Intersection Marketing

Business Strengths + Insights from Market Intelligence = Customer-Compelling Values.

<h2><a href="http://johniduh.yolasite.com/breakthrough-marketing/eating-and-drinking-on-the-go-trends-led-beverage-manufacturers-introducing-plastic-and-cans-beverages-such-as-plastic-coke-lacasera-teems-eat-can-malt-can-juice-eat-" title="Eating-and-Drinking-on-the-go trends led beverage manufacturers introducing Plastic and Cans Beverages, such as plastic: Coke, Lacasera, Teems, eat, Can-malt, can-Juice eat.">Eating-and-Drinking-on-the-go trends led beverage manufacturers introducing Plastic and Can Beverages, such as plastic: Coke, Lacasera, Teems, Can-malt, Can-Juice eat</a>, etc</h2>

Eating-and-Drinking-on-the-go trends led beverage manufacturers introducing Plastic and Can Beverages, such as plastic: Coke, Lacasera, Teems, Can-malt, Can-Juice eat, etc

Posted 185 weeks ago
<h2><a href="http://johniduh.yolasite.com/breakthrough-marketing/trends-in-healthy-living-through-immune-boosting-led-alliance-in-motion-global-developed-c24-7" title="Trends in healthy living through immune boosting led Alliance in Motion Global developed:  C24/7">Trends in healthy living through immune boosting led Alliance in Motion Global developed: C24/7</a>.</h2>
<p><small><span>C24/7 Natura-Ceuticals contains the most number of anti-oxidants with approximately 22,000 phytonutrients in one product. The ingredients of C24/7 work in “synergy” to produce the maximum result for your body, making it the most potent anti-aging product in the history of supplementation.</span></small></p>
<div class="postcontent">
<p><span>C24/7 is the new breakthrough in food supplements; a unique and patented formulation that delivers the highest amount of anti-oxidants and phyto-nutrients.<br/><br/>C24/7 is packed with benefits for different needs, from controlling blood sugar and cholesterol, to healthy blood circulation and sexual vitality.</span><span></span></p>

</div>

Trends in healthy living through immune boosting led Alliance in Motion Global developed: C24/7.

C24/7 Natura-Ceuticals contains the most number of anti-oxidants with approximately 22,000 phytonutrients in one product. The ingredients of C24/7 work in “synergy” to produce the maximum result for your body, making it the most potent anti-aging product in the history of supplementation.

C24/7 is the new breakthrough in food supplements; a unique and patented formulation that delivers the highest amount of anti-oxidants and phyto-nutrients.

C24/7 is packed with benefits for different needs, from controlling blood sugar and cholesterol, to healthy blood circulation and sexual vitality.

Posted 185 weeks ago
<h2><a href="http://johniduh.yolasite.com/breakthrough-marketing/dual-trend-in-the-in-hot-drinks-and-the-use-of-herbs-led-kasapreko-a-ghanaian-based-alcoholic-manufacturer-introduces-alomo-bitters-" title="Dual-trend in the in Hot-Drinks and the use of herbs led KASAPREKO, a Ghanaian based alcoholic manufacturer introduces Alomo Bitters.">Dual-trend in the in Hot-Drinks and the use of herbs led KASAPREKO, a Ghanaian based alcoholic manufacturer introduces Alomo Bitters.</a></h2>
<p><small><strong>Alomo Bitters</strong><span class="apple-converted-space"> </span><span>is a herbal alcoholic product made</span><span> </span><span>from carefully chosen tropical plant extracts and</span><span> </span><span>very well known for its proven medicinal values.</span><span> </span><span>It has its roots in the traditional herbal industry</span><span> </span><span>that is meticulously researched by the Centre for</span><span> </span><span>Scientific Research into Plant Medicine a World</span><span> </span><span>Health Organization affiliate, based at Mampong</span><span> </span><span>Akuapem in the Eastern region of Ghana.</span></small></p>
<div class="postcontent">
<p><span class="yui-tag-span yui-tag"><span class="yui-tag-span yui-tag"><strong><br/>Alomo Bitters</strong><span class="apple-converted-space"> </span><span>– A herbal based drink, is not just any ordinary alcoholic drink. With its origins from Ghana, Alomo Bitters is made from carefully selected tropical plant extracts which forms part of a secret recipe. It’s popular for its aphrodisiac qualities.</span></span><span><br/></span></span></p>
<p><span class="yui-tag-span yui-tag">To quote a recent article by Euromonitor -<span class="apple-converted-space"> </span><em>“Africa brings one of the most surprising alcohol growth stories in recent times. Distilled in Ghana, sales of Alomo Bitters in neighboring Nigeria have skyrocketed over the last few years. What’s behind the jump? The drink is said to hold aphrodisiac qualities for men and women. Nigerians mix the beverage with non-alcoholic beer – sales of that have soared in the country too. Plans to export the drink to more countries on the continent are said to be afoot. -</em><span class="apple-converted-space"></span><strong><em>Euromonitor’s</em></strong><span class="apple-converted-space"></span><em>Malandrankis says the supposed sexual enhancing properties “hit all the right buttons in Nigeria.” Watch out for it on local shelves soon.”</em><span></span></span></p>

