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The localization strategy into Vietnam is also characterized by the fact that it ensures higher levels of business diversification for the company, which in fact serves the number one rule of investments -- portfolio diversification. This in essence means that, through the penetration of the Vietnamese market, the company would increase its sources of revenues and it would decrease its dependency on the more traditional manufacturing plants. The introduction of a highly successful business model in Vietnam
Finally, the localization strategy also allows Win-win to gain potential marketing advantages by creating customer awareness and generating demand for the company's products, even when the company only produces them in the Southeast Asian country (Quick MBA).
The need for the localization strategy is give by the fact that Win-win, as well as any other economic agent, cannot simply adopt a strategic model as it arises within the specialized literature. It as such has to customize it in order to meet its unique situation, such as organizational size, resource capabilities or features of the market onto which the strategy would be employed (Grant, 2008). To increase its success rates, Win-win would customize its strategic approach in order to ensure that it responds to the needs and wants of the local market. In this line of thoughts, the following elements would be considered:
1. The offering of employment opportunities to support the development of the community
2. The operation of the business activities in full accordance with the local legislations and traditions
4. The training of the Vietnamese managers to operate under new standards of quality and efficiency
5. The integration of the domestic advantages of local manufacturers, such as their own distribution channels, their own access to resources and so on
6. In a situation in which the company would decide to also retail the products within the Vietnamese market, the localization strategy would revolve around the following: (a) the reduction of the retail price in order to ensure the easy access of the financially challenged Vietnamese consumers; (b) the implementation of a penetration pricing strategy and the subsequent implementation of a variable pricing strategy; (c) the creation of a marketing campaign promoting the benefits of the product; (d) the creation of strategic alliances with local providers in order to benefit from their distribution advantages, channels and relationships they have supported with the customer base.
References:
Grant, R.M., 2008, International business: competing in the global marketplace, Oxford, U.K., Blackwell 9781405163095
Hill, C., Jones, G., 2009, Strategic management theory: an integrated approach, 9th edition, Cengage Learning
Ansoff's product / market matrix, Tutor2U, http://tutor2u.net/business/strategy/ansoff_matrix.htm last accessed on February 4, 2011
2010, Ansoff matrix, Quick MBA, http://www.quickmba.com/strategy/matrix/ansoff / last accessed on February 4, 2011
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