The degree to which an organisation
does of international business is called as international orientations. Wing, Douglas and Perimutter have
clearly worked out the different degrees of international orientation of
organisation towards International business.
It is called as EPRG scheme. It
is as follows:
1.
Ethnocentrism (home country orientation)
2.
Polycentrism (host country orientation)
3.
Regiocentrism (Regional orientation)
4.
Geocentrism (World orientation)
1.
Ethnocentric orientation:
In
the ethnocentric company, overseas operations in only secondary to domestic
operations. The top management in
ethnocentric companies view their personnel and techniques as superior to
foreign companies. In ethnocentric
companies overseas operations are conducted from home country base and there is
a strong reliance on export agents.
Some companies with ethnocentric
orientation tend to neglect the opportunities outside the home country. Such companies are called as domestic
companies. Ethnocentric companies that
conducts business outside the home country can be described as international
companies. These companies have a strong
opinion that the products that succeed in the home country are superior and therefore
can be sold every where without adaptation.
The ethnocentric orientation are
usually shown by companies which are new to international operations.
Because of the ethnocentric thinking
of these companies they are easily prone to do big flounders/ mistakes
abroad. Here are few examples.
a. Hallmark cards bombed
when they were introduced in France. The
French people dislike sentiments and prefer writing their own cards.
b. Philips began to earn
a profit in Japan only after it had reduced the size of the coffee makers to
fit into the smaller Japanese hands.
c. Coca – Cola had to
withdraw the two-titre bottle in spain after discovering that only few Spanish
homes owned refrigerators with large compartments.
d. General Foods Tang initially failed in France because it was
positioned as a substitute of orange juice at break fast. The French drink little orange Juice and
almost none at breakfast.
e. Johnson’s wax floor
polish initially failed in Japan. The
wax made the floors too slippery and Johnson had overlooked the fact that
Japanese do not wear shoes in their homes.
2.
Polycentric Orientation:
Multi-national orientation is called
as polycentric orientation. According to
this polycentric thinking, local personal and techniques are best suited to
operate only in the local markets conditions.
To work in international environment, the companies must establish many
subsidiaries abroad. (A small unit
controlled by a large unit) These subsidiaries work independently and have
their own marketing strategies. In polycentric
Orientation, a very great emphasis in put on local laws, customs and culture
and great care in given to local way of doing business. Thus in short, polycentrism in exactly
opposite of ethnocentrism.
All multinational corporations are
polycentric companies. The important
merit of polycentrism is the adaptation of the business strategies to the local
conditions.
3. Regiocentric and geocentric orientation:
The Regiocentric company views
different regions as different marketing.
A particular region with certain important common marketing
characteristics in regarded as a single market, ignoring national
boundaries. The Geocentric company views
the entire world as a single market.
These companies are good at producing a standardard product with uniform
marketing mix for the global market.
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