Abstract
Siemens AG organisation is a global business enterprise with its base in Germany and employs over 450,000 employees worldwide. The organization is a whopping 162 years old and covers different business sectors like Energy, Transportation, Financial Services, Domestic Appliances, Automation and control to name a few. It is multinational and operates across 190 separate nation states. The organization specialises in providing both products and services. The purpose of this paper is to analyse the challenges which the company faces pertaining to the international business environment. The report covers all the dimensions of the international marketing process including strategies, pricing, entry modes and management of employees. The report ends with a brief conclusion that ties the contents of the report together (Advameg 2009).
Table
of Contents
Sub Task 1 International Marketing Environment
1.1
Nature of growing global market environment
The contemporary
business environment is marked with increasing amount of globalisation. With an
advent of nearly a technological
revolution being created by social networking websites, the customers are
connecting with each other at a very rapid pace. The same analogy also applies
to businesses that are fiercely impacted by the increasing pressure of globalisation
(Geert Hofstede 2009).
The nature of
the operations are bound to be changed when international boundaries are
concerned. While operating in the local economy, the marketers can make use of local
national celebrities to add a degree of appeal to their marketing communication
campaign. However, this would yield minimal result if they carry out the same
message to the global audience (Arabian Business 2009).
1.2
Significance of cross cultural differences
The primary
challenge that is faced by the international marketers relates to the
differences in the perceptions of the customers as it varies significantly from
place to place. As an example the customers for Siemens AG organisation might
prefer a push strategy through the use of aggressive marketing initiatives in
United Kingdom, the same might not be the case in Brazil where the customers
are accustomed to a pull strategy. The third world countries are believed to be
more technologically developed relative to the Asian counterparts; hence
technologies like 4G might be common in United Kingdom but is still a
relatively newer concept in Sri Lanka. Hence, Siemens cannot launch the same
mobile Smartphone which supports 4G technology in Sri Lanka (Central
Intelligence Agency 2009).
There are
various influences when international boundaries are concerned. The major
points include differences in different legal policies for setting up different
businesses. There can be changes in the trends of the market contingent upon
their respective culture and preferences (Index Mundi 2009).
Sub
Task 2 International Marketing Planning Process
2.1
Importance of project management techniques
The entry to a
new country to launch a product or a service is always considered to be a new
project by Siemens AG organisation. This helps them to identify the salient
critical factors of each different country in a viable manner. Since the
requirements of the different country vary in their respective nature, there is
a greater need to apply project management techniques. Siemens AG organisation
also deploys separate managers to help them get expertise of experience from specialised
managers (Lowtax 2009).
2.2
Different stages of International marketing development
There are
different stages of International Marketing which are namely:
Geocentric: The same products are offered to all parts of the
words and no relevance is given to customization. ‘Siemens AG organisation One’
closely follows this stage of international marketing (Malhotra 2010).
Ethnocentric: This type of International Marketing development
relates to considering domestic market as superior to other countries and the
trends in the domestic market are forced to be adapted by the consumers of the
other parts of the world as well. Siemens AG organisation does not follow this
at all (Nationmaster 2009).
Polycentric: In this type, each different has its own
headquarters set up and there is hardly any relation seen with the other
countries where the company may be operational. Siemens AG organisation also
does not follow this notion and believes that all the operations are handled
through their base (Pippa Sanderson 2009).
2.3
Market Entry strategic alternatives
It can be
potentially possible that a particular company has a very strong domestic
market owing to the fact that they have been producing a product right from the
very beginning. It becomes a real challenge to pose as a competitor for such a
company. Hence, it would be more beneficial for Siemens AG organisation to get
into a strategic alliance with that company (US Department of State 2009).
2.4
Impact of adopting different generic strategies in different geographic
locations
The choice of
the adoption of a generic strategy depends upon the cultural forces that are
prevalent in a specific country. The scope of the completion and the existence
and the preferences of the customers allow the senior management to base their
decision whether to adopt a differentiation strategy or to adopt a cost
effective strategy. Also, whether they should change their existing products or
not is also considered. And if they do decide to change it, by what degree they
should their existing product (Hoffer
2001).
2.5
Importance of Market Research
The senior
management is expected to carry out a thorough analysis of the preferences of
different cultures and countries. Hence, before taking a decision of entering a
new market, international marketers at Siemens AG organisation often create a
Country Notebook which points out the diminutive aspects pertaining to the
culture of a specific country and includes things like ethnic groups present,
mannerism, likes and preferences so that they have beforehand information and
they can offer products that is acceptable by the people of a particular
country (WTO 2006).
Sub Task 3 International Marketing Mix
3.1
Difference in the product and pricing strategies in country specific markets
There are
differences in the currencies of different countries. Hence, Siemens AG
organisation resorts to using the Big Mac Index to know the exact value of a product.
