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Reflections on international marketing: destructive regeneration and multinational firms

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Abstract

Constant in the evolution of the business enterprise has been its relentless search for competitive advantage. What has been phenomenally different about this quest is that it is, increasingly, a global landscape that defines the firm’s opportunities and challenges. The global marketplace has always been dynamic and complex in terms of the changes it brings, but the last two decades have been exceptionally transformational. In terms of opportunities, firms pursuing international customers have never before faced such open markets, rise in discretionary income, and modern tools for accessing global markets. In terms of challenges, intense competition, complexity of managing multiple markets and coordinating marketing strategy, a host of risk elements, and the sheer difficulty of managing geographic, cultural, and political barriers are among the factors which impede the firm’s success in global markets. Often, these changes come in the form of radical, transformative disruptions. This essay draws attention to major disruptions impacting international marketers and provides insights for appropriate firm response.

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Notes

  1. The concept of actant, which refers to an entity that acts, frees the concept of the firm from common criticisms of anthropocentrism and sociocentrism, which are always criticized by its antagonists.

  2. If you were to delete the word international in most of the articles in the domain of international marketing, they would be as equally perfectly relevant and applicable to a domestic firm. This begs the question of whether international marketing is only a semiotic in ontology. In order to refute this question, there needs to be clear demarcation of domestic and international firms along the lines of decisions, activities, processes strategies, and structural aspects of global marketing.

  3. Ownership (O) specific advantages related to resources, capabilities, and markets are a central tenet in OLE theory (Dunning and Lundan 2008).

  4. Apple has about 70 billion dollars in cash and liquid assets in its coffers in 2011. Seemingly, this is a passive asset which does not earn returns. However, a closer look reveals that Apple utilizes its financial muscle to support smaller, global manufacturers who happen to have the technology but limited capital to advance and engineer it. In return, Apple secures exclusive rights to output of the factory for a set period of time (perhaps 6 to 36 months) and then for a discounted rate afterwards. This yields advantages that are not available to other companies: First, Apple has access to new component technology months or years before its rivals. This allows it to release groundbreaking products that are actually impossible to duplicate. For instance, for as long as a year or so after the launch of the iPhone, none of the would-be iPhone clones could even get a capacitive touch screen to work as well as the iPhone’s. It wasn’t just the software—Apple simply had access to new technology earlier. Another extraordinary example of this is the exclusive rights to trade secrets in aluminum machining technology which is used to make Apple’s laptops with unsurpassed strength and lightness.

    Eventually its competitors catch up in component production technology. But, by then, Apple has contracts in place that will allow it to source those parts at a lower cost due to the discounted rate it has negotiated with the most experienced and skilled provider of those parts (who probably has also brought its production costs down as well). This discount is also potentially subsidized by its competitors buying those same parts from the same provider. The part is now commoditized so the factory is allowed to produce them for all buyers, but Apple gets special pricing.

  5. This is the aggression of the animal spirit that Keynes framed (see Akerlof and Shiller 2009).

  6. See http://cdn.walmartstores.com/sites/globalsourcing/corporate-social-responsibility.html.

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Acknowledgement

The authors are grateful to Professors Seyda Deligonul, St. John Fisher College, G. Tomas Hult, Michigan State University, and Attila Yaprak, Wayne State University, for valuable ideas and suggestions on earlier drafts of the manuscript.

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    S. Tamer Cavusgil

  2. University of Michigan Flint, Flint, MI, USA

    Erin Cavusgil

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Cavusgil, S.T., Cavusgil, E. Reflections on international marketing: destructive regeneration and multinational firms. J. of the Acad. Mark. Sci. 40, 202–217 (2012). https://doi.org/10.1007/s11747-011-0287-9

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