Menu

Glocalization In China Harvard Case Study Solution

Home >> Hrm >> Glocalization In China

Glocalization In China Case Study Solution & Analysis


Introduction

Glocalization In China Case Study Analysis is a well-known worldwide brand in technology market, founded in 1938 by Lee Byung Chul, in South Korea. Glocalization In China deals in large number of item categories consisting of Semiconductors, Telecom, Digital Media, Digital Appliances and much more other electronic products. Historically, the company's core consumers include the Original Devices Manufacturers (OEMs), which used to sell Enterprise products withtheir own brand name. Till early 1990s, the core competency of Org depend on its low rate offerings than its competitors by producing existing items at economies of scale. Its customer circle consists of Original Equipment Manufacturers (OEMs), who used to offer Glocalization In China Case Study Solution items with their own brand. Venture was not merely known outside Korea. There were also no or little interest in building the trademark name worldwide. Marketing budget plan was managed by production department with a focal point on providing cheap products.During the 1997 Asian Financial Crisis the company practically got insolvent, but with the Vision of Chairman Lee it completely turn its fortune around and in 2002 was noted the leading 25 most important business worldwide. When Kim was hired as a Chief Marketing Officer in 2000 the business was not even listed. He rearranged Corporation as an international brand and informed his divisional managers to understand marketing and its importance. Now their objective is to arrive 10 by 2005.

Problem Declaration

Org's shift from a product based to a marketing business is not going as efficiently as planned.Overcoming the reluctance of divisional supervisors to integrate marketing successfully is still a significant obstacle. Creating a consistent brand identity throughout the entire world and employing marketing methods that best fits the regional culture is no simple job. The M-net program analysis have been really helpful in determining the high and less potential development locations, however allocation of resources appropriately is not well received amongst the supervisors. There is no agreement amongst the hierarchy relating to the best fit future method.
Executive Summary
Situational Analysis

Yun had a quite clear photo in his mind about how Glocalization In China Case Study Help can transform from a low end to a high end item company. He understood that transformation can only be done through positioning Venture as a business providing high-end items and this could only be done through high level of marketing.

In spite of having a clear vision about how to construct Corporation brand name, with a prospective assistance of its executives, Yun dealt with numerous marketing obstacles in early years of its efforts.

Among the marketing obstacles for Yun was the understandings of executives about the worth of marketing. They thought about marketing and selling as very same tools and thought that quality products do not required marketing for increasing sales. As their focus towards marketing was rather low in their previous service practices, and the existing marketing requirement was excessive high, the gap was too broader and to fill this space with incorrect understandings about marketing was rather tough for Yun.

As mentioned above, marketing focus was really low in previous practices, for that reason there were no proper marketing budgets for each of the product on the portfolio. There was no marketing planning provided for the existing items. In addition to it the item range of the company was increasing with the ripening of brand-new product ideas by the R&D sector of Company. Yun had a difficulty to carry out marketing planning and to develop marketing spending plans for existing as well as for new products from the very beginning, and this would take a big time.

A huge shift would be needed in present marketing expenses to construct the Glocalization In China Case Study Help brand name. This would result in increased marketing expenditures for Venture and might disrupt the administration relating to increased expenses, as they were reluctant to marketing expenditures previously and an abrupt big shiftwould make them interrupt. This might result in declining executive support for worldwide marketing. In this scenario, Yun deals with an obstacle for validating increased marketing expenditures by showing the long term value of big marketing expenses.

Internal Analysis
SWOT Analysis
Strengths


Venture strengths depend on its substantial product portfolio. Corp has biggest number of patents in the industry with overall variety of 15499 patents given in US( USP). Big amount of R&D spending has made it possible for the company to grow its item portfolio at a greater rate than its competitors. Glocalization In China Case Study Analysis spent about $13.079 billion on its R&D sector in 2016, which is 7.3% of its total revenues.

Another strength of Glocalization In China Case Study Solution is its ability to establish ingenious items at a constant rate. It major shows for the development and item designing of Venture is that the business has gotten many awards for its innovation and product design.

Unlike Apple and other rivals, Business is concentrated on producing gadgets which can be easily integrated with any type of open source Operating System (OS) and software application. This provides Corporation an edge over Apple gadgets.
Porter's 5 Forces Analysis
Org's ability to produce high-end items at low expense of production is likewise one of the significant strength of Enterprise as it allows the company to record more market by supplying quality products with expense control.

