...Introduction This report is based on the ‘L’Oreal: Expansion in China’ case study. L’Oreal is a successful French cosmetic company that involved into many different international markets. This report will discuss how L’Oreal gets into the Chinese cosmetic Market and the strategic to develop their brand in the Chinese market. L’Oreal acquires two famous Chinese cosmetic brands which are Yue-Sai and Mininurse. It is in order to entrance the market quickly and sales the most suitable products. The aim of this report is to define the challenge L’Oreal has been faced. Then it describes how L’Oreal managing their strategic in Chinese market. In addition, it gives an accommodation which could help L’Oreal overcoming these challenges. Background L’Oreal’s background The French company L’Oreal is a giant in cosmetics market that founded in 1907 by Eugene Schueller. The earliest success for L’Oreal is because it got the first hair color formula and then expanded into the field of shampoo and soaps. From the very beginning, L’Oreal decided to export its product to other countries such as Holland, Italy and so on. It entered the US market at 1953. Schueller was died in 1957 and Francois Dalle replaces his post. Although the boss has been change but L’Oreal expanded into overseas markets continuity. In 2004, L’Oreal had 52,000 employees over the world and portfolio of 17 international brands. As shown in the L’Oreal group annual report, the largest market for L’Oreal is still Western...
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...International Business OBJECTIVES • To identify how managers develop strategy • To examine industry structure, firm strategy, and value creation • To profile the features and functions of the value chain framework • To assess how managers configure and coordinate a value chain • To explain global integration and local responsiveness • To profile the types of strategies firms use in international business Chapter Overview Chapter Eleven presents tools and concepts used in analyzing and formulating international business strategy. First, the relationship between industry structure and competition in global industries is examined. Next, value chain analysis is used to identify the internal capabilities of the firm that can be leveraged to create competitive advantage. Effective international strategy depends greatly on the proper configuration and management of a company’s global value chain. The sometimes conflicting demands of global integration versus local responsiveness are examined. Finally, a typology of strategic alternatives including multidomestic, international, global, and transnational strategies is presented. CHAPTER OUTLINE OPENING CASE: Value Creation in the Global Apparel Industry [See Fig 11.1 and Map 11.1.] Zara, a large clothing retailer headquartered in northwest Spain, has used an innovative strategy to power its global expansion. The company has grown to more than 1,292 stores in 72 countries since...
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...strategies companies adopt when they expand outside their domestic marketplace and start to compete on a global basis. The chapter opens by discussing how global expansion creates value for a company. The focus is on the ability of global companies to transfer distinctive competencies across national markets, to realize location economies from basing individual value-creation activities in the optimal location for that activity, and to ride down the experience curve more rapidly than competitors that are focused on just their domestic market. Next the chapter examines two types of competitive pressures that firms competing in the global marketplace typically face: pressures for cost reductions and pressures to be responsive to local conditions. These pressures place conflicting demands on a company. The sources of pressures for cost reductions and pressures for local responsiveness are explored. The discussion then turns to the different strategies that companies can pursue in the global arena. Four different strategies are reviewed in some detail—an international strategy, a multidomestic strategy, a global strategy, and a transnational strategy. The pros and cons of each of these strategies are debated. A link is made between the appropriateness of different strategies and the pressures for cost reductions and local responsiveness. It is suggested that the optimal strategy is contingent on the extent of pressures for cost reductions and local responsiveness facing a company. We...
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...up in a number of business environment. Internal companies should have the top leadership, who are from different countries, be conversant with the local staff from host countries that may need different models and processes. In international business operations, getting to be aware of the set structures and processes that include the varied cultures of the company in a balanced manner. Cross cultural interaction in the business world calls for cultural compromise; the aspect of ignoring or favoring one culture over the other one would bring revenue to a decline and general decline of the whole company. For success to be acquired, varied decision making process and organizational models have to be considered with regard to how they change and cultures involved. Culture affect the behavior and preferences of customers and business partners. To be effective in a foreign market, the manager has to adapt their products to acquire the varied needs of a certain group of clients. Any change that has to be made in advertising or features of products among others will to some extend be based on cultural context. The success or inefficiency of a company is reliant upon how well the staff undertake their business and technical skills in a new environment. This capacity is reliant upon the job-based skills and personal sensitivity and how they handle a new cultural setting. One of the common issues that lead to the downfall of companies is the belief that success at home will go on to...
