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Sunday, April 8, 2012
Now here's a fun one. We've looked at a lot, from environmental and firm considerations and benefits (CAGE, RATS, FSA, mutual benefit models for expopriabilility to both home and host. We discussed, bike components, Indian banking, Bollywood where Shimano was gaining advantage with high quality products, where Bollywood was looking for openings for market penetration starting with NRIs and then trying to partner with Hollywood or other nation/region bound film distributors. Finally, ICICI looks to overcome an indecision as to how to expand its relatively nascent banking business (post liberalization) into a domestic or an international strategy with either retail operations or back room operations taking prescience. We also look at the operating strategies for GE Engines, Cisco in India and Singapore (ah, Singapore!). We're also doing a deep dive into global issues that are certainly important to business, but also are likely to be strongly influenced by other stakeholders. It makes for a tough balancing act to be sure. In all these things, which are really intended to help create a more holistic picture. What did you find most compelling? Feel free to write your answer in Haiku, iambic pentameter, or even Dr. Suess like verse. If you don't want to do that, any response will do.
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Surely the variables related to conducting business in a global economy are many. The market approach options are vast and there are a plethora of models to follow.
ReplyDeleteAfter reviewing the theories behind CAGE, RATS, FSA's, and the economic impact of Porters forces, I am not surprised at the diversity of international growth models depicted through the business case studies. There are as many methods as there are global businesses. No combination of FSA's and market factors are the same.
In finding our own direction and approach to international growth, we can use past examples to help model our strategy but we must recognize that there is no best practice to follow. Every case is unique and every approach should be evaluated on it's own.
I agree with Rich in that there is no one size fits all holistic approach that can be applied to every situation. The more analysis you do on a project, or in other words, the more frameworks (RATS, CAGE, etc.) you apply the more chance of success because you would get to know more about the project and challenges ahead. Time and money constraints I think are the reason that perhaps not a full analysis is given to projects. In that case, you would need to pick the framework that best applies to your situation and learn what you can given the constraints.
DeleteI agree with Rich as well. CAGE, RAT, FSA, and Porter's Five Forces are very useful tools. Companies can and should use this type of information to help them gain a better understanding of the markets they enter. Due diligence is a very important part of a company's strategy. Exercising due diligence, understanding new markets, and understanding competitors helps a company stay one step ahead of its competition.
DeleteDefinitely every case is unique. We can read about past examples to learn what allowed a particular business to succeed or even caused them to fail. However things (economies, culture, governments) are always changing, and while history does help to provide insight into the future, each business strategy needs to be analyzed in reference to the current situation and even for possible future opportunities. The frameworks we learned in class are merely just that..frameworks. They are a way to analyze each independent situation. A way to to see things in possibly a more complete picture.
DeleteYou asked for it!
DeleteAll around the world
Expanding diamond of strengths
Not so ICICI...
An excellent job
DeleteRATS AND CAGE
You graduate now.
I found the Bollywood case to be pretty intriguing in that there seems to be somewhat of a precedent with the emergence of Kung-Fu cinema in the 70’s. However, this took some vision on the part of Warner Bros executives and a Kung-Fu action star that had huge amounts of charisma and crossover appeal in Bruce Lee. Keep in mind that Enter the Dragon was wholly financed and distributed by U.S Warner Bros and had some well-known American actors. The two most successful Bollywood films that were able to cross over to America also capitalized on western trends and icons such as David Beckham and the game show, Who Wants to be a Millionaire? Would Bollywood be willing to partner with American studios in such a way and give up so much control? Furthermore does Bollywood possess a star that has immense crossover appeal?
ReplyDeleteI agree with you that in order for Bollywood to crossover to the U.S. they would need to change their styly a bit to conform to the U.S. market, as well as find a great charismatic star that can crossover outside India.
DeleteYes these are very good points, I believe that Boolywood needs to change in order to appeal to a larger market in order to have international success, but I wonder if they ever would be able to do it.
DeleteBollywood's success is probably as successful as it is because its different and its not Hollywood. This is one of their points of differentiation. Hollywood is very successful all over the world not only because they make great movies and have the money to back it up, but also because the entire world look up to the United States to set new trends and innovations. Not that other countries don't do it, they all do, but the USA is closely watched by all other countries, and many other countries want to be like the USA, not all but many do. So I would assume that its easier for Hollywood to push their ideas than it is for Bollywood.
If Bollywood did change and became more like Hollywood, than they would loose this point of differentiation they have and compete directly with Hollywood, and I wonder If they would ever be able to do it since Hollywood have much more money available to compete against them along with the position of the US. So I think its a little trick for Bollywood. They could be successful by making a change, but I think it could also hurt them if not done correctly because they could begin to be evaluated against Hollywood, and the requirements for their shows could raise tremendously.
I absolutely agree, their is not a sizable market share to ever be earned in the US from Bollywood. While they could change to be more US focused they would loose Bollywood and it would just be another American movie. Some things are just not transferable no matter the regional prowess.
DeleteI would agree with all the points. I think the US is not a market for Bollywood to really enter unless you bring over the american culture with it too. Otherwise to americans the movie becomes unappealing and boring, and I really do not think the directors and writers want to give up that much control on their films.