Weaknesses

Glocalization In China Case Study Analysis weak points are hidden in the company's reliance on outsourcing software for its devices due to company's failure in establishing software, unlike Sony. Corp also has low profit margins as compare to Apple due to substantial distinction in the rates of Apple and Venture with a much lower distinction in quality. The diverse focus of the business due to a great deal of items in its portfolio, result in the less effective production and make the business not able to charge greater prices like Apple. The business is likewise inefficient in handling its patents and frequently deals with the issue of patent infraction.

Opportunities

Opportunities for Org lie in the growing Smartphone market and the company's performance in the market. It can increase its market share and incomes from mobile phone as the business is rather efficient in mobile phone market. Company currently runs in about 80 nations and the business has a chance to increase its geographical growth by moving towards more emerging markets outside Asia. Corp can move towards acquisitions to get patents. It would enable the company to increase its item portfolio with an increase in its wealth.

Threats

The vibrant market environment of technology market present an extreme threat on Corporation's survival and require the business to spend much of its profits share on R&D in order to make it through in the long run. The market saturation in industrialized countries i.e. saturation of mobile business is also a big hazard for the company's growth in the presence of strong rivals like Apple.

4 P's of Marketing
Swot Analysis
Item

Organization uses quality products and has a quite rich portfolio which caters to various sectors. LCD and mobile phones are the greatest products of Venture, whereas DRAM is also not far behind in contrast of them.

• LCD/ TELEVISION
• Laptops.
• Cellphone.
• A/c.
• Personal computers.
• Hard disk drives.
• Washer.
• Fridges.
• Cams.
• Microwaves.
• Flash memory.
• DRAM.

Rate.

Glocalization In China Case Study Solution uses both market competitive and market skimming prices methods for its wide range of products. In competitive pricing it changes the cost according to the competitors in order to get advantage, whereas, it utilizes market skimming strategy where the item has actually an added value and by offering a few products it can reach break-even.

Location.

It has among the very best supply chain networks, with retail distributors, their own sole suppliers, E commerce channels like Amazon etc. All its products are prompt supplied to the selling place/ delivered to the consumers straight in case of online order.

Promo.
Vrio Analysis
It wasn't a popular business outside of Korea until 1993. The management initiative taken by their CEO has actually pushed them to market more effectively outside the borders and now it has actually gone into the league of top 25 companies in the world in just 9 years. This is an impressive achievement despite the ongoing arguments amongst the managers about embracing marketing practices. It utilizes both offline & online channels of promo to market their items. Paid item advertisements, social promotion and digital advertisements are utilizes to produce awareness about Org products.

Worth Chain Analysis.

It's an analytical framework for identifying business activities that add value or competitive benefit for the business.

Incoming Logistics.

It has among the most efficient and efficient supply chain network and has over 2700 providers throughout numerous markets around the globe. Almost 80% of which is based in Asia and the remaining around the world. For its inbound logistics it owns numerous logistics firms as it subsidiaries. It takes care of its suppliers and produces a harmonious relationship with them and even lowered their payment cycles to increase this relationship further which adds value to their chain network.

Operations.

Venture's core competency is its mass manufacturing it produces 90% of its items in-house. Divided into 3 different departments its operations are particularly IT & Mobile Communications, Gadget Solutions and Consumer Electronics. It is maintaining operation hubs worldwide to even more add worth to its value chain network.

Outbound Logistics.

Its outbound logistics system efficiency is one of the primary reasons Glocalization In China Case Study Solution is able to take on Apple. Corp's own Electronic Logitec system plays a significant role in the outgoing logistics operations. It even performs the tasks of collection of payment, settling insurance claims, etc. on behalf of Organization.

Marketing and Sales.

Drawing in target consumer attention towards the product is done through marketing and sales to interact with them the worth and competitive advantage the item offers. Glocalization In China Case Study Solution marketing budget is continually growing given that they began their repositioning globally and will continue to do so as they are continuously wanting to invest and broaden in high potential development markets. The budget plan is spent on occasions, print and media advertisements, public relations etc.

Organization Service. Corporation put their clients on top and continually strive to deliver unmatchable client service requirements. As after sales service is becoming exceptionally important to keep customers delighted and engaged, they even perform studies through third parties to find out their consumer's feedback and execute it in the favorable way to lower or if possible entirely eliminate their consumer issues. By adding a direct support line to contact them 24 hours they have even more increased the added value of Glocalization In China Case Study Help service.

