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International Strategic Planning The world is constantly opening new opportunities for businesses and organizations.

Many domestic companies face the decision of expanding internationally knowing the new challenges that come with this decision. There are many important aspects that marketers need to consider and plan at the time to start international expansion. The international planning process is very interesting and varies between different organizations. Also, if planning is not performed on an excellent level, organizations will most likely fail. Planning would allow organizations to be more flexible and organized at the time to face international expansion. Some of the general elements that marketers need to consider for international planning include stakeholder expectations, situation analysis, resources and capabilities, corporate objectives, marketing strategy, and implementation and control. The complexities of the international marketing environment cause a major difference for companies competing in international markets. By expanding, the company has many more organizations and people who have a stake in how they conduct their business. This means there are many more stakeholders whose differing expectations have to be managed. The ability of a company to pursue a chosen marketing strategy is determined to a large degree by the aims and expectations of the stakeholders. They directly or indirectly provide the resources and support needed to implement the strategies and plans. When talking about stakeholders, marketers need to consider shareholders, customers, host government, prospect employees and pressure groups in the intended country as well as in the home country. Organizations need to understand the importance of different expectations and the power that stakeholders have to influence a business strategy. Since there are a large variety of people involved in stakeholders, there is also a large variety of expectations which leads to internal conflict. To emphasize, shareholders usually want a high return on their investment and may expect the firm to find countries with low production costs, but the workers in these countries want an adequate wage on which to live. In many cases, this factor may determine success or failure of a company expanding overseas. International pressure groups are very delicate subjects for marketers. With the help of the internet, pressure groups have eyes everywhere. Pressure groups are not only existent on the country that a business is intended to operate or to offers product and services but in their home countries. The role of pressure groups in global markets tends to be to raise awareness of issues of concern. This fact can limit an organizations operations or force big strategic changes (Doole & Lowe, 2008). As the international business environment becomes more competitive, dynamic and complex, there is a greater need for marketers to be aware not simply of their immediate situation, but also of the possible impact of changes taking place in surrounding areas. Organizations should perform situational analysis in order to develop a clear understanding of each individual market and evaluate the significance that they have for the organization operations. One of the most common ways organization use situational analysis is evaluating past trends. On the other hand, many factors that need to be considered are unexpected events that might occur. Situational analysis also helps developing contingency planning. This allows organizations to be prepared for unexpected changes, and be more flexible at the time of adapting to a foreign market (Doole & Lowe, 2008). One example of an organization that failed to perform a situational analysis with a marketing campaign includes the Indian division of Cadbury-Schweppes. The company suffered
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embarrassment around the world and irritated a large portion of the Hindu society by running a newspaper advertisement comparing one of the companys products to the warzone in Kashmir. To make sure nobody missed the point, the advertising creators laid the too good to share catch-line over a map of Kashmir. The advertising caused a national protest. Arguments over Kashmir took India and Pakistan really close to a nuclear war and using this situation was not adequate to market a product. Indian politicians were shocked at the very mention of sharing the territory and exposed nationwide protests. Another negative aspect of this advertising campaign was marketers launched the campaign on August 15th, which is the Independence Day in India. Cadburys British roots may have made the advertisement even harder to swallow. British colonial rulers where the ones who in 1947 drew boundary lines between India and Pakistan and those lines where the ones in question between these two nations. After the huge controversy, Cadbury India was forced to apologize. This example shows that organizations moving overseas must perform situational analysis and see how their operations would impact internal and external environments (Cozens, 2002). At the time of analyzing and responding to global external forces, companies do not have much control. Sometimes, managers feel tempted to believe that their organization possesses the right capabilities to successfully move overseas. In order to prevent that to happened, marketers should perform a SWOT (strengths, weaknesses, opportunities, and threats) analysis and evaluate how the results fit in the intended region of business. Organizations need to understand the importance of auditing not just the most obvious company weaknesses but also the strengths, which are often taken for granted. For example, customer and brand loyalty may be much stronger in certain markets than others, and products which may be at the end of their life in the domestic market may be ideal for less sophisticated markets. SWOT analysis should, therefore, be carried out separately on each area of the business by function, product or market and focus upon what action should be taken to exploit the opportunities and minimize the threats that are identified in the analysis. This will lead to a clearer and effective evaluation of the resources that are available or show what must be acquired to ensure the necessary actions are performed (Keller & Kotler, 2012). One example of an organization that has experiment success and failure in international markets without changing their main strategy and competencies refers to Wal-Mart. At the time of implementing their everyday-low-prices strategy in other nations, Wal-Mart has had multiple reactions. In South Korea, customers did not appreciate cheap prices. From South Koreans perspective, Wal-Mart products were low quality and were not able to offer status or sophistications. After realizing that, Wal-Mart had no choice but to exit and fail in that country. After learning that lesson, Wal-Mart planned their entrance to China. By performing jointventures with Chinese businesses, Wal-Mart was able to test the waters and study the Chinese environment. This strategy allowed Wal-Mart to realize that their capabilities would be a success in China. The only thing that Wal-Mart had to change was the specific way services were offered like smaller packaging or selling fresh meat (Farhoomand, 2012). Once an organization has identified stakeholder expectations, carried out a detailed situation analysis and made an evaluation of the organizations capabilities, the overall goals to be pursued can be set. Organizations need to stay as realistic as possible when performing this task. Frequently, companies tend to plan thinking only in short-term profits in order to get credibility
