International Business
Introduction
Unilever is an international company that has interest in the manufacture of consumer goods. It manufactures a wide range of products that include beverages, foods, personal care products and cleaning powders and detergents. It’s one of the world’s largest companies that deal in consumer goods. It owns over 400 brands of products but 70% of its total sales are made from only 25% of its major brands. These products include Omo/Surf, Flora/Becel, Aviance, Toni & Guy, VO5, Rexona/Sure among other products. Unilever was founded in the year 1930. www.unilever.com
Emerson Electric trades in NSE under the code EMR, is a multinational enterprise that is based in Ferguson, Missouri in the US. It’s one of the Fortune 500 companies that deals in the production of industrial, consumer and commercial products and also offers other services. Emerson employs over 127,000 employees in over 150 countries worldwide. It manufactures power equipment in the US and exports to other international markets. It was established in St. Louis, Missouri by John Wesley Emerson in the year 1890. It manufactures electric dental drills, electric fans, sewing machines and many other power tools. www.emerson.com
Discuss the pressures for local responsiveness and global standardization faced by each firm.
Pressures for local responsiveness stem from differences that exist in consumer tastes and their preferred preferences i.e. the strong responsive pressures emerge when the tastes according to the consumers differ between the countries in a way that the differences are notable while the differences in traditional and cultural practices and in the infrastructure are also responsible for the pressures that emerge from the local responsiveness when the differences in the available infrastructure and the cultural and traditional practices are also notable between the countries. Unilever due to its large array of products has positioned its products in the international market according to the tastes and preferences of the host countries. For instance the cleaning detergents available in Africa are totally different from those available in Europe. The competition that exists in these two countries is also different in terms of intensity and marketing strategies. Emerson products are totally different and the basic differences are nonexistent in terms of product differentiation. Its marketing strategy in overseas market is largely the same. The general difference that is available in the distribution channels makes it imperative that a company’s marketing strategies have to be responsive to the inherent differences in the distribution channels between the countries. The demands of the host government either economical or political that may have been imposed may also necessitate or result in some degree of responsiveness within the locality.
Firms normally utilize global standardization as a basic strategy to market products internationally and increase the competitive edge of the products in the international markets. (Smith & Taylor, 2004) The strategy of global standardization targets on increasing the firms’ profitability and the growth of profits by enhancing cost reduction strategies that are associated with economies of scale, the learning effects and the available location economies. The strategic target to adhere to is the low cost production strategy that is available on the global scale. This strategy is best suited when there are very strong pressures to reduce costs and the demands are minimal for local responsiveness.
Which experiences the greater pull toward local responsiveness? Why?
Unilever experiences the greater pull towards the local responsiveness due to the nature of its products. Consumer goods normally draw local attachment in terms of the positioning of the product. These products satisfy a certain consumer niche that associates its benefits to the locals i.e. like it has been tailored to the local market. Unlike, Emerson electric products that have no attachment significantly to the locals but its efficiency and durability are its marketing principles internationally.
Which faces a greater need for global standardization? Why?
Emerson faces a greater need for standardization due to the nature of its products i.e. the power machines need standardization mark to survive in the international market and also to market its products as products that meet international standards. (Kotler, Keller, Brady, Goodman & Hansen, 2012) Emerson products are not consumable and are rated according to their performance in the international market that utilizes the standardization mark as a mark of quality for all tested products. (Sullivan, 2004)
Finally to conclude, International strategies involve marketing a product and selling it internationally when it was initially produced for the local domestic market. When the local responsiveness is associated with low pressures and low cost pressures then the best strategy to adopt is the international strategy. An international strategy may be viable for a short term solution but it’s not viable as a long term strategy. To remain afloat firms must shift focus to the global standardization strategy before their competitors.
References
Daniels, J. D., Radebaugh, L. H. & Sullivan, D. P. International business. (14th Ed.)
Kotler, P., Keller, K. L., Brady, M., Goodman, M. & Hansen, T. (2012) Marketing Management. 2nd edition. Essex: Pearson Education Limited.
Smith, P.R. & Taylor, J. (2004) Marketing communications. An integrated approach. 4th edition. London: Kogan Page Limited.
Sullivan, J. J. (2004). Developing a strategy and preparing country analysis reports, pp. 319-328,
www.emerson.com
