Jain (1989)

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Market position

In segmenting world markets, market development, market conditions, and competitive factors need to be considered. For example, markets for a product will be in different stages of development in varying parts of the world (see the Product Cycle). This means that the design of the product may have to be adapted to suit the various markets.

There are 3 market conditions which affect the standardisation decision:

1. Cultural differences. If a product accurately reflects the society, it can be standardised.
2. Economic differences. Owing to the impoverished state of LCDs, it is necessary that products be modified to cut costs, but without affecting functionality.
3. Customer perceptions in foreign markets. If a foreign product is perceived as high quality, then standardisation would be beneficial. However, if the image of a country’s products is negative, it would be “strategically desirable” to adapt the product to the local environment and become disassociated from the host country.

Although the product may match the above requirements, local competition will cause the organisation to develop its products to match the local conditions more precisely. If a company has a competitive advantage in all countries, then it can standardise. This can also occur when the firm is competing against rivals which hold a similar position in the market.

Nature and environment

Organisation