Introduction To The Global Market

Abstract

Effective global marketing is needed in today's world, where everything is connected quickly. Companies that have high adaptability will be superior and able to survive in global competition. In the end, a superior company will result in rapid growth and increased revenue. To achieve this goal, companies use various methods, one of which is using a product / market growth matrix. The matrix includes market penetration, market development, product development, diversification. Competitive advantage becomes a weapon to expand the market, with a competitive advantage the company will be able to increase revenue.

However, a good strategy and a competitive advantage in one country may not necessarily apply to other countries. This causes a manager to also compare and contrast a country's marketing strategy using a global marketing strategy (GMS). GMS requires companies to analyze other countries that will be the target market or location for establishing a new company. The analysis carried out includes social and cultural conditions, economic conditions, and politics of the destination country.

Some companies that are successful in international business are :Walmart; Amazons; State Grids; China National Petroleum; Sinopec Group. These five companies are the top five companies in the world in 2022. This success certainly indicates that they have a good global marketing strategy. 

To achieve this success, the company will go through several stages before competing in the world market. Moving from a company with an Ethnocentric Orientation to a Geocentric one will face various complex problems. The wider the scope of the company, the more complex the problems that will be faced. This high complexity is influenced by several factors that strengthen and weaken. One example is the development of technology and information systems that make relations between countries easier.
 
Introduction

In today's interconnected world, there is a need for effective global marketing (Suhairi et al., 2023). As it is an important aspect of modern business, companies will aim to expand their reach beyond the domestic market and take advantage of new opportunities around the world (Dhea Nita Syafina Rambe & Nuri Aslami, 2022). In-depth understanding of local market dynamics, consumer behavior and preferences. This involves adapting the use of marketing strategies to suit the cultural norms and preferences of different target markets while maintaining a consistent brand identity across all markets (Bunyamin, 2021).

To succeed in carrying out global marketing, a business must be proactive in understanding and adapting to local market conditions or what is commonly called the domestic market(Muhammad Syahbudi, 2021). This includes carrying out extensive research, developing cross-cultural competence, and building relationships with local partners and stakeholders(Dunujung, 2022). Additionally, global marketing requires a multi-channel approach, leveraging multiple marketing channels, including traditional advertising, digital marketing, social media, and content marketing, to reach and engage with target audiences worldwide.(Dr. Hartini et al., 2022).

Ultimately, successful global marketing can help businesses achieve their growth and revenue targets by entering new markets and expanding their customer base. However, achieving this success requires careful planning, research and execution to address unique marketing challenges in a global context.

In this chapter, we will explore more about global marketing and provide practical insights and strategies for businesses looking to expand their operations internationally. Using the product/market growth matrix to explain the various ways a company can expand its market globally, Describe how companies in a global industry pursue competitive advantage, Compare and contrast one country's marketing strategy using a global marketing strategy (GMS), Identify top companies in the Global 500 ranking, Describes the stages companies go through as their management orientation evolves from domestic and ethnocentric to global and geocentric,

Uses the product/market growth matrix to describe the different ways a company can expand its market globally(Dr. Hartini et al., 2022). In this case companies need to consider their strengths and weaknesses, as well as suitability with global market conditions(Irwan Fathurrochman et al., 2021). In addition, companies must also identify risks and opportunities in expanding global markets, as well as allocate appropriate resources to achieve their goals.

Describes how companies in the global industry pursue competitive advantage, in this case companies in the global industry have many ways to pursue competitive advantage, depending on the business strategy they choose and the market conditions they are facing(Saraswati & Maudi Aulia, 2023). Companies in global industries need to constantly adapt their strategies to maintain their competitive advantage(Elsa Rosita, 2022). This can include continuous innovation, operational improvement, brand image development, or increased focus on a particular market(Supriyantony et al., 2021).

Comparing and contrasting a country's marketing strategy using a global marketing strategy (GMS), includes a country's marketing strategy that has differences and similarities in its approach to promoting products or services in different markets. In choosing the right marketing strategy, companies need to consider their internal and external factors, including business goals, available resources, and the global market environment.(Pusporini Pusporini et al., 2022). Companies also need to conduct market research and understand the characteristics of local and global markets in order to be able to develop effective and efficient marketing strategies.

