Global Marketing Strategy - Assignment Example

Executive Summary This study seeks to provide an explanation on the manner on which non-food commodities are extending in the supermarkets. Specifically, the phenomenon will be observed in the experience of 24/7 Stop through an in-depth analysis of the company. This study is divided into four sections. The first part of the study will be discussing the current state of non-food commodities in the supermarkets of THAILANDand Bangladesh. In this part of the study a discussion on recent studies on the consumption of the buying public in non-food products (Business Wire, 2007). The second part of the study will be discussing the experience of 24/7 Stop as the primary provider of non-food commodities in the country. This part of the study will be covering the existing strategies that 24/7 Stop is engages in, such that they stay on top of the non-food retail industry. The paper will compose of the analysis of the company itself as well as the industry that it thrives in, particularly the non-food sector of the retail industry. The tools to be used in this examination include the analysis; analysis of its PEST and Porter's Diamond Model . The last part of the study will consist of a set of recommendations formulated by the researcher based on the results of the tools used in the analysis of the industry and the company. Diamond Model of Thailand Thailand has done remarkably well since the beginning of the economic reform movement in 1978 (Wu, 1996). Between 1979 and 1995, Thailand's GDP grew at an average annual rate of 9.5 percent. Thailand's exports grew even faster and Thailand now ranks among the world's top 10 exporting economies. Moreover, Thailand's entry into the WTO will make Thailand's door even more open. Both foreign investment and foreign trade are expected to increase (Chow, 2000). Foreign firms will begin to penetrate Thailand's financial and telecommunication sectors. Trade will increase in both directions and Thai tariffs will be lowered and Thai goods will have better access to world markets open to members of the WTO. Using foreign competition to stimulate the domestic economy is a major objective in seeking to join WTO, as explicitly stated by the government Bangladesh has become a pioneer in the international garments industry as she is a major exporter of garments in the world which is very helpful in the country because it contributes not only to the country's GNP but also for a number of reasons like for example it had created a number of jobs. The country had created many new jobs of about 1.5 million, mostly for women - have been created by the country's dynamic private ready-made garment industry, which grew at double-digit rates through most of the 1990s. Despite the country's politically motivated general strikes, poor infrastructure, and weak financial system, Bangladeshi entrepreneurs have shown themselves adept at competing in the global garments marketplace. Bangladesh's exports to the U.S. surpassed $1.9 billion in 1999. Bangladesh also exports significant amounts of garments and knitwear to the EU market. The country has done less well, however, in expanding its export base-garments account for more than three-fourths of all exports, dwarfing the country's historic cash crop, jute, along with leather, shrimp, pharmaceuticals and ceramics (Bangladesh Garment and Exporters Association, 1997). Bangladesh' overview in their economy has made significant strides in that sector since her independence in 1971. Although the economy has improved vastly in the 1990s, Bangladesh still suffers an image crisis due to her civil war period of early 1970s. Despite major impediments to growth like the inefficiency of state-owned enterprises, a rapidly growing labor force that cannot be absorbed by agriculture, inadequate power supplies, and slow implementation of economic reforms, Prime Minister Sheikh HASINA Wajed's Awami League government has made some headway improving the climate for foreign investors and liberalizing the capital markets; for example, it has negotiated with foreign firms for oil and gas exploration, better countrywide distribution of cooking gas, and the construction of natural gas pipelines and power plants. Progress on other economic reforms has been halting because of opposition from the bureaucracy, public sector unions, and other vested interest groups. The especially severe floods of 1998 increased the country's reliance on large-scale international aid. So far the East Asian financial crisis has not had major impact on the economy. In terms of cultural orientation and highly similar social standards and practices, the Thai are like westerners, sincerity and friendship is appreciated. A business in Thailand must show acceptance of the host country. Donation to the government and charities, company leaders' visits during