Reflection Paper 4

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Affiliation
 Chapter 7: Strategy and Technology

Question 1: Describe standardization, format wars, and how standardization can lead to a

format war.

Standardization: Set of predefined specifications, rules or features that manufactures or

producers need to follow when they make/produce the products/goods or components of it.

Example- MacDonalds set standardization for each of its menu items like size, weight, food

value etc. So, each food item need to prepare according to predefined standard (Samiee &

Chirapanda, 2019).

Format wars: It is a kind of battle or war among the companies to set and control the standard in

a market. In other words a company set standard for its products, similarly another company of

same industry also set standard, now they compete in the market for customers and long term

better control the market. Example- Microsoft and Intel had won format war against Apple

computer’s proprietary system and later against IBM OS/2 operating system.

How standardization can lead to a format war: Standardization can be an important source of

competitive advantages. Most of the cases one standard become the winning standard, so many

wars in industries occur around the companies for get the winning standard. Thus standardization

lead to format war.

Question 2: Once standardization occurs, how does the industry benefit?

It has been observed that the format wars are usually followed by the standardization. The format

wars may not be beneficial for the industry and consumers. However, standardization is certainly

beneficial for the industry. With standardization, organizations would find it easy to comply with

the established quality standard organizations like ISO. In the absence of standardization,

organizations would not be able to optimize their cost of operations, as they would not be able to
standardize their products and services. It can be said that standardization will raise the industry

profitability by reducing the production and marketing costs associated with supplying the

complementary products for not following standards. The focus on standardization would also

enable the company to have better relationship with customers. The customers would be able to

gather a confidence towards the product due to standardization.

Question 3. During a format war, describe how competition occurs and how a price war can

take shape.

The format war and standardization creates a platform where the large firms would compete

among themselves. Typically, the format war occurs with the introduction of new technology or

product that is not compatible with the market. This is the time when different organizations

would try to have their own format and standards. It eventually increases the rivalry among the

different market players. The organizations may also be involved in the price war when they

enter in the format wars in the industry.

Question 4. Define first and second movers. How do these two entities interact within and

industry, and who learns what as the industry take shape?

First Mover: The first mover is the company that would be the first to introduce the products and

services in the market. The firm would do the research and development to develop the product

and introduce in the market (Ferrell & LeClair, 2015). The product would be a new product in

the market and the competition would be nil or very limited. The advantages and disadvantages

of First Mover can be discussed.

Chapter 8 Questions

5. Why do companies go global? Once a company has decided to go global what entry

modes could the company leverage to break into the global market?
Revenue growth: As companies look to grow and meet their revenue goals, they should consider

global expansion with existing products as another path to real growth. Product extensions and

completely new product categories are also other options but eventually most companies

recognize the need to grow globally.

Born Global: Born global' is an intentional strategy that many companies in the EU and Asia

embrace. The goal is to have an international footprint from the beginning since their home

markets are often not large enough to sustain growth. This

strategy also means global competitors don’t entrench and have time to capture large market

share.

Competitive Forces: Competitors within the home market could also be forcing companies to

grow into new markets to stay competitive as the competitors expand into new countries. There

will also be new competitors within the global markets to stay ahead of.

6. What additional benefits from economies of scale does a company receive from going

global?

There are various benefits that a company gets when it goes global. The main benefit is the

economies of scale. Apart from the economies of scale, there are a number of other benefits. For

instance, the company gets access to new revenue potential. This is because the company can

access larger market. The company is also gets to interact with vast number of different cultures

and people of different backgrounds. This helps in enhancing access to different talents. The

company also gets greater exposure to foreign investment opportunities. The company also gets

to diversify in its market. Most importantly, getting the company to a global mark helps to

enhance the reputation of the company.

7. Describe the main strategies available to an organization going global. Describe why

each strategy may be chosen.

Global Standardization Strategy: This strategy specializes in expanding profitableness by reaping

the price reductions that come back from economies of scale and placement economies, that is,

business model relies on following a low-priced strategy on a world scale. Global standardization

in selling a vital tool, particularly for transnational corporations whose reach spans the world.

A transnational strategy: Is assumed to take advantage of the benefits provided by

simultaneous operation in multiple countries. The objective might be to expand sales, to produce

at lower cost or to achieve economies of scale. There is a central coordination or headquarter and

several decentralized organizational structures located abroad. The complexity and size of the

relationships among the different sites depend on the specific business model. The degree of

control maintained by the central office also varies from one company to another.

It is necessary to have uniform business policies and technologies but at the same time enough

capacity to adapt to the conditions of every foreign operation. The ultimate goal is to improve the

overall corporate performance through the concurrence of resources and markets available in

several countries

8. What are the advantages and disadvantages of the different entry modes a company can

use to break into the global market?

Competing in international markets involves important opportunities and daunting threats. The

opportunities include access to new customers, lowering costs, and diversification of business

risk. The threats include political risk, economic risk, and cultural risk.

Question 9
Every day, riders demand goods and services that could be supplied by people around us, but

riders not aware of how to coordinate with those potential car owners. A commuter taking a

similar route to work as you may be willing to give you a lift for a small fare. What stands in

between buyer and seller are transaction costs the time, money, and effort needed to facilitate a

market exchange. Before the Internet age, the regulatory and liability costs for producers to bring

their goods to market were high, as was the knowledge problem that prevents consumers from

knowing whom to trust. As a result, market exchanges were often facilitated through firms,

middlemen, or even government agencies.

Question 10

They are scaling with a growth hack, and general overall strategy, of dirty scaling. This occurs

when the two key scalding variables, the cost to acquire a customer (CAC) and the customers

lifetime value (LTV) are not tuned. Simply put you can't spend any more money on acquiring

user than you can earn from them. Nothing ground breaking here. When a CAC: LTV Ratio is

less than 1 rider profitable as once can earn money on average on each user. Uber scales using a

ratio of greater than 1 - each additional user they add actually loses them money. This seems

counter intuitive to normal business and to some extent it's pretty crazy. But as long as they keep

hitting huge growth targets investors will keep finding them. For Uber it's a race to be the biggest

player in the market and when they reach that position they will begin focusing on long term

profitability
 References

Ferrell, L., & LeClair, D. T. (2015). Strategic philanthropy’s role in implementing marketing

strategy. In Proceedings of the 2000 Academy of Marketing Science (AMS) Annual

Conference (pp. 349-349). Springer, Cham.

Menon, A., Bharadwaj, S. G., Adidam, P. T., & Edison, S. W. (2015). Effective Marketing

Strategy-Making: Antecedents and Consequences. In Proceedings of the 1997 Academy

of Marketing Science (AMS) Annual Conference (pp. 224-224). Springer, Cham.

Samiee, S., & Chirapanda, S. (2019). International Marketing Strategy in Emerging-Market

Exporting Firms. Journal of International Marketing, 27(1), 20-37.