Identify companies in the top ranking of the Global 500, see belowAdam Hayes, (2021) thatThe Global 500 ranking itself is a list of the top companies in the world compiled annually by Fortune magazine. The companies on this list are sorted by their gross income. In identifying the companies in the top Global 500 rankings, it is important to remember that this ranking may change annually depending on the gross income of these companies. Which can be accessed by viewingfortune official website, (2023).

Describes the stages a company goes through when its management orientation develops from domestic and ethnocentric to global and geocentric, in the process of management orientation from domestic and ethnocentric to global and geocentric involving several important stages(Rika Promalessy, 2021a). Each stage in this process presents different challenges and opportunities for the company, and management must be able to cope with the changes that occur to achieve success in the international market.

Discussing the driving and constraining forces that may affect today's global integration, today's global integration is influenced by several driving and constraining forces that impact the ability of companies and countries to participate in the global economy(Azzahra Putri Annisa et al., 2022). Therefore, in building better global integration, it is important to understand and overcome the existing inhibiting factors, while leveraging the available driving forces(Anni Zuhro Syafrida Hasibuan & Nuri Aslami, 2021). This will enable companies and countries to engage in the global economy more effectively and sustainably.

This book will discuss (a) using the product / market growth matrix to explain the various ways that a company can expand its market globally, (b) describe how companies in a global industry pursue competitive advantage, (c) compare and contrast one marketing strategy a country using a global marketing strategy (GMS), (d) identify companies in the top ranking of the Global 500, (e) describe the stages a company goes through as its management orientation evolves from domestic and ethnocentric to global and geocentric, and (f) discuss the strengths drivers as well as constraints that may affect today's global integration. With the aim of broadening the understanding of global marketing strategy,
 
Literature Review

International marketing is defined as marketing that spans one or more countries. Globalization is the marketing activities of multinational corporations that do business in different parts of the world in many countries, using global marketing tactics, global markets and global products and standards.(Rambe & Aslami, 2022)International trade is the exchange of goods and services between residents of a country and residents of other countries based on mutual agreements. The relevant population can be between individuals (people and individuals) or between individuals and the government of one country and the government of another. 

Global marketing can achieve one or more of four main categories of potential globalization benefits. Reduce costs, improve product and program quality, increase customer preference, and increase competitive advantage.(Masaaki Kotabe, 2020)An important aspect in making global strategic decisions is the ability to think globally: the ability to understand international markets by considering sources of supply and demand, as well as effective management and marketing methods.

Global marketing looks at the world as a whole as the target market. International marketing describes the activities of a company operating in one country and developing methods of marketing similar products in another country.(Wajdi, 2013)However, a successful global marketing strategy must be able to be developed and evaluated in the broader context of the company's overall strategy and not solely based on customer marketing considerations. This requires the allocation of resources between countries, markets and product segments, the integration of purchasing and production functions, management systems and logistics into a global marketing strategy.(P., 2020)

In this case, for a global company means a shared goal of global reach and capability that extends beyond every country. The dictionary or marketing defines global marketing as the obligation to act on world markets.(Saeed Samiee, 2019)Global marketing is becoming very fierce competition also based on investment in special products and developing high-priced products for market niches is also important for companies. However, no differences in performance critical areas were observed between companies that value global standardization and other companies.

(Alone, 2020)To ensure that marketing activities are not carried out in vain, it is necessary to exercise selective control over the distribution of resources between countries, markets and product segments, for the integration of purchasing and production functions, administration and logistics systems into global marketing. The difficulty in global marketing is how to effectively manage relationships involving cross-cultural ties and different organizational/management philosophies so that the commitments made can be intertwined as planned.(Speier, 2022).

