Global Marketing and Sales Assignment Sample 2023
Introduction
The two chosen companies are Tesco and Amazon. Both are retail companies which are based on the United Kingdom. These two companies are famous retail companies that are famous internationally as well as compete in international markets. These two theories are many highlighted along with their advantages, disadvantages, similarities-, as well as differences.
Uppsala model
The Uppsala model was mainly proposed to the firms who wanted to spread their business market internationally. This internationalisation model was first developed in the year 2009 by Wanger. He got the idea of this model while watching a Swedish film. According to this theory, the companies who want to expand their business market internationally should focus on four main aspects (Osano, 2019). These four aspects are-
- Their decision-making process must be done continuously even after they have entered the foreign business market.
- The companies must have enough knowledge regarding commitment and the market.
- Accepting different types of aspects related to the change management of the company.
- The companies must establish foreign subsidiaries of sales (Saralidze, 2020).
Fig: Upsala Model
Source: (Veronica et al., 2019)
Diamond model
The diamond model was first developed by the professor of Harvard Business School named Michael Porter. This model was developed in the year 1980. According to him, it is very important for a company to expand internationally and in a place where it is easily located. The geographic location plays a major role in an industry as because it helps to know the culture more closely, understand the people, and gain a lot of experience (Paul and Rosado-Serrano, 2019). This model consists of four main attributes which are- the condition of the factors, supporting industries, condition of the demand, the strategy used by the firms.
Advantages and limitations of the Uppsala model
Advantages- The Uppsala model is the anti-risk model because it helps a company to encourage them and expand internationally. This model helps a company to nurture their business in an environment that is familiar to them (Osano, 2019). The knowledge that is gained through experience can help a company to expand and grow more than the companies without experience. The companies having experience will be able to endeavour in the future. This model is a proven method which is used by many companies like Tesco to expand in the international market and compete effectively with other companies.
Limitations- The Uppsala model is comparatively a slow model if compared with other internationalisation models (Nambisan et al., 2019). This is a major drawback for the model and for the company like Tesco, who uses this model for expanding in the international markets. Modern companies face a lot of problems while adopting this model due to the advanced technologies they are already enjoying. There are many new models that illustrate that knowledge learnt through experiences is not enough if not practised in a routine manner. Therefore, this model has many drawbacks and is not suitable or effective enough in the modern world.
Advantages and limitations of the diamond model
Advantages- Based on this strategy, the companies must have an alliance in their strategies, that too, with the industries that are supporting the company. The companies should have a good relationship with their rival companies (Qurratu’Aini and Hapsari, 2019).
Limitations- This model concentrates on having a friendly relationship with the rival companies. This is a major limitation because the strength of the rival companies can decrease. It is important to have rivals or else a company can never grow bigger (Kotabe and Helsen, 2020). This model is not that strong to expand internationally as Porter mainly focused on the nation factors that a company should have. This is not the case with international companies. In the international market, competition can be very hard or rather way too tough to work hand in hand with other industries. Therefore, it can become a major drawback for the companies that are using this model. Nowadays, different technologies have evolved and made the expansion of companies much easier. The competitive forces are avoided by the developer of the Uppsala model. Wanger also avoided the potential of the market while developing his model to spread internationally (Indaryani et al., 2020). Uppsala model is effective for the industries that are small or SMEs but for the businesses that are big needs some strong and effective models. This is the reason that big business cannot go with this model for long. But it can be an effective model for SMEs.
Similarity and difference between the two models
| Models | Similarities | Differences |
| Uppsala model | • This model is based on the concept of internationalisation and how a company can expand internationally. | • This model is the latest model developed in the year 2009 (Nguyen and Kim, 2020)
• The companies believe in expanding in the international market to gain advantage and compete against the companies without any compromises. • This model is simply based on expanding their business in the international market by using some model of change management and different strategies so that they can effectively compete in the international market. |
| Diamond model | • This model is also based on internationalisation and how that company can expand internationally. | • This model is an old model which is developed in the year 1980.
• This model focuses on building a good bond with the companies so that they can gain some advantages from the international industries. • This model is based on expanding the business but maintaining the bond that companies have with other national companies. They have the thought of not changing their way of thinking and entering the market of international business. |
Companies using the models
Tesco using the Uppsala model
Tesco is one of the leading retail company of UK. Tesco is a general retailer of merchandise and groceries. This is considered as the retail company, which is the third-largest in the whole world. Previously they had seven shops which are spread throughout the world. This name came from the initials of Cohen and the tea company from where he used to purchase tea (Green and Keegan, 2019). The expansion of business took place rapidly and became very famous throughout the world. Tesco has many subsidiaries that offer different types of services. The Tesco bank provides financial services in the United Kingdom. Tesco is also providing services related to telecom in different countries. Tesco also provides support to the information technology, which they recently started in the year 2007. This has become much easier for them because they have used the model of Uppsala (Manotas and Gonzalez-Perez, 2020). This model helped them to expand much more effectively in the international market. Tesco can nurture their company both nationally and internationally as they are able to expand in the countries that are suitable for them. Tesco had a lot of experience that they gained in their markets nationally and so they can effectively expand in the international markets. Tesco can expand by using different strategies and are able to keep their position in increasing competition. Tesco is still considered as one of the leading retail company of UK and in the world (De Mooij et al., 2019). Uppsala model helped Tesco to not only expand effectively but also helped the company to improve their skills and knowledge with their immense experience. The growth rate of Tesco is shown in a form of chart in the appendix below.
