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Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedGlocalization strategy04.11.2020By Svend HollensenVirtual Guest LectureCopyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedHousekeeping rules + Info• Questions at the end– Use Q&A to type your question– Or ‘raise hand’ button to ask your questionvia audio– Upvote a question if you also have thesame question• Recording will be shared• Slides will be sharedCopyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedSvendHollensen• Ph.D. (Dr.) and Associate Professor ofInternational Marketing at University of SouthernDenmark (Sønderborg).• Practical experience in Marketing from his workat multinational companies.• Multiple publications to his name includingInternationally recognized Journals and PearsonMarketing books.• Research Interests: Relationship Marketing,Globalization and Internationalization ofcompanies.Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedHere I liveSDUCopyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedUniversity of Southern DenmarkSønderborgCopyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedGlobal MarketingEighth EditionPart IChapter 1Global Marketing in thefirm, pp. 15-19Glocalization StrategyCopyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedFigure 1.1: The five-stage decision model in global marketingCopyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedThe glocalization frameworkCopyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedExamples:Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedCase Electrolux:Glocalization used on ElectroluxCopyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedGlobalization at Electrolux– a research projectCopyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedCopyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved2011 Acquisition of Chilean CTI2011 Acquisition of Egyptian Olympic Group 2008 Launch of Electrolux brand in the US2006 Spin off of Husqvarna2001 Acquisition of Email, Australia1996 Acquisition of Refripar, Brazil1994 Acquisition of AEG Hausgeräte, Germany1986 Acquisition of White Consolidated, USA,incl. the Frigidaire brand1984 Acquisition of Zanussi, Italy1978 Acquisition of Husqvarna, outdoor products1962 Acquisition of Elektro Helios firstcommercial products1950 First household laundry machine1922 Absorption refrigerator invented andproduction starts in 19251919 Electrolux is founded, producing a new typeof vacuum cleaners Electrolux history ofinnovation and growthSales1930 1940 1950 1960 1970 1980 1990 2000Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedSalesCopyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedCopyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedElectroluxHQStockholmEMEARegionalHQStockholmNARegionalHQCharlotteAPACRegionalHQSingaporeLARegional HQCuritiba, BrazilCountryA CountryCountry BACountryCCountryDCountryECountryFCountryBCountryCCountryECountryFCountryDCountryBCountryFCountryACountryECountryDCountryCCountryBCountryACountryFCountryECountryDCountryCResearch model:Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedResults from empiricalresearch (interviews with theten Electrolux managers)Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedHigh degree‘Globalization’Low degree‘Localization’Degree of Standardization (Globalization) 7654 3 2 1SamsungHaier BoschSiemensWhirlpoolElectro– luxCopyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedElectroluxHQStockholmEMEARegionalHQStockholmNARegionalHQCharlotteAPACRegionalHQSingaporeLARegional HQCuritiba, BrazilCountryA CountryCountry BACountryCCountryDCountryECountryFCountryBCountryCCountryECountryFCountryDCountryBCountryFCountryACountryECountryDCountryCCountryBCountryACountryFCountryECountryDCountryCCopyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedResults point in the direction that Electrolux followsa true ‘Glocalization’ strategy.– Electrolux has managed to cope with‘regionalization’ in a clear and effective way.– The company has been able to find the rightbalance between globalization and localization.– Electrolux has strong corporate values and hasbeen able to communicate these to all employees,so they are getting all onboard.Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedOn the other hand there still remain some tough futurechallenges for Electrolux:– The report lines through the organization are oftenblurred and too slow – because of the Swedishconsensus culture which means that everybody have toagree– ‘Local kingdoms’ (regional companies / brandsacquired over time by Electrolux) are sometimesgetting too much power, which also adds to the blurredreport lines in the organization– The local adaptation strategy may underminetraditional cost efficiencies and traditional HQ power.Electrolux uses modularization in order to compensatefor this possible threat.Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedWe have a strong corporate culture with a strongindividual commitment and team spirit amongemployees. We share a deep respect for decentralizeddecision-making where employees take ownresponsibilities. But we also are inspired by theSwedish consensus culture, which sometimes result inblurred report lines and a slower speed of decisionmaking, because too many have to be involved andasked. We could have used a more German, Americanor South Korean leadership philosophy, but theconsensus philosophy is part of our deep-rooted cultureand has the advantage that we get all on-board and weall work in the same direction. In fact, we can workwith high speed, as soon as we have analyzed thesituation and agreed on a certain direction.Head of Human Resources and Organizational Development atElectroluxCopyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedCopyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedCase Henkel:Glocalization used on PersilCopyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedCopyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedCase:Internationalization ofGerman Henkel (Persil) tothe Muslim countries= ”Glocalization” strategyCopyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedAshraf El AfifiRegional President and CorporateSenior Vice President for Laundry& Home Care in the Africa/MiddleEast region:“Persil Black or Persil Abaya is aperfect example of what our mix ofglobal technology and localmarket expertise can achieve”Henkel Annual Report 2011Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved2011: Persil Black (for Europe) 2007: Persil Abaya (for womenin Arabic World)Henkel:Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reservedhttp://www.adforum.com/creative-work/ad/player/34482549Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedRabia Z – Celebrity Endorsementhttps://www.youtube.com/watch?v=NsFAMvJ9ELsCopyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reservedhttps://www.youtube.com/watch?v=pyoWtI3QvK4Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedCopyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedCopyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedGlocal strategy:Product:The chemical formulations in Africa/MiddleEast and Europe have some commonattributes, while the fragrances are tailored tocultural preferences. Package appearance andconsumer communications are also regionallyaligned.Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedGlocal strategy:Communication:Persil Abaya was launched in the Gulf States through amix of TV commercials & social media and a verysuccessful viral online marketing campaign. Aninteractive social media website was set up and therewas also a reality TV designer competition, the abayahaving transcended from traditional garment toindividual fashion statement.http://www.adforum.com/awardorganization/6651680/showcase/2015/ad/34512917In the Western European markets, the consumercampaign relied mainly on classic TV advertising,complemented by social media activities such asFacebook.Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved2011/12: New customer segment is added in Middle East: The firstever liquid detergent, especially for Men’s White Thobes isintroduced across the Middle EastCopyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reservedhttps://www.youtube.com/watch?v=I8AkWQaQ_ycCopyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedI 2008 25% of women in the Golf region recognized Persil ‘as anexpert in Abaya care’. This figure increased to 37% in 2010.The sales volume of Persil Abaya increased 24% in 2009 andfurther 33% in 2010. The Persil market share of liquid detergentin the Golf region increased from 25% in 2008 to 40% in 2010.This provided Persil with the first place in the liquiddetergent market in 2010.The launch of Persil for White Thobes added a further twopercent points market shares of the liquid detergent market in theGulf region (Euromonitor, 2012).Results:Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedIn the Gulf region Procter & Gamble (withTide and Ariel brands) is still the region’s clearmarket leader in the overall detergent market,with 35-40% market share, followed byUnilever (OMO) with app. 15-20% marketshare. Henkel is no. 3 with app. 10% marketshare of the overall detergent market.Results:Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedIn Europe the launch of Persil Black resulted inincreasing sales of the black liquid detergent(increased ‘scale of economies’), but in terms ofmarket shares it only resulted in a small increaseof the European liquid detergent market (lessthan one percent), but it created some media‘buzz’ that Persil had actually used the sameproduct as in Middle East.Results:Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedComparison and implicationsof analysisCopyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedCopyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedSuccessful global marketing is increasingly dependenton the managers’ ability to:– develop a global marketing strategy, based on similaritiesand differences between markets;– turn the heterogeneity of the target markets into acompetitive advantage;– exploit the knowledge of the headquarters (homeorganization) through worldwide diffusion (learning) andadaptations;– transfer knowledge and ‘best practices’ from any of itsmarkets and use them in other international markets.Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedIn these Covid-19 times:We are stuck as persons ……..But data is flowing across borders morethan ever ……In Glocalization this means exchange ofreliable data between HQ and localmarkets / regions is becoming moreimportant ….Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedThe two cases are further explained and compared in this book,which came out in September, 2020Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights ReservedThank you !Questions are welcome now orlater on [email protected](SDU University of Southern Denmark, Sønderborg)Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved

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