Product/market growth matrix (Product/Market Growth Matrix) is an analytical model used to assist companies in determining their business growth strategy(Aisiyah & Rukmana, 2023). From this analysis the company can determine the right strategy to expand its business such as market development, product development, related diversification, or unrelated diversification. The product/market growth matrix is an important tool for companies to develop long-term business plans and increase their business competitiveness in the global market.(Edy Fradinata, 2021).

Discussion

A. Uses the product/market growth matrix to describe the different ways a company can expand its market globally.

Product/market growth matrix, also known as the Ansoff Matrix(Weiwei, 2021). Based onCorporate Finance Institute (2021)strategic tools that businesses can use to expand their operations and enter new markets. This matrix offers four different strategies companies can use to grow their business, and each strategy presents unique opportunities and challenges for companies seeking to expand globally.(Loredana, 2021).In this article, we will explore each strategy in more detail and provide recent examples of companies that have successfully used them to expand globally.

1. Market Penetration
Market penetration involves increasing the sale of more products in the market in the current market. This strategy focuses on attracting new customers or retaining existing ones through tactics such as promotions, improved customer service or targeted advertising campaigns(Azzahra et al., 2021).Companies can use advertising and other marketing tactics to increase sales to their existing customers or attract new customers(Rachmawati et alna., 2021).For example, a company can increase its market share in its domestic market by running targeted advertising campaigns, offering promotions, or improving customer service(Fakhriyyah et al., 2021).

2. Market Development
Market development involves introducing existing products into new markets(Kinanthi Haksari, 2022). This strategy can help companies expand their customer base and increase revenue(Azzahra et al., 2021b).Companies can use market research to identify new markets and develop strategies for entering them and companies can enter new countries or regions by setting up distribution channels or partnering with local businesses.(Iqbal et al., 2022)

3. Product Development
Product development involves creating new products for existing markets(Septiani et al., 2022). This strategy can help companies attract new customers or increase revenue from existing ones. This can be done by developing new versions of existing products or launching new product lines in response to customer requests(Kahfi et al., 2022).

4. Diversification
Diversification involves creating new products for new markets(Indrawan et al., 2022).This strategy can help companies reduce their dependence on one product or market and spread the risk(Cao et al., 2021). In a journal written byAgustin & Setiawan, (2021) thata company can achieve this by diversifying into new industries or entirely new product lines to broaden its offerings and enter new markets or by product development.

By analyzing their current market and product offerings and identifying growth opportunities, companies can choose one or more of the four strategies outlined in this matrix to expand their business. Recent examples from companies such as Coca-Cola, Amazon, Apple, and Tesla demonstrate the effectiveness of this strategy and its potential to help companies succeed in global markets. Which can be accessed on the official website(Amazon India, 2022; Apple, 2022; Coca-Cola, 2022; Tesla, 2022).

The latest example of a company successfully using this strategy to expand globally is Coca Cola, quoted from the official website(Coca - Cola Company, 2023).Coca-Cola is one of the global companies that has successfully used the product/market growth matrix in its worldwide expansion(Hess, 2021)Here's how Coca-Cola uses this matrix:

