Global Marketing Strategies 1

Competitive Marketing Strategies in Global Marketing Environment

Dr.R.K.Srivastava & Dr.Srini.R.Srinivasan

Presented by Deepak PatelBDM- Corporate

Amore Crosslink Inc. (P) Ltd.

• Globalisation and Developing Nations

• Trade and Industry

• Labour and Employment

• Intellectual Property Rights

• Environment

• Conclusion

Agenda

Objective

To Understand and to analyze the impact of Globalisation in developing countries

To Strategies the benefits of Globalisation

Globalisation and Developing Nations

Impact on Domestic Economic Development: Globalisation has intensified interdependence and competition between economies of the nations in the world market. This is reflected in regard to trading in goods and services and in movement of capital, labour and employment, environment.

Opportunities vs. Challenges : Globalisation might bring new opportunities to developing countries such as greater access to global markets, accelerate technology transfer from more developed countries, holds out promise improved productivity and increased efficiency. However, globalisation has also thrown up new challenges to developing countries like volatility in financial market, abuse of labour, environmental degradations, etc.

Definition of Globalisation

• Financial scholars such as states that global integration of the financial markets can be seen as the process of globalisation. (Walker en Fox )

• Globalisation as the integration and interconnectedness of world economy (Neuland en Hough, 1999, p. 1). Globalisation as the reduction of transaction cost of trans-border movements of capital and goods thus of factors of production and goods. (Gill ,2000)

• Globalisation as the increasing integration between the markets for

goods, services and capital and at the same time the breakdown of borders. (Redding ,1999, p. 19)

• Globalisation is “a process of increasing connectivity, where ideas, capital, goods, services and people are transferred across country borders.” (PRUS 2001)

Trade and Industry

Free Trade: Developing countries have weak economic, legal, and political institutions, making them vulnerable to high levels of corruption, insecurity, and conflict. Developed countries have already had better infrastructure, highly skilled labours, advanced technology and good managerial skills. That in turns makes developing countries unattractive for foreign direct investment. Therefore, free trade as a game is an unfair competition and will only benefit the highly industrialized countries.

Foreign direct investors (FDI’s) of global companies, bring huge capital, expertise and new technology to developing nations. however the FDI’s presence in the developing countries might also bring the consequences that foreign capital brought by FDI’s is being used in speculative attacks against weak currencies of developing countries constitutes a real threat to economic stability and to the level of employment in these countries.

Trade and Industry

Infant Industry and Trade Liberation: Stiglizt , former Chief economist of the World Bank, states that the impact of trade liberalization has caused inefficient industries, which are mostly found in infant industry in developing countries, to close down as a result of pressure from international competition

In the early 1990s, Indian government started the project of small car projects using local contents as many as possible. The main purpose of this project was to foster development of an indigenous automotive industry, the transfer of technology and the flourishing of supporting automotive spare part industries. Infant Indian car industry in my view is certainly less efficient, and therefore, could not compete with more mature Japanese car industry and thus still need some certain of protection before becoming strong enough to compete in the global market. In this sense, globalisation through trade liberations is more beneficial to industrialized countries for opening fast-growing, huge foreign markets for goods.

Labour and Employment

Labour: Global retailers and brand MNC’s in this industry relocated their productions in some giant countries and would result a potential million of jobs losses, some smaller developing countries had to allow their labour wages remain low and be exploited.

Owning to global competition pressure, Nike start searching for alternative, lower cost producer. The company worked with its lead suppliers to pen up manufacturing plants in Indonesia, China and Vietnam benefiting low wages and abundant number of labours.

Employment: Highly skilled workers, professionals and capital owners in developing countries are now free to move with their resources where they are most demanded. Mainly attracted by better salary and/or investment opportunities in the north, which could have harmful consequences for long-term growth of the countries in the south

Intellectual Property Rights

• When developing countries join the global organization, they are bound with intellectual property right agreement.

• Developing countries coerced into an agreement, which transfer million of dollars worth of monopoly profits from poor countries to wealth countries under the property right law.

Environment

• The environmentalists or greens concern that globalisation is encouraging more economic growth, mass consumption and large-scale economic activities and thus excessive exploitation of renewable and non-renewable resources (Helleiner, 1996, p. 62).

• A similar problem arises with the exploitation of other scarce resources such as minerals, raw materials, and waters (Hoogvelt, 1982, p. 130-31).

• As a result, there will be faster environment degradation around the world. Since, developing nations is great supplier of raw materials, the greatest degradation will be seen in these regions (Hoogvelt, 1982, p. 131).

Conclusion• To benefit from globalisation in trade and industry and take the most of

it, the government of developing countries should still seek limited protectionism.

• MNC’s in Industrialized countries have been in business longer and over time have been able to improve their efficiency in production. As a result they are able to offer their product at a lower price in international markets and still remain profitable. Infant industry in developing countries, therefore, still need some degree of protection before becoming sufficient strong and competitive when protection is eventually lifted.

• The government of developing countries themselves need to find ways to grow more rapidly and adapt new technologies, improve their human capital base and create stronger institutions and encourage the strong research and development.

Thank You