Need for global competiveness

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Slide 1:

Need for Global Competitiveness 1

Global Competitiveness:

Global Competitiveness Firm’s ability to sell its product in home and foreign market Ability to profitably gain and maintain market share in the domestic market 2

Cont..:

Cont.. How effectively an organization meets the wants and needs of customers relative to others that offer similar goods or services Organizations compete through some combination of their marketing and operations functions What do customers want? How can these customer needs best be satisfied? 3

12 pillars of competitiveness:

12 pillars of competitiveness Institutions Infrastructure Macroeconomy Health and primary education Higher education and training Market efficiency Technological readiness Labor market efficiency Financial market efficiency Market size Innovation 4

U.S. Globalization:

U.S. Globalization Many U.S. companies have made the world their market.

Modes of foreign market entry:

Modes of foreign market entry Exporting Licensing Joint venture FDI 6

Joint Ownership:

Joint Ownership KFC entered Japan through a joint ownership venture with Japanese conglomerate Mitsubishi.

Franchising:

Franchising In India, McDonald’s serves chicken, fish, and vegetable burgers, and the Maharaja Mac—two all-mutton patties, special sauce, lettuce, cheese, pickles, onions, on a sesame-seed bun.

Developing international strategies:

Developing international strategies Scope of operation Resource allocation Competitive advantage synergy 9

Evaluating international market:

Evaluating international market Consider market potential,competition Consider the degree of competition within different markets Evaluate the regulatory environment of the prospective markets, Assessment of cultural factors. Chapter 1: Operations Strategy 10

Global Marketing in the 21st Century:

Global Marketing in the 21 st Century The world is shrinking rapidly with the advent of faster communication, transportation, and financial flows. International trade is booming and accounts for 25% of U.S. GDP. Global competition is intensifying. Higher risks with globalization.

Slide 12:

Chapter 1: Operations Strategy 12 The Global Competitiveness Rankings 1999 Country Index 1999 Rank 1999 Rank 1998 Singapore 2.12 1 1 United States 1.58 2 3 Hong Kong 1.41 3 2 Taiwan 1.38 4 6 Canada 1.33 5 5 Switzerland 1.27 6 8 Luxembourg 1.25 7 10 United Kingdom 1.17 8 4 Netherlands 1.13 9 7 Ireland 1.11 10 11 Finland 1.11 11 15 Australia 1.04 12 14 New Zealand 1.01 13 13 Japan 1.00 14 12 India -1.30 52 50

Slide 13:

Global Competitiveness – India Ranks 55 in year 2004 ratings, one up from its ranks as the 56th most competitive nation in 2003. This is below China at 46 (it slipped down 2 places from 44 in 2003). It is also below countries as Australia, Canada, South Africa, Mexico and quite a few East European Countries. 13

Effective Global Manager:

Effective Global Manager Develop and use global strategic skills Manage change and transition Manage cultural diversity Design and function in flexible organizational structures Ability to work with others and in teams Ability to communicate Learn and transfer knowledge in an organization 14

Global Product Strategies:

Global Product Strategies Straight Product Extension: Marketing a product in a foreign market without any change. Product Adaptation: Adapting a product to meet local conditions or wants in foreign markets. Product Invention: Creating new products or services for foreign markets.

Global Pricing Strategies:

Global Pricing Strategies Companies face many problems in setting their international prices. Possible approaches include: Charge a uniform price all around the world. Charge what consumers in each country will pay. Use a standard markup of costs everywhere. International prices tend to be higher than domestic prices because of price escalation . Companies may become guilty of dumping –a foreign subsidiary charges less than its costs or less than it charges in its home market.

International Pricing:

International Pricing 17 European Union countries have adopted the euro as a common currency, creating “pricing transparency” and forcing companies to harmonize their prices throughout Europe.

Measring Global competitveness:

Measring Global competitveness Incremental capital/output ratio Growth in labour productivity Profitability ratio Chapter 1: Operations Strategy 18

McDonald’s :

McDonald’s

Slide 20:

Chapter 1: Operations Strategy 20

Slide 21:

-About 9,000 of the restaurants are company owned and operated; the remainder is run either by franchisees or through joint ventures with local businesspeople. -75 percent of overall sales from 9 Major areas. -McDonalds Business Model is slightly different from others like as ordinary Franchise fees , marketing fees & Rent . -McDonald's trains its franchisees and others at Hamburger University in Oak Brook , Illinois . Business of the McDonald’s:

Slide 22:

EXECUTIVE SUMMARY one of the world's largest chain of hamburger fast food restaurants . McDonald’s currently operates in over 119 countries around the world with over 32,000 stores. Daily serving nearly 47 Million customers. hamburgers , cheeseburgers , chicken products , French fries , breakfast items , soft drinks , shakes , and desserts main products of McDonald’s. McDonald's revenues grew 27% over the three years ending in 2008 to $22.8 billion, and 9% growth in operating income to $3.9 billion.

Competitive analysis:

Competitive analysis Strategies followed: Identifying competitors strategies Identifying competitors resources and its strength &weakness Key Success Factors Product development cost efficiency Marketing Chapter 1: Operations Strategy 23

Challenges:

Strategy Branding Different languages/Culture Communication/ infrastructure Legal infrastructure Political environment Influence in the target country Challenges

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