Download Case Study Analysis and Research

Cola Wars in China
Case Study Analysis
Teaching Notes: Finntrack
Strategy: Analysis and Practice ©2005 McGraw-Hill Education Europe
Index
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Rationale and Objectives
Case Study
 How to Handle a Case Study
Qualitative Research
Business Research
 Marketing research
 Market research
 Product research
Wahaha Group – Indicative Research
Questions
Industry Analysis and Competitive
Strategy
 Context Analysis
 Industry Information
 Market Structures
 Competitor Analysis
 Porters 5 Forces
 Cola Wars
 Water Wars
 The Coca-Cola Company
 PepsiCo, Inc.
 Industry Analysis and Competitive
Strategy Activity
 Market Analysis Activity
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Competitive Position: Competitive
Advantage
 Competitive Strategy: The analysis of
strategic position
 Sustainable Competitive Advantage
 Sources of Cost Advantage
 Core competency
 Economies of Scale
 Experience Curve Effects
 Economies of Scale Activity
 Vertical Integration
 Value Chain Analysis
 Marketing
 Marketing Tactics - Activity
 Market Research
 Market Positioning
 Marketing Strategy
Index
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Life Cycles, Turnarounds,
Entrepreneurs
 Life Cycle Analysis
 Product Portfolio Analysis
 Product Portfolio
Analysis – Activity
 Crises Management
 Financial Crises
 Public Relations Crises
 Strategic Crises
 Entrepreneurs
 Intrapreneurship
Global Strategies and International
Advantage
 International Business
 Multinational Corporations
 Globalisation
 Globalisation Activity
 International Trade
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SWOT Analysis
 Wahaha Group’s Strategic Options
Evaluation and Measurement
 Measuring the Positioning
(Marketing)
 Business Case
 Benchmarking
 Gap Analysis
Risk, Uncertainty and Strategy
 Risk management
 Game Theory
 Decision Making
 Cost-benefit Analysis
Recommended Texts
Resources
 Case Study Research
Rationale and Objectives
Rationale
The resource covers the fundamentals of case study research and
analysis. It focuses on a Chinese soft drinks company, Hangzhou
Wahaha Group Co., Ltd and its position in global Cola Wars as well as
the issues of business research including research objectives, and
methodology.
Objectives
The objectives of this resource are to
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offer a holistic view business and management
demonstrate the case study research and analysis processes,
including methods, techniques and evaluation
familiarize students with the principles and techniques of
qualitative research and strategic analysis
develop and enhance students’ transferable skills in knowledge
management, strategy development and business
communications.
develop and enhance students’ web research skills.
Rationale and Objectives
Required Text
Strategy Analysis and Practice
John McGee, Warwick Business School
Howard Thomas, Warwick Business School
David Wilson, Warwick Business School
Case Study
A case study is a particular method of qualitative research. Rather than
using large samples and following a rigid protocol to examine a limited
number of variables, case study methods involve an in-depth, longitudinal
examination of a single instance or event: a case.
They provide a systematic way of looking at events, collecting data,
analyzing information, and reporting the results.
As a result the researcher may gain a sharpened understanding of why the
instance happened as it did, and what might become important to look at
more extensively in future research. Case studies lend themselves
especially to generating (rather than testing) hypotheses.
 How to Handle a Case Study
 Approaches to Authentic Learning Experience
Qualitative Research
 Involves investigating
participants' opinions,
behaviors and experiences
from the informants' points of
view.
 Is contrasted with
quantitative research in that it
does not rely on quantitative
measurement and
mathematical models, but
instead uses logical
deductions to decipher
gathered data dealing with
the human element.
 Compared to quantitative
research, it is more
expensive, has smaller
sample sizes and is hard to
measure.
Business Research
Business Research is the
systematic investigation of facts,
knowledge, and information that
relate to businesses or the world of
business. There are several major
types of business research.
Types of business research
 Marketing research
 Market research
 Product research
Click on Image
Wahaha Group
Indicative Research Questions
1. How will Wahaha’s multinational
competitors respond to ‘Future Cola’ and
other Future Series carbonated drinks
achieving an impressive 18% market share
(2002)?
2. How should Wahaha prepare for these
responses?
3. How should it continue to increase its
maker share?
 Case Study
 Business Case
Click on Image
Industry Analysis and
Competitive Strategy
Objective: to determine the
opportunities and threats that exist for
firms within a competitive environment
 Industry analysis and competitive
strategy
 Context Analysis
 Industry Information
Click on Image
 Market Structures
 Market Analysis
 Competitor Analysis
 Cola Wars
 Water Wars
Click on Image
Industry Analysis and
Competitive Strategy
 The Coca-Cola Company
 PepsiCo, Inc.
 Industry Analysis and Competitive Strategy Activity
Click on Image
Context Analysis
Context analysis, also known as
environmental scanning, is a method
to analyze the environment in which a
business operates.
Environmental scanning mainly
focuses on the macro environment of
a business. But context analysis
considers the entire environment of a
business, its internal and external
environment. This is an important
aspect of business planning because
such an analysis allows the business
to gain an insight into their strengths
and weaknesses and also the
opportunities and threats posed by
the market within which they operate.
The main goal of this analysis is to
analyze the environment in order to
develop a strategic plan of action for
the business.