<p></p>
<p><span class="yui-tag-span yui-tag">Packaged in a<span class="apple-converted-space"> </span><strong>200ml PET, 30ml Sachet</strong><span class="apple-converted-space"> </span>and<span class="apple-converted-space"> </span><strong>750ml Glass</strong><span class="apple-converted-space"> </span>bottle Alomo Bitters is developed in conjunction with the Center for Scientific Research into Plant Medicine in Ghana, an affiliate of the World Health Organization,<span class="apple-converted-space"> </span><strong>Alomo Bitters contains natural components/ingredients which promote/stimulate/enhances vitality and general well being.</strong><span></span></span></p>

<p></p>
<p><span class="yui-tag-span yui-tag">Alomo Bitters is also c<strong>leanses bowel and relieves body pain, helps ease menstrual pains/cramps in women and contains anti malaria properties</strong><span></span></span></p>

<p></p>
<p><span class="yui-tag-span yui-tag">Alomo Bitters is enjoyed all over the world, it’s vitalizing and best enjoyed straight or mixed with your favorite juice or soda.<span></span></span></p>

<p></p>
<p><span class="yui-tag-span yui-tag">In 2012 Alomo Bitters was awarded a Super Brand. It has also been identified to be amongst the top 5 emerging brands in the world by CNN money.<span></span></span></p>

<p></p>

<p><a href="http://money.cnn.com/gallery/news/companies/2013/10/08/exotic-drinks/6.html"><strong><span class="yui-tag-span yui-tag"><a href="http://money.cnn.com/gallery/news/companies/2013/10/08/exotic-drinks/6.html">http://money.cnn.com/gallery/news/companies/2013/10/08/exotic-drinks/6.html</a></span></strong></a></p>
</div>
<p><span></span></p>
<p><span></span></p>

Dual-trend in the in Hot-Drinks and the use of herbs led KASAPREKO, a Ghanaian based alcoholic manufacturer introduces Alomo Bitters.

Alomo Bitters is a herbal alcoholic product made from carefully chosen tropical plant extracts and very well known for its proven medicinal values. It has its roots in the traditional herbal industry that is meticulously researched by the Centre for Scientific Research into Plant Medicine a World Health Organization affiliate, based at Mampong Akuapem in the Eastern region of Ghana.


Alomo Bitters
 – A herbal based drink, is not just any ordinary alcoholic drink. With its origins from Ghana, Alomo Bitters is made from carefully selected tropical plant extracts which forms part of a secret recipe. It’s popular for its aphrodisiac qualities.

To quote a recent article by Euromonitor - “Africa brings one of the most surprising alcohol growth stories in recent times. Distilled in Ghana, sales of Alomo Bitters in neighboring Nigeria have skyrocketed over the last few years. What’s behind the jump? The drink is said to hold aphrodisiac qualities for men and women. Nigerians mix the beverage with non-alcoholic beer – sales of that have soared in the country too. Plans to export the drink to more countries on the continent are said to be afoot. -Euromonitor’sMalandrankis says the supposed sexual enhancing properties “hit all the right buttons in Nigeria.” Watch out for it on local shelves soon.”

Packaged in a 200ml PET, 30ml Sachet and 750ml Glass bottle Alomo Bitters is developed in conjunction with the Center for Scientific Research into Plant Medicine in Ghana, an affiliate of the World Health Organization, Alomo Bitters contains natural components/ingredients which promote/stimulate/enhances vitality and general well being.

Alomo Bitters is also cleanses bowel and relieves body pain, helps ease menstrual pains/cramps in women and contains anti malaria properties

Alomo Bitters is enjoyed all over the world, it’s vitalizing and best enjoyed straight or mixed with your favorite juice or soda.

