Page 18 - DMGT547_INTERNATIONAL_MARKETING

Unit 1: Basics of International Marketing

Notes
Example: Even though the dollar value of the home market for Japanese companies is
the second largest in the free world (after the United States), the market outside Japan is
85 percent of the world potential for Japanese companies.

For European countries, the picture is even more dramatic. Even though Germany is the largest
single-country market in Europe, 94 percent of the world market potential for German companies
is outside of Germany.
Many companies have recognized the importance of conducting business activities outside, the
home country. Industries that were strictly national in scope only a few years ago are dominated
today by a handful of global companies. The rise of the global corporation closely parallels the
rise of the national corporation, which emerged from the local and regional corporation in the
1880s and the 1890s in the first quarter of the 20th century, there were thousands of auto companies
in the world, and more than 500 in the United States alone. Today, fewer than 20 companies
remain worldwide, and only 2 of them are American. In most industries, the companies that will
survive and prosper in the next country will be global enterprises. Some companies that do not
respond to the challenges and opportunities of globalisation will be absorbed by more dynamic
enterprises; others will simply disappear.

Self Assessment

Fill in the blanks:

15. The companies that sell products in the global market without making any adaptations to
their home made product are called………………..
16. Samsung Electronics is a MNCs with its base in…………………..

17. ……………… marketing and multinational marketing are very similar to each other, in
fact almost the same thing.

Case Study Molex makes Global HR

olex, a 70-year-old manufacturer of electronic components based in Chicago, is
the world’s second largest manufacturer of electronic components. The company
Mestablished an international division to coordinate exporting in 1967, opened
its first overseas plant in Japan in 1970 and a second in Ireland in 1971. From that base,
Molex has evolved into a global business that generated about 61 percent of it’s $·1.84
billion in revenues outside of the United States. The company operates some
50 manufacturing plants in 21 countries and employs more than 16,000 people worldwide,
only one-third of who are located in the United States. Molex’s competitive advantage is
based on a strategy that emphasizes a combination of low costs, excellent customer service,
and mass production of standardized products that are sold globally. Manufacturing sites
are located in countries where cost conditions are favourable and major customers are
close. Since the 1970s, a key goal of Molex has been to build a truly global company that is
at home wherever in the world it operates and that proactively shares valuable knowledge
across operations in different countries. The human resources function of Molex has always
played a central role in meeting this goal.
Contd...

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