Competitive Strategy of Globalizing The Values Proposition and Global Banding
The report focuses on the globalization of value proposition and global branding for having competitive advantage and business growth in terms of financial profitability. In this assignment, researcher considers two industries ICT and automobile. Researcher takes two companies for each industry namely IBM and Citrix from ICT industry and Holden and Toyota from automobile industry.
The main marketing strategies that pave the way of globalizing for any business organizations are Globalizing the value proposition and global branding. This business report focuses on the two marketing strategies that are globalizing the value proposition and global branding and for this purpose; this assessment considers two industries of Australia. The first part of the report represents the adaption of value proposition strategy of Information and Communication Technology (ICT) industry with reference to two leading ICT companies namely IBM and Citrix. The next part of the report pays attention on the global branding strategies of Australian Car industry and for this purpose two major automobile companies that will be considered in this case are Holden and Toyota.
2.1 Globalizing the value proposition
Value proposition is one of the focal statements that an organization uses in order to understand why a customer should use a service or buy a product. Organizations utilize such kind of statement to target buyers who get benefits most from using company’s services and products. On the other hand, this kind of strategy helps to maintain an economic moat. This is because; a value proposition indicates all the innovativeness of a particular brand or service that helps an organization to create its own space among the rivals in the highly competitive market. According to the viewpoint of Paroutis et al. (2014), value proposition also helps to set a trademark for the products or brands of a company to make it different from the other similar products in the market. An ideal value proposition is concise and it can be applied to the consumer’s strongest decision making drivers. However, the main factor of this section is the application of value proposition strategy within the business strategy of ICT industry which is one of the leading contributors to the Australian service industry. Both the concerned organizations IBM and Citrix deliver high quality services in the global platform and this value proposition helps these organizations to survive in the intense competitive market of Australia with the help of its global marketing strategy (London et al. 2015). Marketing procedures and business strategies that work in a particular culture sometimes fail to show the same result in another country. The same advertising campaign, packaging and product work differently in different culture and country. Thus, the value position demands a global approach to pertain success of the organization globally.
2.1.1 ICT industry
ICT industry needs globalization of the value proposition as this industry has that potential to serve top quality economic moat to the service sector of Australia. One of the major ICT companies of the country IBM provides top quality innovative products from hardware, middleware and software to nanotechnology. Hence, in order to grab global market, this company needs to focus on improved global marketing strategies (London et al. 2015).
Another major company of information based solution is Citrix which is basically an American multinational software company that provides server and desktop visualization. However, all these organizations need to review their marketing strategy in order for globalizing the value proposition (refer to appendix I).
Adaption or aggregation suggests that those business strategies that work in a country might not provide the same result in another part of the world. The necessity for adaption of any kind of offer and service require detailed analysis of the existing product in the home country Ballard et al. (2015). The useful construct to analyze the necessity of adaptation is Global marketing mix strategy which is also known as aggregation strategy (Osterwalder et al. 2014). This marketing strategy illustrates some main global strategies.
- It is important for product usage pattern and potential to be homogeneous. It indicates the potentiality to acquire a larger market.
- It is beneficial for an organization to adapt partial or full adoption of various marketing policies for different cultures and countries.
- Globalization matrix
In order to analyze the dimensions of messages and offers, the value proposition globalization matrix is a useful tool. The generic global strategies under such globalization matrix are
- A global offer strategy is all about identical offer but of different positioning.
- A global change strategy under which both the message and offers are adapted to home market circumstances.
- Global Product Platform
A global product platform requires two trade-off things. According to the viewpoint of Herstad et al. (2014), under this strategy, it is important to design a global platform for effective communication with different markets worldwide, though for ICT industry, it is very challenging to develop a single platform that can communicate with other companies and customers.
- Global product development
In recent years, globalization pressures have completely changed the activity of product development in ICT industry. As mentioned by Tripathy and Eppinger (2013), companies are turning towards a phase of global collaboration within which skilled development groups scatter around the world to develop new services and products rather than using a local or centralized cross-sectional model. ICT industry also practices such product development activity in order to maintain the success in the intense pressure of Globalization. However, according to Pero et al. (2017), such practices require change and innovation in the existing service. This is because, as opined by Tripathy and Eppinger (2013), better product design has that potential to lower the production cost and faster business growth in terms of financial profitability. In addition, global product development demands centralized function and regional distribution which is also known as outsourcing as these strategies provides benefits to the companies with greater technical expertise and international engineering efficiency along with flexible business strategies (Westland, 2016).
- Global innovation
As mentioned by Boutellier et al. (2013), global supply chains and product development process are not sufficient for business growth and having competitive advantage. It is also important to have effective global innovation capabilities. The two concerned firms have developed their effective innovation capabilities. For this purpose, these two companies incorporate relationship between knowledge of diversity and geography on the process of their innovation.
