Escolar Documentos
Profissional Documentos
Cultura Documentos
Traditional
Motivations
Marketseeking
behavior*
Access low-cost factors
of production*
Emerging
Motivations
Increase scale
economies*
Global scanning & learing
capability *
Competitive positioning
1992, even the largest RBU were still viewed as a little more than sales&dstrbution
arms
Client Server Model contributed in the following ways:
Responding quickly to changing trends
Threat of strenghtening competition nuclear option
Every man is lord of his castle & Let the market decide strategy presented by Shih
(Created a huge success)
4)Should AAC continue to lead this project? If yes, would you change its current role?
This is a perspective question, thus the following is not 100% correct and the only answer
that could be given.
YES!
AAC is an independent company
Improve the communcation between different business units
Make use of the international resources
Recent developments:
AAC led the project
Business unit independence resulted in problems in communication
National roll-out was not very successful
Aspire created losses (during the first years)
Aspire today is a well known product creating profit
2.What changes in the global industry structure and competitive dynamics led the
Franceand other traditional producers to lose market share to challengers from
Australia, US, and otherNew World countries?
Vineyards and wine makers had been set up in many New World countries since the
18thcentury, butconsumption was not as high as it was in European countries. By the 1960s,
the New World countriesentered in the wine industry and became a key player in the market
with challenging the production andmarketing norms.The New World countries had several
advantages over traditional producer countries in productionnorms. First, suitable land was
widely available and less expensive, allowing the growth of much moreextensive vineyards.
Second, unconstrained by tradition, they began to experiment with grape growingand
winemaking technology; they used mechanical harvesters, irrigation methods. Other
experimentswith fertilizers and pruning
methods increased yield and improved grape flavor. Third, they broke themany wine making
traditions and used on-site labs to provide analysis helpful in making growing andharvest
decisions. Lastly, as a result of these innovations in production they were able to reduce
theircost per tonne nearly to half of French wine.Also, there were challenges on marketing
and demand side. First of all, the consumption per capita of wine in traditional producer
countries were declining since 1966, but it was increasing for New Worldcountries. Secondly,
the New World countries were reinventing the marketing model. They came upwith
innovative packaging
designs like wine-in-a-box, screw caps instead of cork ones. Besides, theytried to appeal
the palates unaccustomed to wine, launched products for this market segment. The bigCPG
companies -like Coca-Cola, Nestle etc- entered the market, even they left after a decade,
theyinfluence the New World wine market with their customer focused attitude and
sophisticated marketingskills. Lastly, the New World producers controlled the whole value
chain, extracting margins at everylevel and retaining bargain power. Overall, changes in
production and marketing aspects of wine by New World countries led the market share loss
of the traditional wine
producer countries.
3. What advice would you offer today to the head of the French wine industry
association?To the owner of a mid-size, well-regarded Bordeaux vineyard producing
wines in the premiumand super premium categories?
One of the major disadvantages that French wine industry faces is the strict AOC
regulations. Up to apoint this is an advantage for French wine industry since these
regulations forces the French wineproducers to produce the best wine in the world but with
the emerge of the New World players, theindustry environment changed and these
regulations turned out to be encumbering the French wineindustry with reducing the
competitive power of French industry. If I were the
French wine industryassociation head, I would try to lessen the restrictions coming from
AOC. For example, I would try toincrease the usage of technology in wine production and
wine making, open labs to search betterharvests and better taste of wine. Besides, the
extreme government intervention should be stopped; the governments purchase of surplus
wine to be distilled into industrial alcohol has to stop eventually.They need to stop rewarding
the poor growers that make unsellable wine and let them go out of business so that their land
can be utilized by more productive and successful growers.About the owner of a mid-size,
well- regarded Bordeaux vineyard producing wines in the premium andsuper premium
categories; actually, he is lucky since there is a shift to quality wine in the global market.But,
he should be taking the advantage of technological improvements and be more responsive to
thepotential changes in taste of wine consumers, improve consumer focus attitude. Also, he
should bemore active on branding, for example in Bordeaux, there are 20,000 producers and
very low
possibilityto launch a brand; so, they have to unite and create their own brand, this will also
provide thembargaining power. In addition to these, he has to do something for simplifying
long and multilevel valuechain which at some part lacks of expertise to operate the system
efficiently. He should be aware of the retail industrys importance and integrate his product
with retail industry with controlling the margins and quality level through the supply chain.