DeleteI think a significant barrier for Bollywood is the average running times. This is even a challenge with American filmmakers as studio execs and theater owners push hard for shorter run times to increase the number of daily showings and subsequently box office earnings. It’s becoming increasingly rare to see movies run past 90-120 minutes with a US release much less a staggering 240 minute run time consistent with Bollywood. I would imagine consumers would not embrace the lengthy run times either.
DeleteThat's true JT. We've gotten to the point where we are too busy to ever sit through a 4 hour movie. This is one reason I think baseball is on the decline.
DeleteBollywood also has a major “musical” component to their films. Musicals in the US are usually reserved for “Oscar bait” or prestige pictures which is not all that frequent. I know the show Glee is a big hit but I just don’t see the US movie going public embracing a new musical release every week.
DeleteHow dare you insult musicals! Mama Mia was this generations Citizen Kane.
DeleteRocky Horror Picture Show was a musical too, but it had terrific "cross" over!..... :>
DeleteI agree with Heather's comments. In order for Bollywood to be successful in the US market they would have to "Americanize", which would completely change the product. Bollywood's only chance in the US may be a niche market such as film festivals or art festivals.
DeletePerhaps a Bollywood re-imagining of The Rocky Horror Picture Show is just what we need? Two great tastes that tastes great together!
DeleteAs Michelle stated, that's exactly what Slumdog Millionaire did. As far as I know, it was considered Bollywood, maybe only because of the ending scene where they sang and danced. But, other than that, it was completely Americanized to be more appealing to a broader audience. Makes sense. Although, someone mentioned that the Indian people weren't quite as pleased with it as the Americans were.
DeleteI have been thinking a bit about ICICI and comparing them to other international banks. While there are successful international banks (RBS, Barclays, etc.) I can't think of any that have any type of retail location in teh U.S., which makes me wonder if trying to expand into the retail banking world would be a mistake. Though there are millions of Indians living throuhgout the world, there may not be a large enough market for ICICI to expand in a profitable way.
ReplyDeleteretail banking could be an issue for them I agree, but there could be places where there is a heavy enough Indian population to make it work and they would want to seek out those locations.
DeleteWould Indian immigrants even respond to ICICI showing up in the US if it could not meet the needs of the demographic? I know if I were living in say, Brazil I would not choose a US bank over a Brazilian bank if the Brazilian bank offered better products and services and just met my overall needs better than the US bank.
DeleteJT, what if you were in Brazil and you spoke very little portuguese and none of the banks had English speaking employees? Woulldn't it be nice to deal with someone who understands your language and culture?
DeleteThat’s a good point Higbee! Although I’m not sure if I would choose the US bank if they had fewer offerings with higher costs. I probably would go with the US bank at first but as I became more fluent and integrated into the culture I would likely switch.
DeleteICICI could expand into the US and other nations with the use of a strong internet presence once it registers as a financial institution in the countries in which it would like to operate if it wanted to have a physical presence. Online banks are a dime a dozen and for ICICI to become a dominate player in commercial lending, it would need to have a sales force in the countries it targets for expansion.
DeleteOther growth opportunities might come from offering insurance products to the growing Indian markets. Also, because ICICI is interested in expanding its services, it might do this through acquiring other banks or financial companies that offer these services already. This helps them expand their product line, accelerate growth and become more profitable.
DeleteIt will be interesting to watch how ICICI Bank does in the United States. It's New York branch offers banking services to large corporations and growing businesses across the U.S. However, deposits are not FDIC insured, and I think this would be a concern for any company that does business with ICICI.
ReplyDeleteOne business opportunity I thought of for ICICI was to enter into cities within countries that had a high concentration of NRI's. Within these cities there are going to be mini market stores where only indian foods and inidian products are sold. Mini branches could be setup within these stores for NRI's to do their banking with the home country.
DeleteI agree with Madalene, but the FDIC insures deposits only up to $250,000. Corporations and businesses would on a normal basis be making higher deposits than that, and the concern after the 250k is gone knowing they could lose that money unless they meet the other criteria to be insured further.
DeleteI agree that FDIC insured deposits are a good thing. However, there are a number of large companies that have far greater amounts of money (Apple, Google, HP, etc.) that wouldn't be covered under any FDIC amounts. Companies such as these that store money in banks can't and aren't reliant upon any type of insurance the US government offers. If ICICI can demonstrate a strong track record, I think many companies would deposit their funds there assuming it has a good rate of return given the market.
DeleteMy outsourced Life was really funny. I found myself laughing out loud. :-)
ReplyDeleteI found the CEMEX case the most compelling. I'm not sure that I would be as ambitious as their CEO to expand so aggressively. Once they controlled most of the Mexican market it seemed as if they were in a great position to prosper in the long term, but I guess they bought into the concept of Eat or be Eaten.
ReplyDeleteI agree with Clayton. CEMEX was interesting to read and learn the companies strategy for Globalization. I do feel the major driving factor was Eat or be Eaton. I beleive they feared they would be purchased if they did not grow the business themselves. Also in order to grow they could not do it being soley located in Mexico. They needed to enter new markets for better financing and expansion opportunities.
