Rules for Entering the International Market of the Company - Essay Example

?Disney The fact that partially forced Disney to create brand awareness in different markets basically in China happens to be very interesting andunique in nature. First, the Chinese customers surprisingly were found to have a preference for tour packages with dining tabs which of course was a result of tour operator’s steering and therefore, made Disney launch dining tabs as per the demand. Disney is dependent on tour operators because of which, it has to lose out its revenues to restaurants rather than Disney’s destinations. With more brand awareness amongst Chinese consumers and the world markets, Disney would not have to rely on the channel of tour operators to get revenues as this would automatically generate independent demand in the markets. 2. For any emerging market, the best strategy often applied is the localization of products or services offered as because it makes the product line and the brand more acceptable to the customers. For the case of Disney, this strategy has proved to be winning in not only the mass markets of China, but in the Indian markets as well and as well as in many others. 3. The global market today comprises mostly of youth that the movie tends to attract, as well as the outstanding promotions adapted like karaoke style. Also releasing it in different local languages made the movie a block buster in the global market. Conclusively, the movie had all that is demanded from clear cut drama to top class music which made the packaging of the product (movie) a victorious release (Johnson, 2007). Whirlpool 1. Previously, the product strategies adapted by Whirlpool was mostly focused on the extension factor rather than the adaptation factor. Whirlpool has recently invested hundreds of millions of dollars to develop new extensions in their product-line. However with time and market saturation, Whirlpool realized that to have an effective product line according to local markets where the product had to be localized, adapting both the strategies is needful according to the market situations worldwide. In the near future the company shall be focusing more on adaptation strategy in maintaining its competency in the global markets rather than introducing extensions in its product line (Whirlpool Corporation, n.d.). Notably, the strategy adapted in case of China was called as ‘T4’ by Whirlpool. 2. The reasons for buyers to opt for Whirlpool products are mostly because people find it more time saving than manual work to use these appliances as well as it involves lesser effort and energy. Additionally, people today are going for these kinds of appliances as they reflect the status of customer in many markets. 3. Whirlpool emphasizing largely on market research has been able to design their product according to the preference of the consumer in their global markets. This was proved at the redesigning fact of washing machine in China and Brazil which includes different specifications. Besides this, Whirlpool correctly believes that the products have to be altered according to consumer preferences which could only be found by conducting primary market research and analyzing secondary research data. Whirlpool has used secondary data to analyze the fact that Brazilians will be able to pay for even their cheapest appliance owing to their monthly income. This lead Whirlpool to design another appliance which was according to the demographics of the market but then again, this wasn’t the consumers’ actual concern. Therefore, the new product included consumer specific features which were found through focus groups and primary research. Whirlpool conducts both ethnographic and anthropological research work at the initial stage of a product which helps in developing the product as per the need of customers and get aware of the opportunities in the given market (DesignCouncil, n.d.). 4. One important lesson that Whirlpool learned in the market of China and other is that the local market overview is as important as the international overview. Besides this, before venturing on with investments in international markets, be it direct or through a joint venture, the business must know its consumers’ preferences. Starbucks 1. The market expansion strategies used for domestic and international locations are different because there are variables such as culture that create risk for the investor while investing in international markets. In the Starbucks case the company knows the United States marketplace better than anywhere else thus they prefer to own a higher percentage of the stores. As Starbucks is expanding into foreign locations, in order to maximize the returns and minimize its business risks the firm prefers to use licensing agreements with foreign investors. 2. I agree with both decisions of introducing a cheaper branded coffee and offering a $4 breakfast menu. However, the case study suggests that the brand Starbucks is positioned as a premium brand of coffee. The new low price brand may hurt the brand of Starbucks itself therefore; the new brand must be introduced under subliminal branding where the new brand will be backed by the corporate brand of Starbucks. Besides this, the cheap breakfast menu brings higher volumes of customer traffic into the store. Due to the decision of McDonalds to expand its McCafe concept, Starbucks can offset the competition by offering a good coffee alternative at a price point that is similar to the McDonalds offering. The breakfast products can increase the revenue stream of the company because regular coffee drinkers will pay the premium prices as well as purchase the breakfast as a by-product. 