Consumer Products

  • coca-colaThe recent decision of India’s parliament to allow 100 percent foreign ownership of companies in India is big news to many multinationals that have been dying to get in on the action in the world’s second most populous market, and the massive Coca-Cola Company is no exception. Indeed, with a full re-entry to the country it abandoned in the late 1970s, there’s essentially no corner of the world that will now be without the seemingly ubiquitous white-on-red script of the most successful soft drink in history. But one other major region has given Coke headaches since at least the early 1960s, and going there today one might be hard pressed to find the classic can for sale. Indeed, Coca-Cola has faced a number of challenges in the Middle East, but learning how to turn them into opportunities there could teach the soft drink giant some important lessons it will need for success in India.

  • Anheuser-Busch InBevA corporate strategy article by Thunderbird students Andrea Bly, Sangeetha Nagaratnam, Joseph Rosing, David Roudybush and William Todd

    Can, or even should, the global leader in brewing take on the numerous craft beer companies, whose sole focus is on satisfying the unique tastes of their local customers?

    Blame the Carmel Macchiato. Or maybe the Mocha Frappuccino. I am not sure exactly when the tipping point struck, but at some time post-millennium, the U.S. society morphed into an environment where consumers attempt to display individualism through their sophisticated and differentiated purchases. Accordingly, companies were anxious to provide expanded and unique assortment to meet the evolving consumer demand. Starbucks now has 87,000 different combinations of drinks, which dwarfs the 31 flavors of Baskin Robbins that offered significant variety for many generations of Americans. [1]

  • BlackberryAs mobile technology has made leaps and bounds, Research in Motion (RIM) maker of the once popular Blackberry mobile phone struggles to survive. Can the company save itself from bankruptcy or is it too late?

    Turned off…
    Thorsten Heins, the new CEO of Research In Motion (RIM) probably cancelled his subscription to the New York Times. One of the United States’ leading daily papers decided to drop its app for BlackBerry after seeing a notable drop off in user traffic on its app. The app will no longer load news stories, essentially turning off. This follows a series of unflattering developments regarding the maker of the once dominant mobile phone brand BlackBerry. Large multinational companies such as Halliburton and Qantas recently decided to no longer use BlackBerry services and have been switching their employees to Apple’s iPhone. The US Government’s procurement agency has also followed suit, starting the switch from BlackBerry to iPhone for all US Government Agencies..(1) (2)

  • razorTo Shave or Not to Shave

    Like most men around the world, Prakash, a thirty-year-old Indian port worker wakes up in the morning facing the unpleasant but necessary task of having to shave. But unlike most men in the developed world, for Prakash shaving means sitting on the floor with a small amount of still water, balancing a hand-held mirror in low light, and experiencing frequent nicks and cuts from his double-edged razor[1].

    On the other side of the globe, with headquarters in Cincinnati, Ohio, Procter and Gamble (P&G) is one of the largest consumer products companies in the world with operations in more than 80 countries and more than 300 marketed brands sold in 160 countries. Traditionally, P&G’s product mix has focused on high-end products geared towards the developed markets. Hurt by slowing sales growth in developed markets during the recent global recession and European economic crisis P&G began to look at emerging markets for long-term growth[2].  P&G’s historic focus on developed markets left them unprepared to enter the emerging markets where they were blindsided by their competitions’ market penetration. P&G underestimated the cost of building its presence in developing countries resulting in a shortage of funds to finance its expansion in emerging markets and an inability to achieve economies of scale. This resulted in higher priced products in these regions. Compared to its competitors like Unilever or Colgate-Palmolive, P&G has been slower at reverse engineering its products to be affordable to the bottom of pyramid market segment in emerging markets.

  • GrouponA corporate strategy article by Thunderbird students.

    In 1887, Mr. Asa Candler was faced with a distribution dilemma. [1] The Atlanta druggist had spent $2,500 on a formula for a sweet-tasting drink and was looking for a way to promote the sale of this little-known beverage named Coca-Cola. [2] His solution: handwritten tickets offering customers a free sample. To Mr. Candler’s surprise, the offer was a huge success. So was born the coupon. By 1913, an estimated 11% or roughly 8.5 million Americans had received a free coke. [1] One could argue that Mr. Candler’s invention of the coupon is the reason Coca-Cola started on its path to becoming one of the most iconic global brands - ever.

    Fast forward to 2008, when an internet start up based in Chicago, IL created one of the largest shake ups in the marketing world since Mr. Candler’s first hand written ticket; that company - Groupon. The novelty of Groupon was this: through the power of the internet, select “daily deal” coupons could be offered and if a big enough “group” agreed to purchase the deal, then the deal would become valid. [3] The program was used by participating companies as a way to reduce the risk of losses, increase customer traffic, and drive promotions. Now four years since its launch, the Groupon business model has come under attack and faces many strategic obstacles, including competition from lookalike websites.

