Marketing Strategy and Plan Multinational Enterprises

Question: Discuss about the Marketing Strategy and Plan for Multinational Enterprises. Answer: Introduction Globalization has brought about dynamic changes in the business world. Various companies have implemented global supply chain and are perpetually involved in developing their products to meet the needs and demands of the people across the globe. It has been seen that companies in the age of globalization have to implement global innovation strategies and approach to suit the needs and demand of clients across the globe (Schlegelmilch 2016). Companies need to incorporate new ideas and methods to gain competitive advantage and to sustain completion on the global scale. The need for global diversity makes the companies adopt and implement the AAA strategy and framework. The AAA theory stands for Adaptation, Aggregation and Arbitrage (Ghemawat 2015). These are the three generic methods that are instrumental for value creation on the global level. According to this theory, the adaption strategy refers to the fact that the companies tend to increase their revenues and market share by makin g sure that certain aspect of their business meets the criteria and suits the needs and requirements of global customers. It is basically adapting to the different needs and requirements of customers on a global level to seek global diversity. Aggregation strategy tends to stress on the attainment of economies of scale and exploit efficiencies on the global scale by clubbing together production and development aspects (Berry and Kaul 2015). In the report, the food and beverage industry and manufacturing of heavy instruments industries are selected. The companies used in the report are Whirlpool and Redarc electronics to highlight the theory of AAA used by these companies and Smith snackfoods company and Flavour and Life are selected from the food and beverage industry. Evaluation of AAA framework Industry Food and Beverage Industry Company Smith snackfoods Company Flavour and Life Adaptation The company entered the South East Asia market. This was a move of the company to achieve global diversity. As a move to achieve global diversity, the company had to consider various important aspects regarding the two countries. One of these was the consideration of religious beliefs and norms. The countries of India and Pakistan are sensitive about religious and cultural norms and beliefs (Morschett, Schramm-Klein and Zentes 2015). In such cases, the company had to implement adaptation strategies to suit the needs and requirements of people and establish a strong foothold in the market. One of the major attempts taken by the company was to restrict and withdraw the sale of burger rings, which comprised of hamburgers. Due to religious issues, hamburgers could not be a success in India since beef is restrained by the majority of the popularity, which comprises of Hindu community. Instead of this, Chipsticks and Smiths Popped were introduced in the market. Another step taken by the co mpany was regarding in the introduction in the Pakistan market (Cassiman 2015). Bacon fries could be a source of major issue in Pakistan since bacon consisted of pork. Pork is prohibited according to Islam and thus this product could not be a success in the country. Thus, the company introduced burger rings and Monster Munch as a replacement of the product. Thus, the company took this step to adapt to the needs and requirements in the global market. Flavour and Life is a Sydney based organization, with interest in manufacturing health-based foods and beverages and cosmetics. As the company is globally expanded, the company has adopted adaption strategy in order to understand social needs and requirements of different target market. The company has a range of products including Iso Boost, Coco Joy, Juiced Up and many more (Jha, Dhanaraj and Krishnan 2015). In order to influence buying behaviour of the consumers, the company has implemented an efficient research and development strategy in order to understand food preference of the consumers. In UK market, people prefer healthy foods On the other hand, Indian consumers prefer taste rather that healthy food. Therefore, the company has launched Coco Joy in Indian market. The company manufactures healthy foods in global market. Therefore, the company has also maintained healthy components in order to maintain global brand image (Mostajeran et al. 2015). Aggregation The company introduced aggregation through economies of scale on a global level and in this process; the company has implemented a franchisee business model. Through this business model, the company has encouraged franchisee business in global market (Todd, Beling and Scherer 2015). The company has targeted the developing countries like India, Pakistan and UK. This strategy helps the company to aggregate resources with third party companies, which further helps the company to reduce entry cost in international market. In order to maintain the brand image, the company has manufacturing units in each targeted country (Iyer and Veeravalli 2016). The overall aggregation strategy helps the company to reduce the selling cost in an effective manner. The company has introduced aggregation strategy by introducing diversified product range. Food preference of consumers may vary in global market. Therefore, the company has cosmetics products in order to conduct sustainable business in global market. The company manufactures healthy food products (Motohashi 2015). However, in some geographic location, consumers use to buy tasty products rather than healthy products. In such countries, the company has aggregated their profitability with diversified product range. Arbitrage Arbitrage strategy is the third generic strategy, which creates a global advantage. It helps to exploit difference between two countries rather than adopting the difference. In case of Smith snackfoods Company, the company is exploiting economic difference between developed and developing country (Schlegelmilch 2016). The company import raw materials from the developing countries in order to reduce the manufacturing cost. This strategy helps the company to be the cost leader in global market. Flavour and Life has a diversified product range including food and cosmetics. Therefore, the company can successfully exploit economic difference between countries. In order to implement arbitrage strategy, the company is purchasing raw materials of different products from different markets. For example, the company is purchasing raw materials for cosmetics from the developing countries in order to reduce manufacturing cost (Park, An and Yeom 2015). In order to adopt this strategy for the food and beverage products, the company has introduced food products according to the market demand. Industry Manufacturing of heavy instruments Company Whirlpool Redarc Electronics Adaptation There were major steps that were taken in the field by Whirlpool. It was seen that the company made significant move