Segmentation.

Glocalization In China Case Study Solution has diversified market division, based upon its provision of wide range of items to a great deal of customers. Company target client sectors can be divided into 3 categories i.e. Glocalization In China Case Study Solution IT and Mobile Communications, Venture Consumer Electronic Devices and Corporation Device solutions.

Geographical.

Glocalization In China Case Study Analysis geographic division is based upon two requirements i.e. area and density. Corporation serves about 80 countries worldwide with its items supplied to Urban in addition to Rural areas of the country. The Org is also growing its global presence and the company's versatility in locating its plants encourages international expansion of Enterprise.

Group.

Corporation produces items that can be utilized by both males and women. The target clients for Enterprise IT and mobile communication items have an age variety of 18-65 with bulk at a young or freshly married life cycle stage. Apart from it, Corporation Consumer Electronics are targeted to a consumer sector with an age range of 25-65.

Psychographic.

The psychographic segmentation of Glocalization In China Case Study Help s based upon the social class and the life style of the customer. Business target consumers on the basis of social class are mainly upper middle, middle and working class consumers, as Enterprise sell products like mobile phone not much more affordable i.e. Motorola as well as not much expensive i.e. Apple. It supplies quality products to middle level customers at a slightly high cost than others targeting the same sector.

Behavioural.

Glocalization In China Case Study Analysis majority target clients have distinct behavioural attributes. They are brought in towards Company because of its moderate rates with an extent of quality.

Quantitative analysis.

Sales of Corp has actually increased amazingly from 16 billion $ in 1997 to 44.6 billion $ in 2002, and the net profit of.48 billion $ to 5.9 billion $. It has actually likewise minimized its financial obligation from 15 billion $ to 4.6 billion $. Digital media is the largest selling category of Organization with sales of 13.9 billion $, whereas, Telecommunication and Semiconductors sectors both reached 11 billion $ in sales. Due to the fact that of the high overhead cost, revenues/ sales are increasing however net revenue is not increasing appropriately. New growths and hiring's were the primary factor of the increase in the overhead expenses, with china currently not providing any earnings to Company, but there is a lot capacity in the present market with 75 % yet to be checked out.

Qualitative analysis.

Yes, this choice is based upon the mission of Kim to target the more youthful audience and develop a global brand name image of the business. Whereas, the core strength of the company is presently manufacturing but long gone are those days when good items were selling themselves. In the present age marketing is really crucial and business can not succeed without it. Kim has actually currently begun to reinforce the marketing activities of Company and soon it will turn into one of its core strength like manufacturing if not much better.

VRIO.

Worth.

Enterprise runs styles, produces and sell a huge portfolio of consumer electronics. It runs in an exceptionally competitive environment and has actually successfully positioned itself as the maker of quality items. So, the answer is yes.

Rarity.

As, said earlier that Glocalization In China Case Study Solution runs in an extremely competitive environment, which indicates all the business have similar products. The answer for rarity is no.

Imitability.

Due to the nature of the industry, it is extremely simple for rivals to comprehend the performance of the products and easily make their own designs. Yes, Business is just behind IBM in registering new patents annually, but the advantage is really short term in this market.

Organization.

Chairman Lee has totally turn-around Corp, from going practically insolvent during the Asian monetary crisis of 1997 to the top 25 business on the planet. Absolutely yes there appertains organization in the business and the results promote themselves.

External Environmental Analysis

PESTLE Analysis

Political

Being an international brand name spread nearly in every nation worldwide, bulk of the environments like U.S.A., Europe, China etc., are very conductive for its operations. Nevertheless, it faces some political pressures in less developed countries where law and order circumstance is not good. Latin American, African and some Asian nations fall in this classification, where political instability do have an effect on Glocalization In China Case Study Analysis operations.

Economic

Purchasing power of clients is crucial for business like Enterprise to grow and prosper. Emerging markets like India, middle-eastern nations and so on provide growth chances, whereas, due to recession even the consumers of industrialized countries suffer terribly. For this reason it is really important for the company to watch on the ongoing economic circumstance of the country before getting in the marketplace.

Socio-Cultural

International companies have to deal with numerous social and cultural problems during its operations in a foreign country. Enterprise has actually likewise dealt with numerous concerns however have embraced to the regional environments of most of the countries remarkably well. It has customized its items, practices, policies etc. accordingly in order to achieve success.