• Method
• Define market or subject
• Trend Analysis
• Competitor Analysis
• Competition levels
• Competitive forces
• Competitor behavior
• Competitor strategy
• Opportunities and Threats
• Organization Analysis
• Internal analysis
• Competence analysis
• SWOT-i matrix
• Strategic Plan
• Example
• Define market
• Trend Analysis
• Competitor Analysis
• Opportunities and Threats
• Organization Analysis
• SWOT-i matrix
• Strategic Plan
Industry Information
 Beverage Digest
 Beverage World
 BevNET
 National Soft Drink
Association
 Beverages (Nonalcoholic)
Industry
 The Soda Pop Story
 Soft Drinks and Health
Click on Image
Market Structures
In economics, market
structure describes the state
of a market with respect to
competition.
There are two kinds of market
structures that are usually
discussed: perfectly
competitive market structure
and imperfectly competitive
market structure. Perfectly
competitive market structure is
an ideal state of a market in
which the competition
amongst the buyers and
sellers is likely to be perfectly
balanced.
Click on Image
Larger Map
Market Structures
Click on Image
Larger Map
The imperfectly competitive structure is quite
identical to the realistic market conditions where
some monopolists, oligopolists, and duopolists
exist and dominate the market conditions.
Market Analysis
 Market Analysis
 Related Readings
Market Analysis 1
Market Analysis 2
 Market Analysis
Activity
Click on Image
Larger Map
Competitor Analysis
Competitor analysis in marketing and strategic management is an
assessment of the strengths and weaknesses of current and potential
competitors.
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Competitor array
Competitor profiling
Media scanning
New competitors
See also
External links
Competitor Analysis –
A brief guide
Porters 5 Forces
Click on Image. Sensory profiling can help
you to understand how your product differs
from the competition's and how to improve it.
Cola Wars
Background
Cola Wars is the term used to describe the campaign of
mutually-targeted television advertisements and marketing
campaigns in the 1980s and 1990s between Coca-Cola
and Pepsi-Cola. They first began showing people doing
blind taste tests in which they preferred one product over
the other, then they began hiring more and more popular
spokespersons to promote their products.
They focused particularly on rock stars; notable soft drink
promoters included Michael Jackson (for Pepsi) and Paula
Abdul (for Diet Coke). One example of a heated exchange
that occurred during the Cola Wars was Coca-Cola making
a strategic retreat on July 11, 1985, by announcing its plans
to bring back Coke Classic.
Pepsi ads often focused on regular people, particularly the
young (and young-at-heart) and those in the future,
choosing Pepsi over Coke, supporting Pepsi's Positioning
(marketing) as "The Choice of a New Generation."
Pepsi Stuff represented a
major assault in the Cola
Wars
Click on Image
Global Cola Wars
• Global Cola Wars (and other familiar
scenes)
• Cola wars add spirited edge
Move over, hard lemonade and
Zima: Jack Daniels and Miller
Brewing prepare to debut hard cola
• Over a Century of Cola Slogans,
Commercials, Blunders, and Coups
• Marketing in China
• Chinese enter Cola War!
• Naming in Chinese, the CocaCola Story
• A turncoat in the Cola Wars
• The Yin and Yang of Chips
• Company Profile
Click on Image
Water Wars
Bottled water is a multibillion-dollar
growth industry - on its way to
becoming the most consumed beverage
in America outside of soft drinks.
Should you buy it, bottle it, or invest in
it? Here's a look at the major players,
the outlook for investors and
consumers, and even the results of one
writer's taste test.
The players
One might salivate over the prospect of
investing in this kind of growth. But
doing so in any significant way in your
portfolio is difficult. Mega-multinationals
have taken over the industry so their
bottom lines are only affected minimally
by water sales.
Click on Image
Water Wars
• The largest player by far is better
known in the U.S. for chocolate
than water. Nestle S.A.'s
(OTCBB: NSRGY) water division
sells 70 bottled water brands in
160 countries. Its North American
subsidiary sells nine domestic
brands, including Arrowhead,
Poland Spring, and Deer Park,
and five imported brands,
including San Pellegrino and
Perrier. Nestle Waters North
America, Inc. had revenues of
$2.1 billion in 2001 (2002's
numbers aren't available yet). Its
market share is 32.5% and
growing.
Click on Image
Water Wars
PepsiCo (NYSE: PEP) comes in second place
with its Aquafina product, which currently only
has a 10% market share but is the top-selling
single-serve bottled water in the U.S. In 2001,
Aquafina sales grew nearly 45% and
comprised 4% of all of Pepsi's beverage sales.
Coca-Cola (NYSE: KO) falls into third place,
its Dasani product grabbing an 8.5% market
share in 2001. Sales grew a hefty 40% in
2002, however. Coca-Cola also recently
entered into a production, marketing, and
distribution partnership with France's Groupe
Danone, owner of a number of niche water
brands, including Evian. Over the last three
years, Coke's global bottled water business
has grown at a compound annual rate of 59%.
Click on Image
Water Wars
Facts and figures
Key figures
Executive committee
Publications
Brands portfolio
Nestlé Brands
International brands
Local brands
Our markets
North America
Europe
Middle- East / Africa
Asia - Oceania
Latin America
A rapidly expanding
market
Click on Image
The Coca-Cola Company
Company Analysis
Click on Image
• Bottlers
• Products and brands
• Brand Portfolio
• Failures
• Criticisms
• Monopolistic Practices
• Discrimination
• Coca-Cola in China
• World of Warcraft Coke commercial from China
• Coca-Cola targets rural China
• Coca-Cola in India
• Coca-Cola in UK
• Praises
• History
• Santa Claus
• Corporate Governance
• Annual Reports
• Stock
• Key Numbers
The Coca-Cola Company
See also
External links
 Coke's Sinful World
 Coca-Cola: A Classic
 Critical Perspectives
PepsiCo, Inc.
