Wahaha Group - Cola Wars in China: The Future is here

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  1. Cola Wars in China Case Study Analysis
  2. Index
    • 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
    • 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
  3. Index
    • 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
    • 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
  4. Rationale and Objectives
    • 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.
    Objectives The objectives of this resource are to 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. Rationale
  5. Rationale and Objectives Required Text Strategy Analysis and Practice John McGee, Warwick Business School Howard Thomas, Warwick Business School David Wilson, Warwick Business School
  6. 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
  7. 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.
  8. 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
  9. Wahaha Group
    • How will Wahaha’s multinational competitors respond to ‘Future Cola’ and other Future Series carbonated drinks achieving an impressive 18% market share (2002)?
    • How should Wahaha prepare for these responses?
    • How should it continue to increase its maker share?
    Indicative Research Questions
    • Case Study
    • Business Case
    Click on Image
  10. Industry Analysis and Competitive Strategy Click on Image
    • Industry analysis and competitive strategy
    • Context Analysis
    • Industry Information
    • Market Structures
    • Market Analysis
    • Competitor Analysis
    • Cola Wars
    • Water Wars
    Click on Image Objective: to determine the opportunities and threats that exist for firms within a competitive environment
  11. Industry Analysis and Competitive Strategy
    • The Coca-Cola Company
    • PepsiCo, Inc.
    • Industry Analysis and Competitive Strategy Activity
    Click on Image
  12. 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
  13. 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
  14. Market Structures Click on Image Larger Map 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.
  15. Market Structures The imperfectly competitive structure is quite identical to the realistic market conditions where some monopolists , oligopolists , and duopolists exist and dominate the market conditions. Click on Image Larger Map
  16. Market Analysis Click on Image Larger Map
    • Market Analysis
    • Related Readings
      • Market Analysis 1
      • Market Analysis 2
    • Market Analysis Activity
  17. Competitor Analysis
    • Competitor array
    • Competitor profiling
    • Media scanning
    • New competitors
    • See also
    • External links
      • Competitor Analysis – A brief guide
      • Porters 5 Forces
    Competitor analysis in marketing and strategic management is an assessment of the strengths and weaknesses of current and potential competitors . Click on Image. Sensory profiling can help you to understand how your product differs from the competition's and how to improve it.
  18. 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
  19. 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 Coca-Cola Story
      • A turncoat in the Cola Wars
      • The Yin and Yang of Chips
      • Company Profile
    Click on Image
  20. 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
  21. 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
  22. 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
  23. 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
  24. The Coca-Cola Company
    • Company Analysis
    • 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
    Click on Image
  25. The Coca-Cola Company
    • See also
    • External links
      • Coke's Sinful World
      • Coca-Cola: A Classic
      • Critical Perspectives
  26. 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
    • Rivalry with Coca-Cola
    • Troubled popstar endorsements
    • See also
    • Notes
    • External links
      • Gatorade
      • Pepsi's New Challenge
    Click on Image
  27. Top Competitors
    • Cadbury Schweppes
      • Dr Pepper
      • Schweppes
    • 7UP
    • A&W
    • Canada Dry
    • Diet Rite®
    • Hawaiian Punch
    • Mott’s
    • Slush Puppie
    • Snapple
    • Sunkist Soda
    • Welch’s
    Click on Image
  28. Industry Analysis and Competitive Strategy Activity 1/2 Based on British Airways Activity by 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
    Click on Image
  29. 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?)
  30. 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 .
    • Related Readings
    • Wahaha Corporation – MarketBuster
    • Beverage tycoon plans more expansion
    Click on Image
  31. 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
  32. 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).
    • 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
  33. 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
  34. 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
  35. Sources of Cost Advantage
    • Marketing
    • Marketing management
    • Sustainable competitive advantage
    • 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).
    • It provides customer benefits,
    • It is hard for competitors to imitate, and
    • 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 .
    Core Competency
  36. Sources of Cost Advantage
    • Economies of Scale
    • Business Economics
    Click on Image Larger Map
  37. 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.
  38. Experience Curve Effects 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".
    • 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
  39. Value Chain Analysis
  40. Marketing Click on Image Larger Map
    • Types of markets
    • The Marketing Mix
      • Four Ps
    • Seven Ps
    • Technique
    • Criticism of marketing
    • List of marketing topics
    • Marketing Tactics - Activity
    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".
  41. Market Positioning
    • Market Positioning
    • Product positioning strategy
    • Product positioning process
    • Positioning concepts
    • Measuring the positioning
    • See also
      • Conjoint Analysis
      • Factor Analysis
      • Lists
    • References
    • Market Research
    • Other types of business research
    • Types of marketing research
    • Marketing research methods
    • Some commonly used marketing research terms
    • See also
    • 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
    Click on Image. Source: © 2006 Framework Partners Inc
  42. Marketing Strategy 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. Click on Image
  43. Marketing Strategy An example of marketing strategy is as follows: "Use a low cost product to attract consumers”. Click on Image. Larger Image .