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...Multinational Companies Silvia Delia OLARU Spiru Haret University, Bucharest, Romania E-mail:olarudelia@yahoo.com Phone: + 40213169793 Elena GURGU Spiru Haret University, Bucharest, Romania E-mail:elenagurgu@yahoo.com Phone: + 40213169785/88 – ext.151 Abstract The good news for multinationals is that globalization is creating more universal standards of business conduct, and these are becoming more rigorous. As more companies adopt these standards, it becomes increasingly important for every multinational to establish companywide core values, standards of behavior, and relevant policies in tune with the rest of the world's ethics and compliance environment. The benefits of an ethical culture outweigh the costs. Globally ethical companies will be those that maintain a strong reputation in all their markets, experience increased employee commitment and loyalty, garner advantages in attracting and retaining customers, and generate superior levels of performance and success. Keywords: globally ethical companies, business conduct, ethical culture, professional standards, corporate code of conduct Introduction Companies operating in foreign countries find that understanding and complying with variant laws, managing employees far from headquarters, serving customers and relating to suppliers and partners in multiple jurisdictions can introduce significant challenges to developing shared corporate values and realizing a truly global culture. Multinational companies are challenged...
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...Question 1: The need for an MNC to “be global and act local” is because of the specific interests of an organization. Some has an interest of being global and some focuses on the local market (Morand and Rayman-Bacchus 2006). This is important for global companies to breach and adapt to domestic markets. For this to work, the company should develop training and development in terms of local cultures and understanding its’ culture. A change of strategy is needed if the company wants to be successful at “be global and act local”. This change of strategy could focus on how well the organization is getting back to its customers in terms of demands. The company could design its structure by adopting global product structure where product classes and services are divided into different groups and divisions (Deresky 2014). Not only learning and understanding the culture, the company should outsource employers locally as they would know the market better and would be able to apprehend any global competitors. Question 2: Reasons to restructure a firm could be to improve any conflict decision-making and how the company monitor and evaluate such decision (Morand and Rayman-Bacchus 2006). Restructuring could be done by making an effective change in the organizational structure such as the workforce structure. Some employees could be taking personal time off and others might be spending more time at work than they should have. Employees who are not performing at their maximum should...
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...world’s leading successful pharmaceutical company offering low and sometimes free drugs to low income consumers. Its products have been known to save lives as well improve the quality of life to its customers. The company has recently launched an initiative to help protect and preserve the environment through green initiatives and recycling and proper packaging. Although based in New Jersey, the company offers a variety of locations and in this paper, I will be discussing the facility based in the African nation of Colberia and its impact on its indigenous people. Before we can dig deeper into the paper, we first need to determine the stakeholders and what role if any do they play in some of issues brought forth by the people. What is a stakeholder? A stakeholder is a person, group or organization that has interest or concern in an organization. In most cases, a stakeholder will have the interest for profit and less for community involvement. Stakeholders have a reputation for being greedy and out for money and minimize costs wherever they can.In our study today, the stakeholders would be all the executives living in Colberia, the CEO as well as any foreigner investors. In the paper, we will explore more the roles of a stakeholder and how they have impacted the local people in Colberia and how PharmaCARE has brought about any changes in living conditions and job security in the area. In our next discussion, we will take a look at how PharmaCARE can improve and change some of...
