As Billabong outsources 98 of their products they need to ensure that they employ separate design and development teams around the world to create products that appeal to different markets. Billabong also needs to make sure that all their products still carry forward that brand identity of the australian surfwear company that they are. Billabong also positions their products as high quality and fashionable to separate themselves from their competition. Following on from this, the higher price point of Billabong products gives the customers a sense of prestige but at the same time leaves them open for increased competition by competitors with a lower cost product. The billabong group is known for maintaining a standard price around their international markets as cutting costs in specific markets can have a devastating impact on their consumer perception of the brand. Furthermore, billabong uses their traditional tried and tested method to promote their products primarily through sponsorships of professional surfing events and emphasises on social channels for increased advertising at a lower cost. Advertising has played a key role in Billabongs expansion to international markets, as countries unfamiliar with the product are now able to see what the brand was about.
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This included the likes of Gary pemberton (Ex-Qantas) and Ted Kunzel (Foster). The business also has 5 executive officers that play a vital role in the operations of the business. These internal changes can be detrimental to a business as well which was evident by a 40 loss in Billabongs share price after ceo matthew Perrins decided to sell 66 million shares in 2001 which significantly impacted Billabongs ability to raise funds and expand. Billabong's management incorporated various different theories like behavioural and scientific/classic to take a contingency approach (McAdam., 2016)to establish and manage systems for leadership to operate effectively thesis in a global environment. Like management, the company culture also plays a key role in globalisation of the organisation. Billabongs rapid expansion and acquisition of various brands like element and Von Zipper were challenging as they now had to make sure that the different cultures of these brands were integrated in order to minimise any conflicts. Billabong successfully incorporated a polycentric staffing model (Konopaske., 2002) and focused on hiring local managers and designers in different countries as they would possess more knowledge about their home countries. Internal factors also include the marketing strategies that Billabong utilises to expand their brand internationally. This can be explained using the 4Ps of the marketing mix (Huang and Sarigöllü, 2012). Billabong has a range of products that they produce in the surf and other board wear market.
This diversification in the companys portfolio has also allowed Billabong to expand their product range and hence reach a greater target audience. Global expansion has also allowed Billabong to extend the product life cycle of their products as products from different regions can now be sold over an extended period. This expansion has also provided Billabong with a greater access to resources and technology. Evidently, internal factors play a vital role in the expansion of a business globally. To successfully globalise organisations need to look at various internal factors including their goals and objectives, management, culture, internal processes and their marketing mix. These factors have been key in Billabongs international success. Billabongs success in Australia fuelled their ambitions for growth in international markets. Management has played a key role in Billabongs expansion globally. Having a strong management team while transitioning from a private to a public company was extremely beneficial for Billabong as their directors had extensive experience in the business world.
Billabong had to increase their spending to make sure they complied with local laws by introducing wastewater systems, emission controls and control for any hazardous waste. They also had to make sure labour laws and regulations were being strictly followed (m, 2016). By acting ethically billabong was able to keep both local and national communities happy and were also able to expand to a niche market as they started producing sustainable surf wear made of recycled plastic. Evidently, the writings executive decision-making within Billabong can be said to have been influenced by the pestle framework. Part 3: Internal Factors year The biggest internal factor for Billabong is their ambition for growth in international markets as they have successfully established a customer base in Australia. The decision to expand into other countries also comes from the fact that Australia has a relatively small population and global expansion can ensure that the brand is able to sustain itself for a long period of time. Billabongs successful expansion has resulted in about 70 of its revenue to come from overseas sales, which emphasise the importance for globalisation for the brand. This increase in overall sales has also enabled Billabong to lower their cost by achieving economies of scale. By diversifying their brand through the purchase of other international businesses, billabong is able to lower their risk.
In terms of the economic factors, the improvements in overall consumer income and standard of living have led to a growing popularity in surfing and similar sports. This has essentially enabled Billabong to successfully reach other target audiences that they wouldn't have been able to in the past. Additionally, the emergence of new markets in south America and East Asia have encouraged Billabong to further their expansion strategies in the developing world. In terms of the social and cultural factors, an increase in the popularity of surfing and skateboarding over the last 3 decades has allowed Billabong to expand globally thereby increasing brand awareness. However, expansion in a range of different regions has presented Billabong with the fundamental challenge of adapting to the cultural and social norms of the region whilst still maintaining the key features of their brand. Furthermore, technological advancements in internet marketing have allowed Billabong to expand their products to a wider customer base as millions of people around the world now have access to the world of surfing. The use of e-commerce has equipped Billabong with a new channel of sales which simplifies many difficulties associated with running a global business. Finally, expanding to an international marketplace has meant that Billabong has become subject to the ethical and legal responsibilities of the various markets it was operating. This affected Billabong both positively and negatively.
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The injection of funds from the ipo enabled Billabong to acquire any possible competition they would come across in their expansion. Element and Von Zipper also presented a challenge for Billabong, as they had to make sure gay that the businesses would adapt to billabongs existing culture, in order to ensure that the business objectives were successfully achieved. This need for going global was determined by both external and internal factors, which will be elaborated in the following sections (Chapman., 2011). Part 2: External Factors With plans to expand to a global market, billabong had to consider various factors in order to ensure their expansion reaped the same successes internationally. The following section focuses on the external factors that have had an impact on Billabongs international strategy.
