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International Strategy: Context, Concepts and Implications by David Collis

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Chapter 7 What Product?

MOTIVATION

Many of you will be familiar with the HSBC advertisements that adorn most of the world's major airports. To support its positioning as “the world's local bank,” HSBC demonstrates how the same word or picture can convey entirely different meanings in different parts of the world – a “football” in the US is oval shaped with tapered ends, in the UK is round, and in Australia is oval shaped like a rugby ball with rounded ends – implying that its local knowledge allows it to adapt its product and service offerings to meet the peculiarities of any market. The irony is that HSBC's main product for consumers is a premier account designed for the few cosmopolitan globetrotters that want single source access to a bank account in several different countries and currencies! Yet this example neatly captures the first strategic choice that confronts firms which compete internationally and illustrates the underlying dilemma – do you offer a single product with similar brand positioning everywhere you choose to compete, like the premier account,1 or do you adapt your product and market positioning to satisfy the idiosyncrasies of different geographic markets?

Look at Exhibit 7.1 and consider the following question (before reading on!): Which company sells the beverages shown in Japan, including the hot coffee, Georgia, available in vending machines throughout the country?

Exhibit 7.1 Japanese Beverages

In fact, it is the Coca-Cola Company (Exhibit 7.2 ...

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