competitive stratergy case studies

8/16/2019 Competitive Stratergy case studies

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Management Summary:

The competitive market of today’s business oers lot many challenges on the

business owners to successfully run their business worldwide and make prots

out of it.To cater needs of these business giants and help them to succeed

requires a well dened business strategy without which making global presence

is questionable. This report will give insights by quoting few examples on how

industries worldwide are using ‘’ theory to take advantage of opportunities presented

by globali!ation.

"eople and well dened policies are crucial for the growth of #$%"&'.

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Table of Contents

1. Management Summary………………………………………12. Table of Contents……………………………………………....23. Introduction………………………………………………….......34. Case Study...........................................................….45. Conclusion....................……………………………………….

. !eferences……………………………………………………..........."

Introduction :

Today’s time is called as ‘)lobali!ation *ra’ as it has brought people and economies from dierentcountries more closer and thus oers various business opportunity all over the world. +hileglobali!ation has made positive impact on the lives of people around the globe with minimum negativeeects it has also exposed to new unforeseen challenges for businesses which were never faced before

,



and thus has necessitated the development of a global framework that can help eectively managethe challenges of globali!ation and result in creating a globally competitive advantage.

To manage the challenges and complexities of the global economy "anka- )hemawat has developed atheory which is called as Traingle/ theory or we can say simple language multiple variants of individual tailoring. These three strategies when implemented are believed to successfully manage thechallenges brought about by globali!ation. *ach in ‘’ stands for daptation0 ggregation and

rbitrage.

daptation calls for the necessary ad-ustments and adoptions to be made by a company so that itsoperation and products can be suitable for local markets and the local people based on their choiceand preference. ggregation assists companies to create economies of scale through the creation of regional or global business operations and at the same time remaining responsive to local markets.rbitrage enables companies take advantages of cost0 price and currency dierences and make adecision on which markets to venture into regarding buying and selling so as to reali!e prots.

These strategies help companies face global business environment with more condence allowingthem to successfully access outside markets with varying demands and market prices for theirproducts. dditionally0 it enables companies to nd good business environments and allow them todominate in those markets. ll these strategies are important but it must be kept in mind that each of the strategy will have dierent degree of eectiveness and relevance for dierent companies andhence every company must decide whether to integrate two or all of the three strategies at the same

time or in phases and then draw a staged implementation plan.

This theory has helped companies to take advantage of numerous global opportunities andsuccessfully manage the challenges thrown open owing to globali!ation. 1t is -ust that companies haveto invest time in prioriti!ing which strategy to implement to achieve the optimum advantage.

$ur report will discuss two ma-or industries which are growing exponentially worldwide2

• 3ood industry 2 %c4onald’s and #oca #ola #ompany

• "harmaceutical industry 2 5un "harmaceutical industries and "!er 1nc.

3ast food and pharmaceuticals are truly global businesses and are relevant in all economies andcountries irrespective whether it’s a developed or developing. 6oth the industries provides

numerous employement opportunities and crucial for the population. To make their presenceworthwhile and for sustenance0 these industries have successfully adopted framework so thatthey continue growing and gaining competitive advantage.

Case Study :

7



1# $ood%&e'erage: This industry be it in any country is integral part of nation’s )4"0itscontribution is signicant.6elow explained are two famous examples of the same.

$ood%&e'er

ages

(da)tation (ggregation (rbitrage

Mc*onald+s %c4onald8s restaurants made

there presence in ((9

countries and serve million’s of

customers each day.

%c4onald’s has a tag line

%odifying the burgers around

the world/. $riginated in :5

now it has got its presence

worldwide and what helped

them a lot is adapting the

burger as per the country.

3urther0 in response to

changing consumer tastes0 the

company has modied its

menu to include salads0 sh0wraps0 smoothies0 fruit and

seasoned fries.

The local deviation from the

standard menu is employed

either to abide by regional

food preferences such as the

religious prohibition of beef

consumption in 1ndia or to

make available foods with

regional taste such as %c;ice

in 1ndonesia0 or prawn burger

in 5ingapore and <apan.