Over pricing or under pricing the product or service can prove to be
detrimental to the success of an organisation. Hence, it is recommended that
the prices of similar products and substitutes are checked before fixing up a
price for an offering in a new country. Also, the company should be flexible
enough to change the price if they feel that the price at which it was initially
launched is not conducive to the market (Jerome 1995).
3.2
Electronic Marketing in the international business environment
With an advent
of a nearly technological revolution being created by social networking
websites, the customers are connecting with each other at a very rapid pace.
The same analogy also applies to businesses that are fiercely impacted by the
increasing pressure of globalisation. Hence, Siemens AG organisation makes it a
point to make the full potential use of electronic market to increase its
presence in the new markets (The Odora 2009).
3.3
Delivery element and its significance
It is imperative
for an organization to understand the local infrastructure and maintain
contacts with the local suppliers to make the best utilization of the
provisions of the services. It is often recommended that the organization must
take help of the locals who can easily negotiate with the other locals on order
to get the job done in a stipulated time frame (Macaulay 1995).
Sub
Task 4 Application of frameworks to International marketing opportunities
4.1
Planning Models used in respect to marketing
It is often
believed that the marketing principles should be kept highly flexible while
trying to capture an unknown market. This is because the changes in the legal
policies, social trends, changes in currency fluctuations are volatile in
nature and the organization under no circumstances is in a position to stick to
a rigid plan. The best way is to adopt learning by doing analogy where the
experience is gained by working in an economy rather than based on mere
speculation (The Odora 2009).
4.2
Examination of competitive strategies in respect to International Marketing
What worked in
one country is not very likely to work in another. Hence competitive strategies
are bound to differ in their scope and application contingent upon the nature
of the country specific region where it is being applied.
While operating
in foreign conditions, it is also important to note that considering that they
are foreigners and do not have the knowledge of local conditions, there can be
people who can overcharge for simple service. Hence, the use of a local person
and his experience becomes crucial for a global organization (Hemp 2002).
There is also an
inherent risk involved by taking the service of such local personnel which is
that they might disclose the critical information to third parties for monetary
benefits as they do not have a vested interest in securing the information of
the company which can prove to cause severe damage to the organisation. Hence,
an organisation should only reveal specific information and should not blindly
trust anyone and reveal all the information to them (Visitabudhabi 2009).
(Patent Express 2009).
Sub
Task 5 Management of International Marketing Operations
5.1
Managing the Human Resources in International Marketing Process
Managing the
Human Resources is among the biggest challenge that is faced by the
International Marketing managers. A common strategy is to hire a local
professional at a senior management level who understands the work ethics and
culture of a particular country comprehensively. The role of the organisation
than becomes to build good terms with that official and he manages all the
issues of the workforce related to that country. However, Siemens AG
organisation considers all its employees as internal customers and irrespective
of their origin and country, treats them equally (Naseej-cyd
2008).
5.2
Assessment of process for setting up and managing overseas operations
While there are a
country where marketing products is a huge success, there are also examples
where networking and word of mouth publicity plays a crucial role. Hence, an
organisation needs to adapt to the nature of the market or economy where they
are operating in order to achieve their respective goals. It can be potentially
possible that a particular company has a very strong domestic market owing to
the fact that they have been producing a product right from the very beginning.
It becomes a real challenge to pose as a competitor for such a company. Hence,
it would be more beneficial for Siemens AG organisation to get into a strategic
alliance with that company (Khaleej Times 2009).
5.3
Analysis of methods of Finance, Payment, Investment in trade
Siemens AG
organisation often gets into hedging contracts to prevent the losses from the
volatile nature of the currency fluctuations. The payment terms are also
contingent upon the preferences of the local market as they cannot expect to
undertake those methods which have worked for them in their domestic markets
(Gulf legal service 2008).
Methodology
This report has
made use of secondary data in the form of websites, academic journals, and
public libraries to get information about the Siemens AG organisation. While
some of the information has been taken from the brief case study that has been
used as the basis for this paper, the major part of the information has been
taken from other secondary sources mentioned above. The literature review has
not been conducted in this report. However, great amount of academic journals
were studied in order to understand the complex issue which relates to the
concept of International Marketing. The list of the Academic Journals has been
presented in the References section at the end of this report (Countries and
their cultures 2008).
Further, the
report has some limitations due to time constraint and lack of primary
investigation and sources. There is a tremendous scope for exploration in this
domain which can help the industry experts to learn from the exemplary
practices of International Marketing followed by Siemens AG organisation (Awadhi 2009).
Conclusion
The primary
objective of Siemens AG organisation is to be a leader in the field of
electrical engineering and electronics. It is learned by the virtue of this
report that Siemens AG organisation is a very customer oriented company. Even
though the business is operational worldwide, the objective remains to satisfy
the individual needs of the specific customers irrespective of their geographic
location (Advmeg 2009).
This report makes
use of the International Marketing concepts and applies the same to the Siemens
AG organisation to understand and learn from their practices.
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