International product policy. Standardization adaptation. Quality

Course summary (International product policy):

Global product strategies: Business portfolio, Quality and international marketing, CE Mark, Digital value. Adaptation options available to the exporter.

Objectives: this learning unit sets out to analyze the key areas of International product policy.

In this unit you will: Learn the importance of adapting your product to local requirements when entering new export markets.

This will be achieved by:

- Examining the product adaptation options available to the exporter.
- Analyzing the product characteristics that typically need to be modified for different markets.

The first thing that an exporting company should ask itself is whether the product is exportable. A product which is successful in the home market will not always be as successful in other markets. Remember, although globalization is a reality, each market is different in its on way. Therefore, only through Market research will we find out if our product is viable or not. Furthermore, we should look at what types of modifications we should carry out on the products in preparation for different markets.

A company with a product / service which is profitable in the domestic market should investigate its product's potential in international markets. There are two common mistakes company managers make with respect to their product and exporting.

The first and main one is to believe that what is good in the home market will also be good in international markets. The other is that they don't keep in mind the different channels available for the distribution of their product (importers, subsidiaries, etc.)

Example of the course International product policy:

 

We should remember the life-long question, Is it a global product or shall we have to localize it to every market?

When an exporting company commissions Market research, one of the most important tasks it will face will be the analysis of the competition's products. Especially when entering new markets, familiarity with the products of competitors is vital. Many inexperienced exporters neglect to do this.
Both locally based competition and that imported from elsewhere should be investigated in great detail.
- How competitive is our product?
- What advantages, unique to our product, are bestowed on the customer?

The business portfolio is the collection of Business and products that make up the company. The best business portfolio is one that fits the company's strengths and helps exploit the most attractive opportunities. The company must:

- Analyze its current business portfolio and decide which Business should receive more or less investment, and
- Develop growth strategies for adding new products and Business to the portfolio, whilst at the same time deciding when products and Business should no longer be retained.

The two best-known portfolio planning methods are the Boston Consulting Group Portfolio Matrix and the McKinsey / General Electric Matrix.

In both methods, the first step is to identify the various Strategic Business Units ("SBU's") in a company portfolio. An SBU is a unit of the company that has a separate mission and objectives and that can be planned independently from the other Business. An SBU can be a company division, a product line or even individual brands - it all depends on how the company is organized.

Product may also be categorized according its contribution to the company. (i.e. the categories set by the Boston Consulting Group):
- Star products, those that have a large market share in a growing market.
- Cash cow products, those that have a large market share in a stable market.
- Dog products, those that have a small market share in a stable or slowly growing market.
- Question products, those that have a small market share in a fast growing market.

The experience curve has important strategic implications. If a firm is able to gain market share over its competitors, it can develop a cost advantage.

Penetration pricing strategies and a significant investment in advertising, sales personnel, production capacity, etc. can be justified to increase market share and gain a competitive advantage.

e-Product. In many cases we will have to add value to our products (atoms) with digital services (bits). We will also see industries in transition which are no longer selling atoms in order to sell bits. In almost every case companies are re-inventing in some way their products (their atoms) in order to add digital value to them through bits.

SGI, also known as Silicon Graphics, Inc., is the world's leader in high-performance computing, visualization and storage. The company offers a targeted set of products, services and solutions designed to give the customers a strategic and competitive advantage in their respective markets.


Comfort (Unilever) was introduced in 1969 and has since developed products that care for clothes both inside and outside the washing machine. Year after year they have sustained high single-digit growth and gained market share in most of the countries where either Snuggle or Comfort is available – making them Europe’s indisputable market leader.

Johnson & Johnson, the world leader in healthcare products, has 200 operating companies in 54 countries around the world employing 112,000 employees and selling products in more than 175 countries. As well as taking standard stock orders, Vistakon Europe offers eye practitioners the additional service of registering the script and lens replenishment schedule for their patients.

General Motors, one of the world’s largest automakers, traces its roots back to 1908. With its global headquarters in Detroit (US), GM employs 209,000 people in every major region of the world and does business in more than 120 countries. In 2003, GM R&D began an expansion of its global research network. The goal was to transform the GM Research Labs into a world benchmark research organization acting as one organic, agile and efficient business unit. The motivation for this was a desire to gain access to diverse scientific skills and expertise globally, and to leverage global research resources to move quickly into new technical areas.

 

Throughout the home entertainment industry's history, Nintendo (Japan) has created entertainment products under the development concept of hardware and software integration, primarily driven by unique and original software. Nintendo was founded in September 1889 and incorporated in November 1947. Nintendo has sold more than 3.4 billion video games and more than 565 million hardware units globally. The basic strategy that Nintendo has been deploying is the expansion of the worldwide gaming population.

Linus Torvalds created the Linux kernel and oversaw open source development of the widely-used Linux operating system. Since 1991, Linux has grown to become a force in computing, powering everything from the New York Stock Exchange to mobile phones to supercomputers to consumer devices. Linux´s development is a good example of free and open source software collaboration. The Linux market is growing rapidly, and the revenue of servers, desktops, and packaged software running Linux was expected to exceed $35.7 billion by 2008.

International, Product, policy, Standardization, Adaptation, Quality, Certification, Strategies, Digital value, Business portfolio, International marketing, CE Mark, Product adaptation options, Master, international business, Customs, Logistics, import, export, exporter