Pearson Education



Video Title: Born Global – DLPRun Time: 6:39Classroom Application: Instructors will find this video helpful in discussing some of the management issues faced by managers of SMEs. The themes discussed in the video serve as a starting point for a discussion on domestic and global staffing (focusing on the recruitment of managers, marketers and those with specialized skills) and the importance of cultural understanding in this context. SynopsisThis video gives an overview of the role of SMEs in the global marketplace. Using the example of DLP, the world leader in the development of catheters and tubing, the video delves into the concept of born global companies and discusses the strategies these enterprises use to internationalize at or near their founding. Discussion Questions1. Discuss the difference between a traditional company and a born global company. A traditional company starts locally, building up its business in local markets and expanding within its home country as it grows and experiences success. Only after the traditional company has “conquered” its home market does it turn to foreign markets and begin to tailor its products and marketing to them. A born global company, on the other hand, makes plans from its inception to sell to foreign markets. Some born globals may avoid local markets almost entirely in seeking the long tail of a global market. Note that a born global does not feel the need to establish itself in order to expand, but rather it seeks out international customers as its base from the get-go.2.Suppose you were starting a company. Discuss the kind of product you would need to have in order for your company to be a good candidate to be successful as a born global? Give examples.The product would need to be unique and distinct from other products in the marketplace. For example, an Internet anti-virus program that was similar to its competitors would not be a good born global candidate. On the other hand, a company that had an entirely new approach to combatting viruses that was different and superior to conventional approaches would be an excellent candidate as a born global. The antivirus software would also need to be universal so that the company could sell the same basic product to consumers and businesses all over the world with minimal modification.3. A U.S. company makes highly effective medicines that combat fairly rare diseases that strike only 1 out of 1000 people. Would this company be wise to adopt a traditional approach to marketing, or a born global approach? Explain. The born global approach would provide a distinct advantage in this situation. If the company took a traditional approach it would not be likely to be able to find enough customers to purchase its products and keep itself in business, given that far fewer than 1 percent (0.1 percent) of consumers would be interested in its products. However, if the company took a born global approach it could market to the entire world rather than the U.S. alone. With 0.1 percent of the American market, the company would have about 300,000 potential customers using the traditional approach with which to establish itself. With 0.1 percent of the world market, the company would have about 7,000,000 potential customers with which to establish itself — a distinct advantage using the born global approach.Quiz1.Which of the following factors is LEAST important in determining a company’s potential success in exporting to a global market?a.core competenciesb.sizec.executive leadershipd.marketing techniquesAnswer: bExplanation: In the current global market, evidence shows that characteristics such as a company’s core competencies, competitive prices, efficient production, executive leadership, and effective marketing techniques, provide a stronger indicator of potential success with exporting than does the company’s size. This allows SMEs the opportunity to find success with international markets.2.Managers in born global companies typically do which of the following?a. strive to develop a strong local presence before expanding internationallyb.try to acquire other companies through mergers and acquisitionsc.try to keep an international outlook and entrepreneurial orientationd.view foreign markets as adjuncts to the domestic marketAnswer: cExplanation: Since born global companies are highly active in international markets from their inception, managers in born global companies typically have a strong international outlook and entrepreneurial orientation. Instead of viewing foreign markets as simple additions to the domestic market, they view the two as equal or perhaps even value foreign markets above the domestic market.3. The Internet has reshaped global export activity in all of the following ways EXCEPT:a.by opening new marketsb.by creating an advantage for larger multinationals over SMEsc.by supporting new strategiesd.by providing new toolsAnswer: bExplanation: Technological advances such as the Internet have made it financially and logistically possible for small and medium sized companies to venture abroad and compete in international markets that were once the sole property of large multinationals. Compared to large multinationals, SMEs can actually be more flexible and quicker to respond to international business opportunities.4. Which of the following identifies a key factor that helped DLP internationalize quickly? a.DLP’s ability to offer a relatively standardized productb.DLP’s established presence in the home marketc.DLP’s willingness to invest heavily in marketingd.DLP’s acquisition of a foreign medical device companyAnswer: aExplanation: One of the factors that helped the born global company DLP to internationalize quickly was its ability to offer a relatively standardized product that could be used in foreign hospitals with little or no modification. This approach keeps international marketing costs low. 5.In what way does DLP maintain a global marketing strategy? a.by teaming up with other companies to market their products together b.by tailoring its marketing strategy to each countryc.by having a consistent image and branding strategyd.by testing branding strategies on the home market firstAnswer: cExplanation: Maintaining a consistent image and brand is in line with maintaining a global marketing strategy. DLP is able to do this, because their products are standardized and there is a demand for them in various global markets. ................
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