Global Strategy
Non-Market Strategy
Non-Market vs. Market
Making Decisions is hard!
In this case...
200
What does Global Standardization Strategy stands for?
High-cost reductions / low-local responsiveness:
•Economies of scale and location economies.
•Achieved through global division of labor.
•Based on wherever capabilities have lowest cost.
Price, the main competitive weapon:
•Minimal local adaptation.
200
What is the role of a firm from a sustainable development/sustainability perspective?
They are fundamental actors within a community and have direct and indirect impact in many sustainability indicators
200
What is the role of the firm in a market environment?
Generate profits and create jobs under the confine of the law
200
This tool helps decision-makers visually map options and their potential outcomes, often assigning probabilities to branches to evaluate risks and benefits.
A decision tree
200
Why did Disney engage with the political arena in the 'Don't say Gay bill' ?
Engage in political activities, within legal and regulatory limits, in order to
•have a voice in public matters ,
•maintain or promote the economic interests of companies and their shareholders by helping elect candidates for office,
•and promote policy initiatives to support strategic business intents.
alignment with corporate values, pressure from consumers
400
List the two main types of pressures firms face when determining an internationalization strategy AND explain the degree of these pressures the fast-food industry faces
cost reduction vs. local responsiveness
400
List three functional tactics of CSR
Create product/service markets to match community needs
Investment in markets that are otherwise underserved
Innovation of products/services that have both monetary and social value
Build Reputation and legitimacy to become trusted members in the community…why?
Talent attraction/retention/motivation
Others?
400
What is the relationship between the firms' market strategies and sustainable development?
Market strategies can harm or advance sustainable development
400
This type of cognitive bias occurs when individuals over-rely on the first piece of information encountered during decision-making, potentially distorting outcomes. What is this bias called?
anchoring bias
400
How does Sodexo’s choice of entry modes in foreign markets impact its ability to balance global efficiency with local responsiveness?
1. Tailored Entry Strategies:
- Joint Ventures: In regions with distinct cultural or regulatory environments, Sodexo often forms joint ventures with local partners. This approach facilitates a deeper understanding of local markets, enabling the company to adapt its services to meet specific client needs effectively.
- Wholly Owned Subsidiaries: In stable, high-income countries, Sodexo may establish wholly owned subsidiaries, allowing for uniform implementation of its global standards and operational procedures.
Impact on Global Efficiency and Local Responsiveness:
- Local Responsiveness: Collaborating with local entities through joint ventures enhances Sodexo's ability to customize services, ensuring they resonate with local preferences and comply with regional regulations.
- Global Efficiency: Operating wholly owned subsidiaries enables Sodexo to maintain consistent service quality and operational efficiency across different markets, leveraging economies of scale.
Challenges:
- Cultural Integration: Managing joint ventures can present challenges in aligning corporate cultures and operational practices, potentially affecting service delivery.
- Resource Allocation: Balancing investments between joint ventures and wholly owned subsidiaries requires careful resource management to sustain both global efficiency and local adaptability.
By strategically selecting entry modes that align with specific market conditions, Sodexo effectively navigates the dual imperatives of global efficiency and local responsiveness, thereby enhancing its competitiveness in diverse international markets.
600
Define Liability of Foreignness
possibility of higher costs of doing business in an unfamiliar cultural and economic environment.
600
List the three types of CPA
Financial; informational; constituency
600
How to balance market and nonmarket strategies?
Understand community needs, firms' assets and capabilities as well as firms' performance and market strategy.
600
A public health campaign in West Virginia failed because the advice to "eat healthy" was too vague, leading to decision paralysis. Later, success was achieved by promoting a specific action, such as switching from whole milk to skim milk. What key principle does this illustrate about effective communication?
The importance of specificity in communication
600
LVMH’s success in diversifying into sectors like cosmetics and hospitality demonstrates the strength of its luxury ecosystem. However, this strategy carries a risk of diluting the brand’s identity. What challenges does LVMH face in aligning its diversified portfolio with its overarching luxury brand identity, and how does it address them? (1 challenge and 1 strategy for addressing)
LVMH balances diversification and brand coherence through strategic focus and synergy:
- Luxury Ecosystem: Each brand within the portfolio operates autonomously but benefits from LVMH’s shared resources, expertise, and reputation, creating a cohesive luxury identity.
- Selective Diversification: LVMH enters markets that align with its core values of craftsmanship, heritage, and exclusivity, such as wines, spirits, cosmetics, and hospitality.
