International Marketing - Assignment Example

However, one glaring difference has to do with the issue of search for competitive advantage. Cameron et al, (2009, p. 6) actually notes that such competitive advantages have become necessary because of “the current economic instability, volatile prices, fluctuating exchange rates and the keen competition for customers.” It would be noted that existing multinational who have been in the system for long depend largely on their brand names as their competitive advantage. By brand names, reference is being to the fact that the companies have a thought that they will automatically appeal to customers because of their long existence.

This often brings about complacency on the need to look for new and challenging competitive advantages. However, new global challengers take inspiration from the fact that they are not well known to look for new and attractive competitive advantages that includes the need for modernity and low cost of products and services. Because the world is generally battling a global economic meltdown, such new competitive advantages tend to attract more focus than those used by existing companies. a) Some of the new global challengers seek organic growth while others internationalize through acquisitions.

What are the advantages and disadvantages associated with each strategy? (6%) The major advantage associated organic growth is that it is less costly and makes room for sustainable growth. It is therefore not surprising that Cameron et al, (2009, p. 11) captured in their report that of the many new challenger companies they sampled, “only 1.4 average deals per company” was recorded within that whole time frame. What this means is that as new companies, organic growth gives companies a lot of opportunity to study a specific market and become well acquainted with that market and so put in place strategies and plans that suit those markets only.

The disadvantage however is that international exposure becomes limited and so the likelihood of building an international brand becomes hindered. With acquisition, the fact that it is expensive to start is the major disadvantage. It however creates the opportunity for businesses to record outright growth and expansion without the need to start from the scratch. What is more, once an acquisition is made, there is the tendency that existing customers of the acquired company will become the automatic customers of the acquiring company. a) Consider all strategies the new challengers appear to use.

Are there other strategies available to them? Will these strategies ensure sustained growth? (6%) On the surface of it, one may think that is should be more costly doing business in rapid developing economies than in low-growth economies. However, the reverse is rather true. Based on this, challenger firms have a strategy whereby they focus their attention on rapidly developing economies as their start-up points. By this, they are privileged to a number of business climate advantages such as tax exemptions and access to credit; which are unfortunately