•Market Penetration: Coca-Cola uses this strategy by expanding its product reach in existing markets(Xiang, 2022). Companies invest in marketing campaigns to increase brand awareness and expand distribution channels to reach more customers(Bradley Pallister, 2022). For example, in developing countries, Coca-Cola is expanding its product access by selling drinks in smaller and more affordable packages(LR Said, 2022)
•Market Development: Coca-Cola has introduced its products to new markets around the world(Jenni Tarigan, 2021)Companies use this strategy by bringing their products to countries where they were not previously available(Cinthya, 2021). To reach this new market, Coca-Cola adapted its products to local tastes and culture. In Japan, for example, Coca-Cola launched a green tea drink because it is more popular in that country than fizzy drinks(Irra Christiyanti Dewi et al., 2022).
•Product Development: Coca-Cola uses this strategy by introducing new products in existing markets(SM Riad Shams et al., 2021)The company continues to develop and introduce new variants of their soft drinks to attract new customers and expand their market share. For example, Coca-Cola launched fruit-flavored soft drinks and diet drinks to meet increasingly diverse customer demands.
•Diversification: Coca-Cola has diversified their business to reduce their dependence on soft drinks(Dr. Dian Sudiantini S.Pd.M.Pd, 2022). The company has expanded its product portfolio by introducing non-soda drinks such as mineral water and energy drinks(dr, 2023)By diversifying, Coca-Cola was able to reach new markets and expand its business beyond soft drinks(Zenal Aripin, 2021).
B. Describe how companies in a global industry pursue competitive advantage.
Companies achieve competitive advantage through innovative actions(Ernawati Ernawati et al., 2022). They approach innovation in a broad sense, including new technologies and new ways of doing things. They perceive a new basis for competing or find a better way to compete with the old way(Maya, 2022)Innovation can be manifested in new product designs, new production processes, new marketing approaches, or new ways of conducting training(Gunawan et al., 2021)Some innovations create competitive advantage by understanding entirely new market opportunities or by serving market segments that others have neglected(Muhammad Ridlo Zarkasyi, 2021). When competitors are slow to respond, such innovation generates a competitive advantage.(Michael E Porter, 1990)
In today's highly competitive business environment, companies in global industries must pursue various strategies to gain competitive advantage(Dr. Miguna Astuti et al., 2021)Competitive advantage allows a company to outperform its competitors, gain market share and increase profits(Mashur Fadli et al., 2022)There are several ways a company can pursue competitive advantage, including cost leadership, differentiation, and innovation:

•Cost Leadership Strategy

One common approach that companies take in a global industry is cost leadership(Aldania & Niswah, 2021). In this strategy, the company aims to become a low-cost producer in its industry. By keeping costs low, companies can offer lower prices to customers while still maintaining profits(Sunarsi et al., 2021). This approach requires companies to have efficient operations, strong supply chain management, and focus on reducing costs continuously(Devi Rahma Dani, 2022)Companies that have successfully implemented a cost leadership strategy according toSuaibatul Aslamiyah & Vembri Aulia Rahmi (2022).including Walmart, Southwest Airlines, and Amazon.

According to(Anisa Raihan Fadhilah Fadhilah Zain et al., 2022)To implement a cost leadership strategy, companies must focus on cost efficiency in all aspects of their business operations. For example, a company might look for ways to reduce production costs, procure raw materials, distribute products, or reduce overhead costs. Not only that, companies also need to pay attention to the quality of the products or services produced(Alfarabi Rachma Hazryas et al., 2022)Even though production costs must be lower than competitors, product or service quality must be maintained or even improved so that consumers are satisfied with the products offered.

•Strategy difference
Another approach that companies can take is differentiation. In this strategy, the company seeks to differentiate its product or service from its competitors in a way that is meaningful to customers(Dany Natakusuma, 2021).By offering unique features or benefits, companies can charge higher prices and build customer loyalty(Nanda Annisa et al., 2021). Exemplified in the book writtenDr. Daduk Merdika Mansur, (2023) bprominent companies include Apple, Nike, and Tesla.

The main advantage of the differentiation strategy is that the company can attract more loyal customers and more easily avoid direct competition from competitors(Sopiah & Etta Mamang Sangadj, 2022). In the long run, this strategy can help companies maintain a larger market share and generate higher profits(Ernawati Ernawati et al., 2021)However, the difference strategy also has risks. 

The costs of developing a differentiated product or service can be prohibitive, and if a company cannot differentiate its products well enough, this strategy can fail.(Mahrus Ali Mufadhol, 2021)Some examples of companies implementing a differentiation strategy by web blog(sold, 2021) is Apple with its innovative products and attractive designs, and Starbucks compliedMoh. Ainurrofiqin, 2021)with a unique customer experience and better customer service.

•Innovation Strategy
Innovation is another way that companies in global industries can gain a competitive advantage(Muhammad Haviel Nurachman, 2021)By introducing a new product, service or business model, a company can disrupt its industry and create new market opportunities(Dr. Apri Winge Adindo, 2021). Innovation requires companies to invest in research and development, cultivate a culture of creativity and experimentation, and be willing to take risks. Companies known for their innovation include Google, Uber, and Netflix(Zenal Aripin, 2021).