Company Analysis
History
Corporate governance
 Annual Report
 Key Numbers
 Former top executives at PepsiCo
Social issues
 Diversity
PepsiCo brands
 Partnerships
 Marketing
Criticisms
 Long-term health effects
 Pepsi in India
 Pepsi in Burma
Click on Image
Rivalry with Coca-Cola
Troubled popstar endorsements
See also
Notes
External links
 Gatorade
 Pepsi's New Challenge
Top Competitors
 Cadbury Schweppes
 Dr Pepper
 Schweppes
 7UP
 A&W
 Canada Dry
 Diet Rite®
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Hawaiian Punch
Mott’s
Slush Puppie
Snapple
Sunkist Soda
Welch’s
Click on Image
Industry Analysis and Competitive
Strategy Activity 1/2
Task 1
Identify the key assets that Wahaha
Group possesses that might give it
some competitive advantage. Think
about the physical assets, human
assets as well as its image when
compiling your list.
Related Readings
• Made in China
• Wahaha Claims Top Beverage Spot
Based on British Airways
Activity by
Click on Image
Industry Analysis and Competitive
Strategy Activity 2/2
Task 2
Use Porter's Five Forces
model to analyse the
market.
You will need to think about
the extent of the competition
it is facing - how this has
changed, the different needs
of its customers, who its
suppliers might be and what
influence they can have
(think oil prices, for
example!) and the nature of
the substitutes to air travel
(are businesses finding new
ways of putting people in
touch with each other, for
example?)
Market Analysis Activity
This Activity is designed to give you the
opportunity to conduct a market analysis
on a business using the PowerPoint
Presentation [244 KB] and Mind Map as
guides to help you. Look at these
resources first and ensure that you
understand the meaning of the key terms.
Task
Conduct a market analysis of Wahaha
Group. You will need to consider the
points indicated here.
Click on Image
Related Readings
 Wahaha Corporation – MarketBuster
 Beverage tycoon plans more
expansion
Competitive Position:
Competitive Advantage
 Competitive Strategy: The analysis
of strategic position
 Sustainable Competitive Advantage
Sources of Cost Advantage
Core Competencies
Economies of Scale
Economies of Scale Activity
Experience Curve Effects
Vertical Integration
 Value Chain Analysis
 Marketing
 Market Research
 Market Positioning
 Marketing Strategy
 Measuring the Positioning
(Marketing)
Click on Image
Sustainable Competitive Advantage
 Companies that compete by
selling similar products (or even
substitutes) to the same group of
customers constitute an industry.
 A company that is more profitable
than its rivals is exploiting some
form of advantage.
 The benchmark for profitability is
the company's cost of capital.
 To consistently make profits in
excess of its cost of capital economic rent - the company
must possess some form of
sustainable competitive
advantage (SCA).
Contents
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Barriers to entry
Marketing
Strategic management
Marketing management
Core competency
Positioning
Marketing mix
Marketing plan
Michael Porter
Strategic planning
Strategy
Synergy
Porter 5 forces analysis
Value chain
Sustainable Competitive Advantage
 A firm possesses a SCA when it
has value creating processes
and positions that cannot be
duplicated or imitated by other
firms that lead to the production
of above normal rents.
 A SCA is different from a
competitive advantage (CA).
However, these above normal
rents can attract new entrants
who drive down economic rents.
 A CA is a position a firm attains
that lead to above normal rents
or a superior financial
performance.
Click on Image
Larger Image
Sustainable Competitive Advantage
 The processes and positions that
engender such a position (CA) is not
necessarily non-duplicable or
inimitable. It is possible for some
companies to, temporarily, make
profits above the cost of capital
without sustainable competitive
advantage.
Click on Image
Sources of Cost Advantage
Core Competency
A company's core competency are things that a firm can (also) do well
and that meet the following three conditions specified by Hamel and
Prahalad (1990).
1.It provides customer benefits,
2.It is hard for competitors to imitate, and
3.It can be leveraged widely to many products and market.
A core competency can take various forms, including technical/subject
matter know-how, a reliable process, and/or close relationships with
customers and suppliers (Mascarenhas et al. 1998).
It may also include product development or culture such as employee
dedication. Modern business theories suggest that most activities that are
not part of a company's core competency should be outsourced.
 Marketing
 Marketing management
 Sustainable competitive advantage
Sources of Cost Advantage
Economies of Scale
 Business Economics
Click on Image
Larger Map
Economies of Scale - Activity
Image: Sony PlayStation controls - the company have
shipped 60 million units since PlayStation 2 was
released. Copyright: Patricia Benitez
Click on Image
PlayStations at £115, colour
printers for under £30, free
scanners, keyboards for less
than £10, a mouse for the
same price as a mouse mat,
CD and DVD players for
less that £40! What have all
these products got in
common? The answer is
economies of scale. The
firms involved in the
manufacture of these items
produce them in vast
quantities.
Experience Curve Effects
 The learning curve
effect
 The experience curve
effect
 Reasons for the effect
 Experience curve
discontinuities
 Strategic
consequences of the
effect
 Criticisms
 See also
 Books and articles
 External links
 Learning curve
calculator
Click on Image
The learning curve effect and the closely
related experience curve effect express the
relationship between experience and efficiency.
As individuals and/or organizations get more
experienced at a task, they usually become
more efficient at them. Both concepts originate
in the old adage, "practice makes perfect".
Value Chain Analysis
Marketing
 Types of markets
 The Marketing Mix
Four Ps
 Seven Ps
 Technique
 Criticism of
marketing
 List of marketing
topics
 Marketing Tactics Activity
Click on Image
Larger Map
Marketing, as suggested by the American Marketing Association, is
"an organizational function and a set of processes for creating,
communicating and delivering value to customers and for managing
customer relationships in ways that benefit the organization and its
stakeholders".