  • IkeaA corporate strategy article by Thunderbird students Marquita Blanding, Ankush Brahmavar, Tim Clarke, Jennifer Garcia, Stephanie Sharma and Jason Teague

    With approximately 500 million young adult consumers in India[1] and an affluent growth rate of 13% equaling USD 203 billion,[2] it would appear that Sweden-based IKEA can’t afford to delay its entrance into India any longer. A country that is accustomed to paying a higher price for the niceties that are afforded around the world, India has an educated, innovative, resource-rich base ready to ‘spend.’

    In January 2012, the Indian government amended FDI restrictions to allow foreign companies to own 100% of their retail ventures in the country.  This was a welcome change from the earlier ownership cap of 51%, as it paved the way for global retail chains like IKEA, Wal-Mart, and others to have full control of their Indian operations. But the market opening came with new restrictions that many retailers view as obstacles to its investment, including a requirement that foreign companies obtain at least 30% of their products from domestic small companies and cottage industries. In light of this rule, IKEA has expressed that local sourcing requirements were “concerning” and more easily met by food retailers such as Carrefour than a single-brand company like IKEA with global product ranges.[3]

  • By Kaleena Rivas, Madhavi Rao, Andrew Rivas, Amar Memon, Antonio Pérez Malpica

    Background

    Since their introduction in 1979, mobile phones have been constantly evolving and becoming an integral part of our daily lives. From the first generation of devices based on cellular networks to the introduction of digital technologies like GSM and SMS and all the way to ultra-fast third and fourth generation (4G) networks, mobile phones have become more powerful, have increased their capabilities and have turned into essential devices for consumers around the world.

    According to the International Data Corporation (IDC), in September of 2010 Nokia (Symbian OS) had 40.1% of the worldwide smartphone market share followed by BlackBerry (17.9%), Android (16.3%), and Windows Phone (6.8%). The IDC predicts that by the end of 2011, Android will become the leading OS system with 39.5% of worldwide market share due to their popular royalty-free business model, their partnerships with key global mobile carriers and the popularity of its applications (most of which are free). In order to increase its market share in the smartphone industry, Microsoft must deal with the strategic issue of proving the value of its Windows Phone 7 OS to their ecosystem partners and customers particularly in emerging markets where most of the growth is expected to occur.

  • Nestlé_GF_GL-300dpiBy Alan Bright, Judy Buhrman, Jenni Ellingson, Jon Harrop, Marra Longo, Anu Narayan

    Switzerland-based Nestlé, SA, touts itself “the world’s leading Nutrition, Health and Wellness Company.” Their mission, described as “Good Food, Good Life,” is to “provide consumers with the best tasting, most nutritious choices in a wide range of food and beverage categories and eating occasions.”[1] However, their size and global ubiquity is also marked with a checkered past of questionable marketing and sourcing practices in the developing world, which has long made them a target of boycotts by human rights watch-groups. In the 1970’s Nestle gained notoriety for its role in the well-known Nestlé baby formula scandal, in which predatory promotion methods that targeted poor mothers were linked to deaths and malnourishment among infants in lesser-developed countries (LDC’s). More recently, Nestlé has come under fire from groups like the International Labor Rights Fund, Global Exchange, and Green America, for its failure to ensure that its commodities, such as cacao, are purchased from suppliers that do not exploit child labor.[2] In spite of a 2005 pledge to eliminate child labor from their supply chain by 2005, Nestlé’s Chairman and former CEO Peter Brabek-Letmathe recently called such a goal “nearly impossible.”[3] Emerging markets play an increasingly important role in Nestlé’s portfolio and global strategy Nestlé’s vulnerability to public relations attacks – and apparent inability to account for all of their global business practices – is due in part one of their biggest strengths as a global corporation: the flexibility and independence they have accorded to their subsidiary operations in emerging markets.

  • Home_brandingUnder Armour (UA) competes in an industry that faces ethical challenges in all operations.  The ethical standards of UA span to all sectors of the business to include the following: product production, manufacturing, operations, and global aspects of the corporation. Yet, UA is leading the way in concurring ethical challenges through successful tactics that make them stand out from competitors.  UA is a market leader, not only in innovation, but in ethical standards, eco-friendly operations, and business practices, throughout the active wear industry.

    Athletic Apparel: A Tainted Industry?

    True to the apparel industry, active wear has not been immune to labor issues as outsourcing to less developed countries has introduced questionable practices and possible human rights violations.  The lack of environmental and human labor regulations has given the industry a suspect reputation and often times a stigma that, “no news is good news” for the industry’s human labor practices.

  • DHL-ExpressBy Carlos Ceron, Isaac Chiu, Eric Craig, Tiina Kandzia, David Kuo, Tatiana Sunshine and David Yom

    The perfect storm of economic downturn, high fuel prices and reduced demand worldwide put a serious hurt on DHL Express. In 2008, it pulled out of the US domestic market and in 2010, it sold its money-losing UK express parcel division. However, it appears that 2009-2010 has seen a fair degree of recovery for DHL Express and the industry as a whole. In the midst of this, Frank Appel, CEO of Deutsche Post DHL began the initiative of Strategy 2015 whose goal is to create synergy among the three divisions of DP-DHL into “One DHL.” It is quite the rosy picture, but integrating each division’s respective strategy and culture will be easier said than done.

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