Thailand's important days, company participation in Thailand's activities or drives, these are likely to make a foreign company accepted by the Thai market. With the country's participation in the international trade and other economic activities of WTO, increased market competition has since characterized Thailand with the influx of foreign investors. PEST Analysis of Bangladesh In relation to the liberalization of the retail market in Bangladesh, the political trends and characteristics illustrate a high probability of initiating the full implementation of the free market structure for the industry (Crook et al, 2003). This is in line with the successful liberalization of other goods and services across the region in order to eliminate economic frontiers between economies. such the company could take advantage of its position as one of the leading most competitive mail companies in the region to increase efficiency and productivity as well as customer satisfaction. The economic situation of Bangladesh has long been characterized with highly active and dynamic exchange of goods and services through increased participation of business firms in line with the globalization trends (Ding, 1997). Contract management and outsourcing strategies have been the result of the complex and sophisticated demands of the market and the objectives of business companies to offer excellent customer value through quality products and services. Generally, the international market consist competitive and innovative businesses that are interconnected through partnerships and agreements (Palmer, 1995 and Bowers et al, 1990). The economic description of the region is reflective of the present socio-cultural trends that characterize its people (David, 2003). As active consumers of products and clients of services, the market was provided with the continuous supply of products and services that meets the complex needs and ever-changing requirements and specifications of the public. With the technological infrastructure that characterizes the operations of the retail company focus on the service quality and customer value and satisfaction can be increased. The services of the company should be in synch with the sophisticated lifestyle of the people through creating means of more efficient service delivery and innovative logistics. These market demands include quality, efficiency, and customer satisfaction. This further resulted to trends in technological advancement particularly on production and delivery of products and services to meet customer requirements and to increase the productivity and revenue of the businesses. Technological advancements in the form of effective tracking and monitoring equipment of the goods and services being delivered, heightened security efforts, and the utilization of the electronic media to transact highly demanded services online should be considered by the company to adapt with the modern social setting it operates in and meet the needs of the customers. PEST Analysis of Thailand The success of the business organization entails detailed understanding and examination of political, social and economic factors that influence the growth and continuous operations of the company. Studying the important consideration relevant to the organization to serve the purpose and objectives of the company will determine its success. Consequently, decision-makers of the company should be sensitive of the general trends and changes that are taking place in their industry. This will include efforts to maximize the opportunities available while reducing the risks that confront the business organization. Political. The country of Thailand has long been recognized as the "Sleeping Giant" of Asia. Its geographic territory and the population that it embodies, distinguish it from other big countries in the world. The resources, human and economic, make this country the most promising country in Asia in the ability of its people and the nation itself to make a stand in the global community that defines the information world at present. The regions of Thailand was characterized by disparities when the central government undertook a two-part balanced redistribution system strategy reflective of the choice made under a planned economy (Naughton & Segal, 2002). According to Brun (2002), the central government that time devoted most of the investments, for redistribution of industrial development, to the country's inland regions instead of allocating the money in the richer coastal parts and "moved" the population into the poorest provinces that reversing it made the beneficiary regions collapse as the few other parts prosper. The price system was the other form of the redistribution system which overvalued the manufactured products and undervalued the agricultural ones (Naughton & Segal, 2002). However, the balanced redistribution