In 2012 Alomo Bitters was awarded a Super Brand. It has also been identified to be amongst the top 5 emerging brands in the world by CNN money.

http://money.cnn.com/gallery/news/companies/2013/10/08/exotic-drinks/6.html

Posted 185 weeks ago
<div class="BlogWidget_Default" id="I169">
<div class="sys_txt">
<div class="sys_blog">
<div class="post">
<h2><a href="http://johniduh.yolasite.com/gurus-on-marketing/chinalife-introduced-%E2%80%9Cultra-slim-tea%E2%80%9D-kinetizing-" title="Chinalife Introduced “Ultra Slim Tea” - Kinetizing!">Chinalife Introduced “Ultra Slim Tea” - Kinetizing!</a></h2>
</div>
</div>
</div>
</div>
<p class="MsoNormal"><span></span><strong>Chinalife,</strong> born in 2007,  felt that the concept of natural healthy living with herbs and tea had, for far too long, been thrown together with images of perfectly pure people restricting themselves from indulgence. </p>
<p class="MsoNormal"><span>With such reason in mind, <strong>Chinalife</strong> introduced </span><strong>Ultra Slim Tea, </strong><span>a high grade herbal tea traditionally used to help reduce weight & regulate blood fat levels - an effective and natural way to lose weight. </span><strong>Ultra Slim Tea</strong><span> can be infused up to 3 times simply by adding fresh water. Ultra Slim Tea defines a  market space, Kinetizing!</span></p>

<p class="MsoNormal"><span> </span></p>

Chinalife, born in 2007,  felt that the concept of natural healthy living with herbs and tea had, for far too long, been thrown together with images of perfectly pure people restricting themselves from indulgence. 

With such reason in mind, Chinalife introduced Ultra Slim Tea, a high grade herbal tea traditionally used to help reduce weight & regulate blood fat levels - an effective and natural way to lose weight. Ultra Slim Tea can be infused up to 3 times simply by adding fresh water. Ultra Slim Tea defines a  market space, Kinetizing!

 

Posted 186 weeks ago
<h2><a href="http://johniduh.yolasite.com/gurus-on-marketing/historical-flashback-create-a-business-space-in-the-newspaper-industry" title="Historical Flashback create a Business space in the Newspaper Industry">Historical Flashback creates a Business space in the Newspaper Industry</a></h2>
<p><span>The desire to document Nigeria’s historical past events has led to the emergence of a newspaper called <strong>Historical Flashback.</strong> The newspaper  serves as the reservoir of information about Nigeria’s past from the pre colonial period, publishing past historical stories in a refreshed manner for documentation purpose. Many things happened in the country  and they continue to happen because many people did not know what happened in the past. </span><strong>Historical Flashback</strong><span> is the first of its kind in the newspaper industry. </span><strong>Historical Flashback</strong><span> is in the market to fill the gap of documentation. The documentation of the past and materials about Nigeria’s past events that cannot be found anywhere. “If you pick the newspaper you can read about events of 100 years ago, stories of past events before and after the country’s independence. The publishers are researching on the past stories in the country so that they can be freshly presented for those who have anything to do with Nigeria. It’s not just newspaper, its historical, as well as documented information. </span></p>

Historical Flashback creates a Business space in the Newspaper Industry

The desire to document Nigeria’s historical past events has led to the emergence of a newspaper called Historical Flashback. The newspaper  serves as the reservoir of information about Nigeria’s past from the pre colonial period, publishing past historical stories in a refreshed manner for documentation purpose. Many things happened in the country  and they continue to happen because many people did not know what happened in the past. Historical Flashback is the first of its kind in the newspaper industry. Historical Flashback is in the market to fill the gap of documentation. The documentation of the past and materials about Nigeria’s past events that cannot be found anywhere. “If you pick the newspaper you can read about events of 100 years ago, stories of past events before and after the country’s independence. The publishers are researching on the past stories in the country so that they can be freshly presented for those who have anything to do with Nigeria. It’s not just newspaper, its historical, as well as documented information. 

Posted 186 weeks ago
<h2><a href="http://johniduh.yolasite.com/gurus-on-marketing/kinetizing-marketing-has-the-ability-to-drive-successes-consider-the-introduction-of-energy-bars-whose-market-was-fragmented-by-definition-targeting-at-different-demograp" title="Kinetizing Marketing has the ability to drive successes. Consider the introduction of energy bars, whose market was fragmented by  definition targeting at different demographics.">Kinetizing Marketing has the ability to drive successes. Consider the introduction of energy bars, whose market was fragmented by definition targeting at different demographics.</a></h2>
<p><strong><span> </span></strong><strong><span>Energy bars</span></strong><span> are supplemental bars containing </span><span><a href="http://en.wikipedia.org/wiki/Cereal" title="Cereal"><span>cereals</span></a></span><span> and other high energy foods targeted at people that require quick energy but do not have time for a meal. They are different from </span><span><a href="http://en.wikipedia.org/wiki/Energy_drink" title="Energy drink"><span>energy drinks</span></a></span><span>, which contain </span><span><a href="http://en.wikipedia.org/wiki/Caffeine" title="Caffeine"><span>caffeine</span></a></span><span>, whereas bars provide </span><span><a href="http://en.wikipedia.org/wiki/Food_energy" title="Food energy"><span>food energy</span></a>. </span><span>Holland & Barrett stock a wide range of energy bars that combine </span><a href="http://www.hollandandbarrett.com/pages/categories.asp?cid=5"><span>sports nutrition</span></a><span> with great tasting confectionary. Customer favourite Powerbar, offer a wide choice of tasty energy bars that are a great source of </span><strong>protein</strong><span> and long lasting energy. Trek bars also come in a range of delicious forms, including protein packed flapjacks and virtually fat free brownies.</span>However, there are Energy bars for women, for children, for sports people; even protein bar, Nutrition bar, Honey bar etc.</p>

