[MUSIC] In this video we ask the question, does your company have what it takes to go global? Recall the four critical questions of global marketing. When should we engage in international business? Who is our target market? What is our marketing strategy? And how should we engage? We answer the first question using the four C's of global marketing. The three C's are semi-fixed environmental factors in your perspective marketplace. They are company, customer, and competition. When considered together, the three C's comprise the foundation for a firm's international marketing strategy. The first of the three C's is company, where we ask, why are we considering international expansion? What are our medium and long-term objectives? How would our objectives be fulfilled by expanding internationally? Do we have the experience with international marketing and sales? What international marketing skills do we already have? What skills would we need to develop? Would our organization's culture embrace the challenge of international operations? And do we have the organizational bandwidth to take on a challenging international marketing project? Answers to these questions will help us understand if we should even consider going global. Often the answer is just no, or maybe well, not yet. Or sometimes the answer is, let's go. If we make the decision to continue to explore going global, the second C is for customer, with which we ask the following questions. What countries are most appropriate for our product or service and why? Who are the customers that want our product or service? What are their characteristics? What are their demographics, income, and social status? Where are they located, are the urban or rural? And how do they get around? Are there under-served niches with needs that we can satisfy? Why would our target market want our product? Who buys and why? How large is our target market? Is it large enough to justify going global? And how can we best connect with potential customers, print advertising, TV, radio, social media, one-on-one sales, trade shows, or whatever? The third and final C is for competitors. Here we ask, who are our competitors in our chosen target market? Who do customers buy from now? Can we differentiate our product or service from the local competition? What can we offer that's better or different? How do customers decide to buy and where to buy, price, quality, prestige, brand name? How do customers, or rather competitors market and sell, advertising promotions, social media? How fiercely will competitors respond to a new foreign entrant? All these competitor questions are critical to ask and understand before proceeding into a foreign market. Another useful tool to help us determine if and how we should go global is the well-known eclectic theory of international operations. Using the results of our three C's work, we ask, does our firm have ownership, location, and internalization advantages if we go global? We first determine, do we have ownership advantages in a foreign market? In other words, do we have sufficient competitive advantage over entrenched rivals in a foreign market to effectively compete? As an example, do we have a great brand, or economies of scale, or novel technologies, or access to niche markets that would allow us to prevail against competitors? If the answer is no, then we probably should just remain domestic and just stay home until such time as we develop new competitive advantages to allow us to prevail in international markets. Or, if the answer is yes, We next ask, do we have location advantages in a foreign market? Are there immobile advantages for setting up in a foreign country? Locational advantages might be access to resources, labor technology, infrastructure, or markets that we cannot get in our home country. If the answer is no, there are no locational advantages, then why do we bother to go abroad? Instead, our best option in this case is to export our products or services from our home country. And avoid the expense and complexity of international expansion. However, if the answer is yes to locational strategies, Our next question is, do we have internalization advantages by going abroad? Can we internalize foreign operations to augment and exploit our core competencies? Internalize here means bringing foreign operations into our organizational structure, thereby becoming part of the company. Or alternatively, can we just as effectively outsource or contract for foreign operations? If the answer to internalization is no, then we should consider licensing or franchising. Letting foreign countries market and sell our products or services in their home market. Finally, if the answer is yes to internalization, we should consider moving into a foreign country by directly investing and operating in that country. Foreign direct investment can take many forms, including a joint venture with a local company, acquisition of a local company, or greenfield investments, where we set up operations from scratch. The eclectic theory of international operations is also known as the OLI framework, for ownership, location, and internalization questions it asks. Used in conjunction with three C's analysis, the OLI or OLI framework provides a systematic and insightful method for a company to evaluate how or even if it should engage in international operations. In summary, the three C's ask fundamental questions. What are our company capabilities and goals? What countries and target customers should we pursue? What are characteristics and capabilities of the competition? Answering these questions are fundamental to developing an effective international marketing plan. Finally, the eclectic theory of international operations provides a useful framework to aid and evaluate the three C's in our international marketing prospects.
