Customer Value Creation

Postgraduate

ABSTRACT


When companies go international some factors present in the host country act like forces that might drive the company to standardize or adapt its strategies. The choices between to standardize or to adapt to local needs are of a great importance, since it can have significant impact in the company’s performance in the foreign market. In this paper these forces are characterized in country specific and industry specific factors. The aim of this study is to investigate the influence of external factors in the customers’ value creation in a new foreign market, under standardization and adaptation strategies. In order to fulfill the purpose of the paper, a qualitative research was conducted using a single case study of a Swedish SME, focusing on a single product, namely machine guarding, in connection with one foreign market, Brazil. The study shows that the factors that were most influenced in the customers’ value creation were social/cultural aspects and competition, which tend to lead the company to adapt in order to fulfill local needs and to react to the competitiveness. It was also presented that economic factors and market size did not represent any influences in the standardization or adaptation strategies of the company studied. However, other external factors, as technological, political/legal and industry structure, have shown impact to some degree, whether in adaptation or standardization strategies.   

PROBLEM 
 
Within international marketing, controllable and uncontrollable variables emerge when operating across a number of foreign countries. These variables compose the complexity of operating in international markets. Hence, the type of strategy adopted in the foreign market, as an attempt to deal with the complex environment, will define the overall performance of the company in the foreign market (Doole and Lowe, 2008). 
 
One challenge faced by the company when operating beyond its home market is whether or not to adapt to local requirements (Doole & Lowe, 2008; Czinkota & Ronkainen, 1995). It has been shown as a challenge for international companies to determine which specific strategic elements are feasible or desirable to standardize or to adapt, under what conditions and in which degree (Theodosiou & Leonidou, 2003). Each country and each industry has its own characteristics that may have an influence on customer value creation. As cited by Cavusgil, Zou and Naidu (1993) adaptation is prioritized in a company when considering the different cultural, economic, political and legal issues, as well as the customer values and preferences. As discussed by Ravasi, Rindova and Dalpiaz (2012) the cultural perspective should be considered when identifying the means to seek customer value creation.

PURPOSE 
 
Considering the importance to fulfill customers’ needs and the different aspects founded in a foreign market, the purpose of this paper is to investigate how external factors act as driven forces affecting standardization and adaptation strategies, in order to create customer value in a new foreign market.