C. Comparing and contrasting a country's marketing strategy using a global marketing strategy (GSM).

Global marketing involves a different approach but with the same functions as domestic marketing, ranging from marketing research, demand analysis and policy development to overall control of marketing efforts.(Dr. M. AnFirmansyah, 2017)The introduction of the distribution of this approach must be able to be carried out correctly so that it is in accordance with the capacity of the strategy carried out.

 On the other hand, a global marketing strategy (GMS) is a marketing tactic that seeks to standardize marketing activities across different countries and markets, focuses on economies of scale, maximizes global brand awareness, and leverages global synergies.(Hollensen, 2019)In a standardized marketing strategy, more emphasis is placed on global markets with homogeneous customer characteristics (consumer homogeneity). This strategy emphasizes a company's ability to market the same products and services worldwide using identical strategies at lower costs and higher margins.

(Simbolon, 2013)Global marketing strategy combines standardized and customized elements to create effective marketing messages for international markets with the aim of achieving efficiency, consistency and flexibility in the use of marketing resources whereas country marketing strategy adapts product, price, promotion and distribution to different local conditions and culture. in each country or region.(Richter, 2012)

In this case the level and method of controlling marketing communications in each country also reflects local economic, cultural and political conditions, so that the balance between voluntary controls through self-regulation and marketing controls has a major influence on the level of marketing outreach that will be developed in the global market in the future.(Rika Promalessy, 2021b)The characteristics described will have a difference and can lead to the emergence of different marketing strategies between the two, both the focus and the challenges faced.

(Jamal Ma'mur Asmani, 2015)Various kinds of political, economic, social, cultural and geographical conditions are important considerations for multinational companies that market their products in one country.(Simbolon, 2013)Globalization and market competition require all managers to be aware of the global environment. International marketing refers to business activities that involve pricing, advertising and distribution of goods (goods and services) to customers/consumers in more than one country for profit.

This industry is the largest producer of gross national product in industrialized countries and the most important employer in industrialized and developing countries.(Rambe & Aslami, 2022)Therefore, the marketing strategy that is applied is an important concern, which must be adapted to the state of the country.

D. Identify companies in the top Global 500 rankings.
The companies that are in the top ranking of the Global 500 exist because they have the highest revenues among all the companies in the world and based on the total revenue of a company it is called the Fortune Global 500.(money, 2000)Companies that feel superior often try to compete to be part of the Fortune Global 500 at the top level.

The Fortune Global 500 list not only provides information about publicly listed companies (whose shares are listed), but also includes other companies that meet certain requirements and includes in particular the publication of financial statements.(Kwiatkowski & Augustynowicz, 2015)Companies at the top of the Global 500 list achieve their position through a variety of determinants that are used as a basis for identification.(Daniel Sarpong MBA, 2021)These factors include:

1. Strong Brand Reputation: Companies with well-known and trusted brands tend to be successful in the global market. 2. Effective management:Successful companies often have an effective management team capable of navigating complex global markets, identifying growth opportunities, and implementing strategies that lead to long-term success. 3. Innovative products or services: Companies that are able to offer innovative and desirable products or services can gain a competitive advantage, 4. Successful marketing strategies: 

Businesses that use successful marketing campaigns to connect with customers and build brand loyalty can achieve long-term success . 5. Effective processes: companies with supply chains, manufacturing processes, and efficient operations can produce high-quality products or services at competitive prices. 6. Investment in research and development:

Companies that invest in R&D can stay at the forefront of innovation and stay competitive in global markets. The Fortune Global 500 represents the 500 largest large companies in the world, so the results reported indicate that company size can be considered as a key factor in preparing a sustainability report.(Road & Kingdom, 2022)The Global 500 is an annual ranking of the world's largest companies by revenue, compiled and published by Fortune magazine on its official website. So that the latest rankings from 2022 are the top companies in the top 500 Global rankings, which are started by: 1. Walmart; 2.Amazon; 3. State Grid; 4. China National Petroleum; 5. Sinopec Group; 6. Sudi Aramco; 7. Apple; 8.Volkswagens; 9. Engineering; 10. CVS Health(Luce, 2022).

