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.
This export mode is suitable for those firms who have limited recourses to export. Small and medium sized firms who want to have
market can use this mode of entry. In this
the manufacturing or the host firm does not take direct responsibility
Export house, broker,
performs these activities, often without
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
of Indirect export.
that the export
buying agent is a representative of foreign buyers who
For exporter it is the easiest way to
payment is usually guaranteed in the exporters native country, what takes all responsibilities refer
movement of goods away.
Direct export is another market entry strategy in which
manufacturer sells its product directly to
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
s and distributors. In this export mode, the firm has more control
how to sell, whom to
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
firm has better understating of
market and its legislation that helps to deal with customers
and to maintain
of Direct export
representative of the country with exclusive
is working with the goods of
and with other non
competing goods from other companies, non
is working with the goods
of exporter as well as with other goods, which may compete, with the
Cooperative export is another type of market entry strategy in which two or more firms coop
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
In this export
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
the downstream func
tions through the same foreign agent.
of cooperative export
Intermediate export mode
The modes where the products enter to foreign market through agents and distributors with no full
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
the firms are also able to transfer the skills and strategies in
The risks and rewards are equally shared by the firms, which help in better control over the
production than in exporting.
export mode includes licensing, franchising, contract
manufacturing and joint ventures.