<p class="MsoNormal"><span> </span></p>

Kinetizing Marketing has the ability to drive successes. Consider the introduction of energy bars, whose market was fragmented by definition targeting at different demographics.

 Energy bars are supplemental bars containing cereals and other high energy foods targeted at people that require quick energy but do not have time for a meal. They are different from energy drinks, which contain caffeine, whereas bars provide food energyHolland & Barrett stock a wide range of energy bars that combine sports nutrition with great tasting confectionary. Customer favourite Powerbar, offer a wide choice of tasty energy bars that are a great source of protein and long lasting energy. Trek bars also come in a range of delicious forms, including protein packed flapjacks and virtually fat free brownies.However, there are Energy bars for women, for children, for sports people; even protein bar, Nutrition bar, Honey bar etc.

 

Posted 186 weeks ago
<p class="MsoNormal"><strong><span>Revlon: An ultimate Kinetizing Marketer, smart at Category innovation. Consider  the innovation of  @Colorstay Lipstick!“</span></strong></p>

<p class="MsoNormal"><span>Revlon is a global color cosmetics, hair color, beauty tools, fragrances, skincare, anti-perspirant / deodorants and beauty care products company whose vision is<span class="apple-converted-space"> </span></span><span class="corporatebold"><strong>Glamour, Excitement and Innovation through High-quality Products at Affordable Prices</strong></span>. <span>The company began its success with <strong>opaque long-lasting nail enamel</strong> sold to beauty salons. Revlon sold its nail enamel through department stores and selected drugstores. llicitudin.</span> <span>Revlon® is one of the strongest consumer brand franchises in the world. Revlon’s global brand portfolio includes Revlon® color cosmetics, Almay® color cosmetics, SinfulColors® color cosmetics, Pure Ice® color cosmetics, Revlon ColorSilk® hair color, Revlon® beauty tools, Charlie® fragrances, Mitchum® anti-perspirant / deodorants, and Ultima II® and Gatineau® skincare and its products are sold in over 100 countries across six continents. Websites featuring current product and promotional information can be reached at<span class="apple-converted-space"> </span></span><span><a href="http://www.revlon.com/" target="_blank"><span><a href="http://www.revlon.com">www.revlon.com</a></span></a></span><span>,</span><span></span></p>

Revlon: An ultimate Kinetizing Marketer, smart at Category innovation. Consider  the innovation of  @Colorstay Lipstick!“

Revlon is a global color cosmetics, hair color, beauty tools, fragrances, skincare, anti-perspirant / deodorants and beauty care products company whose vision is Glamour, Excitement and Innovation through High-quality Products at Affordable Prices. The company began its success with opaque long-lasting nail enamel sold to beauty salons. Revlon sold its nail enamel through department stores and selected drugstores. llicitudin. Revlon® is one of the strongest consumer brand franchises in the world. Revlon’s global brand portfolio includes Revlon® color cosmetics, Almay® color cosmetics, SinfulColors® color cosmetics, Pure Ice® color cosmetics, Revlon ColorSilk® hair color, Revlon® beauty tools, Charlie® fragrances, Mitchum® anti-perspirant / deodorants, and Ultima II® and Gatineau® skincare and its products are sold in over 100 countries across six continents. Websites featuring current product and promotional information can be reached at www.revlon.com,

Posted 186 weeks ago
<h2><a href="http://johniduh.yolasite.com/gurus/starbucks%E2%80%98-howard-schultz-is-one-of-my-nominees-for-kinetizing-strategy" title="Starbucks‘ HOWARD SCHULTZ is one of my nominees for kinetizing strategy" target="_self">Starbucks‘ HOWARD SCHULTZ is one of my nominees for kinetizing </a>Initiatives</h2>
<div></div>
<div class="postcontent">
<div><span class="userContent">When HOWARD SCHULTZ, starbucks ceo till year 2000,came to the company in 1982, he recognized an unfilled niche for “cafes serving gourmet coffee directly to customers“. This strategic initiative helps starbucks achieve loyal customer base in Seatle. In the next growth phase, it applied the same successful formular that had worked wo<span class="text_exposed_show">nders in seattle, first in other cities in the pacific Northwest, then through out North America, and finally, across the globe. Once starbucks had established itself as a presence in thousands of cities internationally, it sought to increase the number of purchases by existing customers with “kinetizing strategy“ that led to new in-store merchandise including compilation CDs, Starbucks Duetto Visa Cards that allows customer to recieve points towards starbucks‘ purchases when they use it; and high-speed internet wireless access at thousands of starbucks‘ HOTSPOTS through a deal with T-MOBILE. Finally, starbucks kinetized into grocery store aisles with Frappucino bottled drinks, starbucks‘ self-branded ice-cream, and the purchase of a tea retailer, Tazor Tea!</span></span></div>
</div>

