Select one of these top U.S. companies competing in this industry, listed below, and complete a more in-depth analysis of its strategy (if you see your chosen company for the final project on this list, do not choose it; select a new company to research for this assignment).
1. Once you have selected one of these companies, focus your analysis on Module Five topics to discuss how that company has strengthened its generic strategy through complementary strategic moves in this industry. In your analysis of its strategic moves, examine the timing of these moves.
2. Then, discuss this company’s strategies for competing in international markets. How does the company enter foreign markets, complete internationally, and leverage any operations internationally? Use topics from Module Six in your analysis. Can you recommend any additional strategies for international markets?
Include 6 to 8 double-spaced pages for your analysis.
Company Sales Employees Location
General Electric Company 147,359.00M 305,000 Fairfield, CT
Comcast Corporation 62,570.00M 129,000 Philadelphia, PA
The Walt Disney Company 42,278.00M 166,000 Burbank, CA
News Corporation 33,706.00M 48,000 New York, NY
Time Warner Inc. 28,729.00M 34,000 New York, NY
NBCUniversal Media, LLC 19,200.00M 30,000 New York, NY
CBS Corporation 14,089.00M 20,930 New York, NY
Viacom Inc. 13,887.00M 9,880 New York, NY
DISH DBS CORPORATION 13,151.60M 3 Englewood, CO
Liberty Interactive Corporation 10,054.00M 22,000 Englewood, CO
(Hoover’s Industry Index, n.d.)
MBA 700 Module Six 1
In previous modules, we discussed common generic strategies available to any company to pursue for competitive advantage as well as ideas on how to extend these strategies for better positioning within the industry.
In addition to any generic strategy and strategic options to strengthen that strategy, companies have the option of pursuing global markets for their products or services.
Companies can pursue global strategies that seek to standardize products or service across country borders, with the benefit of achieving economies of scale and lower costs, or select to cater to local tastes and hope to sell more. In today’s world, global strategies also include locating part of the supply chain in a favorable country, like taking advantage of lower cost labor or locating manufacturing closer to a supply source (Ghemawat, 2007).
Specific strategy options for entering and doing business in foreign markets include exporting, licensing, franchising, acquisitions, alliances, and joint ventures.
How are foreign market strategies pursued?
China is known for its production of goods domestically that are then shipped overseas for marketing in other parts of the world. How often do we see “Made in China” stamped on a product or its packaging? These are examples of foreign companies producing on their own soil and exporting these products for sale in foreign markets like ours within the United States. But did you know that U.S. firms exported over $65 billion worth of products to China in 2007? California alone led the way with $10.6 billion of these exports (Eernisse, 2008).
The United States exports a variety of U.S.-manufactured or finished products exported to China (Eernisse, 2008):
2 MBA 700 Module Six
In fact, U.S. firms’ exports in total to all countries increased overall in 2010 (U.S. Census, 2012).
Table 6.2 Table 1312. Domestic Exports and Imports for Consumption of Merchandise (In billions of dollars). 2007 2010 ..Transportation equipment 190.5 176.4 ..Chemicals 147.6 171.4 ..Machinery, except electrical 122.7 126.0 ..Computers and electronic products 135.4 121.1 ..Petroleum and coal products 31.0 61.0 ..Food and kindred products 38.8 50.9 ..Primary metal products 44.6 49.7 ..Miscellaneous manufactured commodities 38.1 39.4 ..Fabricated metal products 29.9 32.7 ..Electrical equipment, appliances and components 33.4 31.0 ..Plastics and rubber products 22.0 24.3 ..Paper products 19.7 23.0 ..Nonmetallic mineral products 8.4 9.2 ..Textiles and fabrics 8.3 7.8 ..Printed, publishing, & similar products 6.3 6.0
MBA 700 Module Six 3
As a means of foreign market entry, licensing involves the transfer of patented information like technology, know-how, or trademarks to another company so it can sell a product or service in some market. Warner Music International (WMI) has entered emerging markets by creating licensing agreements with companies in countries like Romania and Serbia (Mottner & Johnson, 2000). WMI now has a presence in 50 countries using affiliates and other licensees to market and distribute music releases in foreign countries (TimeWarner Newsroom, 2006).
Pizza Hut, KFC, Dunkin Donuts, and McDonald’s operate franchises in foreign markets. A franchise is “a continuing relationship in which a franchise provides a licensed privilege to do business plus assistance in organizing, training, merchandising, and management in return for a consideration from the franchisee” (Economic Review, 1998). Today, McDonald’s has franchises in 118 countries (International Franchising, 2013)
Joint Ventures and Acquisitions
Starbucks entered the coffee market in France and had 23 stores in Paris by 2006. Starbucks France was a joint venture with a Spanish retailer, Grupo Vips, which found French customers in Paris willing to shell out for pricey Starbucks coffee drinks like Starbucks Frappuccinos (Tiplady, 2006).
However, by early Fall 2009, Starbucks announced it would buy out this joint venture partner to remain in France as a company-operated business under Starbucks Coffee EMEA and Starbucks Coffee International. Grupo Vips will get exclusive franchise rights to operate Starbucks stores in Spain and Portugal as part of the buyout deal (World Franchise Associates, 2009).
IKEA has produced products geared to a youthful market that more readily accepts change and has expanded globally with a stock of standardized products in a traditional global strategy. Today, IKEA is moving away from this global strategy to where it now caters to the tastes of select overseas markets in which it operates by marketing its standardized products, which it hopes will be welcome worldwide, but adds product lines that cater more to local tastes as well. IKEA maintains 300 stores
4 MBA 700 Module Six
worldwide with 27 central warehouses that are stocked by road, rail, and sea. Almost 50% of its products are produced in these top five countries, showing that the company truly is transnational: Sweden, China, Poland, Germany, and Italy (Boscor & Bratucu, 2009).
MBA 700 Module Six 5
Boscor, D., & Bratucu, G. (2009).Transnational strategies adopted by furniture manufacturer. Case study: IKEA. Pro Ligno, 5(3), 55–61.
Eernisse, A. (2008). US exports to China hit new high. China Business Review, 35(5), 36–37.
Foreign food franchises. (1998). Economic Review (05318955), 29(1), 50.
International Franchising. (2013). About McDonalds.com. Retrieved from http://www.aboutmcdonalds.com/mcd/franchising/international_franchising.html
Mottner, S., & Johnson, J. P. (2000). Motivations and risks in international licensing: A review and implications for licensing to transitional and emerging economies. Journal of World Business, 35(2), 171–188.
TimeWarner Newsroom. (2006). Warner Music International and SK Telecom announce partnership. Retrieved from http://investors.wmg.com/phoenix.zhtml?c=182480&p=irol-newsArticle_pf&ID=854632&highlight=
Tiplady, R. (2006). Can Starbucks blend into France? BusinessWeek Online, 7.
U.S. Census. (2012). Domestic exports and imports. Retrieved from http://www.census.gov/compendia/statab/2012/tables/12s1312.xls
World Franchise Associates. (2009). Starbucks (USA) buys out partner in France. Retrieved from http://www.worldfranchiseassociates.com/franchise-news-article.php?nid=85
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