Marketing is the process of communicating the value of products and services to customers. Diversification is a risk management technique that mixes a wide variety of investments within a portfolio. The two are keys to survival in foreign markets. The Auto-Industry is great mechanism that uses both terms for its success. General Motors rich history was recently tested with the economic downturn.
General Motors was founded by William “Billy” Durant on September 16, 1908. Durant had become a leading manufacturer of horse-drawn vehicles in Flint, MI before making his foray into the automobile industry. At its inception GM held only the Buick Motor Company, but in a matter of years would acquire more than 20 companies including ...view middle of the document...
Provide support for your rationale.
Economic globalization is viewed by some as the best hope for world stability, by others as the greatest threat. But almost everyone accepts that businesses of all types must embrace it. Even smaller enterprises—urged on by the financial markets, by investment bankers and consultants, by the media, and by the moves they see rivals making—feel the strategic imperative to go global in one form or another. Although the current financial crisis is putting a damper on such activity, the pressure on companies to globalize is likely to persist.
Indeed, we believe that businesses with ill-considered globalization strategies are poised to become the next targets for breakup or corporate overhaul by activist share owners, just as companies with poorly thought-out business diversification strategies were targets in the past.
* Are there potential benefits for our company? - Just because a move makes sense for a rival or for companies in other industries doesn’t mean it makes sense for your own company or industry.
* Do we have the necessary management skills? - Even if potential benefits do exist for your company, you may not be in a position to realize them. The theoretical advantages of globalizing—economies of scale, for example— are devilishly difficult to achieve in practice, and companies often lack the management key needed to unlock the coffer holding the prize.
* Will the costs outweigh the benefits? - Even if you are able to realize the benefits of a global move, unanticipated collateral damage to your business may make the endeavor counterproductive.
When these three questions are answered with a yes or no the decision to enter that foreign market should be made.