Technological

With an annual expense of 2.4 billion dollars in Research study & Development, and with continuous innovative product launches, Glocalization In China Case Study Analysis is among the leading ingenious business of the world. With a clear mission to be ahead of the rest when it comes to technological improvements, Enterprise has actually risen to the no 25 of the top successful business of the world.

Legal

Each nation has their own laws and policies, being a multinational business Enterprise need to strictly follow those laws in their jurisdictions. Failure to do so, will result in severe legal repercussions. So, it has to study or employ a regional law professional before starting its operations in a specific nation.

Environmental

With the rising awareness among customers about the ethical & ecological infractions of business, Org has to guarantee that it follows all the security standards. Environmental damages, ethical misbehaviors are not acceptable and in some countries the consequences can be very extreme. On the other hand it has to do some Corporate Social Responsibility practices to show the residents that it appreciates their environment and people.

Porter's Five Forces

Risk of Alternative

Risk of substitution for Business's each item classification is quite substantial. Factors for high hazard of substitution for Glocalization In China Case Study Help Smartphone consist of the existence of high number of suppliers and Market saturation in industrialized countries, which make the cost of switching for customers almost absolutely no. Along with it, Venture printing services products are threatened by the increasing attraction of clients towards cloud storage.

Competition Among Existing Companies:

The rivaly among Enterprise and its close rivals is extreme. The major factor behind this is the method of market saturation in numerous number of item classifications, forcing Company to present more ingenious features in existing products and new innovative products to keep its development. Other factor for the extreme rivalry among the competitors is the little item differentiation amongst the items. The popular gamers in the innovation industry are rather knowledgeable about the value of R&D costs for their survival and are facing a race of marketing and R&D spending, to capture the market. The significant rivals for Glocalization In China Case Study Help samrtphones consist of Apple, Motorola, LG, Nokia, Huawei, OPPO etc. High competition rivalry results in the varying market shares which can be seen in Exhibit F.

Bargaining Power of Suppliers:

( Company Sustainability Report, 2016) Supplier's bargaining power for Organization is low as Business runs economies of scale and its orders are of potential size and worth. Due to incapability of Glocalization In China Case Study Solution to build its own software, it has to outsource its software advancement to Google, which ends up being a possible supplier of software application for Enterprise, resulting in high bargaining power of Google.

Bargaining Power of Purchasers:

Bargaining power of purchasers for numerous variety of item classifications of Company is intense. One of the element causing the intense bargaining power is the schedule of large number of competitors in practically each product classification i.e. rivals of Business Smartphone, with an extremely little distinction. The high availability of suppliers of Smart devices with minimum differentiation, make the switching cost for purchasers almost zero, thus increasing the bargaining power of buyers. Market saturation in the majority of the item categories also make the bargaining power of purchasers more extreme in for Glocalization In China Case Study Help. In spite of igh bargaining power Corporation is rather efficient in selling its products at a greater cost than much of its rivals, due to high-end quality product and a fair brand name image.

Hazard of New Entrants:

Danger of brand-new entrants for Venture is quite low. Among the major aspect for low risk of brand-new entrants is the high competition in the market. The requirement of huge amount of capital to enter in the market is likewise among the prospective barrier to entry. Along with it, requirement of substantial competence and research and development expenses for survival in the industry also make new entrants hesitant to enter in the market. Market saturation is likewise among the barrier of entry in technology market. High bargaining power of providers require the players in the market to charge as low costs as possible and this can only be accomplished by production efficiency. New firms, in majority cases, lack the production efficiency, thus increasing the threats for entrance in the technology industry.

Competitive Analysis

Venture's high product diversity supplies it differentiation from its rivals. Unlikely to its close competitors including Sony, Intel and Nokia, who focus majority on a single item classification with Sony focusing on consumer electronic devices, Nokia on cell phones and Intel on chips, Glocalization In China Case Study Solution had a big R&D spending on all of its product categories which make it possible for the business to make potential income from sales of almost all of its products.

The business ranks initially in 4 product categories i.e. DRAM Chips, LCD Displays, Big Screen TVs and Microwave ovens, in terms of international market share, amongst 8 various item categories. Organization was the worldwide leader in making DRAM, SRAM and NAND flash chips. Although, Corporation earnings from chips was less than Intel however its incomes from chips was growing quicker than Intel and has actually grown near to the revenue levels of Intel, as given up the case Exhibit 2.