Market Positioning
Market Research
• Other types of
business research
• Types of marketing
research
• Marketing research
methods
• Some commonly
used marketing
research terms
• See also
Click on Image. Source:
©2006 Framework Partners
Inc
• Market Positioning
• Product positioning
strategy
• Product positioning
process
• Positioning concepts
• Measuring the
positioning
• See also
• Conjoint Analysis
• Factor Analysis
• Lists
• References
Strategic Management
• General approaches
• The strategy hierarchy
• Historical development of
strategic management
• Birth of strategic
management
• Growth and portfolio
theory
• The marketing revolution
• The Japanese challenge
• Gaining competitive
advantage
• External Links
Marketing Strategy
Click on Image
A marketing strategy serves as the foundation of a marketing
plan. A marketing plan contains a list of specific actions required
to successfully implement a specific marketing strategy.
Marketing Strategy
Click on Image. Larger Image.
An example of marketing strategy is as follows: "Use a low cost product
to attract consumers”.
Marketing Strategy
Once our organization, via our
low cost product, has
established a relationship with
consumers, our organization will
sell additional, higher-margin
products and services that
enhance the consumer's
interaction with the low-cost
product or service.“
Click on Image
A strategy is different than a tactic. While it is possible to write a
tactical marketing plan without a sound, well-considered
strategy, it is not recommended. Without a sound marketing
strategy, a marketing plan has no foundation.
Marketing strategies serve as the fundamental underpinning of
marketing plans designed to reach marketing objectives. It is
important that these objectives have measurable results.
Marketing Tactics - Activity
Image: Having impressive adverts may be a useful
marketing tactic but the role of the marketing
function involves much more than this. Do
customers recognise the brand? Is there a unique
selling point (USP) that can be used to differentiate
your product or service from another? How will the
firm manage its cash flow? All these factors and
more are part of the tactics that are used in the
marketing function. Copyright: Gunter Hofer
Click on Image
Life Cycles, Turnarounds,
Entrepreneurs
 Competitive strategy: moving
from theory to practice Life Cycle
Analysis
 Product Portfolio Analysis
Boston Matrix
GE Matrix
Product Portfolio Analysis –
Activity
 Crises Management
Financial Crises
Public Relations Crises
Strategic Crises
Negotiation / Conflict
Resolution
 Entrepreneurs
Intrapreneurship
Entrepreneuring / Venturing
Click on Image
Life Cycle Analysis
The conditions a product is sold under will change over time. The Product
Life Cycle refers to the succession of stages a product goes through.
Product Life Cycle Management is the succession of strategies used by
management as a product goes through its life cycle.
 The Stages
 Management of the
cycle
 Market evolution
 Market
Identification
 Technology life cycle
 Lessons of the
Product Life Cycle
 See also
 Finding related
topics
 References
 External links
Click on Image. Larger Map
Product Portfolio Analysis
 Product Life Cycles and the
Boston Matrix
 The Chart
 Practical Use of the Boston
Matrix
 Relative market share
 Market growth rate
 Risks and criticisms
 Alternatives
 Boston Consulting
Group's Advantage
Matrix
 Other uses of the growth-share
matrix
 See also
 Cash Cow
 B.C.G. Analysis
 References
Click on Image. Larger Image.
Product Portfolio Analysis
Click on Image
 General Electric (GE)
Product Portfolio Analysis Activity
The aim of this Activity is to investigate
Product Portfolio Analysis and in particular to
analyse how products are developed and
then manipulated to maintain their market
share and market profile. The Activity will
focus on one product - the humble 'Post-it'
note.
Image: Different coloured
post-it notes. Copyright: Ákos
Rappay
Click on Image
This product has become an essential piece
of equipment for a whole variety of people
from householders, to remind them about
things that need doing, to office workers and
to students.
Crisis Management
Crisis management involves
identifying a crisis, planning a
response to the crisis and
confronting and resolving the
crisis. Crisis management can be
applied in almost any field of
endeavor, but it is most commonly
used in international relations,
political science and management.
For more about crisis management
in international relations, see
International crisis.
In general terms, the theory of
crisis management can be divided
into crisis bargaining and
negotiation, crisis decision making,
and crisis dynamics.
Click on Image.
Click on Image.
Crisis Management
 Crisis Management Plans
 Crisis Communication Plan
 Crisis Planning and
Communications
 Corporate Crisis Management
Crisis Management
In business there are three main
types of crisis:
Financial crisis - short term
liquidity or cash flow problems; and
long term bankruptcy problems.
Public relations crisis - negative
publicity that could adversely effect
the success of the company.
Strategic crisis - changes in the
business environment that call the
viability of the company into
question - for example the
introduction of the automobile was a
strategic crisis for buggy-whip
manufacturers.
Click on Image.
Financial Crisis
1. Are your inventories growing?
2. Have you noticed shrinking profit
margins?
3. Are your suppliers curtailing your
credit?
4. Do you see accounts receivables
ballooning?
5. Is it becoming hard to to pay your
bills on time?
6. Has your accounting been
incomplete or slow lately?
7. Are restrictions pinching your cash
flow?
Click on Image.
Public Relations Crisis
Almost every organisation
sometimes attracts unwelcome
attention from the press.
An industrial dispute, product
failure, service problem or accident
can get the press flocking to your
door when you’re least able to deal
with them.
Click on Image.
Strategic Crisis
Many of today's
organizations face the
ultimate choice - change or
die.