Starbucks‘ HOWARD SCHULTZ is one of my nominees for kinetizing Initiatives

When HOWARD SCHULTZ, starbucks ceo till year 2000,came to the company in 1982, he recognized an unfilled niche for “cafes serving gourmet coffee directly to customers“. This strategic initiative helps starbucks achieve loyal customer base in Seatle. In the next growth phase, it applied the same successful formular that had worked wonders in seattle, first in other cities in the pacific Northwest, then through out North America, and finally, across the globe. Once starbucks had established itself as a presence in thousands of cities internationally, it sought to increase the number of purchases by existing customers with “kinetizing strategy“ that led to new in-store merchandise including compilation CDs, Starbucks Duetto Visa Cards that allows customer to recieve points towards starbucks‘ purchases when they use it; and high-speed internet wireless access at thousands of starbucks‘ HOTSPOTS through a deal with T-MOBILE. Finally, starbucks kinetized into grocery store aisles with Frappucino bottled drinks, starbucks‘ self-branded ice-cream, and the purchase of a tea retailer, Tazor Tea!
Posted 186 weeks ago
<h2><a href="http://johniduh.yolasite.com/blog/ford-repositioned-existing-products-services-resulting-in-an-original-category-" title="Ford Used Kinetizing Model Repositioned Existing Products/Services Resulting in an Original Category." target="_self">Ford Repositioned Existing Products/Services Resulting in an Original Category.</a></h2>
<div></div>
<div class="postcontent">
<div>
<p><span>In the United Kingdom, Ford positioned its Galaxy Minivan in relation to First-Class Air Travel comfortable enough to be suitable for busy executives. By highlighting attributes far different from those that would appeal to buyers looking for a family vehicle, the automaker used a classic Kinetizng approach created a Minivan subcategory.</span></p>
</div>
</div>

Ford Repositioned Existing Products/Services Resulting in an Original Category.

In the United Kingdom, Ford positioned its Galaxy Minivan in relation to First-Class Air Travel comfortable enough to be suitable for busy executives. By highlighting attributes far different from those that would appeal to buyers looking for a family vehicle, the automaker used a classic Kinetizng approach created a Minivan subcategory.

Posted 186 weeks ago
<h2><a href="http://johniduh.yolasite.com/blog/royal-philips-used-market-insight-to-kinetize-attuned-to-consumer-tech-trend" title="ROYAL PHILIPS Leverage Market Insight Plus Consumer Electronics-Trend to Kinetize" target="_self">ROYAL PHILIPS Used Insights from Consumer Electronics-Trends, Kinetiz</a>ing</h2>
<p><span class="usercontent"><span>Philips researchers asked 1,650 consumers and 180 customers in dozens of in-depth and qualitative interviews and focus groups on what was most important to them in using technology. Respondents from the Uk, U.S, France, Germany, The Netherlands, Hong Kong, China and Brazil agreed on one theing: they wanted the benefits of tech</span></span><span class="textexposedshow"><span>nology without the hassles. With these, Philips crafted “Sense and Simplicity” campaign with the believe that their brands plus innovation will reflect simplicity – the major of mordern technology. To achieve its plans, Philips tirlessly integrate media: the campaign consists of prints, Online, Television advertisement showcasing perspectives on the journey to simplicity, resonating with consumers. It just make sense!</span></span></p>

ROYAL PHILIPS Used Insights from Consumer Electronics-Trends, Kinetizing

Philips researchers asked 1,650 consumers and 180 customers in dozens of in-depth and qualitative interviews and focus groups on what was most important to them in using technology. Respondents from the Uk, U.S, France, Germany, The Netherlands, Hong Kong, China and Brazil agreed on one theing: they wanted the benefits of technology without the hassles. With these, Philips crafted “Sense and Simplicity” campaign with the believe that their brands plus innovation will reflect simplicity – the major of mordern technology. To achieve its plans, Philips tirlessly integrate media: the campaign consists of prints, Online, Television advertisement showcasing perspectives on the journey to simplicity, resonating with consumers. It just make sense!