system economic strategy of the central government collapsed because the provincial manufacturing industries have to significantly contribute to help the poorest regions which gave way to rapid growth in agricultural prices. The government, in implementing the Coastal Economic Strategy, established four special economic zones in the coastal provinces and 14 other coastal cities were opened in 1984 to attract trade and foreign direct investment. These economic zones and cities enjoyed relatively better tax treatments and preferential resource allocations (Litwack & Qian, 1998). In the late 1980's the government extended the policy to all coastal areas of Thailand which put the non-coastal provinces at great disadvantage as economic development was centralized in the coastal areas. Hu and Wang (1996) showed that per capita gross domestic product disparity increased steadily before 1978, decreased between 1978 and 1990, and increased again after 1990. Shi (1996) found that per capita income disparity increased across the eastern, central, and western regions, from 111:95:100 in 1994 to 142:97:100 in 1995. Hu (1996) also showed that the five areas with highest per capita investment directly from the central government. Economic. The concept of endogenous economic development highlights a Thailand's need to allow change and make room for the growth of its production system by developing and utilizing the potential of local resources especially its people through the investment of private firms and holdings as well as of the government itself through national economic policies. Vasquez-Barquero (2002) discussed that economic growth and structural change are the result of investment strategies and decisions of enterprises operating in the market and integrated into the cultural milieux that conditions economic dynamics of territory affecting the production of the organization, the relational system and innovation as well as the learning process. The country's fast developing coastal areas and main regions like Bangkok distinguished and highlighted the need to extend such economic development in the interior regions. Meanwhile, Thailand's capacity to meet the growing demands for products to be exported can be explained by the fact they have the biggest work force in the world and many countries trust them with investment. This fact leads to another fact that Thailand is the largest manufacturer of finished goods. Because of the efficiency of the Thai work force are able to produce finished good at a rate that they have a lot of surplus to export around the globe. And because of low workers pay manufacturers are able to distribute their goods at a much lower rate, once these goods hit the market there prices will still be within the reach of the average consumer. Socio-cultural. Thailand considered being one of the earliest centers of human civilization. It became a large united country with an advanced culture at a very early stage, outpacing most of the world in areas such as art and science. It is a country in continental East Asia with some outer territories in Central Asia and offshore islands in the Pacific Ocean that since 1949 has been divided de facto between the Thailand and the Republic of China (Nee, 1992). The Thai is evidently one of the oldest continuous cultures on the planet, flourishing for 5,000 years, including over 2,000 years with a written pictorial language universally readable within the country (Thailand's Statistical Yearbook, 1995). Thailand has reached peaks of cultural attainment that equal, or surpass, anything that Western European societies or America have achieved. Some of the seminal developments include paper, gunpowder, and movable type. For many centuries, most notably from the 7th through the 14th centuries, Thailand stood as the world's most advanced civilization and as East Asia's dominant cultural influence. Thailand is the most populous nation in the world with a population of approximately 1.25 billion people (Wong & Gabriel, 1998). The population is distributed over 22 provinces, 5 autonomous regions and 3 metropolitan municipalities under the central government. The provinces, which possess a high degree of fiscal independence, are themselves divided into 2182 counties (averaging 400,000 residents), 47,000 townships (averaging 18,000 residents) and 740,000 villages (averaging 1000 residents). The urban population has grown substantially since the 1960's. From 1960 to 1992 the urban population climbed from 19% to 28%, and is expected to increase further to 35% by the year 2000. But then, many travelers want to see how these people live and what they think. Due to the "Open Door" policy in Thailand that went into effect in 1978, numerous Americans have visited the country (Perkins, 1994). The Thai society focuses on the well-being, attempting to provide adequate