1n )ermany and +estern

*uropean countries0

%c4onald8s sells beer and sells

meat pies in &ew =ealand.

>5ameer %athur0,?(,@

+orld famous %c4onald8s

#orporation earns revenue

by investing in properties0

franchising of restaurants0

and an operator of

restaurants.

%c4onald’s has used all

possible means for

revenue maximi!ation and

cost minimi!ation. 1t has

also used

franchising model as there

growth strategy which has

minimum risk.

%c4onald’s is a classic

example of clear

beneciary from arbitrage

opportunity oered by

globali!ation. %c 4onald’s

leverages its :5

reputation for excellence

and high class for doing

business in other

countries. 1t is already

positioned as a high

quality 3ast 3ood chain in

the mind of consumer in

new economies.

1n addition0 they did‘6ackward integration’

with farmers through

#ontract farming in

agricultural economies to

ensure consistent supply

of required quantity and

quality of their raw

material at xed

negotiated price. This

ensures consistent quality

and taste of the nal

products.

Coca Cola ccording to the company’s

nnual ;eport0 the company

sells beverage products in

more than ,?? countries.

&otable here is that #oca cola

#oca #ola implemented

aggregation strategy to

expand beyond :5 and to

achieve worldwide

economies of scale. s a

#ocaAcola is a prime

example of *conomic and

)eographic arbitrage. 1t

outsources and produces

ma-orly in #hina with 7B

C



has not modied the taste of

the base product except where

it changes due to quality of

water and sugar available and

it may happen that taste of

#ocaA#ola in *urope is

dierent from that in the:nited 5tates.

Dowever0 coca cola has

adapted its packaging0

marketing and branding

strategies to be successful in

various countries. lso0 it has

used acquisition of ma-or local

brands as a key strategy to

establish connect with the

consumers and to push its

base brand along with the

popular local brands.

proof0 The #ocaA#ola

#ompany oers more than

7E? brands aside from its

#ocaA#ola beverage to suit

customer preferences.

The company has a longhistory of acquisitions.

#ocaA#ola acquired %inute

%aid in (BF?0 The 1ndian

cola brand Thums :p in

(BB70 and 6arq8s in (BBE.

1n ,??(0 it acquired the

$dwalla brand of fruit

-uices0 smoothies0 and

barsG and in ,??H0 it

acquired 3u!e 6everage.

#oca #ola also announced

its presence in 6urma anew geographical location

as soon as they lifted their

suspension on +estern

sanctions. &ow its regional

portfolio expands all across

the globe.

facilities across the

country.

6esides this it has

manufacturing plants with

local bottling rights in

most of the countries toreduce its cost of

production.

2# ,-armaceuticals:

"harma companies are growing at a rapid rate0 primarily because of the advancement in researchwhich enables them to come up with new drugs. 5ince there is lot of cost involved in the research of anew drug or patent and that it has to undergo the process of patenting0 testing0 safety0 eIcacy and itsmarketing0 the company has to ensure it can rightly market the end product to his customers invarious countries as the law diers in dierent parts of the world. +ith the two examples of pharmacompanies quoted below we can get glimpse of how these industries are implementing ‘’ strategyto expand their operations.

,-armaceu

tical

(da)tation (ggregation (rbitrage

Sun,-armaceuti

cal

industries

6ased in 1ndia this is the Eth largest "harmaceutical

company in the world. To

make its presence

worldwide0 5un "harma has

to make changes that suits

to the needs of the country.

Jikewise they adapted their

chemical formulae0

5un "harma reali!ed theimportance of )lobal

presence for its growth and

5uccessfully acquired

competing businesses in

various countries and

geographies.

Till date0 company has been

able to make (B global

#ompany hasestablished its

research capabilities in

developing countries to

substantially reduce its

cost which has

immensely increased

its capabilities to

provide its products at

E

https://en.wikipedia.org/wiki/Coca-Cola

https://en.wikipedia.org/wiki/Coca-Cola



ingredients and packaging

style which was suitable to

the people of that particular

country.