Few organizations are
prepared for the magnitude
of change that will be
required of them if they are
to survive and thrive in the
next 20 years.
Fewer still understand the
nature of the change.
Click on Image. Larger Image.
Entrepreneurs
Entrepreneur is a loanword from the
French language that refers to a
person who undertakes and operates a
new enterprise or venture, and
assumes some accountability for the
inherent risks.
Most commonly, the term entrepreneur
applies to someone who establishes a
new entity to offer a new or existing
product or service into a new or
existing market, whether for a profit or
not-for-profit outcome (see
entredonneur).
Business entrepreneurs often have
strong beliefs about a market
opportunity and are willing to accept a
high level of personal, professional or
financial risk to pursue that opportunity.
 Defining entrepreneur
 Entrepreneur as a risk
bearer
 Entrepreneur as an
organizer
 Functional and indicative
approach to entrepreneur
definition
 Entrepreneur as a person
willing to engage
uncertainty
 Entrepreneur as a leader
 Nature or Nurture (origins of
the entrepreneur)
 References
 Theories of the Firm
Entrepreneurs
Famed entrepreneurs in America include: Henry Ford (automobiles), J.
Pierpont Morgan (banking), Thomas Edison (electricity/light bulbs), Bill
Gates (computer operating systems and applications), Steve Jobs
(computer hardware, software), the British entrepreneur Richard Branson
(travel and media) and others.
Entrepreneurial Economics
If entrepreneurship remains as important
to the economy as ever, then the
continuing failure of mainstream
economics to adequately account for
entrepreneurship indicates that
fundamental principles require reevaluation.
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Entrepreneur
Entrepreneurship
Entrepreneurial education
Social Entrepreneur
Serial entrepreneur
Parallel entrepreneur
Entrepreneurial Economics is the study of
the entrepreneur and entrepreneurship
within the economy.
The charecteristics of entrepreneurial
economy (regional or national level) are
high level of innovation combined with high
level of entrepreneurship which result in
the creation of new ventures as well as
new sectors and industries.
Click on Image.
Intrapreneurship
 The History of
Intrapreneurship
 Human
Resources Issues
 Intrapreneurial
Organisation
 The Intrapreneur
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Global Strategies and
International Advantage
 Global Strategies and International
Advantage
 International Business
 Multinational Corporations
 Globalisation
Globalisation Activity
 International Trade
 National Innovation Systems
International Business
International Business is a term used to
collectively describe topics relating to the
operations of companies with interests in several
countries.
Such companies are sometimes called
MultiNational Corporations or MNCs. Points of
discussion with this topic may include cultural
considerations, which itself may include
differences in law and legal systems, language
barriers, living standards, climate and more.
These have to be overcome for a MNC to be
successful in an overseas venture.
Well known examples of MNCs include fastfood
companies McDonald's and Yum Brands,
vehicle manufacturers like General Motors and
Toyota, consumer electronics companies like
LG, Sony, and General Electric.
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Multinational Corporations
A multinational corporation (MNC) or multinational enterprise (MNE)
or transnational corporation (TNC) or multinational organization
(MNO) is a corporation/enterprise that manages production
establishments or delivers services in at least two countries.
Multinational corporations (MNC) are often divided into three broad
groups:
• Horizontally integrated multinational corporations manage
production establishments located in different countries to produce
same or similar products.
• Vertically integrated multinational corporations manage
production establishment in certain country/countries to produce
products that serve as input to its production establishments in
other country/countries.
• Diversified multinational corporations manage production
establishments located in different countries that are neither
horizontally or vertically integrated.
Multinational Corporations
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Critiques
Examples
See also
External links
References
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Globalisation
MNCs generally have a subsidiary or an
interest over a company in the country of
venture.
One of the results on the increasing success
of International Business ventures is
Globalisation.
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Globalisation - Activity
A member of the Clandestine Rebel Clown Army protesting
during the week of the July 2005 G8 Summit, held at
Gleneagles, near Edinburgh, Scotland.
Title: Edinburgh Prepares For Influx Of Protestors To G8
Summit. Copyright: Getty Images, available from
Education Image Gallery
International Trade
International trade is the
exchange of goods and services
across international boundaries or
territories. In most countries, it
represents a significant share of
GDP.
While international trade has been
present throughout much of history
(see Silk Road, Amber Road), its
economic, social, and political
importance has been on the rise in
recent centuries.
Industrialization, advanced
transportation, globalization,
multinational corporations, and
outsourcing are all having a major
impact. Increasing international
trade is the usually primary
meaning of "globalization".
 Derek trade theory
 Ricardian model
 Heckscher-Ohlin model
 Specific Factors
 Gravity model
 Regulation of international
trade
 Risks in international trade
 Economic risks
 Political risks
 See also
 External links
 Data
 Diplomacy Monitor International Trade
 Export Trade Finance
Porter’s Diamond
The Competitive Advantage
of Nations
Four attributes of a nation
comprise Porter's "Diamond"
of national advantage:
 factor conditions (i.e.
the nation's position in
factors of production,
such as skilled labour
and infrastructure),
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 demand conditions (i.e. sophisticated customers in home market)
related and supporting industries, and
 firm strategy, structure and rivalry (i.e. conditions for organization of
companies, and the nature of domestic rivalry).
Cluster Analysis (in Marketing)
Cluster analysis is a class of
statistical techniques that can
be applied to data that exhibits
“natural” groupings. Cluster
analysis sorts through the raw
data and groups them into
clusters.
A cluster is a group of relatively
homogeneous cases or
observations. Objects in a
cluster are similar to each other.
They are also dissimilar to
objects outside the cluster,
particularly objects in other
clusters.