housing, universal education, access to medical care, and childcare. The success of these policies, especially wide-scale education, has produced massive educated elite in Bangkok, and elsewhere that makes Thailand a formidable force in the modern world (Jefferson, Rawski & Zheng 1992). Technological. The tremendous growth of technological advancement has become the driving force of contemporary industries. The diffusion of the internet has revolutionized the business arena. The use of the Internet is changing high-tech marketing overnight while different industries have been trying to use it as part of their marketing strategy. It has not only reconfigured the way different firms do business and the way the consumers buy goods and services, but it has also become an effective instrument in transforming the value chain from manufacturers to retailers to consumers, creating a new retail distribution channel (Donthu & Garcia, 1999). Thailand was able to adapt with modernization along with the technological advancement in progressive other countries. As the manufacturing capital of the world, Thailand is among the leading users of highly advanced equipment in production, supply chain management, marketing and sales. This has long been evident in the bulk of produced goods in the country as well as the generated services provided by the different industries of Thailand. Applications of advanced technologies in the country can be likewise observed in the emerging utilization and function of the Internet not just in business but also in other disciplines like politics and social welfare, environment conservation, culture and the arts, media and communications, and in education and research (Jinghai, 2002). Recommendation Retailing engages establishing a wide range of products from an array of sources and providing them to consumers (Blouet, 2001). The main sources of a retailer's competitive advantage are their expertise and competence. The major activity of the internationalization of the retail industry is in the operation of their shops and in the other types of retailing, in more than one country. After a thorough analysis using the diamond model of Porter, it will be much better if 24/7 stop invest on Thailand. Although, Bangladesh is creating and undergoing some economic progress, the activities under this progress are still weak. Considering also that Banglesh's labor force is still unskilled although cheap as compared to Thailand. All these major retailers utilize the store as a venue to sell its products. This is accomplished through the use of e-marketing campaigns and product bundles (Shaoming and Tamer, 2002). The company is able to build awareness of its products and brands through mass media advertising, public relations efforts and branded Internet properties. The company also makes it a point to receive feedback from its customers through market research (Hessan and Whitely, 1996). The company then uses these feedbacks to refine its product development efforts and marketing strategies. International retailers out-source all of its manufacturing and hardware designs of its products to third party manufacturers (Child and Faulkner, 1998). This outsourcing extends from prototyping to volume manufacturing and includes activities such as material procurement, quality control and delivery to distribution centers. The company is assured that there is an adequate supply of components to manufacture its products. The majority of the company's products are assembled in Thailand (Daniels, Radenbaugh and Sullivan, 2004). Distribution centers are operated on an outsourced basis in Tennessee, Ireland, and Hong Kong. The last strategy is direct entry strategies, according to the study of Palmer in 1995, the firm either acquires a firm or builds operations "from scratch" involve the highest exposure, but also the greatest opportunities for profits. The firm gains more knowledge about the local market and maintains greater control, but now has a huge investment (Hall, 1996). In some countries, the government may expropriate assets without compensation, so direct investment entails an additional risk. A variation involves a joint venture, where a local firm puts up some of the money and knowledge about the local market. Reference Bailey, S. & Schultz, D. (2000). Customer/Brand Loyalty in an Interactive Marketplace. Journal of Advertising Research, 40 (3), 41. Blouet, B. W. (2001) Geopolitics and Globalization in the Twentieth Century. London: Reaktion. Bowers, MR, Martin, CL & Luker, A (1990). "Trading places: Employees as customers, customers as employees", Journal of Services Marketing, vol. 4 (Spring), pp. 55-69. Brun, JF & Renard, MF (2002) 'International Trade and Regional Specialisation in Thailand', Thailand and its Regions, Routledge. Business Wire. (2007). AOL UK and ASDA Announce Strategic Marketing