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Good students ill introduce key words like ethnocentric, polytechnic, recognition, and geocentric in their answers to describe their view of the manufacturer of beer and how they “feel” about the national origin(s) of and about the beer they drink. 2. Enhancers-Busch, (A- B) has long enjoyed a reputation as a very desirable place to work. Executives were awarded well-appointed corporate suites and traveled on corporate Jets; many had secretaries as well as executive assistants. When manager took commercial flights, they flew first class.
Most employees received beer for free and could count on donations of beer and merchandise for community events. Tickets to Cardinal home games were also used as a marketing tool. A-B spent heavily on advertising and promotion; various advertising agencies produced about 100 new ads for A-B each year. Given these facts, what changes, if any, would you expect A-BI’S new owners to make? Why? Student answers should explain the differences in / among / and between the different management orientations and compare and contrast the ethnocentric orientation of A-B beverage company versus their new Belgium owners.
One could argue that A-Bevel, the new owners of A-B practice a polytechnic orientation towards selling beer around the world. In that case, the marketing sales and promotional practices previously enjoyed by A-B most likely will continue. However, the executive “perks” will most likely decrease. 3. In 2009, Italy’s Fiat acquired a 20 percent stake in Chrysler, another iconic American company. Are you familiar with Fiat? What do you think CEO Sergei Maraschino hope to accomplish with this deal? How might Chrysler benefit from the alliance?
CEO Sergei Maraschino hopes to turn Fiat into a transnational company serving global markets and utilizing global supply chains. His strategy might be to turn Fiat into a geocentric company. Chrysler might benefit from the alliance by becoming a “global” brand instead of Just an “American icon. ” 4. Ben & Jerry Homemade is a quirky ice cream marketer based in Burlington, Vermont. Founders Ben Cohen and Jerry Greenfield are legendary for enlightened business practices that include a three-part mission statement: product mission, financial mission, and social mission.
When the company was acquired by consumer products gait Milliner, some of the brand’s loyal customers were alarmed. What do you think was the source of their concern? The form and substance of a company’s response to global market opportunities depends greatly on the management’s assumption or beliefs. In this case, Ben & Jerry consumers were afraid that Milliner’s management orientation would be different from the original owners views – either ethnocentric, polytechnic, or recognition. CASE 1-2: McDonald’s Expands Globally While Adjusting Its Local Recipe Overview.
Today, McDonald’s golden arches are one of the most recognized symbols in the world, Just behind the Olympic rings. While growth within the U. S. Has slowed, the picture outside the U. S. Has appeared brighter, until recently. However, globally, taste profiles and consumer desires are changing. McDonald’s has responded to these changes by altering their basic products (when necessary) to fit the requirements of the local markets. While not always successful, it has proven to be a winning strategy. 1 . Identify the key elements in McDonald’s global marketing strategy (GSM).
In particular, how does McDonald’s approach the issue of standardization? The popularity of American-style hamburgers, fries, and soft drinks is growing around the world, supporting Levity’s view of the global village. Also, the restaurants themselves offer the consumers a chance to experience for themselves a fast food legend. However, students should point out that, in many locations, menu items are adapted according to the customs and tastes of individual countries. McDonald’s offers an ideal example of “global localization. ” 2. Do you think government officials in developing countries such as Russia, China, and India welcome McDonald’s?
Do consumers in these countries welcome McDonald’s? Why or why not? Despite concerns by governments and citizens in some countries about “cultural imperialism,” McDonald’s and other franchises with well-known brand names are generally welcome. Such businesses provide both much-needed Jobs and employee training. McDonald’s does a good Job of earning the support of local authorities and the local population by working with agricultural producers to develop local supply sources for beef, potatoes, and dairy products. Finally, thanks to changing lifestyles around the globe, more people are embracing the whole concept of fast food. . At the end of 2003, McDonald’s announced t was selling the Donates Pizza unit. Then, in 2006, the Chipolata chain was spun off. In light of these strategic actions, assess McDonald’s prospects for success beyond the burger-and-fries model. McDonald’s spent a period of time acquiring businesses they believed to be implementation to their core burger-and-fries model. However, during this expansion, they made the error of “taking their eye off of the ball. ” This allowed competitors to make inroads and resulted in their core business flagging.
