Internationalisation of Companies and Marketing Strategies

The provided text is about internationalisation, which is the process of increasing involvement in international markets. There are different triggers for internationalisation like market opportunities, risk diversification, economies of scale, proactive reasons, and reactive reasons. The assignment mentions various models such as Ansoff matrix model and 7 P's of marketing that are followed while establishing business in global markets. It also discusses methods of market entry, including market opportunities, risk diversification, economies of scale, profit seeking, and reactive reasons. The text concludes by suggesting potential marketing strategies for success in international markets, such as creating a consistent brand culture and marketing products and services.

Global Marketing

Table of Contents
INTRODUCTION...........................................................................................................................1
A brief background of the company............................................................................................1
Potential internationalisation motives or triggers that influence company to move into
international markets...................................................................................................................2
Comparison of international markets using global marketing models........................................3
Analyse the method of market entry used by the company .......................................................4
Potential marketing strategy used to ensure success in international market.............................5
CONCLUSION................................................................................................................................6
REFERRENCES .............................................................................................................................7
.........................................................................................................................................................7

INTRODUCTION
Global marketing is defined as the process of changing marketing strategies of the
company for adapting conditions of other countries. This is a process of planning, creating,
promoting, positioning and promoting the products in the global market (Thieu, And Et. Al.,
2017). If any organisation is not extending internationally, it will face domestic competition from
international companies that are expanding into foreign countries. In this report, the company
which is considered is SEM Ltd. It is a UK based firm established in 1914. This was founded by
Henry F Joel. This company focuses on designing and manufacturing of high performance
servomotors. This makes company renowned worldwide. SEM company is involved in the field
of motor technology for cutting metal machine tools like spindle and axis motors. This report
includes Potential internationalisation motives or triggers that influence company to move into
international markets and comparison of international markets using global marketing models. It
explains the method of market entry used by the company and at last this company explains
potential marketing strategy used to ensure success in international market.
A brief background of the company
SEM is a UK based company founded in year 1914 by Henry F Joel. This company is
located at the Bridge Technology Park development near Dartford, Kent. SEM is located with a
quick and easy access to the UK's major motorways, international or private airports and
channel ports. The core product of SEM are high performance AC synchronous servomotors and
Asynchronous Spindle motors. SEM provides quality and innovative products to people since
it's incorporation. The quality system are implemented in this company and embedded in the
culture of firm. This ensures products, designs and services are delivered with the highest
standards. SEM is committed to have flexibility at the core of the business. It invests in latest
systems and technology within art manufacturing facility. This manufacturing system is
organised by product value streams that are made of various lean manufacturing cells and
processes. This creates a strong customer focus and it provides a platform to improve. The
operational excellence program of this company involves an extensive focus on engagement and
training and staff development to ensure improvement (SchönertPanibratov, 2017). This
company was recognised with an Investors in People award.
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Potential internationalisation motives or triggers that influence company to move into
international markets
Internationalisation is defined as the process of planning and implementing products and
services so that organisations can adapt culture, language and traits of different countries and
work accordingly. It is the growing tendency of organisations to operate in foreign countries.
There are different potential motives or triggers that influence an organisation to move into
international markets (Novela and Hansopaheluwakan., 2018). These are described below-
Market opportunities- An organisation can be interested in expanding business
internationally as there are more market opportunities in abroad. These are demand of product in
foreign markets, trends of product in markets and the absence of competition that will help in
making profits. SEM Ltd. Of UK should expand services in China that is a BRIC country. This
will help in expansion in markets of China and earning profits.
Risk Diversification – This is another reason for any organisation to expand globally.
This helps companies to become more immune to changing trends in consumption for different
markets. Companies are less affected by external factors that influence consumer behaviour and
purchasing of product such as climate. SEM is a company that is involved in designing and
manufacturing of high performance servomotors. It should expand globally and make money and
build reputation of the company. China is a country having large population. SEM can start
operating in China and minimise the risk of business.
