deal with customers
and to maintain
a
sound
relationship.
Figure
3
.
The p
rocess
of Direct export
(Hollensen
S. ,
2007)
The a
gent
can be
the
exclusive
representative of the country with exclusive
rights,
semi

exclusive
, when
the
agent
is working with the goods of
the
exporter
and with other non

competing goods from other companies, non

exclusive when
the
agent
is working with the goods
of exporter as well as with other goods, which may compete, with the
exporter’s
production.
2.4.3
Cooperative export
Cooperative export is another type of market entry strategy in which two or more firms coop
erate
together to manufacture the product because of limited resources and limited capital. Making
collaborating agreements the cooperative firms achieve higher economies of scale and form
broader product concept. And also provides the opportunity to study
methods and potential of
exporting
.
In this export
mode
,
all the collaborating cooperatives share risks and reduce the cost
of manufacturing and selling. The process starts with finding and extracting the raw materials and
dealing
with
the downstream func
tions through the same foreign agent.
18
Figure
4
.
The p
rocess
of cooperative export
2.5
Intermediate export mode
The modes where the products enter to foreign market through agents and distributors with no full
ownership are
known
as
a
n
intermediate
mode. Although there is no full ownership of the parent
firm, the ownership and control can be shared with the local partners and agents. In this mode
beside the
product
,
the firms are also able to transfer the skills and strategies in
the
f
oreign
market.
The risks and rewards are equally shared by the firms, which help in better control over the
production than in exporting.
The i
ntermediate
export mode includes licensing, franchising, contract
manufacturing and joint ventures.
2.5.1
Licensing
A
licensing ag