Posted 186 weeks ago

Global Strategic Management

Posted by JOHN BRIGHT on Friday, April 12, 2013 Under: Business Principles That Work

During the last half of the twentieth century, many barriers to international trade fell and a wave of firms began pursuing global strategies to gain a competitive advantage. However, some industries benefit more from globalization than do others, and some nations have a comparative advantage over other nations in certain industries. To create a successful global strategy, managers first must understand the nature of global industries and the dynamics of global competition.


Sources of Competitive Advantage from a Global Strategy

A well-designed global strategy can help a firm to gain a competitive advantage. This advantage can arise from the following sources:


  • Efficiency
    • Economies of scale from access to more customers and markets
    • Exploit another country's resources - labor, raw materials
    • Extend the product life cycle - older products can be sold in lesser developed countries
    • Operational flexibility - shift production as costs, exchange rates, etc. change over time
  • Strategic
    • First mover advantage and only provider of a product to a market
    • Cross subsidization between countries
    • Transfer price
  • Risk
    • Diversify macroeconomic risks (business cycles not perfectly correlated among countries)
    • Diversify operational risks (labor problems, earthquakes, wars)
  • Learning
    • Broaden learning opportunities due to diversity of operating environments
  • Reputation
    • Crossover customers between markets - reputation and brand identification

Sumantra Ghoshal of INSEAD proposed a framework comprising three categories of strategic objectives and three sources of advantage that can be used to achieve them. Assembling these into a matrix results in the following framework:


Strategic Objectives Sources of Competitive Advantage
National Differences Scale Economies Scope Economies
Efficiency in Operations Exploit factor cost differences Scale in each activity Sharing investments and costs
Flexibility Market or policy-induced changes Balancing scale with strategic & operational risks Portfolio diversification
Innovation and Learning Societal differences in management and organization Experience - cost reduction and innovation Shared learning across activities



The Nature of Competitive Advantage in Global Industries

A global industry can be defined as:

  • An industry in which firms must compete in all world markets of that product in order to survive.

  • An industry in which a firm's competitive advantage depends on economies of scale and economies of scope gained across markets.

Some industries are more suited for globalization than are others. The following drivers determine an industry's globalization potential.

  1. Cost Drivers

    • Location of strategic resources

    • Differences in country costs

    • Potential for economies of scale (production, R&D, etc.) Flat experience curves in an industry inhibits globalization. One reason that the facsimile industry had more global potential than the furniture industry is that for fax machines, the production costs drop 30%-40% with each doubling of volume; the curve is much flatter for the furniture industry and many service industries. Industries for which the larger expenses are in R&D, such as the aircraft industry, exhibit more economies of scale than those industries for which the larger expenses are rent and labor, such as the dry cleaning industry. Industries in which costs drop by at least 20% for each doubling of volume tend to be good candidates for globalization.

    • Transportation costs (value/bulk or value/weight ratio) => Diamonds and semiconductors are more global than ice.


  2. Customer Drivers

    • Common customer needs favor globalization. For example, the facsimile industry's customers have more homogeneous needs than those of the furniture industry, whose needs are defined by local tastes, culture, etc.

    • Global customers: if a firm's customers are other global businesses, globalization may be required to reach these customers in all their markets. Furthermore, global customers often require globally standardized products.

    • Global channels require a globally coordinated marketing program. Strong established local distribution channels inhibits globalization.

    • Transferable marketing: whether marketing elements such as brand names and advertising require little local adaptation. World brands with non-dictionary names may be developed in order to benefit from a single global advertising campaign.


  3. Competitive Drivers

    • Global competitors: The existence of many global competitors indicates that an industry is ripe for globalization. Global competitors will have a cost advantage over local competitors.

    • When competitors begin leveraging their global positions through cross-subsidization, an industry is ripe for globalization.


  4. Government Drivers

    • Trade policies

    • Technical standards

    • Regulations


The furniture industry is an example of an industry that did not lend itself to globalization before the 1960's. Because furniture has a high bulk compared to its value, and because furniture is easily damaged in shipping, transport costs traditionally were high. Government trade barriers also were unfavorable. The Swedish furniture company IKEA pioneered a move towards globalization in the furniture industry. IKEA's furniture was unassembled and therefore could be shipped more economically. IKEA also lowered costs by involving the customer in the value chain; the customer carried the furniture home and assembled it himself. IKEA also had a frugal culture that gave it cost advantages. IKEA successfully expanded in Europe since customers in different countries were willing to purchase similar designs. However, after successfully expanding to several countries, IKEA ran into difficulties in the U.S. market for several reasons:

  • Different tastes in furniture and a requirement for more customized furniture.

  • Difficult to transfer IKEA's frugal culture to the U.S.

  • The Swedish Krona increased in value, increasing the cost of furniture made in Sweden and sold in the U.S.