E. The Stages A Company Goes Through When Its Management Orientation Evolves From Domestic And Ethnocentric To Global And Geocentric.

The more the company develops, the more likely the company will expand its market share. From a domestic-focused company to a global company. In changing from a domestic company to a global company, there are several stages that the company will go through, including:

1.First Stage: Domestic and Ethnocentric Orientation

Domestic companies are companies that only focus on the domestic environment from both suppliers and competitors(Sihite, 2016a). Someone who thinks that their home country is better and superior than other countries is someone who has an ethnocentric orientation.(Green & Keegan, 2020b)Companies that adhere to an ethnocentric orientation tend to ignore opportunities from abroad(Green & Keegan, 2020b). Assuming that the country of origin is superior to other countries, most companies when expanding abroad will not pay attention to local culture, which means that all regulations follow the regulations of the head office.

2.Second Stage: Multinational and Polycentric Orientation

Multinational companies are companies that involve more than one country in running their business(Dunning & Lundan, 2008)At this stage managers begin to realize that other countries also have their own uniqueness. Polycentric orientation is an assumption that other countries where the company does business have its own differences and uniqueness from the country of origin(Green & Keegan, 2020b)In the process of decision making and management processes are adapted to the geography of the company running its business(Sihite, 2016)

3.Third Stage: Global and Geocentric Orientation
Global Companies are companies that make the global region a market(Sihite, 2016)At this stage the manager assumes that the whole world is a potential market, therefore a manager must have an integrated strategy(Green & Keegan, 2020b). Global orientation can be said to be Geocentric because it considers that world markets have similarities and differences so that a global strategy will be created. At this stage is the stage where the company has a very high complexity because of the differences and similarities.

F. The Driving Forces And Restraining Forces Affecting Today's Global Integration.
The many differences and some similarities with other countries in conducting international business make a manager must be precise in choosing a strategy. It is from these differences that many countries carry out a strategy by working with other countries to complement each other. There are also many other factors which, instead of strengthening global integration, also weaken global integration.
Driving Force

1)Multilateral Trade Agreement
One example of multilateral trade is the WTO. The World Trade Organization (WTO) is the only body that regulates and oversees various issues or trading activities on world markets (PRINCIPLES). With the existence of the WTO, it will certainly strengthen integration because there are rules and bodies that protect world trade activities so that each country does not hesitate to carry out cooperation.

)Development of Technology and Information Systems

ith less than 48 hours, one can circumnavigate the world by using a jet boat(Green & Keegan, 2020)This indicates that technological developments have made human activities easier, from transportation to communication.
3)Global Strategy
Global strategy is a design that has the goal of creating a competitive advantage in the global market. By having a global strategy the company will be able to compete well.(Green & Keegan, 2020).

Restraining Strength

1)National Control
Each country has control over what happens to its country(Green & Keegan, 2020a). A rule made by a country sometimes hinders and complicates the process of company activities to do international business.
2)Rejection Against Globalization
Some individuals and a country view globalization as a threat to themselves, so they will close themselves off from the outside world. People with these assumptions are often called Globaphobia(Green & Keegan, 2020).

 
Conclusion

Globalization is now familiar to every individual, where globalization triggers companies to expand their business in the world market. With a wider market, of course, income will also increase, but to achieve success in the world market one must be able to overcome various obstacles both domestically and globally. One way that can be done to expand the market is by analyzing the market matrix which contains how the company penetrates the market, expands the market, expands the product, and diversifies the product. This matrix will have an impact on the company to have a competitive advantage.

The Global Marketing Strategy (GMS) is a strategy that must be owned by every business actor in the world market. GMS will improve the performance of companies around the world. Moving from a company with an Ethnocentric Orientation to a Geocentric one will face various complex problems. The wider the scope of the company, the more complex the problems that will be faced. This high complexity is influenced by several factors that strengthen and weaken. One example is the development of technology and information systems that make relations between countries easier.