Some firms, such as General Motors, may have difficulty in organizing, or may not be
willing to organize, operations to maximize flexibility and encourage integration across
national borders. Beyond various cultural, political, and economic differences across
national borders, organizational realities also impair the ability of multinational firms
to pursue global marketing strategies. Not surprisingly, integration has often been
opposed by foreign subsidiaries eager to protect their historical relative independence
from their parent companies.
In finding a balance between the need for greater integration and the need to
exploit existing resources more effectively, many companies have begun to explore the
use of regional strategies in Europe, North America, and the Pacific Rim. Regional
strategies can be defined as the cross-subsidization of market share battles in pursuit of
regional production, branding, and distribution advantages.69 Regional strategies in
Europe and North America have been encouraged by the economic, political, and
social pressures resulting from the development of regional trading blocs, such as
European Union, North American Free Trade Agreement (NAFTA), and Southern
Common Market (MERCOSUR).70
Regional trading blocs have had two favorable effects. First, the volatility of foreign
exchange rates within a bloc seems to be reduced.71 Second, with the growing level of
macroeconomic integration with regions, the trend is also toward greater harmonization
of product and industry standards, pollution and safety standards, and environmental
standards, among other things.72 These regional commonalities further
encourage firms to develop marketing strategies on a regional basis.73 Global marketing strategy cannot be developed without considering competitive and other
market forces from different regions around the world. To face those regional forces
proactively, three additional strategies need to be considered at the firm level. These
are cross subsidization of markets, identification of weak market segments, and the
lead market concept.74 See also Global Perspective 8-4 for an example of global
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