  • Stock-outs due to the one to two month shipping time from Europe

  • More competition in the U.S. than in Europe


Country Comparative Advantages

Competitive advantage is a firm's ability to transform inputs into goods and services at a maximum profit on a sustained basis, better than competitors. Comparative advantage resides in the factor endowments and created endowments of particular regions. Factor endowments include land, natural resources, labor, and the size of the local population.

In the 1920's, Swedish economists Eli Hecksher and Bertil Ohlin developed the factor-proportions theory, according to which a country enjoys a comparative advantage in those goods that make intensive use of factors that the country has in relative abundance.

Michael E. Porter argued that a nation can create its own endowments to gain a comparative advantage. Created endowments include skilled labor, the technology and knowledge base, government support, and culture. Porter's Diamond of National Advantage is a framework that illustrates the determinants of national advantage. This diamond represents the national playing field that countries establish for their industries.


Types of International Strategy: Multi-domestic vs. Global

Multi-domestic Strategy

  • Product customized for each market
  • Decentralized control - local decision making
  • Effective when large differences exist between countries
  • Advantages: product differentiation, local responsiveness, minimized political risk, minimized exchange rate risk

Global Strategy

  • Product is the same in all countries.
  • Centralized control - little decision-making authority on the local level
  • Effective when differences between countries are small
  • Advantages: cost, coordinated activities, faster product development

A fully multi-local value chain will have every function from R&D to distribution and service performed entirely at the local level in each country. At the other extreme, a fully global value chain will source each activity in a different country.

Philips is a good example of a company that followed a multidomestic strategy. This strategy resulted in:

  • Innovation from local R&D
  • Entrepreneurial spirit
  • Products tailored to individual countries
  • High quality due to backward integration

The multi-domestic strategy also presented Philips with many challenges:

  • High costs due to tailored products and duplication across countries
  • The innovation from the local R&D groups resulted in products that were R&D driven instead of market driven.
  • Decentralized control meant that national buy-in was required before introducing a product - time to market was slow.

Matsushita is a good example of a company that followed a global strategy. This strategy resulted in:

The global strategy presented Matsushita with the following challenges:

  • Problem of strong yen
  • Too much dependency on one product - the VCR
  • Loss of non-Asian employees because of glass ceilings

A third strategy, which was appropriate to Whirlpool is one of mass customization, discussed below.


Global Cost Structure Analysis

In 1986, Whirlpool Corporation was considering expanding into Europe by acquiring Philips' Major Domestic Appliance Division. From the framework of customers, costs, competitors, and government, there were several pros and cons to this proposed strategy.

Pros

  • Internal components of the appliances could be the same, offering economies of scale.

  • The cost to customize the outer structure of the appliances was relatively low.

  • The appliance industry was mature with low growth. The acquisition would offer an avenue to continue growing.

Cons

  • Fragmented distribution network in Europe.

  • Different consumer needs and preferences. For example, in Europe refrigerators tend to be smaller than in the U.S., have only one outside door, and have standard sizes so they can be built into the kitchen cabinet. In Japan, refrigerators tend to have several doors in order to keep different compartments at different temperatures and to isolate odors. Also, because houses are smaller in Japan, consumers desire quieter appliances.

  • Whirlpool already was the dominant player in a fragmented industry.


Since Philip's had a relatively small market share in the European appliance market, one must analyze the cost structure to determine if the acquisition would offer Whirlpool a competitive advantage. With the acquisition, Whirlpool would be able to cut costs on raw materials, depreciation and maintenance, R&D, and general and administrative costs. These costs represented 53% of Whirlpool's cost structure. Compared to most other industries, this percentage of costs that could benefit from economies of scale is quite large. It would be reasonable to expect a 10% reduction in these costs, an amount that would decrease overall cost by 5.3%, doubling profits. Such potential justifies the risk of increasing the complexity of the organization.

Because of the different preferences of consumers in different markets, a purely global strategy with standard products was not appropriate. Whirlpool would have to adapt its products to local markets, but maintain some global integration in order to realize cost benefits. This strategy is known as "mass customization."

Whirlpool acquired Philips' Major Domestic Appliance Division, 47% in 1989 and the remainder in 1991. Initially, margins doubled as predicted. However, local competitors responded by better tailoring their products and cutting costs; Whirlpool's profits then began to decline. Whirlpool applied the same strategy to Asia, but GE was outperforming Whirlpool there by tailoring its products as part of its multi-domestic strategy.


Globalizing Service Businesses

Service industries tend to have a flat experience curve and lower economies of scale. However, some economy of scale may be gained through knowledge sharing, which enables the cost of developing the knowledge over a larger base. Also, in some industries such as professional services, capacity utilization can better be managed as the scope of operations increases. On the customer side, because a service firm's customers may themselves be operating internationally, global expansion may be a necessity. Knowledge gained in foreign markets can used to better service customers. Finally, being global also enhances a firm's reputation, which is critical in service businesses.

