Posted on October 22nd, 2009 7 comments
One month after Best Buy Inc. (Best Buy), the largest retailer of consumer electronics in the United States, acquired Five Star, the third-largest retailer of appliances and consumer electronics in China, in May 2006, the management of Best Buy is weighing its branding options. Should Best Buy retain the Five Star brand and let the two brands — Five Star and Best Buy — compete with each other in the Chinese market? Or should Five Star lose its brand identity and be hereafter marketed as Best Buy?
The options have a sense of déjà vu: when Best Buy first stepped out of its home turf in January 2002, by acquiring Future Shop, the largest consumer electronics retailer in Canada, it had been facing a similar dilemma. The company had decided, at the time, in favor of a dual-brand strategy, and had thus retained Future Shop as a brand in its own right. The strategy had worked. There had been no evidence of cannibalization — the single largest risk in dual branding. Both Best Buy and Future Shop had grown together as independent brands.
Will the dual-brand strategy work in China for Best Buy with regard to Five Star? How should the company make it work? These questions are the focus of the case study.
ISSUES FOR CLASS DISCUSSION
1. What are the conceptual underpinnings of a dual-brand strategy?
2. What did Best Buy learn from its experience with dual-brand strategy in Canada?
3. How does the Best Buy situation in China differ from its situation in Canada?
4. Does a dual-brand strategy provide Best Buy with a core competitive advantage as it expands into new global markets?
Posted on October 22nd, 2009 13 comments
Kerim Taner, chief executive officer (CEO) and owner of Alara Agri, a major Turkish cherry and fig producer, wants to convince retailers in Belgium and Germany (and eventually other parts of Europe) to move cherries from a bulk product to a higher-end luxury product packaged in small carry bags. The move from bulk to small packages has been highly successful in the United Kingdom, where retailers both reduced waste and increased margins. The German and Belgian retailers are resisting the change, claiming greater price sensitivity in their consumer base. Taner is considering the need for a detailed test marketing plan to offer to selected retailers.
1. Should Taner engage in consumer research for Alara Agri’s prepackaged cherries or should he attempt to persuade German and Belgian retailers to conduct some test marketing in their stores?
2. If you think consumer research is appropriate, what are the specifics of your research plan?
3. If you think test marketing by retail customers is appropriate, what are the specifics of your research
4. Do you have any other recommendations for Mr. Taner?
Posted on October 22nd, 2009 1 comment
The case illustrates the opportunities, challenges and trade-offs involved in the design, prototyping and marketing of the Nano — the so-called people’s car — by Tata Motors Ltd. (TML), a Tata Group company. The case takes place nine months after the company’s chairman, Ratan Tata, launched the Nano, on January 10, 2008, at the 9th Auto Expo in Pragati Maidan, an exhibition center in New Delhi, India. The case asks students to take the position of Ravi Kant, the company’s managing director, in early September 2008, as he faces multiple dilemmas that could lead to the temporary closure of the Nano manufacturing facility in Singur, West Bengal: increasing competition, rising manufacturing costs, aggressive moves by local and global competitors, and stakeholder pressures.
CASE PREPARATION QUESTIONS
1. How sustainable is the Nano? How would you rate the Nano in terms of its economic, social and environmental consequences (i.e. net gains, net losses, trade-offs, etc.)? What are the key sources of
these gains or losses? What are the differences in the short-term versus the long-term economic, social and environmental footprints?
2. Is the Nano a disruptive innovation, or is it an innovation whose time has come? What are the short- and long-term implications of its launch? What key tensions surround the introduction of the Nano?
What competitive or political motivations maintain these tensions?
3. How does the introduction of the Nano influence sustainability at TML and within the Tata Group? What questions does the Nano raise or answer as TML aspires to a global position in the automotive
sector? How does the introduction of the people’s car square with luxury corporate acquisitions (e.g. the UK-based Jaguar)?
4. What are the implications of stakeholder tensions in Singur? What steps should TML (or the Tatas) take? Should TML have done things differently in the past? What stakeholder engagement strategy
would you recommend to TML going forward?
Posted on October 21st, 2009 6 comments
Set in June 2007, the case is about an Indian enterprise attempting what few other consumer packaged goods (CPG) companies from emerging markets have attempted to do: move beyond national geographical boundaries to the global arena. In most emerging markets, including India, CPG is a local business characterized by indigenous players aspiring to rule at provincial levels. Very few graduate to national status. Having acquired a place among the top 10 CPG companies in India, Dabur India Ltd. (Dabur) has taken the next step forward. The case examines whether global expansion, uncommon among its genre, is logical for Dabur. It looks at the issues not only in the context of Dabur’s unique positioning in the domestic market, which itself is growing, but with particular reference to the ongoing expansion in Nigeria.
Selected Case Issues:
1. Should Dabur build scale first in India before investing in global operations?
2. Does global expansion detract the company from its core market?
3. What are the reasons why Duggal and his team are expanding globally?
4. What are the domestic competencies that Dabur can leverage in a global market?
5. Is the company’s template for globalization workable?
6. Why is the template not working in Nigeria?
7. How should Dabur address the Nigerian market?
Posted on October 21st, 2009 3 comments
The chief executive officer (CEO) of Calgary-based Guest-Tek Interactive Entertainment Ltd. (Guest-Tek) considered whether and how his company should grow its business overseas. Ninety-seven per cent of Guest-Tek’s FY2003 revenue was derived from North American hotels — a market he knew would eventually become saturated. Guest-Tek had listed publicly several weeks earlier, in January 2004. Both internal and external investors now demanded results. Other geographic markets held the promise of new growth and competitors were already pursuing those opportunities. The CEO had to decide on a course of action.
The CEO needs to decide whether or not to pursue one or more international markets, and if so, how to go about it. On a process level, he needs to decide how to make these decisions — whom to involve and how.
SUGGESTED Minimum Presentation Points to Address:
Managerial Decision Making
1. If you were coaching the CEO, what would you see as the strengths and weaknesses in the way he is thinking about entering overseas markets?
2. What are the strengths and weaknesses of the key decision-making team at Guest-Tek?
3. What advice would you give to the CEO about managing the decision-making process for expanding GlobalSuite sales in overseas markets?
4. If you were facilitating a decision-making retreat to help the Guest-Tek team make these decisions, how would you structure the meeting? What questions would you guide the group through? What biases and opportunities would you expect to observe?
1. What information should Guest-Tek gather?
2. What sources are available for gathering this information?
3. How confident are you that the information will be complete and useful?
4. What techniques would you use to verify the information?
Positioning Strategy and Management of an Internationally Diverse Company
1. If you were the CEO, would you expand GlobalSuite sales in overseas markets? If so, which markets? Why?
2. If you chose to expand GlobalSuite sales in overseas markets, which countries or regions would you develop first, and how quickly?
3. Again, if you chose to expand GlobalSuite sales in overseas markets, how would you structure the expanded organization in terms of channels and management? How would you allocate decision-making and management responsibilities for each of the new regions? Why?
4. What should the CEO’s next steps be?