- Brand Positioning: By maintaining the premium positioning of all its products and services, LVMH ensures its diversified offerings reinforce, rather than dilute, its luxury status.
- Leadership in Innovation: Through investments in sustainability and digital transformation, LVMH remains at the forefront of luxury trends, appealing to evolving consumer expectations.
Challenges:
- Risk of Brand Dilution: Expanding into too many sectors could weaken the association with exclusivity, requiring careful market selection.
- Operational Complexity: Managing diverse industries necessitates robust oversight to prevent inefficiencies.
- Market Fluctuations: Diversification into sectors like hospitality may expose LVMH to cyclical economic risks.
800
What does Transnational strategy stands for?
High-cost reductions / high-local responsiveness:
•“Think globally, act locally.”
•Best practices, ideas, and innovations used everywhere.
Used by multinational enterprises that pursue a blue ocean strategy.
Difficult to implement:
•Duplication of efforts.
•Organizational complexity.
800
Define "independent expenditures" and list two issues associated with this tactic
Independent expenditures are a CPA functional tactic that are less overt and less traceable, with no disclosure required. Money is given to a third party for campaign donations.
800
Can you cite two examples of products and/or services created to address a social or environmental issues?
Electric vehicles, microcredit, microfinance, drug development and distribution
- Smart recycling bin: Sorts recyclable waste
- Smart fridges: Track food expiry
- Stackable planters: For small spaces
- Coastal traps: Clean oceans
- Smart sprinkler system: Adjusts to weather and regulates water consumption
- Indoor air filters: Improve indoor air quality
- The Shoe That Grows: A durable leather sandal that can be adjusted at three points and can grow by five sizes
- Edible cutlery: Chopsticks, cups, and plates that are just as cheap as plastic and can reduce waste worldwide
800
Despite knowing the right actions to take, such as washing hands in hospitals or wearing seat belts, individuals often fail to follow through. What is this behavioral challenge called?
The knowing-doing gap
800
What are the best modes of entry for Netflix in order to counter shrinking subscriptions in its home market (US)?
JVs, alliances, etc.
1000
DAILY DOUBLE
Name the mode of entry that (1) requires the least investment and yields the least control and (2) requires the most investment and yields the most control for the headquarters
1000
What is the name of the sustainability agenda of the United Nations for 2030?
Sustainable Development Goals
1000
Why is it hard to strategize and implement non-market strategies (e.g. create a product that disrupts a traditional industry and breaks with status quo by combining profit with people and planet concerns such as Warby Parker)?
identify who are the actors in the Nonmarket environment and implement strategy that can address ALL of their (sometimes) diverging demands
expensive, mission drift, not the goal of the firm, too many diverging opinions on the subject, greenwashing trap
1000
DAILY DOUBLE
Define willful blindness using the Peloton case as the context.
TBD
Margaret Heffernan’s concept describes how people ignore obvious problems or avoid acknowledging them because resolution would disrupt the status quo.
During the pandemic, Peloton experienced an unprecedented surge in demand as lockdowns and gym closures drove consumers to invest in at-home fitness equipment. In response, the company committed substantial resources to ramp up manufacturing capacity, including building a $400 million production facility in Ohio. However, as restrictions eased and gyms reopened, consumer demand dropped sharply, leaving Peloton with excess inventory, underutilized facilities, and financial strain.
This situation reflects willful blindness because:
Ignoring Market Signals: While the surge in demand was extraordinary, there were clear indicators that it was tied to temporary conditions rather than a permanent shift in consumer behavior. Peloton may have chosen to focus on optimistic growth projections instead of planning for a potential reversion to pre-pandemic demand levels.
Failure to Adapt: Peloton might have dismissed warnings from analysts or internal voices suggesting caution, clinging to the belief that pandemic-driven growth would continue indefinitely.
Overconfidence Bias: The company appeared overly confident in its ability to sustain growth, which clouded its judgment about potential risks and market volatility.
This example illustrates how willful blindness to temporary trends and external market signals can lead to overinvestment and strategic missteps. It underscores the importance of scenario planning and building flexibility into business strategies, particularly during periods of rapid and unusual growth.
1000
This is my favorite fast-food chain. Give the name of the chain and cite one example of local adaptation viewed in class.
McDonalds - germany (mc brezel), brazil (pao de queijo/mc cafe/guarana), thailand (temples, eggs), japan (shrimp burger)