Principles of International Business Management Essay

Principles of International Business Management - Essay Example Having established itself on a firm footing within the domestic markets, the company started looking for avenues of growth in foreign markets. To undertake such an initiative, the company studied took stock of its internal as well external factors which drive its urge for entering a foreign market. Internal factors are of course the strengths of the company while external factors were compiled after doing an environment analysis. In addition the company also undertook an analysis of PESTLE factors for the particular markets, where the company was supposed to go. All such factors were not looked into 'in isolation', because one particular factor might have a spillover effect on couple of other factors and vice-versa. All such permutations and combinations were taken into account while preparing for an expansion strategy. Reckitt Benckiser has over the year successfully implemented the strategy of building strong brands across all its key categories like surface care, fabric care, dishwashing, home care, health and personal care and food. If Lysol is a leading brand in disinfectant cleaning, Calgon holds the number one market position in fabric care in Europe. Similarly placed are the major categories like Vanish (fabric care), Veet (cosmetic depilatories), Mortein (pest control) and Airwick (air fragrance). The company highlighted the brand equity to its fullest potential, while negotiating with foreign collaborators for investing in a new market. This strategy paid off rich dividends for the company with its top 15 brands consistently accounting for a majority of the company's revenues, from 40% of total revenues in 2001 to about 56% in 2005. Such a brand creation in different categories allows Reckitt to; Differentiate its products and earn a price premium and Provides a competitive advantage to the company in the market place. In addition the company also resorted to ambush marketing depending upon the scenario of competition in some of the foreign markets. For example, in one such recent case (23 Nov 2006), the company also won a legal battle against its rival in India, Hindustan Liver Ltd. (HLL), when the courts upheld the contention of Reckitt Benckiser concerning the advertisement of Dettol soap. For marketing the products the company has been dependent on Supermarkets and hypermarkets which form the most important distribution channel, e.g. accounting for 65.2% of the UK market's value and 69.5% of the European market's value. The company used innovation as its core competitive strategy which helped the company in creating product differentiation and providing it the competitive edge. Motivational factors for undertaking foreign investments are mainly; To tap the vast consumer market outside Europe and UK. Markets in India, China and other Asian countries are developing very fast and these markets have immense potential for a company dealing with consumer items. The company had established itself quite well in the home market and wanted to move on in newer markets. Company wanted to take the competitors head on, not only in domestic market but in overseas market as well. To