Strategic International Alliances

Strategic International Alliances

An issue facing many multinationals today is how to compete in an increasingly competitive global market. Whether a small company or one of the giants, staying competitive means constantly re-accessing marketing strategies. How product, promotion, distribution, and pricing strategies evolve in international marketing is dependent on the approach to internationalization the company takes. Of the three operating concepts that characterize a company’s international orientation, Domestic Market Extension Concept, Multidomestic Market Concept, or Global Market Concept, the main focus of this chapter and the text is on the Global Market Concept. I believe that regardless of the size of a company or in how many countries it operates, it should have a global orientation. The teaching objectives of this chapter are to:

1) Present the operating concepts an international company may have and explore the idea of global marketing management.

2) Discuss the benefits of global orientation.

3) Stress the importance of quality and cost containment in global marketing competition.

4) Examine the different types of collaborative relationships and show how these alliances are being embraced by international companies.

5) Focus on relationship marketing and strategic international alliances as two important types of collaborative relationships for the global marketer.

6) Stress the need for strategic planning to achieve company goals.

Comments and Suggestions

  1. The subject of collaborative relationships and the subsequent discussion of relationship marketing and strategic international alliances are important ideas to focus on in this chapter. Changes in technology, the shortening product life cycle, competition, the rapid growth of emerging markets and the need for cost containment as major trends in global marketing means that many firms must engage in collaborative relationships to remain competitive. There are several good examples in the text that illustrate how these relationships have been used. Also, Michael Schrage, “Notes on Collaboration,” The Wall Street Journal, June 19, 1995, p. A-10, had three good examples of important collaborations by IBM, Microsoft, and Boeing. As Schrage states, “. . . ‘winning’ in tomorrow’s global markets isn’t going to be a matter of scoring points but of creating value with customers, clients, suppliers and colleagues in innovative ways.” These relationships span the complete range of contacts a company has from customers through suppliers to other companies.
  2. Not to be overlooked in this chapter are the various alternative market entry strategies. It is important to stress that there are a variety of ways to enter international markets and a company may use only one or a combination depending on the goals of the company and target market characteristics.

Lecture Outline
I. Global Marketing Management

A. Global Marketing Management

B. Benefits of a Global Orientation

II. Planning for Global Markets

A. Company Objectives and Resources

B. International Commitment

C. The Planning Process

III. Alternative Market-Entry Strategies

A. Exporting

B. Contractual Agreements

  1. Licensing
  2. Franchising
  3. Joint Ventures
  4. Consortia

C. Strategic International Alliances (SIA)

D. Direct Foreign Investment

IV. Organizing for Global Competition

A. Locus of Decision

B. Centralized versus Decentralized Organizations

Discussion Questions

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