  44. 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.“ 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. Click on Image
  45. 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
  46. 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
  47. Life Cycle Analysis
    • 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
    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. Click on Image. Larger Map
  48. 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 .
  49. Product Portfolio Analysis
    • General Electric (GE)
    Click on Image
  50. Product Portfolio Analysis - Activity Image: Different coloured post-it notes. Copyright: Ákos Rappay Click on Image 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. 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.
  51. 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 .
  52. Crisis Management
    • Crisis Management Plans
    • Crisis Communication Plan
    • Crisis Planning and Communications
    • Corporate Crisis Management
  53. 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 .
  54. Financial Crisis
    • Are your inventories growing?
    • Have you noticed shrinking profit margins?
    • Are your suppliers curtailing your credit?
    • Do you see accounts receivables ballooning?
    • Is it becoming hard to to pay your bills on time?
    • Has your accounting been incomplete or slow lately?
    • Are restrictions pinching your cash flow?
    Click on Image .
  55. Public Relations Crisis Click on Image . 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.
  56. 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 .
  57. 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
  58. 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.
  59. 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 re-evaluation. 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.
    • Entrepreneur
    • Entrepreneurship
    • Entrepreneurial education
    • Social Entrepreneur
    • Serial entrepreneur
    • Parallel entrepreneur
    Click on Image.
  60. Intrapreneurship
    • The History of Intrapreneurship
    • Human Resources Issues
    • Intrapreneurial Organisation
    • The Intrapreneur
    Click on Image
  61. Global Strategies and International Advantage
    • Global Strategies and International Advantage
    • International Business
    • Multinational Corporations
    • Globalisation
      • Globalisation Activity
    • International Trade
    • National Innovation Systems
  62. 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 M ulti N ational C orporations 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 . Click on Image
  63. Multinational Corporations
    • 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.
    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:
  64. Multinational Corporations
    • Critiques
    • Examples
    • See also
    • External links
    • References
    Click on Image
  65. 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 . Click on Image
  66. 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
  67. 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
  68. Porter’s Diamond Click on Image 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),
    • 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).
  69. 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. Click on Image
  70. 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. Click on Image
  71. 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) Click on Image. Larger Image.
  72. 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. Click on Image
    • 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
    • Strategic Action Plan for Science and Technology Innovation
  73. 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. Click on Image
  74. 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. 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.
    Click on Image SWOT Activity
  75. 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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  76. SWOT Analysis Click on Image
  77. 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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  78. 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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  79. Wahaha Group’s Strategic Options
    • Related Readings
    • Wahaha Claims Top Beverage Spot
    Growth Strategies
    • Horizontal integration
    • Vertical integration
    • Diversification (or conglomeration)
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  80. 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 zero-sum game. One person’s gain is possible only at another person’s expense. Success depends on battling competitors for market share. Click on Image
  81. Wahaha Group’s Strategic Options
    • 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
    Marketing Warfare Strategies Click on Image Larger Map
  82. 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 meta-evaluation
    • Evaluation approaches
      • Classification of approaches
      • Summary of approaches
    • Evaluation methods and techniques
    • See also
    • Notes and references
    • External links
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  83. 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 . 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 . Click on Image
  84. 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 Click on Image
  85. 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
    • 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
  86. Statistical Surveys When the questions are administered by the respondent , the survey is referred to as a questionnaire or a self-administered survey .
    • See also
      • Opinion poll
      • Marketing
      • Marketing research
      • Quantitative marketing research
      • Questionnaire construction
    • Lists of related topics
    Contents Click on Image
  87. 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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  88. 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
  89. 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 . Click on Image
    • Conjoint analysis (Marketing)
  90. 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. Click on Image
    • Conjoint Analysis Tutorial
  91. 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. Click on Image
  92. 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. Click on Image
  93. Logit Analysis in Marketing Other purchase intention/rating translations include the preference-rank translation and the intent scale translation . The main disadvantage is that the software is not easy to find.
    • Logit and Probit Analysis
  94. 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.
  95. 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
  96. 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.
    • 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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  97. 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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  98. Gap Analysis This comparison becomes the gap analysis. Such analysis can be performed at the strategic or operational level of an organization. Click on Image
  99. Risk, Uncertainty and Strategy
    • Risk, Uncertainty and Strategy
      • Risk management
      • Game theory
    • Decision Making
      • Cost-benefit Analysis
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  100. 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
  101. 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. Click on Image
  102. 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
  103. 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 . Click on Image
  104. 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 .
    • 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
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  105. 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 , long-term 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
  106. 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. Click on Image
  107. 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 St