In addition to the chips Corporation mobile market was also flourishing at a high rate than its competitors i.e. Motorola and Nokia. Corporation's cellular phone's sales growth was 51% as compare to Motorola with just 4% and Nokia with no sales growth. The significant reson behind Enterprise's high development despite of greater costs than Nokia and Motorola was the business's high-end quality cellular phone.

Org was also profiting from increasing market share of high-end LCDs as given up case Exhibition 3. The major reason, making the company enable to get the opportunity is its mass production at low expense. Sony was the biggest rival for Glocalization In China Case Study Analysis in LCD market, nevertheless, it had likewise started joint endeavor with Org in 2003 for LCD manufacturing, decreasing the competition for Org.

Porter's Competitive Strategy

Low Cost Management method of porter is completely carried out by Corporation the way they achieve economies of scale by strengthening their core proficiencies of manufacturing. They constantly bring something new and ingenious whether it's a service or a product.

Alternatives

Alternative Option 1

The Chief Marketing Officer (CMO) of Glocalization In China Case Study Help would create a brand-new brand image by targeting the more youthful generation of the specific nation. As, specifically cellphones of Corporation are popular among the more youthful demographic.

Pros

1. It is the best technique to build Client Lifetime Value (CLV) by producing a long-term relationship with consumers. Construct commitment through providing value and reap the benefits for long-lasting, as research study has showed it is much cheaper to keep current consumers than to bring in new ones.
2. Another pro of this option is that word of mouth spread quicker amongst younger people and which in turn will bring in brand-new customers for my products.

Cons

1. Old clients who were associated with Corporation prior to might not like this new image the company is attempting to represent.
2 It will sustain more costs to rearrange some products and it might not even bring success as the trends alter really quickly amongst the younger demographic.

Alternative solution 2.

It would be done by arranging training workshops during which significance of marketing will be taught and numbers will be given. Marketing environment must be developed internally initially as genuine marketing starts inside the corporation.

Pros

1. Its pro will be that all the marketing method supporters will come out and also the opposite ones.

Cons

2. Its con can develop an extremely unhealthy environment in the office, as people typically resist change because they fear it.

Determine the best option

First option is the very best as it clearly has more pros since when a Client Life time Value is developed the business will profit from it till that customer is alive and has buying power also. Plus, our target consumers are the younger generation which are bound to live longer than the present old age people. Corporation's primary objective is to create loyalty amongst its consumers and make them redeemed it from them and even purchase their different products.

Application Plan

• Targeting more youthful generation through social marketing, producing a relate to them like Pepsi do with music. And set the expectations sensible and possible.
• A group including finest marketing and sales experts should be put together, and both views ought to be taken into account prior to securing the resources required to carry out the plan.
• Thorough interaction of the plan ought to be done as it is really crucial for everybody to be on the exact same page to make it work.
• Jobs and timelines should be develop and communicated appropriately to each individual accountable.
• The supervisor need to use a dashboard which shows the development of all the tasks which have been done or about to be done and by whom.
• The manager must keep track of and keep a continuous check on the overall and individual efficiency.
Since any brand-new trend or policy might come in due to which all the things already prepared have to be changed, • Everyone should be ready to adapt midway. It's much better to have contingency strategies already prepared.
• At the end of the campaign the manager must communicate the outcomes and if effective should celebrate with the group.

Budget plan

This change the spending plan allotment of different countries and numerous supervisors were unhappy and argued however the analysis done by the program was accurate and revealed figures like North America and Russia development potential merited a 35% allotment while they were getting 45%. It actually assisted to relatively disperse the resources and catch more clients by investing more on ads on the high development capacity areas of the world.
Recommendations
Conclusion

Glocalization In China Case Study Help is a leading 25 company in the world now and prepares to get ahead of Sony who sits currently at no. 20. Its continuous financial investment in R&D and ingenious practices have propelled them to new heights but for them its' just the start and they want to be amongst the top 3 brands on the planet. They totally turnaround from almost declaring bankruptcy throughout the Asian Financial Crisis to a world popular brand name, understood for quality and innovation. Their worth chain and their core proficiency their manufacturing ability, along-with global brand image building have seen their sales go from 16 to 44.6 billion $ from 1997-- 2002. With more expansion in China and other emerging markets those numbers will just increase further in the future. Their marketing efforts should be directed towards more youthful market amidst the internal arguments about marketing and need to create Customer Life time Worth as it will not only provide advantages now however will continue to reap it till the customer life time. As the cost of keeping the customer is much cheaper than bring in a new one.