612 The Marketing Book
e New global competitors. The Pacific Basin
countries have become fully-fledged
competitors to well-established Western
rivals.
2 Cross-currentswhich make the pattern of
international competition different from earlier
decades, evidenced in:
a Slowing rates of economic growth.
b Changes in the basis of competitive
advantage. Labour cost natural resources
and technology access are less important
than before.
c New forms of protectionism, e.g.
requirements for local content and local
ownership.
d New types of government inducement,
working between governments to attract
foreign direct investment.
e Joint ventures, proliferating coalitions
among firms from different countries.
Broader, deeper collaboration than the
marketing joint venture and production
licences of the past.
f Growing ability to tailor to local conditions.
New technologies support globalization but
allow customized tailored product offerings.
The need to standardize products
worldwide is diminishing.
Porter believes that a prerequisite for success
internationally is to be strong domestically. It
is important to add, though, that both Ohmae
and Porter converge on the importance of
‘clusters’. These clusters may be economic,
political or geographic groupings of countries
(e.g. the Baltic states) or it may be the effect
of one country economy upon its neighbours,
such as Brazil within South America. The
economic effect of one is still felt by several.
Most recently, Ohmae (2001) has been pro-
pounding the ‘invisible continent’ as an exten-
sion of the ‘borderless world’, but one in
which we have to embrace the old and the
new in a new dynamic uncharted territory
where finance and communications create as
well as destroy business empires at lightning
speed.
Add to this debate the diverse arguments
now being propounded for relationship mar-
keting, building upon existing networks, and
the overall rationale for international market-
ing becomes clearer. More than one type of
international strategy can be viable in a given
industry. Johanson and Mattson (1986) put
forward the argument that the internationaliza-
tion of the firm is affected by the inter-
nationalization of its markets. The marketing
mix may still contain the same 4Ps of product,
price, promotion and place of sale, but each P
introduces new variables now that it has been
transposed from a purely domestic setting to an
international marketing environment. The
environment is seen now as dynamic not static
and markets have been reinterpreted here as
networks of relationships between firms.
Figure 24.1 shows four cells, each of
which depicts a company and its environment
at different developmental stages of
internationalization.1 The early starteris the company which has few
rather unimportant relationships abroad, but is
no different in this respect from its
competitors, so this kind of situation is a
developmental one which, for example, faced
Europe at the start of this century.
2 The lonely internationalis highly
internationalized while its market environment
is not.
3 The late starteris indirectly involved with
foreign markets. This is a specialized company,
which has to decide whether to adapt or to
get customers to adapt.
4 The international among others. Both the firm
and its environment are highly
internationalized.Aside from the fact that Johanson and Mattson
blow away the whole concept of passive mar-
kets where sellers have only the four variables- product, place, promotion and price – to play
with, they also introduce explanations for
internationalization that are more industry and
company specific. Raw material extraction may