The diagram above illustrates the results of a
survey that studied drinkers’ perceptions of
spirits (alcohol). Each point represents the
results from one respondent. The research
indicates there are four clusters in this market.
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National Innovation System
Also called National System of
Innovation.
The national innovation system
is the flow of technology and
information among people,
enterprises and institutions which
is key to the innovative process on
the national level.
According to innovation system
theory, innovation and technology
development are results of a
complex set of relationships
among actors in the system, which
includes enterprises, universities
and government research
institutes.
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National Innovation System
There is no single definition of national
innovation systems. Here are a few country
specific status reports from the OECD.
A national system of innovation has been
defined as follows:
.. the network of institutions in the public and
private sectors whose activities and
interactions initiate, import, modify and
diffuse new technologies. (Freeman, 1987)
.. the elements and relationships which
interact in the production, diffusion and use
of new, and economically useful, knowledge
... and are either located within or rooted
inside the borders of a nation state.
(Lundvall, 1992)
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Construction of China's
National Innovation System
The Construction of the National Innovation System is an
important strategic decision made by the Chinese
Government to speed up economic and social
development in China by fully implementing the policies
of rejuvenating China through science and education, and
of sustainable development.
 Construction of China's National
Innovation System
 Overall Planning for the KIP Pilot
 Project Progress in the Initial Phase of
the KIP Pilot Project
 Main Goals for the Phase of All-round
Implementation of the KIP Pilot Project
 Achievements Notched by KIP Pilot
Project over Past Four Years
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 Strategic Action Plan for Science and
Technology Innovation
SWOT Analysis
A SWOT Analysis is a strategic
planning tool used to evaluate the
Strengths, Weaknesses,
Opportunities, and Threats
involved in a project or in a
business venture or in any other
situation requiring a decision.
The required first step in SWOT
analysis is the definition of the
desired end state or objective.
The definition of objective must be
explicit and approved by all
participants in the process.
This first step must be performed
carefully because failure to identify
correctly the end state aimed for
leads to wasted resources and
possibly failure of the enterprise.
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SWOT Analysis
In relation to objectives the following
terms have been used in the literature:
desired end states, plans, policies,
goals, objectives, strategies, tactics
and actions.
SWOT Activity
Definitions vary, overlap and fail to
achieve clarity.
The following concept has been found
useful.
The items listed above may be
organized in a hierarchy of means and
ends and numbered as follows:
 Top Rank Objective (TRO),
 Second Rank Objective,
 Third Rank Objective, etc.
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SWOT Analysis
From any rank, the objective in a
lower rank answers to the question
"How?" and the objective in a higher
rank answers to the question "Why?"
The exception is the Top Rank
Objective (TRO): there is no answer to
the "Why?" question. That is how the
TRO is defined.
An example may help to clarify the
concept presented above.
 Improving Your Ability to Recognize
Business Opportunities
 SWOT Analysis of Tesco PLC
 Analysis of Forest & Forest Case
 Customer-centric SWOT
 Radford Intranet-Definition
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SWOT Analysis
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Wahaha Group’s Strategic
Options
Porter Generic
Strategies
 Cost Leadership
Strategy
 Differentiation
Strategy
 Segmentation
Strategy
 Recent
developments
 Criticisms of generic
strategies
 References
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Wahaha Group’s Strategic Options
Market Dominance Strategies
Market dominance strategies are marketing strategies which classify
businesses by reference to their market share or dominance of an industry.
 What is market
dominance?
 Market dominance
strategies
 Market leader
 Market
challenger
 Market follower
 Market nicher
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Wahaha Group’s Strategic Options
Growth Strategies
 Horizontal integration
 Vertical integration
 Diversification (or
conglomeration)
Related Readings
• Wahaha Claims Top Beverage
Spot
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Wahaha Group’s Strategic Options
Marketing Warfare
Strategies
Marketing warfare strategies are a
type of strategies, used in business
and marketing, that try to draw
parallels between business and
warfare, and then apply the principles
of military strategy to business
situations. In business we do not have
enemies, but we do have competitors;
and we do not fight for land, but we do
compete for market share. It is argued
that, in mature, low-growth markets,
and when real GDP growth is negative
or low, business operates as a zerosum game. One person’s gain is
possible only at another person’s
expense.
Success depends on battling
competitors for market share.
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Wahaha Group’s Strategic Options
Marketing Warfare
Strategies
 The use of marketing
warfare strategies
 Marketing Warfare
Strategies
 Guerrilla marketing
warfare strategies
 Learning from Napoleon
 Robin Hood invades
business schools
 See also
 Lists of related topics
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Larger Map
Evaluation and Measurement
Evaluation is the systematic determination of merit, worth, and
significance of something or someone. Evaluation often is used to
characterize and appraise subjects of interest in a wide range of human
enterprises, including the Arts, business, computer science, criminal
justice, education, engineering, foundations and non-profit organizations,
government, health care, and other human services.
 Evaluation concepts and issues
 The distinction between
evaluation and assessment
 Evaluation standards and metaevaluation
 Evaluation approaches
 Classification of approaches
 Summary of approaches
 Evaluation methods and
techniques
 See also
 Notes and references
 External links
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Measuring the Positioning
Positioning is
expressed relative to
the position of
competitors. The term
was coined in 1969 by
Al Ries and Jack Trout
in the paper
"Positioning" is a game
people play in today’s
me-too market place" in
the publication
Industrial Marketing.
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Positioning is facilitated by a graphical or non-graphical techniques,
such as perceptual mapping, various survey techniques, and statistical
techniques like multi dimensional scaling, factor analysis, conjoint
analysis, and logit analysis.