High quality service products often depend on the service firm's culture, and maintaining a consistent culture when expanding globally is a challenge.

A good example of a service firm that experienced global expansion challenges is the management consulting firm Bain & Company, Inc. In consulting, a firm's most important strategic asset is its reputation, so a consistent firm culture is very important. Bain faced the following challenges, which depend on the firm's strategy and which affect the ability to maintain a consistent culture:

  • Coordinating across offices and sharing knowledge
  • Whether to hire locals or international staff
  • How to compensate

Modes of Foreign Market Entry

An important part of a global strategy is the method that the firm will use to enter the foreign market. There are four possible modes of foreign market entry:

  • Exporting
  • Licensing (includes franchising)
  • Joint Venture
  • Foreign Direct Investment

These options vary in their degree of speed, control, and risk, as well as the required level of investment and market knowledge. The entry mode selection can have a significant impact on the firm's foreign market success.


Issues in Emerging Economies

In emerging economies, capital markets are relatively inefficient. There is a lack of information, the cost of capital is high, and venture capital is virtually nonexistent. Because of the scarcity of high-quality educational institutions, the labor markets lack well trained people and companies often must fill the void. Because of lacking communications infrastructure, building a brand name is difficult but good brands are highly valued because of lower product quality of the alternatives. Relationships with government officials often are necessary to succeed, and contracts may not be well enforced by the legal system.

When a large government monopoly (e.g. a state-owned oil company) is privatized, there often is political pressure in the country against allowing the firm to be acquired by a foreign entity. Whereas a very large U.S. oil company may prefer acquisitions, because of the anti-foreign sentiment joint ventures often are more appropriate for outside companies interested in newly privatized emerging economy firms.


Knowledge Management in Global Firms

There is much value in transferring knowledge and best practices between parts of a global firm. However, many barriers prevent knowledge from being transferred:

  • Barriers attributable to the knowledge source
    • lack of motivation
    • lack of credibility
  • Barriers attributable to the knowledge itself - ambiguity and complexity
  • Barriers attributable to the knowledge recipient
    • lack of motivation (not invented here syndrome)
    • lack of absorptive capacity - need prerequisite knowledge to advance to next level
  • Barriers attributable to the recipient's existing process - process rigidity
  • Barriers attributable to the recipient's external environment and constraints

Furthermore, even when the transfer is successful, there often is a temporary drop in performance before the improvements are seen. During this period, there is danger of losing faith in the new way of doing things.

To facilitate knowledge transfer a firm can:

  • Implement processes to systematically identify valuable knowledge and best practices.
  • Create incentives to motivate both the knowledge source and recipient.
  • Develop absorptive capacity in the recipient - cumulative knowledge
  • Develop strong technical and social networks between parts of the firm that can share knowledge.

Country Management

Country managers must have the following knowledge:

  • Knowledge of strategic management
  • Firm-specific knowledge
  • Country-specific knowledge
  • Knowledge of the global environment

Country organizations can assume the role of implementor, contributor, strategic leader, or black hole, depending on the combination of importance of the local market and local resources.


Strategic Importance
of Local Market
Level of Local Resources & Capabilities
Low High
Low Implementor Contributor
High Black Hole Strategic Leader


The least favorable of these roles is the black hole, which is a subsidiary in a strategically important market that has few capabilities. A firm can find itself in this situation because of company traditions, ignorance of local conditions, unfavorable entry conditions, misreading the market, excessive reliance on expatriates, and poor external relations. To get out of a black hole a firm can form alliances, focus its investments, implement a local R&D organization, or when all else fails, exit the country.

Country managers assume different roles (The New Country Managers, John A. Quelch, Professor of Business Administration, Harvard Business School).

  • International Structure: Country manager is a trader who implements policy.

  • Multinational Structure: Country manager plays the role of a functional manager with profit and loss responsibilities.

  • Transnational Structure: Country manager acts as a cabinet member (team player) since management control systems are standardized and decision-making power is shifted to the region manager. The country manager develops the lead market in his country and transfers the knowledge gained to other similar markets.

  • Global Structure: Country manager acts as an ambassador and administrator. In a global firm there usually are business directors who oversee marketing and sales. The role of the country manager becomes one of a statesman. This person usually is a local with good government contacts.


Recommended Reading

Bartlett, Christopher A., and Sumantra Ghoshal, Managing Across Borders: The Transnational Solution

Ohmae, Kenichi, The Borderless World: Power and Strategy in the Interlinked Economy

In : Business Principles That Work 


Tags: global strategic management 
comments powered by Disqus