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from shareholders. The objectives must be based on realistic performance expectations rather than on a best case scenario. Marketers also need to consider developing alternative scenarios so that realistic objectives can be set and accompanied by contingency plans in case the chosen scenario does not materialize. The process adopted for determining long-term and short-term objectives is important and varies significantly depending on the size of the business, the nature of the market and the abilities and motivation of managers in different markets. At an operational level, the national managers need to have an achievable and detailed plan for each country, which will take account of the local situation, explain what is expected and how performance will be measured. For most companies the most obvious international strategic development opportunities are either in increasing geographical coverage or building global product strength (Doole & Lowe, 2008). Once the objective has been set for the corporate and subsidiary level, the next step is to develop a detailed program of marketing strategies and activities that will achieve the objectives. At this time, the organizations need to consider a way to segment and target the selected international market. Also, organizations have to know how the organization will be positioned in a different international market and how organizations would add value to their product portfolio, communications, distribution and pricing strategies. A central consideration in marketing strategy development for international markets is the predicament that all international managers are facing. The question is how much they can standardize marketing strategies in different countries (Keller & Kotler, 2012). Once all of the marketing strategies have been established, organizations need to plan for implementations required at both domestics and international level. Organizations usually distribute resources to individual subsidiaries on a top down basis. On the other hand, when dealing with international growth, special distribution is made to enable foreign subsidiaries or divisions to resource specific market opportunities or difficulties encountered in particular markets. Agreement is reached through a process of discussion between the operating department and management levels. Detailed budgets and timescales can then be set for all areas of marketing in order to ensure that their contributions are delivered on time and within the budget. By considering this fact, managers need to design programs that give clear direction for implementation, continuous evaluation, and control of the organizations marketing activities. With this in mind, the plan not only must be strategic by satisfying the organizations and marketing objectives but tactical by focusing on individual strategic business unit marketing activities in each country. Finally, the plan must be implementable, by detailing individual activities of each department (Doole & Lowe, 2008). The last stage of the planning process includes preparing an effective system to obtain feedback and control of the business. This system needs to be included as an integrated part of the whole planning process. Feedback and control systems help organizations ensure that the marketing plans are not only being implemented but also help evaluate change in the international environment. At the time of performing control systems there are three fundamentals to consider. The first one refers to setting standards. These standards need to be relevant and they have to include corporate goals such as financial growth, return on investment, and non-financial indicators such as market share. Organizations need to be precise at the time of setting standards. They must be achievable and relevant to each local situation. The second fundamental includes
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measuring performance against standards. In order to find measurements and guarantee quick feedback of information, organizations use a variety of techniques which include reports, meetings and special measurements of specific parts of the marketing program, such as cost benefit analysis on customers, product lines and territories or marketing audits for a thorough examination of every aspect of marketing in a particular country. Benchmarking is also important. This method of control allows comparison of different aspects of the business, such as efficiency of distribution, customer response times, service levels and complaints. The last fundamental of control refers to correcting deviations from the plan. Here, organizations determine when performance has deviated sufficiently from the plan to require corrective action to be taken either by changing the plan or the management team charged with the responsibility of carrying out the plan (Keller & Kotler, 2012). An example of an organization that bases performance on feedback and control systems includes the retailer Zara. Instead of predicting future clothing trends like most of the other clothing retailers, Zara trains their employees to encourage feedback from customers, and to pay attention of their comments when they are shopping. After each day, the employees are required to write a list of things they heard and find common themes. Once these themes are found, Zara makes the changes necessary to get their customers satisfied. This makes Zara a flexible organization that can offer different products depending on the country of operation. Even though this process might be expensive, Zara is not only the number one retailer in the world but also has amazing logistics that help the evaluation and control process be smooth (Gallaugher, 2012). When planning international expansion, organizations can count on a progression system that can make the path clearer. By understanding the stakeholders, organizations can assess the power that external and internal forces have in strategic planning. By performing situational analysis organizations can be prepared for the unexpected. Once there is an understanding of the external environment and the possible situations, objectives need to be set for domestic and foreign operations. After that, organizations can develop marketing strategies that would guide the organization toward the objectives. At this point the preparation phase is over and organizations need to implement everything planned. Finally, organizations need to find ways to evaluate and control operations. In some cases, organizations will have to make changes to their plans and adjust to the environment. This planning strategy sets guidelines and help organizations be more secure and flexible when investing overseas. By going thought this process, organizations increase their chances of success when expanding overseas.

MBA 512: Marketing Management

Cesar Uauy

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References Cozens, C. ( August 20, 2002). The Guardian. Retieved on January 31, 2013, From http://www.guardian.co.uk/media/2002/aug/20/advertising.india Doole, I., & Lowe, R. (2008). International Marketing strategy: Analysis, Development, and Implementation. London, England, 24-31: Cengage Learning . Farhoomand, A. (20 de May de 2012). Walmart in China (2012). Harvard Business Review , pag. 14-17. Gallaugher, J. (2012). Information Systems: A Manager's Guide to Harnessing Technology. (Vesrsion1.4).NY: Flat World Knowledge, Inc. Keller, K. L., & Kotler, P. (2012). A Framework For Marketing Management. Harlow, England: Pearson Education Limited.

MBA 512: Marketing Management

Cesar Uauy

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