The innovative products that IBM offers include IBM CARD which has that ability to double the amount of stored data. In addition, IBM innovates a question answering technology “Watson” that allows the computers to process and acknowledge natural language.
On the other hand, Citrix produces XenDesktop that allows both the online and offline access to windows virtual desktops. In addition, this organization innovates a software device named OpenVoice that allows effective audio conferencing (refer to appendix II).
2.2 Global branding
The automobile industry is one of the largest within the global branding section. It delivers messages which similar are nature with providing similar imagery and tone. For the last several years, the automobile industry of Australia is facing major issues which related to the brand loyalty lacking. The brands and models are acts as the same after they got recognized. The marketing procedures of the different brands are quite different from each other but when the question of loyalty comes lack of brand loyalty has been seen. For the car industry global branding is a very important factor. The failure of global branding has been seen when it comes to different market (Chabowski et al. 2013). The well known brand name cannot be sacrificed on the basis of the premium prices. There are three different brand structures which have been followed by the multinational global car companies. They are dominant, corporate dominant and hybrid structure. But the most used structure which has been used by the car or automobile industry is the hybrid structure. These multinational companies generally use global branding for entering into the local market of any new country. The product diversity and the product line basis have been changed according to the different market. Global branding portfolio and branding decisions has to be made on the basis of the global market presence because both this are inter related to each other. These companies have to provide market effective global brand strategy to expansion of the companies outside the national borders (Knight, 2015).
Branding of the product includes different self – expression, experience and reputation to create the global branding of the products. The customer generally identifies the products by the company name, which is also beneficial for the companies and it also reduces the risk associated with the profit margin. The manufacture of these branding cars is always kept in mind about the quality level of the brand and the customer satisfaction to increasing the sustainability sales and profit for the global market. Comparative market strategy is also important factor for these global brands (Penna and Geels, 2015). The two companies which have been selling their products in the Australian global market are named as Toyota and Holden. Few features which has been which used in the global marketing strategy of this company are:
- Increasing the competition in the local market
- Making platform in the global market
- Slow growth in the regional market
- Diversified the products
- Reduction of the cost from economic sale
- Managing profit relating risk
- Focusing in the international growth
- Working on the overseas profit opportunities
a. Competition strategies used by the global branding
Standardization and adaptation are mandatory to competitive strategies used by these two automobile companies. The marketing program of these two companies is uniform in nature. The mix marketing strategies between these two countries has been introduced to achieve the minimum profit of the company. As these companies are dealing with similar market segments they generally seek similar features. The car which has been manufacture should include universal specifications to create impact in the market. The local representation with the brand name makes a huge impact in the market.
b. Building of Global brand
Global brand strategies require global motivation in order to buy various brands. There are different expectations and requirements for people but it cannot be taken as the drawbacks to utilize same quality global product. According to the viewpoint of Chabowski et al. (2013), sometimes people go for same product and brand with different perspectives and viewpoints. Holden and Toyota originate different global products which are developed by keeping in mind the global needs. As mentioned by Tantalo and Priem (2016), the ten illustration of global branding are
- It should be free from short cuts
- Understanding the differences and similarities of global business
- It is important to develop operable guidelines
· Cultivation of global brand partnership
· Implementation of global brand equity measurement system
· Maintaining global and local control
· Integration of marketing communications
· Maintaining the equilibrium of adaptation and standardization
Global branding demands understanding of customer behavior. According to the viewpoint of Steenkamp (2017), consumers have certain buying habits and preferences towards one culture but it does not mean such habits are universal. Therefore, it is important for companies to reposition all its products and services for changing buyers demand conditions.
c. Selection of names and brand name strategies
One of the important factors for marketing of the products and brands is global brand name selection.Both the name Toyota and Holden are very easy to pronounce and easy to recall in foreign languages. As mentioned by Alden et al. (2017), brand name has that ability to suggest product’s qualities along with benefits. Under legislation, both the brand names are distinctive and are capable of registration. Lane and Fastoso (2016) opined that, a same brand name can manufacture different products. In this case, both the concerned companies produce different models and services under a same brand name. One of the major parameters of these two concerned organization is that they modify brand names for different markets and they also have different brand names for each markets.
Powerful brands can gain global status with the help of technology, top level of investment, innovation, mixed marketing elements. All these business strategies help a company to persist in the global market for a long period by originating valuable financial asset and also by simulating brand equity and brand loyalty. An improved global brand holds brand quality, value and prestige. Therefore, it is necessary for a company to have a capability to demand premium price for their services and products.