to establish a dominant market in Japan. One of the issues that are seen in Japan is that there is scarcity of place. As a result, there the houses in Japan are small (Ario 2015). Thus, space consuming products would not be a feasible option in the country. As a result, the company had introduced small sized portable washing machines in Japan to meet the specific needs and requirements of the customers in Japan. By modifying and altering the size of the equipments, it provides utility and value to the customers. Thus, it can be viewed that the company had implemented adaptation strategy. In comparison to the US market, the houses in the United States of America are large and spacious. The company introduced large and more features oriented washing machines in the country to suit the needs and preferences of the people. Thus, this was the adaptation strategy by the comp any in the United States of America. Redarc Electronics is a manufacturer of heavy instruments. The company has a range of technical products, especially cars that use battery power. The company has adapted requirements of different consumers group in order to build good brand image in global market. In UK market, the company has a range of products based on solar power. In UK, people are concern about natural resources and therefore, use of solar power is high in this market (Zhang and Dong 2015). On the other hand, developing countries are capitalizing natural resources rather than using solar power. Therefore, the company has a diversified product range in order to influence consumers from different geographic location. Aggregation Whirlpool took over Maytag Corporation and increased its alliance. This helped the company to increase its competitive advantage in the global market. It also increased the companies economies of scale and in the process; it helped the company to increase its product portfolio (Jarrow and Larsson 2015). Global branding helped the company to increase its product portfolio and it helped the company to establish its market in various countries and establish a strong market hold. The companys alliance and acquisition with Philips Electronics helped the company to establish a strong market in North America. The company established ties with domestic companies through common systems and processes on a global scale, which helped the company develop a strong market for the product and in the process develop a strong market in various parts of the world (Ghemawat 2015). In order to aggregate resources, Redarc Electronics has bought Hummingbird Electronics, which is a NSW-based company. Through this strategy, the company has increased their product range in global market. In Australian market, this particular strategy helps the company to increase product range in both global and domestic market (Schlegelmilch 2016). Aggregation strategy of Redarc Electronics was developed for reducing manufacturing cost for long-term. The aim of the company was to reduce the cost of manufacturing by utilizing resources of Hummingbird Electronics. In other words, the company has successfully become price leader in global market (Berry and Kaul 2015). Arbitrage Whirlpool is a Multinational company if America. The company has expanded their business in global market including India, Japan, China and many more. In order to implement arbitrage strategy, the company has exploited difference in labour market (Morschett, Schramm-Klein and Zentes 2015). For example, in Indian market, the company can get labour at low cost and therefore, the company has developed manufacturing units in developing countries in order to reduce manufacturing cost. The company exports products in different regions where price of resources is high. Through this strategy, the company can capitalize the economic difference between targeted markets rather than adopting the difference. Arbitrage strategy refers to the process of capitalizing difference between target markets rather than adopting the difference (Cassiman 2015). Apart from capitalizing the difference in labour market, the company has targeted the difference in economic stability of the targeted countries. In order to reduce manufacturing cost, the company imports raw materials from the country, where the price is low. In order to implement arbitrage strategy, Redarc Electronics has identified the market from which the company can buy resources at low cost. Through this strategy, it is possible to reduce manufacturing cost and increase organizational profitability (Jha, Dhanaraj and Krishnan 2015). An appropriate arbitrage strategy helps the organizations to exploit the economic difference between two or more countries. Redarc Electronics exports the manufacturing products to the market, where demand is high. On the other hand, import low materials, where price is low. Apart from that, the company has developed manufacturing unit in developing countries in order to reduce labour cost. Therefore, the overall process helps the company to reduce organizational cost and increase profitability at same time. The acquisition strategy of Redarc Electronics was effective to increase product range in overseas market. At the same time, the company has initiated aggregation strategy through this activity (Most ajeran et al. 2015). As a manufacturing company of heavy materials, the company has successfully utilized the price difference between different countries. As the company deals with non-perishable products, it helps the company to export and import materials globally. In this process, the risk of resource wastage becomes very low. Conclusion While concluding, it can be said that Adaptation, Aggregation and Arbitrage are the most useful business strategies for global organizations. These marketing strategies help global companies to conduct sustainable business in an efficient manner. The adaption strategy is the first phase of this framework, through which organizations can adopt cultural and social needs of the targeted country. In case of Smith snackfoods and Flavour Life, both the companies have implemented AAA framework in order to conduct sustainable business in international market. On the other hand, Whirlpool and Redarc electronics have utilized this framework in order to reduce manufacturing cost and increase organizational profitability. Reference list Ario, A., 2015. Semiglobalization: A Relevant Reality. InEmerging Economies and Multinational Enterprises(pp. 35-42). Emerald Group Publishing Limited Berry, H. and Kaul, A., 2015. Is There a Multinationality Effect? A Replication and Reexamination of the Multinationality-Performance Relationship.A Replication and Reexamination of the Multinationality-Performance Relationship (June 15, 2015) Cassiman, B., 2015. Developing an Innovation Mindset. InShaping Entrepreneurial Mindsets(pp. 81-96). Palgrave Macmillan UK Ghemawat, P., 2015. From International Business to Intranational Business. InEmerging Economies and Multinational Enterprises(pp. 5-28). 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