International Marketing: Strategy, Theory, and Law

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Hofstede’s four-dimensional framework model for global marketers

It is important that global marketers implement the Hofstede model (Brown, 2005, p 21). The model increases the demand for the nation’s products and services. The increase in demand increases revenues. There are no limitations in using the Hofstede model. Hofstede emphasized there are four-dimensional framework models. The first model is the individualism – femininity model. The model centers on the participants’ gender.

For example, the masculine gender includes entering into a competitive cultural environment. Further, the second model is the uncertainty avoidance model. The model shows that people normally do their best to eliminate future uncertainties. Laws, policies, and other regulations reduce the risk of uncertainties. The third model is the power distance model; less powerful nations are forced to accept the global market place inequality. The fourth model in the long term versus short term model; nations should prioritize the accomplishment of future goals.

The importance of understanding market growth rates

Companies must understand the market growth rates (McDonald, 2011, p 172). The market growth rates served as a basis for the production of goods and services. A high market growth rate prods nations to manufacture more products to fill the current and prospective clients’ increasing needs and wants. On the other hand, the nation should reduce the production of goods in markets indicating a declining market growth rate.

The benefits of standardization and adaptation

There are many promotional benefits of implementing standardization and adaptation activities (Jackson, 2003, p. 3). First, there is a favorable understanding between the buyers and the sellers. The standards are used as a basis for customers to accept or reject the sellers’ products or services. At the same time, the sellers must adapt to the prevailing changing standards of the buyers. The adaptation retains or increases the entities’ current market share. For example, the United Kingdom’s current was removed from the European Union’s Exchange Rate Mechanism (ERM) in 1993 when the market showed their lack of confidence in the nation’s currencies (Stone, 2004, p. 169).

The factors that affect pricing in foreign markets

There are some factors that affect pricing (Shaw, 2008, p. 577). First, the transportation cost increases the selling price. Second, advertising and promotion expenses contribute to price increases. The demand for the product affects the selling prices of the products and services.

Further, entities can resolve the pricing issue. First, the company’s improving the product’s quality increases the demand price of the products. Second, the company should advertise its products. Third, the company can improve or enhance the current benefits of the products and services.

Six must-have competencies for a nation to be not “globally ignored” in the wealth-building and exchange process of FDI

There are six competencies for the nations to be globally accepted implementing its foreign direct investment plans (Hofstede, 2001, p. 304). First, nations should have performance orientation competency. Here, the nation should reward its members or groups for superior job performances. Second, the assertiveness competence requires all its members to ensure all the assertiveness, confrontations, as well as aggressiveness, reach allowable levels. Third, the future orientation competency focuses the entities’ scarce resources on fulfilling their future goals and objectives in the near or distant future. Fourth, the human orientation competency ensures all its members are fair, friendly, caring, and kind to others. Fifth, power distance competency centers on discussing how power should be distributed. Sixth, uncertainty avoidance competency focuses on establishing policies, rituals, or social norms to reduce future uncertainty risks.

The classical theory of comparative advantage

Ricardo emphasized that each country has an advantage over other countries. The countries use the advantage as a bargaining chip with other countries. For example, countries that are blessed with oil will have an oil advantage over countries that have no oil reserves. For example, Oil-rich Saudi will buy gold from countries that have rich deposits of gold. In terms of model: Saudi sells Oil —— to Nation B; Saudi buys gold <—– from Nation B. There are some shortcomings of Ricardo’s theory (Matsuyama, 2000, p. 1096). First, the oil –absent Nation B may end its dependence on oil. Nation B can replace its oil needs with electricity needs. Nation B’s cars can run on batteries.

The major components of the Harvard Product Life Cycle theory by Vernon

According to Vernon, the product life cycle is divided into three stages. First, the new product stage focuses on the research and development of a new product. Second, the product matures to its current market stage. The product design is popularly wanted by current and prospective customers. The last stage is the standardized product stage. The product has earned its place in the current and prospective customers’ regular shopping list.

The law represents the written or formal expression of the political will of a nation

There are four world categories of legal systems (Shelton, 2012, p. 23). In countries like France and Germany, the Civil Law legal system s full of codes in countries. In countries like Australia and the Bahamas, the common law includes court decisions made by the judges in countries. In countries like Afghanistan and Saudi Arabia, religious Koran law is implemented. In countries like Cyprus and Israel, the Pluralistic legal system is implemented. The law is grounded on the English common law system.

Why companies should strive to realize economies of scale

All companies should strive to implement the economies of scale concepts in their strategic management program. The nation, company, or entity should increase its plant size in order to reduce its average marginal operating expenses and costs (Baumol, 1994, p. 3).

References

Baumol, W. (1994). A convergence of Productivity. New York: Oxford University Press.

Brown, D. (2005). Challenges For China’s Development. New York: Routledge Press.

Hofstede, G. (2001). Culture’s Consequences. New York: Sage Press.

Jackson, P. (2003). E-Business Fundamentals. New York: Routledge Press.

Matsuyama, K. (2000). A Ricardian Model with a Continuum of Goods under Nonhomthetic Preferences. The Journal of Political Economy, 108 (6), 1093-1120.

McDonald, M. (2011). Marketing Plans: How to Prepare Them, How to Use Them. New York: J Wiley & Sons Press. Proven Models. Web.

Shaw, J. (2008). International Marketing: Strategy and Theory. New York: Taylor & Francis.

Shelton, D. (2012). International Law and Dometic Legal Systems. New York: University Press.

Stone, M. (2004). International Strategic Marketing. New York: Routledge Press.

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