Economies of Scale- This is a reason which helps firm to globalise. Economies of scale is
an opportunity in expansion of business and earning profits. This allows an organisation to
economise the distribution and transport network. Moreover, this allows a firm to produce
products at a cheaper rate in some countries. This is because of some factors like flexibility,
supplier availability, component costs, legislations and wages. SEM Ltd is operating in UK and
it can expand it's business in China. Economies of scale is basically a proportionate saving in
costs that is gained by increase in production level (Masier, Ogasavara and Risso, 2017). China
has more number of labour as compared to UK. If SEM establishes business and factory in China
it will be beneficial for making profits and serving customers of that area.
Proactive reasons- These means to act in advance or anticipating something is happening.
Organisations which are proactive in international business have better position in market. The
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proactive motivators for a company to internationalise are market opportunities, risk
diversification and economies of scale.
Profit seeking- If an organisation enters in a market with lower prices than business is
marked as competitive edge by rivals. Manufacturing of products in low cost countries is
beneficial and enables to maximise profits. China is a great opportunity for SEM to develop it's
business.
Sales expansion- There is a strong potential in expansion of business globally rather than
concentrating on the domestic market. Sales expansion depends upon life cycle of the product for
e.g. if a product enters the last cycle in one country then it s essential for the company to search
for new markets fr re arranging whole process in foreign country.
Resource seeking- If there is scarcity of resources in one one country then it is advisable
for companies to found these resources like skilled workforce, natural resources, labour, ideas
and new concepts in foreign markets. China has more skilled labour than UK so it will be
beneficial for SEM to expand in this market.
Reactive reasons- Organisations cannot predict any event that can occur in future.
Therefore, when a company decides to expand globally it is a reactive action to an event
(Hollensen and Møller, 2018). There are various examples of reactive reasons for expanding
abroad like market opportunities, overproduction, declining sales or excess capacity, competitive
strike, governmental reasons, economic and political changes.
Comparison of international markets using global marketing models
There are different markets which a company can consider while operating in global
market. Some of the marketing models used by SEM Ltd are given below-
Ansoff matrix model – This model was given by Igor Ansoff in the year 1957. This is a strategic
planning tool that provides framework for helping executives and senior management for making
strategies for future growth. In this matrix, Ansoff focuses on existing products and new products
of the company. The main products of SEM are high performance AC synchronous servomotors
and asynchronous spindle motors. These motors are used in metal cutting machine tool
applications. This model can be used by this company to estimate the market opportunity in
other foreign countries (Grünig and Morschett, 2017). There are basically four possible product-
market combinations such as market penetration, product development, market development and
diversification.
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The Ansoff matrix provides four different growth strategies described below-
Market penetration- The market penetration strategy is the least risky strategy for
business. It leverages the resources and capabilities of firm. This is an opportunity for the
company to grow it's market share in foreign countries. SEM is offering AC synchronous
servomotors and if it plans to expand in China it is beneficial for the growth of market share of
the company. This firm will achieve growth with the existing product in the present market
sector.
Market development- The firm seeks growth by targeting the existing products to new
market segments. This includes the pursuit of additional geographical regions or market
segments. This is a good strategy when core competencies of firm are related more to the
specific product than to its experience with a specific market segment. The development
strategy has more risk than market penetration strategy. China has a huge market segment and if
SEM Ltd. Expands it's factory or products in this market, this will make profits for the company.
Product development- This strategy is appropriate when the firm launches any new
product and target the existing customers. The organisation leverages its strength by developing
a new product and targeting existing existing customers. The new product development carries
more risk. SEM deals with the servomotors and if this company starts operating in any other
sector and launch this product in market of China. This is a risky business as company is not
sure whether this will make profits or not.
Diversification- Diversification is a risky strategy. In this strategy, organisation grows by
diversifying into new businesses and developing new products for new markets. This quadrant of
matrix is referred as the suicide cell. Diversification is a reasonable choice if the level of rate of
return is high than the rate of risk (Couto and Ferreira, 2017). Diversification helps in reducing
overall portfolio risk of any organisation. SEM company can diversify it's products and sell them
in China markets. This may help in increasing and capturing market share of that country. This is
a good opportunity as well as risk for the business. On the other hand, the chances of profits will
overcome the chance of taking risk.
Analyse the method of market entry used by the company
There are a number of ways by which market entries are done in a business. There are
following strategies used used by organisations to enter international markets-
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Direct exporting- This is direct selling of the product or service into markets. The companies
produces their products in the country and then sells this o customers overseas.