Perceptual Mapping
Perceptual mapping is a graphics
technique used by marketers that
attempts to visually display the
perceptions of customers or
potential customers. Typically the
position of a product, product line,
brand, or company is displayed
relative to their competition.
Also see Cluster Analysis
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Statistical Surveys
Statistical surveys are used to
collect quantitative information
about items in a population.
Surveys of human populations and
institutions are common in political
polling and government, health,
social science and marketing
research.
A survey may focus on opinions or
factual information depending on its
purpose, and many surveys involve
administering questions to
individuals.
When the questions are
administered by a researcher, the
survey is called a structured
interview or a researcher
administered survey.
Contents
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Structure and standardization
Serial surveys
Advantages of surveys
Disadvantages of surveys
Advantages of self-administered
questionnaires
Disadvantages of self-administered
surveys
Advantages of researcher
administered interviews
Survey methods
Methods used to increase
response rates
Research
 Doctoral and Masters
Degrees
 Masters Degrees Only
External links
References
Statistical Surveys
When the questions are
administered by the respondent, the
survey is referred to as a
questionnaire or a self-administered
survey.
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Contents
 See also
 Opinion poll
 Marketing
 Marketing research
 Quantitative marketing
research
 Questionnaire
construction
 Lists of related topics
Multidimensional Scaling
Multidimensional scaling (MDS) is a set of related statistical
techniques often used in data visualisation for exploring similarities or
dissimilarities in data. An MDS algorithm starts with a matrix of item-item
similarities, then assigns a location of each item in a low-dimensional
space, suitable for graphing or 3D visualisation.
 Categorization of MDS
 Applications
 Marketing
 Comparison and
advantages
 Multidimensional
scaling procedure
 References
 See also
 Factor analysis,
 Discriminant analysis
 External links
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Factor Analysis
Factor analysis is a statistical
technique used to explain variability
among observed random variables
in terms of fewer unobserved
random variables called factors.
The observed variables are
modeled as linear combinations of
the factors, plus "error" terms.
Factor analysis originated in
psychometrics, and is used in
social sciences, marketing, product
management, operations research,
and other applied sciences that
deal with large quantities of data.
 Example
 Mathematical model of the
same example
 Factor analysis in
psychometrics
 History
 Applications in psychology
 Advantages
 Disadvantages
 Factor analysis in marketing
 Information collection
 Analysis
 Advantages
 Disadvantages
 Bibliography
 See also
Conjoint Analysis
Conjoint analysis, also called
multi-attribute compositional
models or stated preference
analysis, is a statistical technique
that originated in mathematical
psychology. Today it is used in
many of the social sciences and
applied sciences including
marketing, product management,
and operations research.
 Conjoint analysis (Marketing)
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Conjoint Analysis
The objective of conjoint analysis is to
determine what combination of a
limited number of attributes is most
preferred by respondents. It is used
frequently in testing customer
acceptance of new product designs
and assessing the appeal of
advertisements. It has been used in
product positioning, but there are
some problems with this application of
the technique.
• Conjoint Analysis Tutorial
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Logit Analysis in Marketing
Logit analysis is a statistical
technique used by marketers to
assess the scope of customer
acceptance of a product,
particularly a new product. It
attempts to determine the intensity
or magnitude of customers'
purchase intentions and translates
that into a measure of actual buying
behaviour.
Logit analysis assumes that an
unmet need in the marketplace has
already been detected, and that the
product has been designed to meet
that need. The purpose of logit
analysis is to quantify the potential
sales of that product. It takes
survey data on consumers
purchase intentions and converts it
into actual purchase probabilities.
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Logit Analysis in Marketing
Logit analysis defines the functional
relationship between stated
purchase intentions and preferences,
and the actual probability of
purchase.
A preference regression is performed
on the survey data. This is then
modified with actual historical
observations of purchase behavior.
The resultant functional relationship
defines purchase probability.
This is the most useful of the
purchase intention/rating translations
because explicit measures of
confidence level and statistical
significance can be calculated.
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Logit Analysis in Marketing
Other purchase intention/rating
translations include the preferencerank translation and the intent scale
translation.
The main disadvantage is that the
software is not easy to find.
 Logit and Probit Analysis
Business Case
A business Case is a part of the project mandate, or separate
document referenced by the project mandate (depending on the scale of
the project), produced before a project is initiated. It is owned by the
executive sponsor. Many project methodologies, such as PRINCE2,
explicitly require a formal business case.
The Business Case addresses, at a high level, the business need that
the project seeks to resolve. It includes the reasons for the project, the
expected business benefits, the options considered (with reasons for
rejecting or carrying forward each option), the expected costs of the
project, a gap analysis and the expected risks.
In almost all cases the option of doing nothing should be included with
the costs and risks of inactivity included along with the differences
(costs, risks, outcomes etc) between doing nothing and the proposed
project.
Business Case
It is from this that the justification for the project is derived.
The case will be reviewed at the initiation of the project (before the
go/no-go decision is made) and periodically during the running of the
project (e.g. at stage or sub-project boundaries) to ensure that:
 The business case is still valid, i.e. the business need still exists.
 The project is still on track to deliver the solution to the business need.
As a result of this review the project may be terminated or future parts
amended. The business may also be subject to amendment if the review
concludes that the business need has abated or changed, this will have a
knock on effect on the project.
 Strategic Business Case
Benchmarking
Benchmarking (also "best practice benchmarking" or "process
benchmarking") is a process used in management and particularly strategic
management, in which organizations evaluate various aspects of their
processes in relation to best practice, usually within their own sector. This
then allows organizations to develop plans on how to adopt such best
practice, usually with the aim of increasing some aspect of performance.