Amazon using diamond model
Amazon is one of the largest retail company of UK just like Tesco. These two companies have extended a lot in the international market and are able to attract customers along with the competitors. Amazon is the four leading technological company after Google, Facebook, and Apple. This company has explored many countries and has used some of the most effective tools that helped Amazon to expand so much. Amazon provides services and goods that are of good quality along with affordability (Gerschewski et al., 2020). This company has a great influence on both the internet world as well as the offline world. Everything is available and is of good quality in this retail company. Amazon is considered as one of the leading companies that are having the leading revenue in the internet world. This company is having a great influence on the online market as well as on the people who like to visit offline stores. The diamond model is used by Amazon as because they must compete against all the leading retail companies of the UK before extending their market in the international market. This is the reason that they used the diamond model, and it turned out to be effective for the company. Their business is situated in a place that has attracted a lot of UK customers. Their online expansion is also vast and can stay one of the leading online retail company (Chen et al., 2019). This expansion is remarkable because there are many people who do not get enough time to visit the store and buy stuff. Therefore, going with the online store option made their expansion much easier, and they did not have to work hard as doing business through the Internet became quiet famous from their time. The growth rate of Amazon after using the diamond model is shown below in the appendix.
Conclusion
From the above discussion, it can be considered that the Uppsala model is far better than the diamond model. The Uppsala model is simply based on expansion and using some change management principles so that they can effectively compete with the competitors in the international business market. On the other hand, the diamond model is based on the concept of simply expanding and building a good relationship with the competing industries. This is what can become a major drawback for the company. Another major difference is that the diamond model is an old model, but the Uppsala model is the latest model that was developed in the year 2009.
References:
Chen, L., Shaheer, N., Yi, J. and Li, S., 2019. The international penetration of ibusiness firms: Network effects, liabilities of outsidership and country clout. Journal of International Business Studies, 50(2), pp.172-192.
De Mooij, M., 2019. Consumer behavior and culture: Consequences for global marketing and advertising. SAGE Publications Limited.
Gerschewski, S., Evers, N., Nguyen, A.T. and Froese, F.J., 2020. Trade shows and SME internationalisation: Networking for performance. Management International Review, pp.1-23.
Green, M.C. and Keegan, W.J., 2019. Global Marketing. Pearson.
Indaryani, M., Sumekar, K., Mulyani, S. and Gunawan, B., 2020. Registration of Weaving Copyrights and Their Effects on Increasing Sales Turnover and Rising Selling Prices towards Increased Competitiveness of Indonesian Weaving Crafts in Global Marketing. Journal of Economics and Economic Education Research, 21(1), pp.1-9.
Kotabe, M.M. and Helsen, K., 2020. Global marketing management. John Wiley & Sons.
Manotas, E.C. and Gonzalez-Perez, M.A., 2020. Internationalization and performance of small and medium-sized enterprises from emerging economies. Competitiveness Review: An International Business Journal.
Nambisan, S., Zahra, S.A. and Luo, Y., 2019. Global platforms and ecosystems: Implications for international business theories. Journal of International Business Studies, 50(9), pp.1464-1486.
Nguyen, Q.T. and Kim, S., 2020. The multinationality and performance relationship: Revisiting the literature and exploring the implications. International Business Review, 29(2), p.101670.
Osano, H.M., 2019. Global expansion of SMEs: role of global market strategy for Kenyan SMEs. Journal of Innovation and Entrepreneurship, 8(1), p.13.
Osano, H.M., 2019. Global expansion of SMEs: role of global market strategy for Kenyan SMEs. Journal of Innovation and Entrepreneurship, 8(1), p.13.
Paul, J. and Rosado-Serrano, A., 2019. Gradual internationalization vs born-global/international new venture models. International Marketing Review.
Qurratu’Aini, H. and Hapsari, A.Y., 2019. Interests Influence of Digital Marketing Product Sales in Exports by SMEs in Bandung. Global Business and Management Research, 11(1), pp.217-225.
Saralidze, M., 2020. Financing of internationalisation process and its effects on Finnish SME.
Veronica, S., Shlomo, T., Antonio, M.P. and Victor, C., 2019. International social SMEs in emerging countries: Do governments support their international growth?. Journal of World Business.
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