Cross-border alliances: cultural integration approaches and challenges

Cross-border alliances are defined as strategic partnerships which are formed between two or more firms, which are from different countries with the purpose of pursuing the mutual interests by sharing their capabilities and resources. They give an organization flexibility to commit on fewer resources and activities and build a bridge to the present resource of the firms. It also brings about a competitive advantage such as a reduction of risk and access to new technologies, market development and low cost resources Cherian, Flores, & Srinivasan, 2008()

Cross-border alliances help firms to be more efficient in their manufacturing and distribution processes. They also help to gain access to new talent in terms of human resources and new technology. It creates new opportunities, which the company can exploit while ensuring that issues such as barriers of entry are controlled.

Cross-border alliances are driven by globalization where in the face of difficult economic times, many organizations are forced to find new markets to expand to in order to keep revenues and profits high. Many firms across the world are using cross-border alliances in order to maintain and strengthen their market position. It is often seen as a fast and efficient way to expand into the new market, and to incorporate new technologies. However, there is no assurance of the success of the cross-border alliance. Such alliances often fall short of the objectives and goals which are stated. Some of these failures can be explained by market factors in play while others can be explained by issues related to human resource and activities which are associated with management of cultural diversity in the organizations.

When creating cross-border alliances, the organization need to choose from four distinct options. The first is the portfolio option where the companies maintain separate cultures. The second is the blending approach where the organization chooses the best elements from each culture and merges them. The third is the new creation approach where the companies create a new culture that fits the new venture. The last approach is the absorption approach where one culture is made to be legit then the members of the other culture are expected to be assimilated into the new culture Tjosvold & Leung, 2003.

An example of the absorption approach is when Pfizer acquired Warner Lambert. Pfizer kept its culture and the Warner Lambert employees had to adopt the Pfizer culture.

Online marketing response

Online marketing is also known as web marketing, e-marketing or webvertising. It is a form of promotion whereby products and services are advertised on the internet. For the store to be successful in internet marketing, it needs to tie together the creative and technical aspects of the internet which include design, advertising, development and sales Kotler & Keller, 2012.

This involves the placement of advertising media on the various stages available such as email marketing, banner ads on particular websites, search engine marketing, and web 2.0.

Banner advertisements are placed on third-party websites or blogs in order to drive traffic to the company's website and thus increase product awareness. Search engine marketing involves promotion of websites by increasing traffic to their websites by increasing their visibility in search engines. Web 2.0 includes social media such as Facebook, Twitter, LinkedIn and blogs. It involves placing advertisements on these platforms and also gaining attention through them. Email marketing involves sending promotional messages through emails.

There are many advantages of online marketing. One is that it is a targeted method of advertising. The advertisements can be targeted to particular geographical locations or a particular niche which is the target market of the store Nezamabad, 2011.

Additionally, online marketing is usually inexpensive as compared to traditional methods of advertising such as billboards, radio and TV advertising. It also has a wider reach for this low cost Kotler & Keller, 2012()

Another major advantage of internet marketing is that it allows the advertiser to get detailed statistics on the company in terms of views and clicks thus the advertiser is able to gauge the effectiveness of their campaign Horn, 2011()

Online marketing, however, has several limitations. One is that there are many outright scams or false promotions which make it difficult for buyers to differentiate the legit advertisements from scams. A good example is the emails that people receive claiming they have won millions of shillings which are usually huge scams.

Having explored the advantages and disadvantages of online marketing, it can be seen to be worthy to be used in the store in order to boost sales and to gain competitive advantage against the new companies or organizations that are building strip malls.

Segmentation and the marketing mix

Segmentation helps greatly in customer retention and acquisition of new clientele. This is because it helps the company to tag their customers based on three distinct values. First is whether the customers are at high risk of cancelling the services they are getting from the company. One of the most common indicators of these high-risk customers is a drop in the usage of the company's service. The second value is whether the customer is worth the efforts to retain them. This looks at the profits and income that this particular customer is bringing in. If the cost incurred in satisfying and retaining the customer is higher than the income or profit accrued, this relationship is not worth the effort. The last value is what the right tactics to retain the customer are. These include customer discounts, freebies, individualized attention, etc.

The basic components of marketing are embodied in the marketing mix which consists of the product or service, promotion, price and lastly, sales or distribution. The product or service is part of the marketing mix and it is important for the product to be well suited for the target market Vignali, 2001.

A good example is Starbucks which has several tea and coffee products which help the company target a large market based on the individual taste Stuhl, 2011()

The second component is promotion which represents all the communication between the marketing team and the target market. It includes advertising, sales promotions and public relations activities Vignali, 2001.

A good example is the TV and radio commercials that are undertaken by Starbucks in efforts to promote their products and brand awareness Stuhl, 2011()

The third component is price. This is what the customer pays for the service of product. There are various pricing strategies such as penetration pricing, line pricing and premium pricing Kotler & Keller, 2012.

Price is an important component of marketing since for example penetration pricing can help the company to penetrate a highly competitive market.

The last component is distribution of sales which requires the company to provide the goods and services to their customers. There are various sales techniques such as direct sales, agency-based sales, door-to-door, electronic (internet), mail-order, vending machines, etc. For example, Starbucks uses both internet selling to their customers and direct sales in their stores Stuhl, 2011.

Other companies such as Coca-Cola and Pepsi use vending machines in addition to agency-based sales and electronic (internet) sales.

Market segmentation creates recognition that people are different thus they have different tastes, lifestyles and needs. It also helps in creation of a marketing strategy that focuses on the marketing mix of the product. It can lead to changes in the product, the promotional tactics, distribution and pricing.

One form of segmentation is benefit or behavioral segmentation whereby the elements of the marketing mix are designed to suit the consumer's behavior and the benefits that they seek to attain from the product itself. Psychographic segmentation, on the contrary aligns the elements of the marketing mix to address the major interests and lifestyle of the consumers.