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...Dec2012, Vol. 90 Issue 12, p109-113. The article focuses on how Panasonic in China learned to bridge two strategies that are often mutually exclusive: localization and integration. The founder of Panasonic was asked by the Chinese leader Deng Xiaoping to help modernizing China’s industries. Panasonic began licensing technologies to China which led to more than 40 China-based manufacturing operations. Panasonic’s first main purpose was to take advantage of low manufacturing costs and exporting the output. In Japan, Panasonic invested a Lifestyle Research Center to understand more how households use their products. However, there was little effort to understand China’s market which had as consequence of minimal efforts to localization. As the middle class of China began to emerge, local competitors such as Haier outpaced the Panasonic company. In response, Panasonic started to develop a deep understanding of consumer lifestyles in China’s market. Through its effort in the Chinese market, Panasonic learned to bridge localization and integration as their strategies. Reflection “When your manufacturing base becomes your growth market, your strategy has to adjust.” This statement was written by the authors of the article What Panasonic Learned in China. By reading this, one can have different thoughts about what kind of strategies should be used? It was surprising how Panasonic came back as a changed company. Panasonic went to China to take an advantage of the usual...
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...international business? What are the primary reasons that companies engage in international business? International business consists of all commercial transactions (private or governmental) such as sales, investment, and transportation that take place between two or more countries. Companies` primary reason to engage in international business is to make profit, however government may not be motivated by profit. Firms engage in international business for three main reasons; expanding sales, acquiring resources, and reducing risk. 1- There are more potential consumers in the world than found in any single country, so the companies might try to increase their sales by reaching international markets. 2- Producers and distributers seek out products, services, resources and components from foreign countries sometime because domestic supplies are inadequate or they might want to gain competitive advantage, so they want to cut costs by acquiring special resources. 3- Reducing risk. Operating in countries with different business cycles can minimize swings in sales and profits; they might go international for defensive reasons. 2. Why should domestic managers have an understanding of globalization and international business? What are the current views regarding the future of globalization? Studying international business is important because 1- most companies either are international or compete with international companies. 2- Modes of operations may differ from those used domestically...
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...currently headquartered in Boise, Idaho. McBride is a rapidly growing company with plans to open a total of eight company branches located throughout Idaho, Montana, Wyoming, North Dakota, and South Dakota. McBride’s mission is to break even financially within six months of commencing operations. Because McBride is a little known, new company, an aggressive marketing campaign will help make McBride Financial a well-known, trusted lender. By developing a proper advertising and marketing campaign, McBride will be more apt to meet their ambitious financial goal of breaking even within six months. Target Market McBride Financial specifically targets the following types of home buyers: Professionals seeking a primary or secondary residence, retirees seeking a primary or secondary residence, and families or individuals purchasing recreational properties. By determining who their primary markets are, McBride will be able to better conduct market research into those groups of people. In turn, this will allow McBride to custom tailor services and marketing to their intended audience. Market Research Conducting market research will allow McBride financial to better understand its target customers and learn how to more efficiently operate. Two key points McBride Financial should focus on while conducting their research is the local demographic and other local mortgage companies. Researching and studying the local demographic will help McBride better focus their marketing campaign...
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...The Strategy of International Business Learning objectives • Explain the concept of strategy. • Understand how firms can profit from expanding globally. • Understand how pressures for cost reductions and pressures for local responsiveness influence strategic choice. • Be familiar with different strategies for competing globally and their pros and cons. In this chapter the focus shifts from the environment to the firm itself and, in particular, to the actions managers can take to compete more effectively as an international business. This chapter looks at how firms can increase their profitability by expanding their operations in foreign markets, the different strategies that firms pursue when competing internationally, and the various factors that affect a firm’s choice of strategy. Subsequent chapters build on the framework established here to discuss a variety of topics including the design of organization structures and control systems for international businesses, strategies for entering foreign markets, the use and misuse of strategic alliances, strategies for exporting, and the various manufacturing, marketing, R&D, human resource, accounting, and financial strategies that international businesses pursue. OUTLINE OF CHAPTER 12: THE STRATEGY OF INTERNATIONAL BUSINESS Opening Case: MTV Networks Introduction Strategy and the Firm Value Creation Strategic Positioning Operations: The Firm as a Value Chain Global...
