4Globalization of International Marketing in United Stated
GLOBALIZATION OF INTERNATIONAL MARKETING IN UNITED STATED
Historically, nations retained complete control over the products and capital crossing to their borders, however, economies are increasingly becoming intertwined. Globalization is the development towards more cultural, economic and innovative association between national economies and organizations (Czinkota, and Ronkainen, 2013). This pattern is described by denationalization or the part of limits turning out to be less pertinent and is different from internationalization or participation of substances crosswise over national limits. The more prominent relationship that is being created by globalization means an increased flow of goods, ideas and money across boundaries.
Globalization from the economical standpoint, there are two macro factors that appear to emphasize the development towards globalization. The first one is decline in flow of goods and capital and the other one is on technological change, mainly the dramatic developments in communication, and technologies in transportation in the recent years. In the United States globalization has extended its influence throughout the globe (Czinkota, and Ronkainen, 2013). More markets for the United States have been opened because of globalization which in effect has helped America’s companies have access to more international markets. The number of multinational corporations in America has increased and globalization helps in the capability of these corporations to sell their products internationally and keeps American on top economically.
One of the best examples of globalization in respect to United States is Starbucks Company. Starbucks is growing fast in terms of expansion. The company started in Seattle and today it is possible to purchase a cup of Starbucks coffee in numerous countries across various continents. The company managed to grow from 15 coffee shops in Seattle to around 20,891 outlets in 62 countries within a span of 15 years. One of the company’s aims to go global is that it stands a chance to enjoy and achieve a synergy in its overall operation. The company also takes advantages of diverse tax rates, exchange rates, skills level, labor rates, as well as, market opportunities.
Ultimately, Starbucks is a success in its globalization move in that it has been able to manipulate the controllable tools of marketing mix inside the uncontrollable market environment. However, the main reason for failure within the international markets can be linked to a company’s botch to conduct necessary market research and consequently failing to understand nuances and differences of the marketing environment (Steenkamp, 2001). Despite going global, Starbucks has been faced by non negligible problems that are crucial to underline. The company faces anti-globalizations movement issues as it was among the aim of protesters during WTO November in 1999 where it was taken as a symbol of free market capitalism. There were drop of sales which translated to a drop in profit levels. The company was forced to close some of its stores in the US to reduce cost, a case of self cannibalization and saturated markets emerged. From a global context, Starbucks is faced by huge risks in that it makes less money on overseas stores because most of them are operated locally an aspect that reduces the company’s profit share.
Through research and development the company has managed to have control over its research processes and as a result it has improved its services with automatic espresso machines. This implies that globalization has increased the real-time communication abilities between its international coffee stores.
Czinkota, M.R. and Ronkainen, I.A., 2013. International marketing. Cengage Learning.
Steenkamp, J.B.E., 2001. The role of national culture in international marketing research. International Marketing Review, 18(1), pp.30-44.