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COMR 465 Lecture Quiz 4

Terms in this set (58)

- Increased market size: especially when targeting mainstream consumers
- greater returns on major capital investments or new products/processes: global market go through development stages
-a competitive adv. through location

(lecture)
§ Increased market share
· Selling more = making more, producing more, cost of development decreases (per unit basis)
§ Greater returns on major capital investments or new products or processes
· Global markets go through development stages
· Ex. Selling product in Canada, reaches a point of saturation because mature but already have infrastructure and now how - use what you have and develop in diff market - allows company to leverage current investments and capabilities
· Between developed and emerging markets
o *Development curve shows a lot of opportunity for them
o Ex. Starbucks very mature in US/Cad - not a lot of first-time buyers excited about it
o New market will have lots of new, excited customers
o Differences across countries = opportunity for business
o If there is an opportunity today and you are not ready for it and can't capitalize on opportunity, you are a few years behind
§ In business - want to position yourself for the next things
§ Opportunities everywhere - Can you spot it and can you do something about it
§ In the right industry, at the right time, in the right place, with the right people
§ Ex. You work in this market, build connections, develop core competencies - if I did this 10 years ago but you know what you know today and take it to a market that was operating like where you are but 10 years ago
§ Development gaps - from business perspectives - build opportunities
§ Company from developed market emerging market
· Yes lots of challenges but less competition
§ Greater economies of scale, scope or learning
· Matured in one market can be "novel" somewhere else
§ A competitive advantage through location
· Ex. Apple iPhone assembled in china - cheaper labor costs, suppliers in japan, Taiwan, south Korea - manufacturing in mainland china whole process and partnership - lots of efficiency in china as opposed to CAD
· Bottomline - if companies globalizing - need to be incentivized
o Global citizen segment - Majority of responders - in developing markets - china and India
o Global dreamers - North America, developed markets
o A lot of developing countries see value so why so skeptical - could be because info flow - making products I low cost places - low wages - doing things illegal in own country but legal there - lower moral in own market but diff actions in background markets - should be helping society involved in - high level of hypocrisy
o In west we make assumptions - bombarded with Infor at young age - when no one is watching - we are allowed to do it
o Provides some insight - perception people have
o Ethics - normative approach - not supposed to customize - supposed to be like this as long as its my way
o Why global companies - businesses doing a lot of charity abroad - is it really charity or part of business? - always marketed when abroad - need to make video, put on youtube - start connecting the dots
o Perception typically drives behaviour
o If this is how consumers are thinking about the brand - what do companies need to do to close the gap?
o Global dreamers - people like us
o Majority of global companies come from powerful economies
o All aspects in equation
o Purpose - findings of study - brings a lot of insight that might explain why ex. Ikea have factories and building schools - need to make video, let locals know or let us know?

· Study that came out last class - investigators trying to better understand perception of diff types of global buyers - study on actions of global firms on the authenticity when they deal with CSR
o Not saying that global citizens more globally conscious
o Global citizens - more skeptical on authenticity on activities of global firms - translates to what they say and do which is why firms try so much harder - business trying to convince
o Global dreamers - more positive outlook on what companies are doing
· Apples and oranges - diff risk and reward
· The legal way to copy and paste what you have, you help them at a fee
· Ex. In Vancouver lululemon - sells store, carpet, specific exercise, culture Andrew sees lululemon - do you want to expand internationally? - I would like to copy and paste everything you have and I want you to support me - pay him $1,000,00 to take idea to set up in diff area with idea
o But 2 conditions - whatever you sell (I want 5% royalty fee)
§ You are allowed to legally to copy and paste but still rightful owners - go by rules
§ franchising agreement
· Hard for company to have so much access to international basis
· Ex. Starbucks - most in North America, company owned
o But international - franchisee
· Benefits for franchiser
o Lower risk, faster, you get benefits'
· Downsides
o Started as partner - but once you know everything become competitor
o If you own own store - customer and consumer same person - marketing to same
o **But if franchisee: consumer - person buying from franchisee
o Franchisee - customer (paying)
o Franchisee fees makes up majority of income

The right to use a firm's business model and brand for a prescribed period of time•Franchising gives more control to the franchisorcompany over the franchiseewho has licensed the company's trademarks, products and/or services, and production and/or operation processes. •Franchisor is paid a royalty on revenue + other fees•Control is exerted through the franchise fee which can be expropriated if contracts are not adhered to, and elaborate contracts that govern the relationship between the franchisor and the franchisees. •Franchisee takes investment risk in initial setup