IBM

Place

According to Wild and Wild, Distribution is the “planning, implementing and controlling of the physical flow of a product from its point of origin to the point of consumption.” These channels serve to provide satisfaction for consumers. International channels of distribution represent “a system composed of marketing organizations that connect the manufacturer to final users or consumers of the company’s product in a foreign market” Albaum (2005) . Companies in the international marketplace have four ways to engage. They can opt to export in their home country, establish a manufacturing plant in the other country, set up assembly operations or form a strategic alliance with one or more companies. In the international arena, the choice of the distribution strategy is vital because it is a source of a competitive advantage. The real issue is whether to adopt a standardized strategy or adaptable strategy in the international markets.

This looks at whether companies should use a rigid distribution strategy that remains unchanged or an adaptable one in entering across borders. Based on an investigation, the prevailing view is that standardization of a distribution strategy may not effective in an international context as stated by, Douglas & Wind, 1987; Walters & Toyne, 1989; Rosenbloom, Larsen, & Mehta, 1997; Mitchell et al., 1998” . Three factors hinder this. They are culturally distant distribution behavior, distributive institution rigidity and international functional fragmentation.

According to Hofstede (1980, 1994, 2001) and Kogut & Singh, (1988) culturally distant distribution behaviour refers to “cross-country differences in, value systems, norms and behaviours and tradition which in turn has significant impact on the ...

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...ication leading to efficient logistics- Adapting in the international markets through language would ensure efficient logistics management where the flow of goods can be distributed to the final customer at the right place, right time and right condition.

3) Standards and reputation increased. By adapting to the international markets, the firm would increase its standards and increase reputation for taking into consideration changing business environment.

Cons

1) Takes time in planning- A multinational firm have to invest time to adapt its distribution strategy abroad by partnering with local firm.

2) Language barrier- Understanding the various languages may be a challenge.

3) Execution- The actual process of executing the flow of the product from the point of origin to the point of consumption through adaptation may be a challenge because of low demand for product.