Licensing- In this method, licensor will grant an organisation in the foreign market for producing
product, use the brand name, etc. in exchange of a payment.
Franchising- Franchising is another way of licensing. In this company puts a package of
successful ingredients which contributes in success in domestic market and then franchising the
product to overseas investors. A franchisee holder can be given trainings and marketing for
growth of business in international market.
Partnering- Partnering is a useful strategy in which markets of international borders are captured
by making partners in those countries (Cantone, and Et. Al., 2019). This is a risky job and also
on the other hand it helps in maximising profits of the company.
Joint Venture- In this kind of strategy two companies come together and do business together.
Both the companies faces risk of market and share knowledge and expertise for for performing
well in business.
SEM Ltd. Can use franchising for expanding in international markets. This is a form of
licensing. This company will have a rapid market expansion in China by following this strategy.
The company must make effective business model and it must have a strong brand recognition
which can be recognised internationally.
Potential marketing strategy used to ensure success in international market
Global marketing strategies are important to create by an organisation for achieving success
in international markets. A good global marketing strategy incorporates all the countries of
different regions of the world for coordinating their marketing efforts. There are following two
strategies used by SEM in expanding business globally-
Create a consistent and strong brand culture- A company's priority is to create a strong
and consistent brand by making the product of the company familiar. Brand culture has become a
trend nowadays for the expansion of business. SEM can launch its products in China but these
products must be accepted by culture of China then only this product will be appreciated by
customers.
Market your products and services- Brands cannot adopt different strategies according to
the country every time because of the proliferation of digital platforms (Althagafi and Ali, 2017).
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The companies market it's product on internet. SEM should advertise it's products and adopt a
marketing approach that is less unified.
CONCLUSION
Internationalisation is the process of increasing involvement of company in international
markets. There are different triggers of internationalisation like market opportunities,Risk
Diversification, Economies of Scale, proactive reasons and reactive reasons. There are different
models that are followed while establishing business in global markets like Ansoff matrix model,
7 P's of marketing, etc. The various methods of market entry are Market opportunities, Risk
Diversification, Economies of Scale, Profit seeking and Reactive reasons. Potential marketing
strategy used to ensure success in international market are Create a consistent and strong brand
culture and Market your products and services.
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REFERRENCES
Books and Journals
Althagafi, A. and Ali, M., 2017. Understanding the Relationship Between Culture and Sensory
Marketing in Developing Strategies and Opportunities in Emerging Economies: A
Cross-Cultural Study. In Promotional Strategies and New Service Opportunities in
Emerging Economies (pp. 236-262). IGI Global.
Cantone, L. and Et. Al., 2019. Outsourcing New Product Development Fostered By Disruptive
Technological Innovation: A Decision-Making Model. International Journal of
Innovation Management. 23(01). p.1950008.
Couto, M. and Ferreira, J. J., 2017. Brand management as an internationalization strategy for
SME: A multiple case study. Journal of Global Marketing, 30(3), pp.192-206.
Grünig, R. and Morschett, D., 2017. Determining a Framework for Going International for
Production and Sourcing. In Developing International Strategies (pp. 141-146).
Springer, Berlin, Heidelberg.
Hollensen, S. and Møller, E., 2018. Is “glocalization” still the golden way for Electrolux? Is
there more to be done?. Thunderbird International Business Review, 60(4), pp.463-476.
MARKETING, G., Course Syllabus GLOBAL MARKETING (LISP1018)–Graduate 5 ECTS 1.
Course Description.
Masiero, G., Ogasavara, M. H. and Risso, M. L., 2017. Going global in groups: a relevant market
entry strategy?. Review of International Business and Strategy. 27(1). pp.93-111.
Novela, S. and Hansopaheluwakan, S., 2018. Analysis of Green Marketing Mix Effect on
Customer Satisfaction using 7p Approach. Pertanika Journal of Social Sciences &
Humanities.
Panibratov, A., 2017. International strategy of emerging market firms: Absorbing global
knowledge and building competitive advantage. Routledge.
Schönert, I. P. D. M. , Course MV4. 63 152663 International Marketing.
Thieu, B. T. And Et. Al., 2017. Linkages between Marketing Mix Components and Customer
Satisfaction: An analysis on Google in Hanoi, Vietnam. Journal of Economics &
Business Research. 23(1).
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