Global Marketing at AOL - Case Study Example

Global Marketing: AOL Effective international marketing depends upon effective marketing system employed by a company. As OAL is dynamically evolving entities operating within a dynamically evolving environment, some means of evaluation of the way in which the two interact has to be found to enable them to be better matched. Before entering a new market a company should scan its environment and evaluate potential threats and opportunities, taking into account barriers to entry and cultural differences. From the case study it is evident that the choice of the foreign partner was not well- weighed. On the one hand, the companies had had business relations before, which raised the level of trustworthy to Mitsui, but on the other hand this company was not an appropriate partner as it operated on entirely different market segment. It is a traditional Japanese trading company which products are iron and steel, chemicals, electronics, textile, etc. The main problem is that this company is not involved in the service sphere of business, especially Internet services. The better partner for AOL will be the company dealing on the service market segment as a minimum requirement, which is well aware of Japanese market peculiarities exciting in this segment. On the other hand, a good partner for AOL could be a company selling software which is familiar with the Japanese computer market much better than a traditional trading company like Mitsui (Brake, Walker, 1995). The success of any company is closely connected with its management team, structure of the company and people work with it. The structure of AOL in Japan is not appropriate for the company of this type. The first problem is that only one person from eight, J. barber, is involved in day-to-day operations. According to the report results, it is not enough for such company as AOL because it needs more management control and adjustment on the upper level. The second problem is that the five groups report only to the President, who coordinates their work, but the other members of the board is unaware of the company's problems. The third, and the major problem, is the unstable management team of the company (Hoecklin, 1995). During the recent years 3 persons have held the office of company but did not succeed. This is closely connected with recruiting procedure used by AOL, who committed to his partner Mitsui this mission. Even if it was difficult to find top local people the company could employ a US citizen on the President post. This experience is widely used by other companies in their foreign offices and proves its efficiency (for instance, Coca-Cola company is used to appoint non-residents on the post of General Manager). The Barber should recommend to AOL to employ an experienced leader on the President's post (if the current will not be able take AOL on the next level), and be involved in the process of staff selection itself (Griffith, Hu, Ryans, 2000). If AOL continues the present structure it will not gain any results in foreseeable future. Only a new radical strategic approach as for management and the company's structure could take AOL on the higher level. The main impediments of AOL in Japan are that it employs the same marketing strategy that used in America. It uses bundling, magazines inserts and direct advertising, which cannot work on the Japanese market at all. And AOL did not take into account the difference that in Japan (in contrast to USA), the PC manufacturers are much more active in the ISP business. The overcome the obstacles AOL should use cultural approach to its marketing in Japan. Many problems associated with the relationships between people of different cultures stem from variations in norms and values. At its deepest level, however, culture comprises a set of basic assumptions that operate automatically to enable groups of people to solve the problems of daily life without thinking about them. This approach will include examination of the techniques and marketing peculiarities used in Japan, in contrast to USA experience. AOL can study the strategic approach used by its major competitors. The way businesses conduct their affairs affects and often changes the particular culture in which they operate. Cultural context is important for understanding differences among cultures in their reactions to communication and behavior. For instance, instead of cards with Pokemon, which is alien to Japanese people, the company can choose its national hero or heroin which are more familiar and popular among Japanese citizens. Japanese culture differs greatly from the American one, and that is why all those marketing technique successfully used in America do not work in Japan (Gesteland, 1999). To grow its market share AOL should take into account the peculiarities of communication and its meaning in Japan. In addition to the lower amount of yen, AOL can propose to its users free additional services. In order to capitalize watershed events AOL can propose the internet banking service, and involve banks (as subscribers) in this system. It is a well known that present day banking is closely connected with Internet, and additional services can be proposed to banks. Buying other ISPs AOL can create a joint venture, or any other type of company involving small ISPs. In addition it should be noted that for the manager, the key advantages of convergence are that ideas and techniques developed in one cultural or national setting may be transferred to another and used effectively. Furthermore, developing nations are able to learn from those more advanced countries and thus benefit from the mistakes of others. Such thinking is clearly behind the adoption by American firms of Japanese techniques such as quality circles and just-in-time and the focus on American theories of motivation (Keegan, Green, 2000). These important facts should be taking into account during the process of strategic planning. Belief in the transferability of techniques has led management to turn elsewhere for solutions to problems. References 1. Brake, ., Walker, D. M., and Walker, T. Doing Business Internationally. Burr Ridge, IL: Irwin Professional, 1995. 2. Gesteland, R. Cross-Cultural Business and Behavior 2nd edn. Copenhagen Copenhagen Business School Press, 1999. 3. Griffith, D. A., Hu, M. Y. and Ryans, J. K. Jr. "Process standardization across intra- and intercultural relationships". International Business Studies, 2000, 31, pp. 303-24. 4. Hoecklin, L. Managing Cultural Differences: Strategies for Competitive Advantage. Wokingham, England: Addison-Wesley, 1995. 5. Keegan, W. J. and Green, M. S. Global Marketing 2nd edn. UpperSaddle River, NJ: Prentice-Hall, 2000. Read More