CHAPTER 4 The Microenvironment in an Era of Global Competition

CHAPTER 4CHAPTER 4

The Microenvironment in The Microenvironment in an Era of Global an Era of Global

CompetitionCompetition

ObjectivesObjectives

Understand microenvironmental four C’sDiscuss customer economic utilityUnderstanding various competitive

strategiesDescribe the value chainUnderstand importance of global competitionDiscuss global impact on the four C’sIdentify global cultural differencesDiscuss structuring management for

international marketing

THE FOUR CTHE FOUR Css

Company

The Four CThe Four Css: Company: Company

Total organization InteractiveFlexibilityEntrepreneurial

approach Intrapreneurial

approach

The Four CThe Four Css: Customers : Customers - -

Economic UtilityEconomic Utility

Form UtilityPlace UtilityTime UtilityPossession Utility

Form UtilityForm UtilityForm UtilityForm Utility

Created by conversion of raw

materials into finished goods or

services.

Created by conversion of raw

materials into finished goods or

services.

Place UtilityPlace UtilityPlace UtilityPlace Utility

Created by making goods and

services available where consumers

want them.

Created by making goods and

services available where consumers

want them.

Convenience store

Created by making Created by making goods and goods and

services available services available when when consumers consumers

want them.want them.

Created by making Created by making goods and goods and

services available services available when when consumers consumers

want them.want them.

Time UtilityTime Utility

Created by transfer Created by transfer of physical of physical

possession and possession and ownership of a ownership of a

product to a product to a consumerconsumer

Created by transfer Created by transfer of physical of physical

possession and possession and ownership of a ownership of a

product to a product to a consumerconsumer

RetailerRetailer

ConsumerConsumer

Possession UtilityPossession Utility

The Four CThe Four Css: : CompetitorsCompetitors

LevelsProduct classProduct categoryBrands

TypePriceFormTimeLocation

Four Types of Four Types of CompetitionCompetition

Four Types of Four Types of CompetitionCompetition

Price-basedPrice-based

Quality-basedQuality-based

Time-basedTime-based

Location-basedLocation-based

The Four The Four CCss:Collaborators:Collaborators

AlliancesNetworks Informal

partnershipsSuppliersVirtual corporations

Company

The Value ChainThe Value Chain

UPSTREAM

DOWNSTREAM

PRIMARYACTIVITIES

Raw MaterialsSupplier

ComponentsSupplier

ServiceSupplier

Transportationcompany

Wholesaler

Retailer

Customers

Core CompetencyCore Competency

“…is a proficiency in a critical functional activity that helps provide a company’s unique competitive advantage.”

Resource Concentration

Unique Value

Executed in-house

Competitive superiority

Imports

Exports

Global EconomyGlobal Economy

The Four CThe Four Css in a Global in a Global Economy: CompanyEconomy: Company

Go/No GoCompetition is global

Price of beans in Columbia ?

Wine production in France?

Oil supply from Middle East & The Russian Federation?

Four CFour Css in a Global in a Global Economy: CustomersEconomy: Customers

Cultural values

Religious beliefs

Trends

Government “policy”

Four CFour Css in a Global in a Global Economy: CompetitorsEconomy: Competitors

Intensified“Home field”

advantagesJapanese keiretsuTariffs and import

quotas

Four CFour Css in a Global in a Global Economy: CollaboratorsEconomy: Collaborators

Capital Outlay/RisksHigh Low

DirectInvestment

Joint Venturing

Exporting

The Four CThe Four Css in a Global in a Global Economy: CollaboratorsEconomy: Collaborators

Central role of technology

ReviewReview

Understand microenvironmental four C’sDiscuss customer economic utilityUnderstanding various competitive

strategiesDescribe the value chainUnderstand importance of global competitionDiscuss global impact on the four C’sIdentify global cultural differencesDiscuss structuring management for

international marketing