Companies may decide to internationalize in order to gain economies of scale (Solomon, 2003). The companies, which are manufacturing products that may be acceptable in the different countries of the world, may opt to venture into the international markets, so as to expand its business. Moreover, a company with a differentiating advantage may enter international markets to exploit this advantage. In the case of the Russian Standard brand, Roust aimed at increasing the brand’s presence in the world and at gaining economies of scale, as other companies such as Virgin and Disney had done.
Companies may enter international markets to increase their sales. Better performance in the home countries may be an indication that a company can perform well in the international markets. The companies with the unique products and technological advantage may enter international markets, whose competitors have no such advantage. Due to this competitive advantage, a company may increase its sales through superior product quality.
To assess the countries to enter, a company must consider its capabilities and the prevailing conditions in the target market. Entering the international markets can be risky for a company. Therefore, assessing the markets before the actual entry can help the company to determine the level of risk involved. The results of the assessment can guide the company to decide the most favorite market to enter. A SWOT analysis of the company can identify its strengths, weaknesses, opportunities, and threats. A company’s strength refers to its aspects that are superior than those of its competitors. These include unique technology that is hard to imitate, an established brand, and economies of scale. Entering an international market, where competitors are weak in these aspects, may help the company to maximize on its strengths.
The Russian Standard Brand was known for its high quality vodka, which motivated the company to enter the international market. Weaknesses refer to the company’s aspects that are inferior, as compared to those of competitors. Identifying such weaknesses can help the company to improve, so as to minimize its vulnerability. Through the SWOT analysis, a company may identify the markets that have opportunities that can be tapped using its internal capabilities. This was the case with the Russian Standard Brand, when the company was considering the American market. The American market was an untapped opportunity for the Russian vodka that needed serious consideration.
Threat identification in a target international markets is crucial, because a company identifies competitors that may take away business competitiveness from the company. The external national market environment involves other aspects that are beyond a company’s scope, which determine a company’s success in the foreign market. These factors include Political, Environmantal, Social, Technological, Economic, and Legal aspects. Assessing theses factors requires the use of PESTEL, as an analysis tool. This tool identifies the target market’s political atmosphere, environmental regulations, social aspects, the level of technology available, the general economic conditions, and legal requirements in the target market. Such an assessment helps a company to determine the country with the appropriate business atmosphere to venture into.
Using a global marketing strategy is easy, because once the strategy has been developed, it can serve all international markets. Customized marketing strategies are tedious because each international market is unique and needs to be reached using different strategies. Products in one country may be manufactured to appeal to a particular market segment. As such, the marketing campaigns are customized to appeal to that market segment. Marketing campaigns need to be customized in order to effectively appeal to the different market segments that may be targeted in the international market. Moreover, competitive product strategies may vary depending on the nature of the international market.
The need to have customized marketing strategies for the various markets emanates from the effects the country of origin can have on the marketing strategy. For instance, the marketing strategies of the Russian Standard Brand within the Russian market were designed to appeal to the people’s nationality as Russians. The marketing strategies evoked Russian traditions and a sense of pride. Such strategies could not be used in the American market, because customers in this market had no attachment with Russia as a country and its traditions. Using such strategies to target customers in the American market would alienate them from the Russian Standard Brand. Cultural aspects, such as religion and its norms, may affect the perception of consumers in a particular market. Religion can limit the content of marketing and promotional campaigns. When a company fails to identify such unique needs and proceeds to use a global marketing campaign, it may face resistance and hostility from the consumers.
A company planning to enter international market should consider several issues. These issues include whether the company can satisfy the existing needs of the target markets and the company’s resources available for investment in the new markets. Moreover, the company needs to decide on the most effective marketing strategy that can appeal to the new markets. For instance, the Russian Standards Brand had to consider the existence of needs that could be satisfied with its products in the United States. Brozin’s question can only be answered by evaluating the performance of the company in the Southeast Asia. A flourishing performance in the Southeastern Asia could indicate that venturing into that market was the right decision and occurred at the right time. On the other hand, a poor performance could be an indicator that the decisions to enter that market was ill-timed.
When designing a global strategy for promoting Nando Restaurant, cultural and demographic factors should be considered. Cultural factors determine people’s eating behaviors. Therefore, promotion campaigns should target the approved food and drinks and avoid culturally prohibited foods. Demographic aspects, such as age, should be considered, because people of different ages can be attracted by different promotion strategies.
Standardizing products has several issues that affect it in relation to the international markets. On the positive side, it offers economies of scale to a company and uniform products to the customers irrespective of their geographical regions. On the negative side, it fails to appreciate the unique needs and preferences of customers in the different international markets. Adapting products takes care of customers’ preferences and tastes. However, the customization may change the product completely, making it lose its original characteristics. Nando’s used product standardization, which was partially successful in the Southeast Asia, given the region’s low profitability. Although Vodka used product standardization, the culture in America was different from that of the Asian countries.
Nando’s organized its strategy such that the overall vision was to expand to the new markets and to increase its world presence. This was similar to the vision of Russian Standard Brand in the vodka case study. Nando’s wanted to maintain its management strategy irrespective of the markets being operated. It failed to consider the ease of getting prime land to locate its stores due to excitement. Partnering with people, who had no experience in the food industry, took place. Moreover, government regulations hindered Nando’s from having full control of its business. These issues could be overcome through revisiting the strategy and planning afresh based on the market research.
To some extent, the Southeast Asian market looked promising and was a potential market, but more research was needed before entering the market. Nando’s should have considered other African countries, which had similar conditions and cultures as South Africa.