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Paper info: MEASURING THE INTERNATIONAL ENVIRONMENT IMPACT ON CORPORATE MARKETING AND STRATEGY: THE « P.R.E.S.T.» MODEL

Title


MEASURING THE INTERNATIONAL ENVIRONMENT IMPACT ON CORPORATE MARKETING AND STRATEGY: THE « P.R.E.S.T.» MODEL

Authors


Jean-Paul Lemaire

Place of Publication


The paper was published at the 16th IMP-conference in Bath, U.K in 2000.

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Abstract


The changes in the international environment have been sharply perceived by companiesoperating both wihin and beyond national boundaries, leading, within a short period of time,since the late seventies, to a substantial evolution of traditional international marketing andstrategic approaches. However, all the companies are not equally affected by theenvironmental changes and consecutive pressures ( formalised into the P.R.E.S.T. model, i.e.Political-Regulatory, Economic and Social, Technological): their specificities (such as size,international experience, financial soundness..), require an intermediate analysis levelbetween «macro» analysis (at a national or multinational level) and «micro» reactions (at thecorporate level). A so called «meso» level corresponding to the industry, the sector or, even,the activity, would be, then, necessary in order to enlighten and to facilitate the formulationof corporate responses to the evolving international environmental «pressures».In such a P.R.E.S.T. analysis process, the «meso» level has to be geographically positioned inaccordance with the globalization degree of the considered industry/sector/activity(measuring at a certain point the balance between localization and globalization forces) andwith the strategic issue at stake (national, regional or global marketing approach, forinstance).Nevertheless, industries, sectors or activities have also to be permanently monitored, in orderto take into account the continuous evolution of their flexible limits, due to the environmentalpressures themselves as well as to the adaptation of corporate strategies, which leads· to reposition each actor vis à vis its providers and customers, upstream and/ordownstream, through the industrial networks,· to internalize and/or to externalize them, through its value chain.For the past twenty years, the common vision of internationalization has been deeplytransformed (Welch and Luostarinen, 1988). Before, it relied on cross border or overseasexport or import operations (see, for instance, Johanson and Wiedersheim-Paul, 1975, Bilkeyand Tesar, 1977), on a relatively limited range of activites (such as raw materials, heavyequipments, cars, hifi, computers..), and, through foreign investment, on a relativelyrestricted group of large multinational companies (Porter , 1986). Nowadays, if allcompanies are not equally hit by the intensification of the competition, all are, henceforth,confronted with new challenges abroad or coming from abroad (Buckley and Casson, 1998).These companies do not correspond so closely to the previous models; and Internationalbecomes for all an unavoidable dimension of strategy (Barrtlett and Goshal, 1987). Thechanges of political, technological and economic environment have declustered previouslyprotected national areas, increasing dramatically communication facilities and capacities,creating new needs all over the world, with some convergences among customersexpectations (Atamer, 1993).As a consequence, a majority of firms have to react, not only to seize new opportunities tosell more on a larger scale, to cut costs by spreading overseas production and sourcing, toreduce their exposure to fiscal pressure or to foreign exchange, to enlarge their access to newcompetences and skills ... but also to prevent the loss of their domestic market shares, or toavoid possible take overs from foreign competitors (Zanfei, 1992)..: even in some sectorstraditionally well protected -such as financial services, public utilities or defence industry- theinternational competition has to be considered, beyond and inside the home «sanctuary», andthe correlative necessity to restructure on a worldwide scale (Sarathy, 1994).Henceforth, in each company, some basic questions have to be raised, in order to cope withthe new conditions of international competition, to find some methodological answers, givingthe opportunity to analyse, then, to select possible orientations, and, finally, implement thebest choices, with enough lucidity to adapt or, even, abruptly reconsider them, under thepressure ofenvironmental changes or sectorial moves (Cavusgil, 1980, Douglas and Craig, 1989,Buckley and Ghauri, 1994).For a majority of internationalizing firms, development beyond the national boundaries of thecountry of origin refers to successive steps to follow and to indispensable tools to be used,with some key preoccupations to keep in mind:
· the impact of external «pressures» on their sectorial environment,
· the international dynamics of their activities,
· their incentives to internationalize,
· the process they have to adopt in order to define their objectives and choices and toimplement them..