By reasserting themselves in their core business, they are reestablishing themselves as innovators in the market. Success beyond their core model is certainly possible; however, attention can not be diverted from their core business model. 4. Is it realistic to expect that McDonald’s – or any well-known company – can expand globally without occasionally making mistakes or generating controversy? Why do anti-globalization protesters around the world frequently target McDonald’s? McDonald’s has a reputation for being sensitive to local issues and mentalities.
According to the staff director for international human resources in Central Europe, “One of our guiding principles is that our restaurants should always be a reflection of the communities they serve. ” Mistakes such as the one in France represent exceptions that can serve as learning experiences. Still, each new national has the potential to present unique problems. In Israel, for example, McDonald’s must deal apolitically and appropriately with dietary laws pertaining to kosher foods and operating restaurants on the Sabbath (Friday and Saturday). Another issue is to maintain the service attitude that was a cornerstone of McDonald’s U.
S. Reputation. A German student noted that in Germany, good service is not associated with McDonald’s because counter help consists of immigrants who do not exhibit the cheerful demeanor of their U. S. Counterparts. CASE 1-3: Acre Inc. Overview. Twain’s Acre is a leading marketer of notebook and desktop PC’s. However, they have had very limited success in breaking into the all-important American racket. Partly as a result, Acre refocused and concentrated its efforts on the growing Chinese market. They believe they have a much greater probability of success in China given the shared language and culture.
They are attempting to “remake” themselves as a “local” company based in China. 1 . Acre’s strategy has been described as “divide and conquer. ” Explain. Acre’s goal is to become the dominant market leader in China. To accomplish this they are “repositioning” themselves as a Chinese company. Shih’s vision is to build a solid market base in China first. From there, they envision expanding to the rest of the world. If greater China becomes the company’s “home” market, Acre believes they will capture critical economies of scale that will allow it to develop new products that will succeed in China and the rest of the world. . How did the “global markets-local markets” paradox figure into Stan Shih’s strategy for China? Shih gives much of their success in China to this strategy. As Acre has (in essence) moved itself to China, Shih believes Acre will have an advantage compared to other “local” PC makers – such as Leno – because Acre is “more global. ” At the same time, Shih believes his company will be able to compete with better-known global impasses entering China because Acre is viewed as “more local. ” 3. Can Acre become the world’s third largest PC company, behind Dell and Hewlett- Packard?
Probably. Since Acre spun off its manufacturing division in 2000, they have concentrated on aggressive marketing of their products in the rapidly growing China market. The results have been impressive thus far, with Acre now commanding a significant share of the local market. Wang believes Acre is well positioned to overtake local mainland China firms to become the leader in PC sales. This would go a long way in moving them into the #3 position. 4. Even before the current economic crisis deepened, growth in the U. S. PC market had begun to slow down.
Despite strong competition from Dell and Hewlett-Packard, Acre’s U. S. Market share increased from 1 percent in 2004 to 3. 3 percent by the end of 2006. What are Acre’s prospects for gaining further share in the United States? The U. S. Has been a difficult market for Acre to crack. Dell and H. P. Are strongly entrenched in the top two positions. While Acre has been somewhat successful in the BIB (business to business) market, it has been less so in the BBC (business to consumer) market. Increased U. S. Market share will have to involve a greater emphasis on the BBC market.
Acre’s lower pricing strategy gives them an opportunity. Case 2-1: The Global Economic Crisis: The Assignment Overview: As U. S. Consumer spending slowed in 2007-2009, exports from Singapore and the Philippines began to slump. By contrast, Indonesia and Malaysia, were experiencing strong demand for exports of crude oil and natural gas. Japan, became less dependent on exports to the United States. The ripple effect from the global recession was felt especially strongly in Canada. Rupee’s economy was also mired in a recession.
