Bringing the world home, understanding globalization of domestic markets makes businesses more competitive

Publish Date: Friday, April 17, 2009

As people become more mobile, domestic markets are becoming more international. Understanding the needs of this new customer segment is a key to survive and even succeed in this tough global marketplace.

“Managers need to consider the how the internationalization of domestic markets is transforming their current customer segments,” said David A. Griffith, The John William Byington Endowed Chair in Global Marketing at The Eli Broad College of Business. “By matching the firm's resources to the needs of these new segments, firms can not only thrive domestically, but this matching could set the stage for their global success.”
In the award winning article, "The Resource Matching Foundations of Competitive Advantage An Alternative Perspective on the Globalization of Service Firms," Griffith and co-author Steven H. Seggie of Ozye in University, argued for an alternative view of internationalization.

Traditionally, internationalization has referred to the movement of domestic firms into new foreign markets, but Seggie and Griffith argued the globalization of world markets has tremendously increased the diversity of clientele that many service providers engage at home.

“Whether we speak of hospitality, airline, banking or any number of other industries, the increased spread of customers because of travel and migration has increased the need of global service providers to revise their existing protocols and procedures in servicing an increasingly diverse clientele in order to better meet their needs and exceed their expectations, or maximize value delivery,” Griffith said.
According to Griffith, service firms must begin to recognize the global aspects of the segments they are currently serving. "Today, many service firms, while recognizing the diversity of their existing clientele, fail to recognize the fact that the increasing diversity of their customer base is reflective of global segments,” he said.

Griffith stressed how important it is to analyze a firm's current competitive advantage in terms of resource matching. Successful resource matching means understanding what firm resources are value delivering to their various segments of their existing clientele that allow for competitive advantage.

“Once an understanding of the specific resources employed that provide value to each segment of their customer base is established, the firm can then employ this resource match approach as it expands globally, thus maintaining its value creation proposition within these segments across markets," said Griffith.
The study recently received the 2008 Article of the Year Award from the International Marketing Review; 2008 Volume: 25, Issue: 3, Page: 262-275.