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...will always be carefully monitored by the staff. External Forces Environmental The Happy Pawws Playground is dedicated to the environment and the community (Pearce & Robinson, 2009). Living in the community where the business is located means that the company will be sure to be responsible in taking care of environmental issues in the area. Not only will they be environmentally friendly themselves, but also they will encourage their employees to do so as well. They will also donate time and money to several local environmental agencies in the Branson area. Global In the beginning, the Happy Pawws Playground will not be active in global business because they are a small local company. In time they hope to attract customers from all over the world to their establishment by advertising on their own web sites as well as on social media sites (Pearce & Robinson, 2009). They will also be seeking to open in other locations around the globe for their customers to leave their pets when they vacation nearby. The company will focus on areas that are popular to tourists, such as Paris, Cancun, and Australia. Innovative Because this is a new company is a good way to be on the cutting edge of innovation. The company will focus on hiring both young and older employees to have a wide range of ideas and culture. The employees will always be encourages to speak their minds and share...
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...Directory Introduction P 2-3 Elaborate Topic P 4–5 Local Advertising P 6–25 Global Advertising P 26–36 Conclusion P36-39 Effective advertisement global or local? Advertisement, every time we turn on TV or radio, surf the Web, check the mail or drive to the supermarket, we are subjected to multiple, and sometimes simultaneous--advertising messages. With that kind of saturation, and the high cost of running an ad campaign, advertisers need to make their ads stand out. Of course, advertising needs to do more than get noticed. It needs to be focused, memorable and ultimately compelling enough to move customers to choose their product or service over all the others fighting for attention. Before we define an effective advertisement is global or local, we should know one thing first . what is the meaning of an effective advertisement? What is the factor to construct a successful advertisement ? effective advertising is advertising that changes the behavior of the consumer of that one thing and also effective advertising, is advertising that makes people feel a certain way about a brand mean it’s all about the brand and how people allow that brand to influence their lives, effective advertising is there is a lot of ways to measure advertising these days, but the over view of what makes an add effective is to people remember and they motivated by is it to the consumption...
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...Introduction II. How some businesspeople do when they are stuck in the dilemma between business ethics and business profit. a. Follow what local companies do b. Find the way that can improve their business III. How some company response when their staffs breach the company rules, a. Business ethics b. Business reputation IV. A well paragon a. Do not rationalize any action that is probably not right b. Stable rules V. Conclusion What can people learn from this case? a. Taking account of both side b. Investigation before getting in a new market Business is a field that has been changing and improving all the time. Fifty years ago, many companies were still limiting their markets in their own countries, but the improvement of technology has been triggering the development of multinational companies. More and more companies have intended to expand their business territories in order to increase their profits. Nevertheless, cross-border business has faced many problems since it sprung up, especially in various cultures. Managers get to set up different company policies so that they can cater to different business environments. However, there are some codes in business that should never be changed, such as business ethics. In the example of International Harvester, one can understand how the business person did when he or she was stuck in the dilemma between business ethics and business profits, how the company responded...
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...organisations that exist locally, regionally and nationally and by considering the business framework in which they operate Work covered You will: * Understand the purpose and ownership of business * Understand the business context in which organisations operate Understand the purpose and ownership of business Purpose: supply of goods and services e.g. at a profit, free, at cost, for sale below cost Ownership: sole trader; partnership; limited companies (private [ltd], public [plc]); charity; voluntary organisations; co-operatives; government Size: small; medium; large Scale: local; regional; national; European and global organisations Classification: primary (e.g. farming, forestry, fishing, extraction/mining); secondary (e.g. manufacturing, engineering, construction); tertiary (e.g. private service industries, local and national public services, voluntary/not-for-profit services) Understand the business context in which organisations operate Role of government: European; national; local; growth, full employment; inflation/deflation; surpluses; competitiveness; equality Business environment characteristics: markets; trends (employment, income, growth); relative growth/decline by sector: decline of primary and secondary industries; growth of tertiary service industries; legal framework Assessment Everyone will be completing the PASS criteria work that is set....
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