Introduction
This is a study about the international sales operations of Monster Health care Company (MH Co), headquartered in the northeastern part of the United States. As Vice President of International sales, I am responsible for the company’s sales operations outside the US. Even though it ensures all facilities and benefits to my career and personal life, I have to manage all the issues and overcome the problems related to global marketing. Before making arrangements for its global marketing operations, the responsible persons must have a thorough knowledge of international marketing and the scope of international sales. So the sales manager has to compare all the alternative organizational structures of global marketing and build an appropriate organizational structure to expand its operation globally.
Organizational structures for international operation
An organization requires a suitable organizational structure for its effective functional operation. A well-designed organizational structure includes a series of central functional departments such as finance, marketing, R&D, production, etc. The system of an organization is determined by the size of the domestic market and the area of the international market in which the firm operates. International division, product division, Global area, and Matrix are the main basic organizational structures.
- International division: It is the basic organizational structure, including the CEO and other functional departments of an organization. Under this structure, all the powers related to the product and areas of operations are concentrated in the hands of the CEO.
- Global product division: The entire organization is divided into different departments in this structure. There exists a lack of coordination between various departments of the company. So it is a difficult task to provide information among its departments.
- This structure breaks the firm into different divisions. As a result, it isn’t easy to transfer knowledge between departments because there is little coordination between the same company’s products.
- Global area structure: It is challenging to send knowledge and best practices from one department to another under this structure.
- Matrix structure: In this organizational structure, the CEO has to take responsibility for both products and areas of an international operation. (6 organizational structure of an MNC, n.d.).
Global Market Entry Strategies
Exporting is used as an initial step for international entry. A company has two basic options for carrying out its export operations. They are:
Indirect Exporting
It means trading through export companies of foreign agents, merchants, or distributors. Several types of intermediaries positioned in the domestic market are ready to aid a manufacturer in contacting international markets or buyers. In addition, this method provides the exporter with readily available expertise.
Direct Exporting
Here a separate department is created for selling and dealing with international customers. In this method, an exporter must deal with many foreign contacts, possibly one or more for every country the company plans to penetrate. This method provides the company with greater control over its distribution channels. The exporter might select from chief intermediaries like agents and merchants.
Licensing
Here the foreign licensee needs provisions for manufacturing homemade products for which the licensor gets a fixed amount of money. In addition, licensing may present the foreign organization’s right to brands, trademarks, trade secrets, or patents connected with the final product. Here the company gets a certain amount of money by entrusting the right to trademark or patent to another company.
Franchising
Franchising is a method of licensing which enables the franchiser to create an entire marketing program for a product.
References
Akkaya, F M. (n.d.). Global marketing strategies. Web.
6 organizational structure of a MNC. (n.d.). Endurance Trading. Web.