3. In the long run the coffee war will be won by Starbucks. Starbucks has built a corporate empire with over 16,635 stores across the globe (Starbucks, 2009). The McCafe concept is going to rollout about 1,200 stores. As the first entrant in the marketplace, Starbucks holds a significant competitive advantage in terms of market share, brand awareness and experience in the brewing sector. Starbucks has built a great physical environment and experience for their customers to enjoy their drinks with added services such as Wi-Fi internet connectivity. The Smart Car 1- The economic crisis has strongly affected the American market. Pertaining to persistent increases in the gasoline prices, many major automobile manufacturers such as Honda, Toyota, Mercedes etc have launched hybrid cars in the U.S market expecting higher returns because of the hybrid’s special features. Besides this, many hybrid conversion kits have also come up. Since the gas prices are rising, the consumers may want to buy an electric engine Smart car which requires little gas. Apart from gasoline prices, there is also an environmental concern amongst political activists who are further encouraging hybrid cars in the U.S market. The car will be a success because of the reason that the producers take social responsibility in order to avoid taxes and be more ethically and morally responsible and they are moving along with trends. The car falls under the income bracket of the majority of Americans who belong to the middle class and hence, a strong demand could be expected in the U.S for fuel efficient cars (Kang, 2007). 2- Target markets could have been people with several family members, who drive a car daily, elderly people and students who live in cities, housewives who have to make their weekly or monthly grocery purchases. These markets could be people who drive in cities with traffic jams. It could be in cities where people think about being eco-friendly, and how the use of car is affecting in global warming. This car would do strong business in metropolitan cities with dense population and frequent traffic jams. Countries like China, India, Pakistan and far eastern countries including Singapore, Japan, Taiwan where pollution and population are amongst major problems of the economy, would be most welcoming for Smart Car (Kang, 2007). Tesco Case Study 1. Alongside its competitors, Tesco as a global business has the flare for localization of its operations according to the target market of the country in which it functions. In the United States for example, people tend to travel longer distances and make their purchases once a week, prefer larger stores with a wide assortment of goods. Whereas in Japan, people make their purchases daily and visit about 6 to 7 shops looking for best deals. Tesco has been able to establish itself as among the leading retail stores in other international markets as compared to Carrefour and Wal-Mart because of its ability to tailor its product according to the needs and preferences of the market with the help of local partners as Tesco believes in investment though joint ventures (Racanelli, 2007). 2. In the U.S retail industry which is highly saturated and competitive with major players like Wal-Mart, Macy’s, Costco, The Kroger Company, Best Buy etc, Tesco’s decided to expand into the highly competitive US market to meet its strategic goal of global expansion, and as Tesco was already a leader in the UK, there was no more expansion opportunities and the growth had saturated. Besides this, the research had shown that in order to avoid head-on competition with Wal-Mart, it would be feasible to open small convenient stores however, the U.S market preferred to travel and make their purchases from large stores like Wal-Mart. With Fresh & Easy’s own distribution network, the store will have to keep a unique assortment of fresh groceries and position itself solely as a grocery stop where all the items would be fresh and perishable. Also, the stores would have to be comparatively large yet smaller than other Hypermarkets. As the US economy is in turmoil, the company will need a lot of investment of its own rather than rely solely on its turnover so as to have enough running liquidity (Racanelli, 2007). 3. Tesco opted for Direct Foreign Investment while entering the U.S market. This option has its own shortcomings and positive aspects as well. By bringing in suppliers from its home market, Tesco seems to have sealed all the loopholes in its strategy. However, to proceed with a venture of this scale, Tesco would need devote an enormous amount of resources (both capital and man power) in order to execute the plan successfully. Entering a foreign market with little or no insight of the market will be disastrous if the product is not tailored according to the consumers’ preferences. Tesco in this regard, proves to be successful as it has also outperformed its global competitors in other foreign markets. However, in a saturated market, entering through FDI is not advisable unless the idea of the product is out of the box. The brand of Fresh & Easy has found an opportunity in the market but then again, it will have to face competition from other large retailers. Also, the company will have to back the venture by a huge capital. Therefore, a joint venture in this situation will be advisable as not only would it be able to give the brand a local touch, but also guide Tesco through the business environment of the United States (Racanelli, 2007). References DesignCouncil. The Whirlpool Design Process. Research. Retrieved Online on November 1, 2010 from http://www.designcouncil.org.uk/case-studies/whirlpool/the-whirlpool-design-process/ Johnson, K., (2007). What Time Is It? Time to Cash In! (And Why HSM Does Exactly That). Imdb User Reviews for High School Musical 2. Retrieved Online on November 1, 2010 from http://www.imdb.com/title/tt0810900/usercomments Whirlpool Corporation. Strategy Execution. Our Strategy. Retrieved Online on November 1, 2010 from http://www.whirlpoolcorp.com/about/strategy.aspx Starbucks.com (2009). Starbucks Company Timeline. Retrieved November 21, 2010 from http://news.starbucks.com/images/10041/StarbucksCompanyTimeline-JAN2010.pdf Kang, H. (2007). An analysis of hybrid-electric vehicles as the car of the future. Thesis (S.B.)--Massachusetts Institute of Technology, Dept. of Mechanical Engineering, 2007. Racanelli, Vito J. "A Shopper's Dream - U.k. Retail Giant Tesco Is Worth Buying, Even If Its U.S. Venture Flops. Watch for Its Fresh & Easy Neighborhood Markets, Coming This Fall." Barron's. (2007): 34. Print. Read More