The key framework that often guides a business decision to expand to a global market is known as the pestle analysis (Czinkota.,. The decisions made by the executive team within Billabong during their expansion stage can be understood through an analysis of the aforementioned framework. A key political factor that facilitated Billabongs expansion strategy is the reduction of trade barriers worldwide thereby allowing them to export their products to other regions far more efficiently. Deregulation of overseas markets made it easier for Billabong to expand by acquiring international businesses and establishing production and retail outlets outside australia. Billabong also benefited from the australian government's protection of domestic closing and manufacturing industry lean through the maintenance of tariff barriers. The import duty on goods produced by billabongs foreign competitors was.2 in 2005 and.3 in 2010 (Weller, 2007).
Part 1: A historical overview. Billabong like many international businesses started small with a narrow vision of creating a product, which fulfills the need for a segment; in their case surfwear. With this vision of providing quality surf-wear, gordon and Rita merchant went from a small business on the gold coast to a multinational corporation with a presence in over 100 countries around the world. By 1980s Billabong had established themselves in the australian surf culture through companysponsored competitions and events and were ready for international expansion (m, 2016). However, the relatively small population of Australia presented a significant restriction for Billabong in terms of growth.
The introduction of their products in an international market lead to an increase in the awareness of the brand within a global setting. Billabong began their international expansion in the north American market and in the wake of the positive reception, further expanded to new zealand and Europe in 19 respectively by granting licenses to local brands to sell Billabong products (m, 2016). With the success of surf-wear around the world, billabong started expanding into other sports like skateboarding and snowboarding, which granted them a wider target market to work with. By increasing their presence in international markets Billabong was able to get an initial public offering in 2000 which granted them the financial capacity to pursue more international markets and solidify their position is new and existing market segments (smh, 2013). Billabong started increasing their presence in the fashion and apparel industry by acquiring already established companies including Element, von Zipper, kustom footwear and Nixon watches and started selling their products under these brands. This not only allowed Billabong to solidify their existing presence in the beachwear market but also allowed concentric diversification into other leisure sports. The billabong group focused on increasing their presence not only through physical stores but also through online channels at a global level. This increasing demand for online shopping lead to billabong purchasing online retailers like m in the us and m in Australia which further increased their reach in the market. Billabongs key strategy in their expansion to an international market was the purchase of already established international brand of different countries.
Standardization of the promotional mix enables firm to gain worldwide efficiencies. Finally a key determinant of performance in global markets lies in managers ability to establish common needs among the customer segments worldwide so that core product features are kept intact. Mktg209 - assignment 1 - mktg209: Global Marketing - stuDocu out of 6, individual Essay, mKTG209, introduction. The following essay will focus primarily on Billabong International Limited, a leading Australian surf wear company and their emergence in the international fashion and apparel industry. The essay is split into 3 parts. Part 1 will emphases on Billabong their history and their need for going global. Parts 2 plan and 3 will focus on any external and internal factors that influenced their decision for going global respectively. Finally, the essay would conclude the importance database of decision making for organisations willing to enter new international markets.
According rbv, a firms competitive advantages reside in the inherent heterogeneity of the immobile strategic resources the firm controls. Findings: gms is a broad conceptualization of global marketing strategy that incorporates all three perspectives. . gms dimensions are distinctive but related. Gms scale is related to a firms global marketing performance, good the external globalizing conditions, the firm global orientation and international experience. Thus gms serves as a broad, unified view of what constitutes global marketing strategy. Another significant finding of this study is that the gms have a positive and significant effect on a firms global market performance. Gms influences firms strategic performance positively in the global market. Managers should carefully asses the attractiveness of various markets and carry on marketing activities. An attempt to integrate competitive moves recognizes that the key markets of the world are now tightly interlinked.
channel structure, standardized price, concentration of marketing activities. Coordination of marketing activities, global market participation, integration of competitive moves. A model of the gms and firm performance: two theoretical perspectives are central to explaining the relationship between the gms and a firms performance: the industrial organization (IO) theory and the resource-based industrial view (RBV). The io theory focuses on the external market to identify drivers of a firms strategy and contends that the firms performance is determined by its strategy. Competitive advantage is viewed as a position of superior performance that a firm attains through offering either undifferentiated product at low cost or differentiated products. The rbv uses the firms internal organizational resources to explain its strategy and performance.
Configuration-coordination perspective: basic logics of configuration-coordination are comparative advantage, interdependency and specialization. Key variables are concentration of value chain activities and coordination of value chain activities. Antecedents are low trade barriers, technological advances, orientation of firm and international experience. Effects are efficiency and synergies. Integration perspective: basic logics of Integration are cross-subsidization, competitive dislocation and rationalization. . key variables are integration of competitive moves and global market participation. . Antecedents are low trade barriers, orientation of firm, international experience, integrated markets. Effects of integration are effectiveness in competition assignment and competitive leverage. The gms: the gms is the degree to which a firm globalizes its marketing behaviors in various countries through standardization of the marketing mix variables, concentration and coordination of marketing activities, and integration of competitive moves across the markets.
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The gms: A broad conceptualization of with global marketing strategy and its effect on firm performance. What about: The article is about a broad conceptualization of global marketing strategy and its effect on firm performance. Objective of the article: The objective of this article is to present a review of the global marketing strategy, to propose a new conceptualization of global marketing strategy, to develop a conceptual model, to describe the research design and methodology of the study and present. Main feature: There are mainly three major perspectives of global marketing strategy. Standardization perspectives, configuration-coordination perspective, integration perspective, standardization perspective: basic logics of standardization are economized of scale, low cost and simplification. Key variables are product standardization, promotion standardization, standardized channel structure, standardizes price. Antecedents are convergence of cultures, similarity of demand, low trade barriers, technological advances, and orientation of firm. The effects of standardization are efficiency, consistency, transfer of ideas.