Essays on Multinational Companies: Do They Add Any Value to a Local Brand Preferred by Local Customers Literature review

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The paper 'Multinational Companies: Do They Add Any Value to a Local Brand Preferred by Local Customers" is a good example of a business literature review.   Stonehouse et al (2003, p. 15) in differentiating a multinational company from global and international business asserts that differences that exist in these terms relate to nature and extent to which these firms are involved in international markets and the level of integration and degree of coordination of geographically dispersed operations. While the term international business indicates that a firm is operating in more than one country or simply across its national boundaries, the term multinational business suggests that the firm is not only conducting international business and operating in several countries but also implies the existence of decentralization of management and strategy to overseas subsidiaries, markedly evidenced in limited coordination of activities across national boundaries.

Global business, on the other hand, conducts its business in a range of countries in the world adopting a highly coordinated and integrated single strategy across the world. Multinational businesses, therefore, allow their subsidiaries considerable autonomy in regards to their strategies largely determined by local conditions in the operating environments.

One of the most critical decisions that multinational companies have to make is in regard to branding. Branding is defined as a term, sign, name, symbol, design or combination thereof that is intended to differentiate a product from the competitors (Stonehouse et al, 2003, p. 24). Branding when successful is a critical aid in creating brand loyalty, differentiating the products from its competitors, maintaining certain quality and image, achieving consumer commitment and acting as a barrier to entry. Firms therefore often aim to generate a strong brand presence in the markets that they operate in order to attain these benefits.

In consumer markets, brands are especially crucial compared to industrial markets where technical specifications and price override brands. (Uncles 2010, p. 398) captures the critical role of branding in enhancing the success of companies citing recent successes experienced by Apple making it the top global brand following its advertising-centric view of brand management. While apple brands such as the iPad meet most of its client's requirements regarding design style among other attributes, emphasis on the narrative of communication as evidenced in public media has resulted in the near mythological brand recognition resulting to increased shareholders wealth. The importance of brand management especially coupled with brand issues in global and international markets has thus resulted in wide interest among marketers on the best strategies to utilize especially when faced with local brands in foreign markets.

On one spectrum, are the benefits associated with brand foreignness resulting in positive brand associations of quality, glamour and so on thus resulting in the success of the brand.

On the other end, such foreign associations, especially in an already successful local brand, may result to poor brand image associations as proven in recent failures of acquisitions of brands in emerging markets such as China. The choice of brand approach that firms should take has thus become a critical issue that multinational firms must approach carefully as they expand globally with the increased globalization.

References

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Stonehouse, George, David Campbell, Jim Hamill, Ton Purdie. 2003. Global and Transnational Business: Strategy and management. John Wiley and Sons.

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Stuart, Smith, 13 August, 2009, why brands continue to surf the recession http://www.marketingweek.co.uk/why-brands-continue-to-surf-the-recession/3003331.article

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Lianxi Zhou, Zhiyong Yang, Hui, Michael KNon-loc or al local brands? A multi-level investigation into confidence in brand origin identification and its strategic implications. Journal of the Academy of Marketing Science; Spring2010, Vol. 38 Issue 2, p202-218

Broadening the scope of brand management

Uncles. Mark D Broadening the scope of brand management. Journal of Brand Management (2010) 17, 395 – 398. doi: 10.1057/bm.2010.9

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