GBM Assignment 1

Question no 1: "Going global, thinking local.
" Explain what this phrase means and critically

discuss the potential benefits and conflicts for a company in following this logic. Explain this
scenario in context of one company based on this perspective.
“Going global, thinking local” means that the multinational companies involved in markets
always strive towards going global meaning that they advance their companies goals based on
strategies, aims & objectives of international affiliation and a worldwide mindset. However in
their view of globalizing the company should also take consideration of their cultural and
traditional roots.
Understanding this approach is necessary as it explains each markets cultural and traditional
expectations with increased global monetization of the company. Setting global vision for a
company is important since it helps to achieve the primary objective of the businesses, which is
profit maximization, in the most effective way through intensive market expansions across
countries and continents. However, the strategy any multinational company adopts in order to
achieve its global vision does not have to be rigid, because different markets differ from each
other on the grounds of political system, religion of people, culture, standard of life etc. and these
differences find their reflection on consumer behavior, customer expectation and other related
matters.
If any multinational company tries to adopt the same strategy to all markets, even if that specific
strategy was the source of competitive advantage in some markets no provision would be made
for local differences of above specified nature, and this can lead to customer misunderstandings,
even contradictions or anger in some extreme cases, and ultimately to failure of the company in
that specific market.
Therefore this approach of “Going global, Thinking local” allows the multinational companies a
great way for foreign intensive market entry strategy and also give local customers the
satisfaction they need from each market by the strategies and plans they adopt.
EXAMPLE
The biggest example relating to this approach that one can find is McDonald’s. McDonald’s
offers the value of cheap-priced, fast served tasty food that can be conveniently consumed
globally, however, local differences in each county are reflected on the menu of restaurants
serving there. Adam’s (2007) mentions Maharaja Mac in India, McDonald’s beer in Germany,
McLobster in Canada, shrimp burgers in Japan, McLaks (fish) in Japan, avocado burger in Chile,
and many other variations of burgers and other meals in different parts of the world.
Question no 2: LIST 3 reasons a business may expand its international markets. What and
why’s of these reasons? And properly justify each of the mentioned reasons along with an
organizational example.
Following are the reasons why international business may present opportunities for increased
profit and why businesses go international:
a) Saturated domestic markets – the international product lifecycle
Sometimes the reason companies opt to go international is due to the saturation of the domestic
markets and no potential of future growth. Therefore, the companies look for their future
potential in foreign international markets. There may be several reasons why a market may be
saturated at home and yet offer potential for growth in other markets, but one reason is the
product lifecycle. You know, of course, that the product lifecycle concept illustrates the fact that
products pass through a number of stages in their lives from introduction through growth to
eventual saturation and decline. We can also see that a product may often be at different stages in
different countries. So, for example, the microwave oven was entering maturity in the United
States whilst at the same time only being at the introduction stage in the United Kingdom. Very
often, in fact, there is a pecking order to the international product lifecycle with products and
services first reaching maturity and decline in developed economies while still being at the
growth or even introductory stage in developing economies. The point is that by carefully
identifying the next growth market, a business can achieve a fresh impetus to growth when
domestic markets have become saturated.
b) Intense/increased international competition in home markets.
Another factor which may prompt a company to go international is where it faces intense and/or
increased competition in its domestic markets, particularly from non-domestic competitors.
Sometimes the business may seek to avoid such intense competition by looking for non-
domestic markets to maintain and expand sales and profits. The danger here, of course, is that
competition will simply follow you into your new markets.
c) Economies of scale
We have already mentioned the fact that international expansion through expanding the potential
market often enables a company to achieve economies of scale. At one time, these economies of
scale were linked to decreases in average cost in the production and research and development
areas of the business, but increasingly, companies are also being driven by economies of scale in
the marketing area and particularly in the areas of branding and advertising where going
international can help reduce the average costs in this increasingly expensive area of the
business.
Question no 3: Elaborate and justify the statements that identifying and understanding global
customer needs means that the international marketer needs to:
a) study all the world's cultures.

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Question no 1: "Going global, thinking local.

" Explain what this phrase means and critically

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