As the economic crisis deepened in the fall of 2008, world leaders offered a variety of perspectives and proposals. 1 . Does the global economic crisis signal that the American model of free market capitalism is fundamentally flawed? Not necessarily flawed, Just bruised a little. The American model, capitalism does not fully address the different social situations of all of the countries around the world, which are: those that are centrally planned capitalism, centrally planned socialism, and market socialism. Each system requires different approaches to prevent and alleviate an economic crisis 2.
Policymakers in Japan, the world’s second-largest economy must transition their nation away from a manufacturing-dependent model for growth. What industry sectors might emerge as the new drivers of economic growth? The service sector and environmental manufacturing and service opportunities abound for Japan as it transitions’ from a manufacturer of goods to a producer of goods and services. One of the fastest-growing sectors of world trade is the trade of services between high income and low or middle- income countries.
Japan with its location in Asia stands to profit from their distribution of services to that continent. . Do you think that the economic stimulus programs in the United States, Asia, and elsewhere are the right approach to pulling the world out of recession? The movement of capital, the production of goods, the balance of payment, trade surpluses, trade deficits, and service trades are all key driving forces surrounding a country’s economy. The US balance of payment in both its current and capital accounts are in the negative range. Therefore, it is unlikely that the US can further influence the world’s economy.
Case 2-2: One Laptop Per Child Overview: In 2005, after 20 years, Nicolas Negotiate, announced he was leaving to ruse an ambitious vision: bridging the digital divide between developed and developing nations by providing powerful PC’s to schoolchildren in impoverished parts of the world. Negotiate named his initiative One Laptop Per Child. 1 . Why are Microsoft, Intel, and other leading for-profit companies interested in low- cost computers for the developing world? Forty percent of the world’s population resides in low-income countries the exact ones that the OLAP program is targeting.
These major companies understand the need to grow their consumer base in countries that are low income or low-middle income countries. These companies are betting that the economies of these low- income countries will grow in the future. 2. Do you agree with Moonstone’s decision to partner with Microsoft? Student answers will vary depending on whether or not they agree with the decision. However, student answers should include statements regarding the role(s) international companies play in expanding the OLAP program around the world. 3. Assess the thinking behind the “give one, get one” promotion.
Do you think this is a good marketing tactic? The goal of OLAP was to give laptops to children in low-income countries, not US and Canadian children. The stated goal of the tactic was to increase production via increased sales – but not to their target market. At best, this is a stop gap measure, designed to accomplish two disparate goals: increase production to lower unit costs and increase exposure to the program. Case 2-3: From Communism to Capitalism: Vietnamese Economic Transformation Overview. Vietnam is an underdeveloped country with a great market potential.
Many developed countries have invested money in the Vietnam market since the early asses. America became involved in the process of investment later and based normal riding relations (NET) with Vietnam only in mid-asses. Foreign countries have experienced great market opportunities at Vietnam due to low labor cost and the availability of human resources. American companies involved in trade relations with Vietnam face many challenges in market development. 1 . Assess the market opportunities in Vietnam for both American consumer-products companies and American industrial-products companies.
What is the nature of the opportunity? Even though the United States were preceded by other countries in establishing market relations with Vietnam in early asses, American companies (such as Gillette, AT, Snowmobile, etc) started to work on the issue after NET establishment between Vietnam and America. Vietnam gives a great opportunity for American industrial-products and consumer-products companies. The infrastructure in Vietnam is weak, therefore electric, road-building, and phone companies can expect to profit greatly from investing in Vietnam market expansion.
Due to the cheap labor- cost, the U. S. Can build (and it actually does) factories that would produce such goods as clothes and computers and export them back to the United States or around the globe. Vietnam is a “mostly unfreeze” country in degrees of economic freedom, but the amounts involvement in WTFO can change the situation and make the state more market-oriented. 2. Nikkei and several other well-known American companies are sourcing some of their production in Vietnam, thereby taking advantage of a labor force that is paid the equivalent of 2$ per day or less.
