Competing internationally (Edexcel GCSE Business): Revision Notes
Competing internationally
What does competing internationally mean?
When UK businesses want to expand into global markets, they face unique challenges. International competition requires companies to adapt their offerings to meet the specific needs and requirements of foreign customers. This means understanding different cultural preferences, legal systems, and market conditions in each country they want to enter.
Understanding international markets involves more than just translating your website - businesses must research and adapt to completely different business environments, consumer behaviours, and regulatory frameworks in each target country.
E-commerce as a pathway to international markets
Online trading has revolutionised how businesses can reach international customers. E-commerce platforms allow companies to access global markets without establishing physical stores or distribution centres abroad. This digital approach offers several advantages:
Benefits of e-commerce for international expansion:
- Businesses can operate around the clock, serving customers in different time zones
- Companies can promote themselves through social media platforms that reach global audiences
- No need for expensive physical infrastructure in foreign countries
- Direct access to international customers without intermediary retailers
However, challenges still exist. Trade barriers such as tariffs, import restrictions, and different regulatory requirements can still affect online businesses selling internationally. E-commerce doesn't eliminate all barriers to international trade.
Glocalisation strategy
Glocalisation combines "global" and "local" approaches to international business. This strategy involves adapting products and services to suit the cultural differences, taste preferences, and legal requirements of specific countries whilst maintaining a global brand presence.
The need for glocalisation arises because customers in different countries have varying needs and expectations.
Worked Example: McDonald's Glocalisation Strategy
McDonald's Maharaja Mac in India demonstrates perfect glocalisation. Since consuming beef is illegal in many Indian states due to religious and cultural reasons, McDonald's created this chicken-based alternative to their famous Big Mac.
This adaptation allowed them to:
- Respect local religious and cultural values
- Comply with regional laws
- Maintain their global brand presence
- Successfully serve the Indian market
Adapting the marketing mix for international competition
Successful international businesses modify their marketing strategies across four key areas:
Product adaptations
Companies often need to change technical specifications to meet different safety standards and legal requirements. For example, businesses might modify electrical components like sockets to match local systems, or alter ingredients to comply with food safety regulations in different countries.
Product adaptation isn't just about meeting legal requirements - it's also about understanding local preferences, climate conditions, and usage patterns that might differ significantly from your home market.
Price considerations
International pricing becomes complex due to several factors. Businesses must account for tariffs and import duties that increase costs. Currency exchange rates also affect pricing decisions, as they impact both the cost of doing business and customer purchasing power. Companies need to research local income levels to set appropriate prices for each market.
Place strategies
The location and distribution of products must align with local shopping preferences and habits. Businesses need to understand where customers in different countries prefer to shop and how they like to receive their products. This might mean partnering with different types of retailers or using alternative distribution methods.
Promotion tactics
Marketing messages and advertising campaigns require careful adaptation for international markets. The same colours, gestures, and phrases can have completely different meanings across cultures. What appeals to customers in one country might be ineffective or even offensive in another, so promotional materials need localising for each target market.
Cultural sensitivity in promotion is critical - colours, symbols, and messaging that work in one culture can have negative or offensive connotations in another. Always research local cultural norms before launching marketing campaigns.
Benefits of product adaptation
When businesses modify their products for international markets, they gain several competitive advantages. Adapting products to meet local legal requirements ensures compliance and builds trust with regulators and customers. Meeting safety standards specific to each country makes products more appealing to local distributors and retailers, who are more willing to stock items they know are appropriate for their market.
This approach ultimately helps businesses compete more effectively against local companies who already understand their home market's requirements and preferences.
Key Points to Remember:
- International competition requires businesses to adapt their products and services to meet foreign market requirements
- E-commerce provides accessible routes to global markets but doesn't eliminate all trade barriers
- Glocalisation means adapting global products to local cultural, taste, and legal preferences
- All four elements of the marketing mix (product, price, place, promotion) need modification for international success
- Product adaptation helps businesses meet legal requirements and compete effectively with local rivals