#ompany’s strong research

strategy and county specic

implementation strategyhas given the competitive

advantage.

$ver the last (? years0

company has been

consistently successful in

challenging patents on

several highAvalue products

in the :5 and thus helped

introduce cheaper0 highA

quality generic versions of

such products to the market

to gain market share.

acquisitions to increase its

reach to various countries.

much cheaper price.

3urther0 established

ma-ority of its

manufacturing facilities

in sian countries with

lower cost ofproduction and made

exports to developed

countries for selling at

higher price

,/er 5elling anything in dierent

country from where it was

originated requires

modication .5imilar is the

case with

pharmaceutical companies.

This fact is well supported

by "!er sales stratergy in

latin merica. To be

successful in Jatin merica0

"!er has had to learn

alternative ways K which

take into account cultural0

economic0 and regulatory

dierences K to market its

products.The steps taken by

"!er in that regard are2

• *xtensive brand

building through

community

outreach programs.

• 4evoted resources

to work with

"harmacist whoplays ma-or role in

helping patients to

choose

medications.

>5usan 5ilbermann0,?(,@

1ts an example of

administrative aggregation. T

o market its drug lets say in

*urope it has to meet

regulatory requirements of

few countries and then they

are qualied to sell

throughout *urope.

1t’s a good example of

TL arbitrage2

relocation to cut their

taxes.

"!er takes over

stra=eneca of :M.6y

doing this "!er is

benetted as 2

• :M companies

don’t pay taxes

on overseas

earnings

• Tax ;ate is

lower

• Tax rate on :MA

patented

products is also

less

nd thus making more

prot.

Conclusion:

F



This paper focuses on growth of two ma-or industries using ‘’ framework0 any organi!ationsmust use and balance these strategies but the tradeAos is always there between them. 1tsall about managing cross border dierences0every industry is part of ‘)lobali!ation’ which isrestructuring the world and the ma-or factors which contributed for it are2

• Technology

• ;elaxed trade policies

+hich strategy a company should use depends on factors like2

• )lobali!ation history

• 3inancial statements

nd companies may not require all strategies at single point of time but probably some years down theline.

&othing is simple so ‘)lobali!ation’ too creates challenges for the industries in terms of lengthy supplychains and distribution0 security of facilities and information systems.

*very industry in the +orld is adapting the )lobali!ation strategy to position themselves in thiscompetitive world where survival depends upon various factors like quality0 policies0placement0need

etc. The extent of a company’s capabilities to tailor its oerings around the globe limits or broadens itsoptions to successfully enter new markets or cultures. s everything has its pros and cons so is thecase with ‘)lobali!ation’ and few of them are as follows2

• 4amage to environment

• Jess -ob security

1n short0globali!ation is a serious issue that is aecting everybody’s life.There is a need of analy!ing itsnegative impact so that steps can be taken for their preventions.This is going to be winAwin situation toeveryone around the world .

!eferences:

5ameer %athur>,?(,@ 0 http2NNwww.slideshare.netN"rofessor%athurNBAexamplesAofArmsAimplementingAglobalAstrategyAbyAadaptation

5usan 5ilbermann>,

?(,@0 https2NNhbr.orgN,?(,N?9NhowAp!erAadaptsAitsAsalesAstrategyAforAlatinAamerica

-tt):%%catalogue.)earsoned.co.u0%assets%-i)%gb%-i)gb)earson-ig-ered%sam)lec-a)ter%2"3"5234.)df

H

http://www.slideshare.net/ProfessorMathur/9-examples-of-firms-implementing-global-strategy-by-adaptation


https://hbr.org/2012/08/how-pfizer-adapts-its-sales-strategy-for-latin-america

http://catalogue.pearsoned.co.uk/assets/hip/gb/hip_gb_pearsonhighered/samplechapter/0273752634.pdf




https://hbr.org/2012/08/how-pfizer-adapts-its-sales-strategy-for-latin-america



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