Benchmarking may be a one-off event, but is often treated as a continuous
process in which organizations continually seek to challenge their practices.
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Advantages of benchmarking
Competitive benchmarking
Collaborative benchmarking
Procedure
Cost of benchmarking
Benchmarking in financial markets
External links
 Benchmarking for competitive
advantage
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Gap Analysis
Gap analysis is a business
assessment tool enabling a company
to compare its actual performance
with its potential performance. This
provides the company with insight to
areas which have room for
improvement.
The process involves determining,
documenting and approving the
variance between business
requirements and current capabilities.
Gap analysis naturally flows from
benchmarking or other assessments.
Once the general expectation of
performance in the industry is
understood then it is possible to
compare that expectation with the
level of performance at which the
company currently functions.
 Gap Analysis and New
Products [1]
 Usage Gap
 Market potential
 Existing usage
 Distribution Gap
 Product Gap
 Competitive Gap
 Market Gap Analysis
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Gap Analysis
This comparison becomes the gap analysis. Such analysis can be
performed at the strategic or operational level of an organization.
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Risk, Uncertainty and
Strategy
 Risk, Uncertainty and Strategy
 Risk management
 Game theory
 Decision Making
 Cost-benefit Analysis
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Risk Management
Generally, Risk Management is the
process of measuring, or assessing
risk and then developing strategies to
manage the risk.
In general, the strategies employed
include transferring the risk to another
party, avoiding the risk, reducing the
negative effect of the risk, and
accepting some or all of the
consequences of a particular risk.
Traditional risk management focuses
on risks stemming from physical or
legal causes (e.g. natural disasters or
fires, accidents, death, and lawsuits).
Financial risk management, on the
other hand, focuses on risks that can
be managed using traded financial
instruments.
 Areas of risk management
 Enterprise Risk
Management
 Risk management
activities as applied to
project management
 Risk
 Business Continuity
Planning
 Uncertainty
 Financial risk management
 Critical chain
 Futures Studies
 Earned value management
 Insurance
 Precautionary principle
 Project management
 Value at risk
 Operational risk
management
Risk Management
Intangible risk
management focuses on
the risks associated with
human capital, such as
knowledge risk,
relationship risk, and
engagement-process
risk.
Regardless of the type of
risk management, all
large corporations have
risk management teams
and small groups and
corporations practice
informal, if not formal, risk
management.
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Game Theory
Game theory is a branch of applied
mathematics that studies strategic
situations where players choose
different actions in an attempt to
maximize their returns.
First developed as a tool for
understanding economic behavior
and then by the RAND Corporation
to define nuclear strategies, game
theory is now used in many diverse
academic fields, ranging from
biology and psychology to sociology
and philosophy.
Beginning in the 1970s, game
theory has been applied to animal
behavior, including species'
development by natural selection.
 Representation of games
 Normal form
 Extensive form
 Types of games
 Symmetric and asymmetric
 Zero sum and non-zero sum
 Simultaneous and sequential
 Perfect information and
imperfect information
 Infinitely long games
 Uses of game theory
 Economics and business
 Computer science and logic
 Political science
 History of game theory
 Notes
 References
Game Theory
Because of interesting games like
the prisoner's dilemma, in which
rational self-interest hurts everyone,
game theory has been used in
political science, ethics and
philosophy.
Finally, game theory has recently
drawn attention from computer
scientists because of its use in
artificial intelligence and cybernetics.
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Decision Making
Decision making is the cognitive
process leading to the selection a
course of action among alternatives.
Every decision-making process
produces a final choice called decision.
It can be an action or an opinion. It
begins when we need to do something
but we do not know what. Therefore,
decision-making is a reasoning process
which can be rational or irrational, and
can be based on explicit assumptions or
tacit assumptions.
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• Decision making style
• Decision making in groups
• Decision making in business
and management
• Sources of Power: How
people make decisions], Klein, G.
• Intelligent Decision Support
Systems
• Decision analysis
• Decision Analytic Methods
• Multi-criteria decision
analysis
Cost-benefit Analysis
Cost-benefit analysis is the most
important technique for project
appraisal in the public sector.
During cost-benefit analysis, monetary
values may also be assigned to less
tangible effects such as risk, loss of
reputation, market penetration, longterm strategy alignment, etc. This is
especially true when governments use
the technique, for instance to decide
whether to introduce business
regulation, build a new road or offer a
new drug on the state healthcare.
In this case, a value must be put on
human life or the environment, often
causing great controversy.
 Kaldor-Hicks efficiency economic principle underlying
cost-benefit analysis
 Pareto efficiency - alternative
economic principle
 Net present value - a similar
type of calculation
 Excess burden of taxation which should be figured into
cost-benefit analyses of
publicly funded projects
Cost-benefit Analysis
The cost-benefit principle says, for
example, that we should install a
guardrail on a dangerous stretch of
mountain road if the dollar cost of
doing so is less than the implicit dollar
value of the injuries, deaths, and
property damage thus prevented
(R.H. Frank 2000).
Cost-benefit calculations typically
involve using time value of money
formula. This is usually done by
converting the future expected
streams of costs and benefits to a
present value amount.
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Recommended Texts
Business Research Methods with
Student CD-ROM
Cooper, Donald R Schindler, Pamela S.
ISBN: 0072819790
Format: BB
Pub Date: 2002-07-23
Copyright: 2003
Edition:8
Management: Competing in the New Era,
5/e
Thomas S Bateman, University of Virginia
Scott A Snell, Pennsylvania State
University
Resources
 Glossary
 Case Study Research