While the French should be concentrating on the lucrativeU.K. market, one should not forget
about other possibilities. For example, Japanese market can be agood market for high
prestige French wine
or giant China market with its 39.5% growth rate of 2002-2006 is very promising and should
be entered by French wine industry.
4. What advice would you offer today to the head of the Australian wine
industryassociation? To the owner of a mid-size, well-regarded vineyard in the
Barossa Valley (a premierAustralian wine region) producing wines in the premium and
super premium categories?
The Australian wine industry association looks well-organized and I like their having a vision
andmission. For more than a decade, Australia's wine producers had become accustomed to
success. Theyachieved to be "the world's most influential and profitable supplier of branded
wines by 2025" and withtheir export rates, seems like they almost achieved this goal.
However, they have price and image problem as being cheap and cheerful; when we think
about the increasing cost of wine production in Australia, these are vital problem for the
Australians wine industry since they will lose their competitive advantage of low cost. I think
both the head of
association and individual producers shouldfocus on increasing the perception of Australian
wine quality and invest more in global marketingcampaigns, more seen with the celebrities
throughout the world. They can also use upscale restaurantsfor merchandising their products
and luxury magazines to give their ads. These are not only wine associations duty; individual
producers should be a part of the project with increasing the image of Australian
wine.Besides, the producers should try to find new techniques to reduce the cost of
production and increasethe efficiency. In addition to these, they should be doing research on
how to produce higher qualitywines like French ones. Lastly, they should not be just focused
on the UK and US market, they alsohave to make business with the China and Asian market
as well.
5. What advice would you offer today to the head of a major US wine industry
association?To the owner of a mid-size, well-regarded vineyard in the Napa Valley (a
premier US wineregion) producing wines in the premium and super premium
categories?
Some industry critics suggested that because American producers had long focused on their
large, highpriced domestic market, they had fallen behind the prevailing global price/quality
ratio, not only at thelow end, but even at the higher price points. The same quality of US
wines is
nearly 2.7 times moreexpensive than the same quality of Australian one, which is a weak
spot for US wine market. Majorreasons for these high land cost, labor and grape production
cost. So, they should decrease their cost bybecoming more mechanized in wine production
like Australia does.
Also, I think the change in the three-tier distribution system in US is a great risk for the wine
industry since it will erode the entrybarrier for the export products and with their cost
advantage exporters countries will be able capturesignificant market share in US.I would
advise the wine producers in US to also produce products for middle segment. Because of
theirhigh cost, vineyards in North Coast locations targeted the super-premium and ultrapremium segments at $12 a bottle and above. On the other hand, the Central Valley which
produced 70% of California'swine volume was focused on the basic segment with $1.99
price. This segmentation focus led to themiddle segment of the market ($5-$8 a bottle) being
underserved. If I were the producer in NapaValley, I would produce some products for this
segment also; otherwise the other countries will fill thisgap with their products. Also, branding
is the other issue that US dont have a brand, they should focus on branding. Lastly,
according to Exhibit 6, the per capita wine consumption in US is the least, so theyshould start
marketing and promotion campaigns to increase the domestic consumption and
producingwine regarding the domestic taste and income level.
2)How should the company manage Healthy Berry Crunch (and other Eurobrands)?
-> Product: launch Herry Berry Crunch as a Eurobrand due to knowledge and expertise
sharing, cost reductions and the urgent competitive risk
-> Structure: one person in charge of a Eurobrand Team with clearly defined roles
- The Eurobrand team needs to respect the roles of local authorities and be aware of the lead
country issue and functionality concerns
When local markets were saturated, Matsushita followed a global strategy of international
growth. They shifted basic manufacturing to low-wage countries, but high-value components
were still manufactured in Japan. Assembly plants were eventually established in Europe
and the Americas to satisfy protectionist sentiment, but the central product divisions kept
strong control over the overseas plants.
Contrary to Philips, Matsushita stayed in control of the company's subsidiaries: they
developed an effective network of expatriates to build relationships and teach their
management process to their foreign subsidiaries, foreign GMs traveled often to the Osaka
headquarters, and they stayed in constant contact with daily faxes and nightly phone calls.
With a unified global strategy, increased volumes enabled Matsushita to drive costs (and
prices) lower, and eventually they overtook Philips based on the strength of their
manufacturing operations.
