International Strategic Management (MGT5182) Tutorial 3

Case: Pursuing local-for-local and local-for-global innovation in a global media company

Global Marvels is a diversified multinational media company, headquartered in Glasgow, that publishes online and printed newspapers like the Daily Bugle in the US and the Glasgow Post in Scotland, as well as magazines, tech blogs, and live streaming programmes for gamers and app developers. It also has a social media consulting business, where it partners with emerging social media stars, especially on TikTok, and provides them with various marketing and training services. Today, the company is present in Canada and the United States, the UK, France, Spain, Germany, and Italy, as well as in Singapore, Malaysia, Indonesia, and Thailand.

For several decades Global Marvels had enjoyed steady growth and delivered profits, even at times when most of its peers did not achieve targets. But for the last five years its growth slowed down, and the company struggled growing internationally. Mary Jane Watson, the CEO of Global Marvels, concluded: "Globalization is a challenge, especially these days. And on many levels. A particular difficulty for us has been developing products for emerging markets. Yet, emerging markets are the key to grow."

Global Marvels is currently reviewing how it innovates in emerging markets. Traditionally, the company would focus on finding new ways of hitting lower price points, either through a different set of features or through innovative marketing concepts. Creating lower-cost products for an emerging market was, for example, core to its strategy when it entered Indonesia. However, since Global Marvels is behind growth targets, some managers began questioning its approach to innovation in emerging markets. For example, Budi Darmawan, the company's director for Indonesia, commented: "Traditionally, our mandate here was to get prices down and to place affordability at the centre of our innovation activities. We take a product from Europe, study it, and change it in a way that makes it more affordable - but affordability is in my view not the primary issue. We need to get better at understanding the real customer problem and come up with a solution that will take into consideration a variety of factors: availability, portability, social and cultural needs, and of course price as well. It's about getting the right functionality for the Indonesian market."

Mary Jane acknowledged that changes to the way Global Marvels innovates are needed and was open to discussing what the role of its subsidiaries in emerging markets like Indonesia could be in a new model, but she worried that the capabilities that had enabled the company to succeed in the past may not be the ones needed to succeed in emerging markets and beyond. What could a new innovation model for Global Marvels look like that enables it to pursue local-for-local and local-for-global innovations, and how could that model be implemented?

1) Using relevant global strategy theory, critically discuss the traditional innovation model of Global Marvels and then develop a new innovation model for the company, one that changes the locus of innovation. In your discussion, identify capabilities Global Marvel requires to excel in developing innovations in emerging markets and beyond.

2) Critically discuss how the new innovation model you proposed affects the global strategy and organization of Global Marvels. In your discussion, identify potential barriers against the new model and evaluate how Global Marvels can overcome those barriers.