Are goods labeled “Made in Vietnam” likely to find widespread acceptance among American consumers? The mentioned situation has an equivalent in the already established U. S. -Chinese market. “Made in Vietnam” goods will find buyers in the U. S. And in other countries. If the products prove themselves to be reliable and trustworthy, while being inexpensive (and they will be based on low-cost labor force), these products should find widespread acceptance among U. S. Consumers. 3. Some critics have argued that Cuba is more deserving of diplomatic and trade relations with the United States than Vietnam.
What are some of the factors behind this argument? Ranked by degree of economic freedom index, Vietnam is described as a “mostly unfreeze” country while Cuba is that of “depressed” group. One factor behind the argument that Cuba is more deserving of diplomatic and trade relations is that of Cubans location on the world map. Cuba is a closer neighbor to the U. S. Besides this, there is the argument that we fought a war with Vietnam and lost; while we have never been at war with Cuba. Case 2-2: Is China’s Currency Too Strong? Overview: China is one of the largest trade partners of the United States.
The Chinese government has been attempting to make Chinese goods competitive with those of the United States by revaluing Chinese currency Yuan. United States trade representatives protest against the possible revaluation saying that it can lead to changes in Chinese-American trade relationship and cause losses for American impasses investing to Chinese market. 1 . Consumer goods, including shoes and electronics, represent about 80 percent of U. S. Imports from China. American consumers have saved an estimated $600 billion over the past 10 years by buying inexpensive Chinese goods.
If the Chinese government revalues the Yuan by 20 percent or more and American consumers pay higher prices, is this a desirable outcome? It’s definitely not a desirable outcome for American consumers and for American economy at all. If prices for these products were to go up, quantity demanded will most probably go down. Chinese goods such as clothes and shoes have a low-income or medium-income population as a consumer who will not pay higher price if there would be something cheaper. Historically, Chinese goods are known for low price and not the best quality. China is the largest big emerging market (BEMA).
If the relationship between China and the investing countries should change, it could cause a tremendous shift in world trade. If the Chinese currency goes up, there would be less profitable for other countries (especially the United States) to invest. The result might be negative for China. USA can always use Mexico, while Europe eight use Asian countries, even though it would be a tremendous challenge. The impact on our economy would be significantly negative. 2. Protectionist sentiments in the United States are fueled by the argument that China is to blame for the flood of imports, the giant U.
S. Current account deficit, and downward pressure on wages in some industries. Do you agree? The United States Congress tries to use protectionist sentiments against China in blaming it for U. S. Current account deficit, the flood of imports, and downward pressure on wages in some industries. I don’t believe that China can or should be lamed for problems in the American economy. American-Chinese relationships are beneficial for both sides. China provides American market with low-cost products and low-interest rate loans. China is one of the greatest trading partners of the United States.
If this relationship were to be restricted, America would experience a great challenge trying to recover. To say it would precipitate an economic crisis would not be overreaching. The best thing for the American-Chinese relationship is to keep free trade process between two countries open and untouched. Case 4-1 : Disney Adapts to Cultural Differences: The Assignment Overview: The Walt Disney Company, home to Mackey Mouse, Donald Duck, and other iconic characters, has a stellar reputation in many parts of the world for its family- friendly entertainment offerings.
However, despite high worldwide awareness levels of the Disney brand, as of 2006, only 25 percent of the company’s revenues came from outside the United States. Now, as the company targets China, India, South Korea, and other emerging markets, it is departing from its “one size fits all” approach. 1 . Why is it necessary for Disney to build brand awareness in China and other emerging markets? One glaring fact is that as of 2006, only 25 percent of the company’s revenues come from outside of the United States.