DeleteI agree with Clayton, but as you think about it as a business owner you kind of have to have that mentality of eat or be eaten. It is also hard now a days to survive a business only doing it in one country. You usually need to expand in to global markets to really be a competitor if you are wanting to be a big corporation.
DeleteAnyone would rather Eat than be Eaton...
Deletehttp://www.nba.com/historical/playerfile/index.html?player=mark_eaton
Is that an English prep school joke of Eaton? So they say, the battle of Waterloo was settled on the playing fields of Eaton. (it wasn't really it was actually fought)
DeleteCEMEX leadership team developed a process or "product" to turn acquired businesses around and become profitable in a relatively short period of time. Referred to as a the CEMEX way. Almost as though CEMEX was a model of efficiency/lean culture that just happened to sell cement.
DeleteI agree with Rich that no one strategy emerges as a leader because of FSA's. Each company we have researched has their own FSA's which has driven their global expansion. One common theme I can pick out is each of the firms was in essence the gorilla of their industry regionally before they choose to expand. Their must be something to local power driving global expansion.
ReplyDeleteThat's the home base advantage right. The trick for companies to succeed is to take the success that they have locally and transfer that to another country, region and/or culture. That's how success is made.
DeleteYes, and if you think about it, no company is protected any longer by staying in their local markets. Since most companies are now expanding internationally, your company will have competition from the local companies as well as the international companies. So if a company does not expand internationally, they may be limited in their market and growth and a bigger company witresources available resources can take over the market.
ReplyDeleteMaybe I'm behind the curve, but it dawned on me last night that Gore's FSA is culture. My, how that changes things.
ReplyDeleteRoses are red,
Violets are blue,
Gore's culture
FSA is. True.
True Story.
Like a Boss.
Now that's interesting. Then I wonder, if Gore's FSA is their culture, and a specific FSA is not sustainable over time, then does that mean that Gore will have to find another FSA in order to stay ahead of competition since their culture will not give them an advantage as time goes on and more competitors are able to immitate their strategy? What makes them unique will not work anymore? I wonder what they will do next to keep an FSA.
DeleteAdaptation will
DeleteBe the element beguine
The lead, shall endure
RATS in CAGES
ReplyDeletebusiness escapes
across the globe
How about this - see if you can find the original author for the adapted verse...
DeleteThen Spake King Gore to Class of Kin,
The Sequel of today unsolders all
the goodliest academics of famous profs
Whereas this World holds Truth
Such a sleep, the Commerce we hold. I think that We
Shall Never More at Any Time Delight our Souls With
Talk of Academe Truths.
Walking About the Gardens and the Halls of the Church
of Reason and in the Days that were, I perish by the people
Whom I taught although Merlin swears that practical truth
Shall Come Again.
Of Gore once more, but let what will be
be that we know that scholarly truths only
help toward the Morn when the Battle Plans
of Excalibur FSA, RAT, CAGE Shall Moderate
to Practices of Managers.
I'll practice my craft
DeleteUntil I am through
Though after first goal
I'll know what to do
I'll see it adapt
and morph to some new
I'll achieve it I will
with culture anew.
I'll bring that right back
To friends, pals at home
We'll learn how to do it
And further we'll roam
To green fields ports and customs
we'll build our commerce
We'll look first at ratios
and then move in first
Electronic commerce will take
IPR we'll protect
Then possibly we'll eschew
the planes, trains, and boats.
Oh never we'll do it
and never we'll crave
Green Eggs and the ham
We'd rather eat cake.
Lord Tennyson?
DeleteThese were both great! I enjoyed reading both of them.
Alfred Lord Tennyson it was!
DeleteRemember, we are the very models of the modern young professionals
ReplyDeleteWith information valuable, political, and cultural
And in the age of commerce, global home and pataphysical
We know the stuff we need, we know it categorical!
(now the chorus)
Something to write on your bosses performance review, assuming you can..
Delete"I've never met anyone with his qualifications to lead."
The chorus
DeleteThat what we know, we know
And dare to share with all
As if it is our duty
Eagerly we heed the call
Eagerly we heed the call
My boss,
Delete"I've never met anyone with his qualifications to lead."
He is smart and does a great job of devloping and fostering relationships. He assesses situations with a positive attitude and works to obtain the best outcome. He leads by example. He has a great sense of humor and that makes working and interacting with him fun.
THIS IS SO COOL!!
ReplyDelete:-) It is!
DeleteK - so this is kinda out of the blue, but as we talked a lot about outsourcing, I'm wondering if anyone's read "The World Is Flat"
ReplyDeletehttp://www.amazon.com/The-World-Flat-3-0-Twenty-first/dp/0312425074
Fantastic read. I thought I would mention it because it really puts things in perspective in regards to how companies think. It also speaks to the glocalization of companies and that by outsourcing, you risk losing that advantage. But, it's hard to pass up on the cost savings. Any ways, just throwing it out there on this blog :)
Thanks for the link. I will add this to My Books to Read list.
ReplyDelete:-)