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E-Marketing Strategy - Global Internet Marketing Strategy: Framework and Managerial Insights, Introduction, The Internet and Global Opportunities

firms markets development potential




Introduction


Even after several years of the commercial expansion of the Internet
and the development of the World Wide Web (WWW), the adoption of
Internet technologies by global firms and the promises of reaching a
global market appear to be fraught with a variety of structural and
functional encumbrances (Guillen, 2002; Samiee, 1998). Some of the
barriers stem from the relatively slow pace of development of Internet
infrastructure around the world, while others are due to the inability
of firms to fully exploit the global potential of the WWW. The
potential of electronic technologies to foster radical changes to
marketing exchanges and organization depends to a large extent on the
institutional context of specific firms and countries. Differences in
technological advancement, culture, politics, law, and consumer
behavior would largely shape the development of electronic markets
(Guillen, 2002; Zugelder, Flaherty & Johnson 2000). While such
markets offer more complete information as compared to traditional
markets, buyer-seller exchanges would, nevertheless, have to adapt to
the unique constellation of institutional forces in different countries
and industries. Moreover, the regulatory environment of e-commerce is
only emerging, and it is bound to be only much more complicated given
global differences in intellectual property considerations, patents,
consumer privacy, and other issues (see Dutta, Lanvin & Paua, eds.
2003; Kogut, ed. 2003, OECD, 2002; UNCTAD, 2002).


In retrospect, global reach through the Internet may add a new layer
of complexity on top of the already numerous challenges faced by firms
attempting to cross national boundaries through conventional methods.
However, the promise of reaching a wider market more efficiently
through the Internet is an opportunity that can certainly be exploited
(Brynjolfsson & Kahin, 2000; Gray, 2000; Vulcan, 2003). Savvy firms
could harness the powers of the WWW to create superior and customized
value for global buyers, search and obtain global resources more
effectively, reduce business risk through a diversified portfolio of
markets, and thereby, add to profit margins.




This chapter first identifies some strategic and operational
opportunities for global marketing presented by the Internet as well as
some structural and functional constraints in the realization of the
full potential of the Internet for the development of global marketing
strategies. Using extant knowledge on global marketing strategy
development and implementation, the section following identifies some
key issues for the development of a global Internet marketing strategy.
This strategy development process is guided by the imperatives of
creating a global customer-centric organization. The chapter concludes
with some practical managerial guidelines for using the Internet to
develop an integrated global marketing strategy.


The Internet and Global Opportunities


Global opportunities presented by the Internet and WWW are both
strategic and operational (Samiee, 1988). At the strategic level, some
key opportunities are summarized in Figure 1.


Wider Market Access


A key feature of the Internet is the connectivity with diverse and
far reaching markets, thus bringing to fruition the type of economic
convergence predicted by globalization (Levitt, 1983). Within domestic
markets, the Internet can expand the reach and trading areas even for
small firms, but the potential for reaching global markets is only
exponential in scope (Brynjolfsson & Kahin, 2000; McKnight, Vaaler
& Katz, 2001). More firms can chase global dreams and ambitions,
and at the very minimum, the ability to attract customers from outside
the conventional national trading area more efficiently and effectively
enables firms to fulfill their international expansions efforts more
rapidly.


Efficient Resource Access


Firms can use the Internet to efficiently search for cross-border
resources, including critical raw materials and components, sources of
manufacture, and products for which there may be a large domestic
demand. With more firms coming online, the amount of trade leads that
could be generated over the Internet has grown substantially.
Electronic tradeboards,
business-to-business electronic exchanges, and e-procurement sites are
increasingly global in scope, and the search and notification
capabilities of such sites can produce a tremendous volume of resource
leads for firms.

Global Niche

The Web also enables firms to pursue a specific positioning strategy
and applies it globally. For example, Yahoo! has a very similar design
for its information and shopping portal in all of the numerous
countries in which it has a presence. The portal niche by Yahoo!
essentially provides very similar functions for usersPage 88 
worldwide, though the content remains local to each country. Contrast
this to specific positioning developed and applied painstakingly to
each country, and the potential of the Internet becomes more obvious.

Competitive Advantage

Virtual networks formed with participants in the global supply
chain, including those involved in production, distribution, and
support functions, foster effective coordination and yield tremendous
strategic benefits. The new sources of competitive advantage lie in
creating and delivering customer value and in the exploitation of
network externalities. Ultimately, the collaborative strengths of
cross-border alliances become sources of advantage in domestic markets
as well. Firms utilizing such global virtual networks could potentially
be truly multinational in scope and operations.

The Internet also provides other opportunities to create competitive
strengths. Such advantages are no longer location specific but involve
knowledge based skills, timing, and flexibility. Firms that do better
faster stand to gain more from the Internet, and firms that innovate,
create, and apply well-planned business models would better withstand
competitive onslaughts.

Some of the operational opportunities provided by the Internet
include:

Efficient Coordination

The real-time communication and interactive capabilities of the
Internet provide opportunities for much better coordination with
suppliers, importers, distributors, and customers than through
conventional communication media. But communications are only part of
the story. Costs of transactions are lower due to reductions in costs
of precontract negotiations and agreements, more efficient price
haggling, and more transparent information exchange. Such communication
and transactional efficiencies could ultimately contribute to the
development of exchanges based more on trust, rather than on costly
legalistic frameworks. Commitment enabled through trust is often more
enduring and involves lower costs of monitoring as compared to those
obtained by fiats and legal documents.



Closer and Direct Contacts


Besides enabling closer contacts with relevant partners and
customers, the Internet allows firms to understand them better. Such
enhanced understanding could be leveraged for customizing products as
well as for better pre- and postsales service design and delivery.
Moreover, opportunities for direct sales and global account management
are now greatly facilitated, thus reducing dependence on the whims of
local agents and dealers.


Online Distribution


For several knowledge and media products as well as
information-intensive services, the Internet enables cheaper and
efficient online distribution options. For example, software companies
could distribute their products online, thus realizing further cost
savings. Call centers and technical support could now be located in
cross-border markets where labor costs may be cheaper. The increasing
media convergence facilitated by the Internet could be used to leverage
resources for wider distribution, as traditional news publishing firms
and radio stations have already discovered.


Production and Sales “Smoothing”


Variations in demand and supply can be “smoothed” over the global
market. The efficient identification of trade leads and resources
enable disposal of excess inventory, arranging nontraditional forms of
payments (such as barters), and obtaining functional flexibilities,
including real-time inventory management and operations scheduling.

Eagleson, William Lewis(1835–1899) - Editor, journalist, political activist, Chronology, Helps Promote All-Black Town [next] [back] E-Learning and Multimedia Databases - INTRODUCTION, BACKGROUND, FUTURE TRENDS CHALLENGES, CONCLUSION

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