Obviously, the Disney Corporation knows that it is vulnerable to any economic downturns in the U. S. Economy. “As Bill Ernest, managing director, told the Financial Times, “If you haven’t grown up with the brand, the stories, or the theme, you are not quite sure what you are walking into” into” The changes underway at the Walt Disney Company illustrate how differences in the social and cultural environments impact marketing opportunities and dynamics around the globe. Moreover, Disney noted some other cultural differences between North American and European tourists and those of other countries.
For example, Chinese tourist book dinner packages, For example, in India, Disney is abandoning its go-it-alone policy and partnering with local companies such as Hash Raja Films. Local managers have been given greater autonomy to develop television programming. Disney is hoping to appeal to Indian’s family-oriented middleman’s consumers; core themes include “believe in yourself, express yourself, and celebrate your family. ” A Russian version of High School Musical is also in the works. Next up: the Middle East. As Disney’s Jason Reed says, “There’s a really strong affinity between the strong family values in the region and the Disney brand.
We want to go out and try to make a film that will play to families from North Africa to the Gulf States. ” 2. Do you agree with Disney’s decision to pursue a localization approach in emerging markets? (Student answers will vary depending upon agreement or disagreement). Better students will back up their arguments with fact and figures surrounding the Disney franchise in the US and other countries around the world – very good students will tie Disneyland Paris as an “example of what not to do”. 3. Why is High School Musical so successful in global markets? High School Musical appeals to family-orientated middle-class consumers.
It does not matter what country or continent they reside that makes this a successful Disney event. Case 4-2: Fair Trade Coffee: Ethics, Religion, and Sustainable Production Overview: The coffee industry has a lot of challenges nowadays. Such problems as oversupply and the drop of wholesale price can lead to many disputes around the world. This drop in prices is definitely having a negative impact on the supplying countries’ economies. The Fair-trade label is supposed to treat the issue of ethical standards, but customers buying coffee need to care about the fair-trade along with those who invents and promotes it. . Is it important for coffee marketers, such as Cataracts, Kraft, and Nestle, to create “ethical supply chains”? Why? It is important for coffee marketers to create an “ethical supply chain. ” If people know that companies work in an ethical way it should attract more customers. The customers would expect that they would be treated the same fair and ethical way as suppliers of the market. It would be easier for these companies to expand globally cause new countries would be more open for business relationship with ethically sensitive corporations. 2. A recent study by the U. K. S Institute of Grocery Distribution determined that the majority of consumers do not buy fair-trade products. The report noted, “Self-interest is at the center of food choice for most consumers. Few consumers consider the impact of their purchase decisions on anyone or anything but themselves and their family. ” Do you agree with this finding? I agree. People can tend to be selfish in their nature. A lot of people in the world do not have “decent” incomes, thus they need to conserve money and find less expensive alternatives to feed their families. Not many buyers think about someone else as they purchase.
For many people when they enter a store, they think only about getting the greatest for their dollar. Money talks. Another reason why people don’t buy fair-trade products is that they don’t know what these products are and what their difference from regular products is. 3. What recommendations would you make to help cure the ills of the coffee market? I agree with Paul Rice who considers advertising of fair-trade essential for the product to be sold. Probably there are more people who care about the principles of air trade, but they simply don’t know that it exists.
The fair-trade principle should be advertised along with places where customers can by the product. It is necessary to explain all the importance of fair-trade products for developing countries. Case 5-1 : America’s Cuban Conundrum: The Assignment Overview: Cuba and United States have a tense relationship over years beginning with the Fidel Castor’s coming to power in 1959. The expropriation of American property by Cuban government resulted in American embargo toward the island nation. Helms-Burton Act was signed by President Clinton in 1996 and led to many spites in the world political and business arena. . What was the key issue that prompted the EX. to take the Helms-Burton dispute to the WTFO? The Helms-Burton act was considered as a violation to the rules of international trade. EX. didn’t want to comply with the Helms-Burton act and requested WTFO to create a three person trade panel that would decide the case of the act. 2. Who benefits the most from an embargo of this type? Who suffers? Cuba definitely suffers from this embargo. The country’s economy requires international investments, which are restricted by the Helms-Burton act.