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Lecture Global marketing: Contemporary theory, practice, and cases – Chapter 15

Chapter 15 - Designing and controlling global marketing systems. After reading the material in this chapter, you should be able to: Product-based organizational format, regional organizational format, functional organizational format, matrix organizational format, new organizational directions, control mechanisms. | Chapter 15 – Designing and Controlling Global Marketing Systems “The way you will thrive in a business environment is by innovating—innovating in technologies, innovating in strategies, innovating in business models.” Samuel Palmisano, CEO, IBM McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Outline Product-based Organizational Format Regional Organizational Format Functional Organizational Format Matrix Organizational Format New Organizational Directions Customer-Centered Organizations Global Marketing Teams Born-global Firms Control Mechanisms Formal Control Mechanisms Informal Control Mechanisms Summary Traditional Organization Structures Traditional formats Regional Functional Product-centric Matrix Product-Based Organizational Format MNCs, especially those marketing consumer products and those with diverse end-user markets, commonly organize by product Advantages Ability to focus on continuous improvement and innovation Flexibility to quickly respond to changing market needs and competitive pressures Drawbacks Duplication of resources and efforts among the different product teams No shared know-how Global Product Lines Structure Figure 15-1 Regional Organizational Format Best suited for companies with a limited number of products Advantages Focus on specific geographies Opportunities for standardization can lead to economies of scale Changes in individual market conditions can receive timely attention Drawbacks Regional organizations don’t scale well Regional divisions often become too focused on their own operations For firms with this structure, corporate headquarters is usually the hub of control. Global Regional Structure Figure 15-2 Functional Organizational Format Based on the processes performed by an organization Advantages Simple and easy to grasp and navigate Clear lines of communication and task management Drawbacks Functional organizations are prone to develop "divisional silos“ Cross-departmental . | Chapter 15 – Designing and Controlling Global Marketing Systems “The way you will thrive in a business environment is by innovating—innovating in technologies, innovating in strategies, innovating in business models.” Samuel Palmisano, CEO, IBM McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Outline Product-based Organizational Format Regional Organizational Format Functional Organizational Format Matrix Organizational Format New Organizational Directions Customer-Centered Organizations Global Marketing Teams Born-global Firms Control Mechanisms Formal Control Mechanisms Informal Control Mechanisms Summary Traditional Organization Structures Traditional formats Regional Functional Product-centric Matrix Product-Based Organizational Format MNCs, especially those marketing consumer products and those with diverse end-user markets, commonly organize by product Advantages Ability to focus on continuous improvement and innovation Flexibility to .