Agreement, Strategic Alliance with ShopSmart.com. Westport, CT: Quorum Books. Child, J & Faulkner, D (1998), Strategies of cooperation: managing alliances, networks, and joint ventures, Oxford University Press, Oxford. Childs, C. (2001) Supermarkets turn to non-food for future growth. Eurofood. March Issue. Chow, G (2000) 'Thailand's Economic Reform and Policies at the Beginning of the 21st Century', Perspective, vol. 2, no. 1. Cohen, S. & Moore, J. (2002). Today's Buzzword: CRM. Public Management, 82 (4), 10. Crook, Russell T., Ketchen, David J., Snow, and Charles C., 2003, Competitive edge: A strategic management model. Cornell Hotel and Restaurant Administration Quarterly. Ithaca:. Vol. 44, Iss. 3; p. 44. D'Agostino, D. (2003), Case Study: Walt Disney World Resorts and CRM Strategy, CIO Insight, Ziff Davis Media, Inc. Ding, D.Z., (1997). 'Control, conflict, and performance: a study of US-Chinese joint ventures', Journal of International Marketing, 5(3), pp. 31-45. Daniels, J, Radebaugh, L & Sullivan, D (2004), International business: environments and operations, 10th edn, Prentice Hall, London. Donthu, N & Garcia, A (1999) 'The Internet shopper', Journal of Advertising Research, vol. 39, no. 3, pp. 52-58. Donthu, N. & Garcia, A. (1999). The Internet shopper. Journal of Advertising Research, 39 (3), 52-58. Goldberg, R. & McCalley, R. (1992). Marketing Channel Development and Management. Westport, CT: Quorum Books. HALL,P (1996) Britain's uneven shrinkage, NEW SOCIETY, 14 April, 18-19. Cambridge, MA: Perseus Books. Hessan D. and Whiteley R.. (1996). Customer Centered Growth: Five Proven Strategies for Building Competitive Advantage. Cambridge, MA: Perseus Books. Hu, A & Wang, H (1996) 'Changes in Thailand's regional disparities', The Washington Center for Thailand Studies Papers, vol. 6, no. 9. Jefferson, GH, Rawski, TG & Zheng, Y (1992) 'Growth, Efficiency and Convergence in Thailand's State and Collective Industry', Economic Development and Cultural Change, vol. 40, pp. 239-266. Jinghai, Z (2002) Efficiency, Technology Advancement and Optimum Practices of Thailand's State-owned Enterprises During 1980-1994, Economic Development, Gteborgs Universitet, Sweden (lecture), April 2002, Thailand Center for economic Research, Peking University. Litwack, JM & Qian, Y (1998) 'Balanced or unbalanced development: special economic zones as catalyst for transition', Journal of Comparative Economics, vol. 26, pp. 117-141. Lowenstein, M.W. (1997). The Customer Loyalty Pyramid. Westport, CT: Quorum Books. M2 Presswire. (2007). 24/7 Stop.com retail portal goes mobile. Westport, CT: Quorum Books. McAuliffe, W. (2000). 24/7 Stop.com takes 60,000 orders a week. Retrieved November 25, 2004 from the ZDNet UK website at http://news.zdnet.co.uk McCue, A. (2004). Online sales boost 24/7 Stop. Retrieved November 25, 2004 from the ZDNet UK website at http://news.zdnet.co.uk Moore, J. & Thorson, E. (2007). Integrated Communication: Synergy of Persuasive. Mahwah, NJ: Lawrence Erlbaum Associates. Naughton, B & Segal, A (2002) 'Technology Development in the New Millennium: Thailand in Search of a Workable Model', in Keller, W & Samuels, R (eds.), Crisis and Innovation: Asian Technology After the Millennium. New York: Cambridge University Press, pp. 160-186. Nee, V (1992) 'Organizational Dynamics of Market Transition: Hybrid Forms, Property Rights, and Mixed Economy in Thailand', Administrative Science Quarterly, vol. 37, pp. 1-27. Palmer, A. (1997) Defining Relationship Marketing: An International Perspective", Management Decision, Vol. 35, No. (4), pp. 319-21, ISBN 0025-1747. Palmer, A., (1995) Global Strategies and Local Implementation of Relationship Marketing", International Business Review, Vol 4 (4), pp 471-81, ISSN 0969-5931. Perkins, D (1994) 'Completing Thailand's Move to the Market', Journal of Economic Perspective, vol. 8, pp. 23-46. Schultz, D. E. (2007). Integrated Marketing Communications: Maybe Definition Is in the Point of View. Marketing News, 17. Shaoming, Z. and Tamer, C. (2002) The GMS: A Broad Conceptualization and Measurement of Global Marketing Strategy, Journal of Marketing, 66 (4), 40-56 Stern, N. (2007). One stop shop: how can UK supermarkets increase their health and beauty appeal. Soap Perfumery & Cosmetics. Southwestern: Thompson. Thailand's Statistical Yearbook (1995) Bangkok, P.R. Thailand: Thailand State Statistical Bureau. Vazquez-Barquero, A (1992) Endogenous Development: Networking , Innovation, Institutions, and Cites. Routledgem London, p. 21 Wong, B. & Gabriel, S (1998) The influence of Economic Liberalization on Urban Healthcare Access in the People's Republic of Thailand. Nanjing University, Nanjing, Thailand. Wu, J (1996) The Trends Of Thailand's Economic Reform. The Chinese Academy of Social Sciences and the Development Research Center of the State Council, People's Republic of Thailand. Read More