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Strategy in emerging countries.
Transcript of Strategy in emerging countries.
What is the size of the house.
Which products might not be successfull in Japan, in year 2000. How to solve the problem Why retailers like IKEA go abroad? Product/Price/Place/Promotion Prezi Slide The 5th birds of Innovation; Juan Jose Goñi Zabala
(Owl, Hummingbird, Stork, Swallow, Peacock)
(Buho,Colibri, Cigueña, Golondrina, Pavo Real) Lets analyze IKEA case in JAPAN Strategy? Strategy in emerging countries What do you enjoy most? The dream is to be sucessful in other countries. Feeling + How to go?:
From dreams to achivable results Where to go?:
What?, Where? why? Understanding So know that we know what we want to do? Let see how to adapt Product, Prize; Place and Promotion. IKEA made a rational choice instead of following Upssala Model this time.
Japan after second world war was a very attractive market. Also cities were experience a very fast growth.
BUT did they realized about Psychic distance? Whereas production companies look for low cost production, retailers look forward to increase sales. But why do IKEA failed in Japanese Market? IKEA was not ready for Japan, Japan was not ready for IKEA.
( Small stores, Ensambling, Philosophy of the living style, Regulations,..
Too early for IKEA in Japan...)
Lets see this video to understand "why sometimes we tend to take things for granted" http://www.ted.com/talks/sheena_iyengar_on_the_art_of_choosing.html Foreground Middleground Background Combined analitical research with soft research.
Be aware you might be under a Physic Distance case.
Time is importance, arriving too early or not late.
FAILURE IS BEST CHANGE TO LEARN. Promotion;
IKEA promotion is dome by letting you see the flat in the shop.
In Japan the focus on creating showrooms for really small small spaces. Place;
Japanese were not atractted by IKEA small store in the 70s. They try second time with a large one, with big restaurants areas, and parking lots.
Packaging strategy of saving money for the client was not successfull in Japan. IKEA did not change the packaging but added new services like services of delivery and ansemble with extra cost. Pricing;
Cost base vs. Market Base.
Ikea followed cost based, which is not a problem in Japan, but was a problem in China at the beginning. You must undergo the whole program to develop the strategic plan. Why is Carrefour in these countries? ¿But what make emerging countries special? Global Born So strategy is not a fixed model Till here all is an strategic game Step 1 Step 2 Step 3 Step 5 Step 4 Step 6 Step 7 Open eyes
Learn from others
Innovate Step 8 Last example? Where did carrefour see the business advantage. Take disadvantages into account but focus on advantages; ( You might have already lived in the Future, Easier to see business opportunities. ) Business opportunity DEVELOPING ECONOMIES disadvantages;
1. Property rights infrigments.
2. Governmental regulations in favor of local companies.
3. Political risk. Expropiation. Riots.
4. Not freedom for certain activities. Carrefour case Which birds shall work in this area. Do not worry, there is plenty of work to come for the other kind of birds. We are still dream, know it is time to start getting the work done!!! Entry modes strategy AT LEAST WE CAN FIND 5 DIFFERENT APPROACHES TO SAME DREAM, GLOBALIZATION Finalizar con una vista general ( o revelar el final) es ideal para dar contexto y armar la historia A combination between Uppsala model and business opportunity in the Services sector, due to less developed economy. They are buying foreign companies; ( know how, distribution system, Brand name)
They are investing in other merging countries getting direct access to natural resources. Meanwhile what are companies from emerging countries doing , like for example China? Lets first talk about the challenges I am just going to mention a little tiny part of it. But IKEA tries again in 2001, and then it is sucessull; How?
IKEA spent 5 years analizing japanese families and their homes.
IKEA Already was stablished in Canada , USA, Australia, China, Russia,..
Japanese regulations were more flexible.
Baby Boom was demanding new living styles. So lets hands to work.... Till know we were just dreaming... IKEA started to expand internationally from the nearest countries, such as Norway in 1958, Denmark in 1969, Switzerland in 1973, Germany in 1974 and so on. After entering successfully in those countries, IKEA decided to enter Asia area. Japan was the first country that IKEA entered in 1974 and the internationalization strategy used for Japan was not much different from what is used in its nearest markets. The degree of adaptation was low. IKEA’s small-size stores did not attract Japanese consumers’ attention and they were not willing to assemble IKEA’s products.
1986 IKEA leaves Japan. But 20 years later they try again. Johanson and Vahlne 1977 There is psychic distance when dealing with internationalization. Managers who have experience abroad. Working and living abroad.
Managers with foreign language proficency.
Natural risk takers.
So try to think about yourself: Just Think about it.
Which can of bird you are.
What are your passions. What do you like doing.
Do you like taken risks.
Just think what makes you happy, Avoid thinking of anything else. ( Family, Salary, Capabilities, ) Company size Money Logistics Company
structure Small Medium size High Tech Managers are people with experience working and living abroad Web positioning services
in China MBA Studies in China Chinese companies still do not offer still do not demand this type of services, that foreign companies required this kind of services in China Chinese companies still do not offer high quality services on MBA. Chinese students still not clear about this market, but Foreign students are already demanding Them Pro Eseune The did not take into account psychic distance. Case study; Potential markets ; All of the countries of the students that belong to the program.
Decide which countries to enter and tell us why. define the strategy model your are using if any.
Decide the entry mode strategy.
Decide the advantages and disadvantages of both strategies selected.
Strategy goes from dreaming to results, individually each person must say what kind of activities would like to do more and why. ( Bird )
1. Look for ideas, information about markets, etc
2. Think about new ideas, breaking the rules.
3. Design the strategy for implementing the ideas
4. Be the one that manage the company and project after the 2 nd year running.
5. Be the one to sell the idea to Capital risk investors.