This control, however, stifled creativity at the foreign subsidiaries, and innovation began to
lag. It seems that the foreign operations were little more than arms of the home
organizations, only implementing what they were told by the central organization. While it
seems that Matsushita may have desired for their local operations to be more independent
in words, in practice American engineers resigned due to excessive control that the their
central operations exercised. Unable to develop innovative overseas companies,
Matsushita tried to buy innovative companies (i.e. MCA), but the collapse of the Japanese
bubble economy and high Yen caused the Japanese economy to enter a protracted
recession, and Matsushita was forced to abandon this strategy.
3. What do you think about the changes each company has made to date? The
objectives? The implementation? The impact? Why is change so hard for both of
them?
It seems that Matsushita and Philips had adopted two cultural extremes in their
organizations; Matsushita with a highly centralized operation that dictated global
operations, Philips a conglomerate of similar businesses with little central coordination. It
seems that both realized that they needed to adopt the best practices from the other
company. In a mass-market like consumer electronics, this would mean a strong central
organization that could develop standards for emerging technologies in order to develop
economies of scale for production, yet has the flexibility to adapt the standards to fit the
desires of local markets.
On the Philips side, seven CEOs over 30 years tried to reshape the company. In the
70's, they tried consolidate the most efficient local plants into International Production
Centers (IPCs), each supplying multiple NOs. It turned out that the NOs were too
powerful, and the PDs were still unable to set direction for the company, so the local
operations prevailed. In the 80's, Philips began closing inefficient plants (40 in Europe
then 75 internationally), and identifying businesses as either core (where they were
technical leaders or strategically important) or non-core (candidates for divestiture).
They also repurchased the North American Philips Corp., in order to regain control. It
seems that they might have begun to turn the corner on control, but then Philips also
halved its spending on basic research, and made R&D the direct responsibility of the
businesses supported by the research. The CEO implied that R&D spending was being
wasted on impractical ideas, but it seems just as likely to me that money was being
wasted because the various NOs were unwilling to rally around the new technologies
being developed. Indeed, by 1994 it seemed that the cuts had left the company with
few who understood the technology for new businesses.
The 90's were marked by cost cutting; a 22% headcount reduction followed by divestiture on
1/3 of its 120 major businesses, and then shifts of thousands of jobs from North America to
APAC. After all of this, in mid-2001 Philips was again losing money, and looking to outsource
even more manufacturing.
and seems an obvious candidate; Matsushita does not list profitability by sectors).
1. How was this obscure little firm of accounting and engineering advisors able
to grow into the worlds most prestigious consulting firm in fifty years?
Case 6-3 Eli Lilly in India: Rethinking the Joint Venture Strategy
1)Did Eli Lilly pursue the right strategy to enter the Indian market?
PRO :
o perfect timing-Easy entry
o no enormous upfront investment
o reliable partner with similar beliefs
o Growth rate and profitability
no signs of bad management decisions
o use of Ranbaxy's market knowledge and distribution network
o great opportunity to get presence and use knowledge of local companies
CONTRA:
o
o
2)How would you assess the overall performance of the IJV? What did the partners
learn from the IJV?
Ranbaxy:
o gain prestige to be a global player
o credibility from Lillys reputation in international market
o distribution network
o Learned code of ethical conduct like the Red Book of Lilly that leads to more honesty
and integrity
Lilly:
o
o
o
o
o
o
Case 7-4: Managing a Global Team: Greg James at Sun Microsystems, Inc.
1. How well has James managed his global team?
Positive Aspects:
- It was easy for him to set up the global team
- Often in contact with his direct reports (many times a week)
- Weekly conference calls to keep everyone updated
Negative Aspects:
- Scheduling of the weekly conference calls not satisfying for the team in India (too
late)
- A lot of misunderstandings among the team members
- Indian team feels not really important only responsible for customer service, would
like to be more innovative
- American team members get a higher salary then French team members French
feel less valued
- French team members have vacation by law, US team members dont also leads to
displeasure
- Different teams have the feeling that US team is the favorite team & that James has
the most contact to the US team other teams feel excluded
- Some personal problems among the team members
2. Who is responsible for the HS holding crisis?
Problems:
- Every team accuses the other teams for being responsible
- Indian team couldnt reach the US team even though they should be on call
3.
-