1. College of Business Administration
Maximizing Competitive Strategy:
Lessons from Latin America and the USA
Professor Chris Robertson
Tools for entering potential foreign
markets and adapting to national brand-
building strategies
2. College of Business Administration
Key globalization strategic decisions
Main decision: Efficiency vs. Localization
Efficiency
Cost reduction, Economies of scale, Standardized
goods
Local responsiveness
Adapting to different tastes and preferences
3. College of Business Administration
Cost-Responsiveness Framework
High
Global Transnational
strategy strategy
Pressure for
Efficiency
Multidomestic
strategy
Low
Low High
Pressure for Local Responsiveness
4. College of Business Administration
Efficiency-Responsiveness Framework
Global
Produce and sell standardized products in different markets
(Coca-Cola)
Transnational
Produce and sell somewhat unique, yet somewhat
standardized products in different markets (Caterpiller –
Japan)
Multidomestic
Produce and adapt products in different markets (Nestle)
5. College of Business Administration
Following multiple strategies at Hasbro
Multidomestic - Action Man
Global – Mr. Potato Head
Transnational - Trivial Pursuit
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6. College of Business Administration
The International Strategy -
Exporting National Identity
International strategy - products produced for the domestic
market initially sold internationally with minimal localization
Low cost pressures and low
responsiveness
Examples:
Chateau Margaux
Salvatore Ferregamo
Juan Valdez
Rolex
7. College of Business Administration
Implementing Globalization: Choice of
Entry Mode
Exporting
Franchising
Licensing
Joint Venture
Wholly-owned subsidiary
How does leveraging national brand relate to entry mode?
Control!! Adaptation!!
8. College of Business Administration
Country Choice Decision. Key factors to
consider
Size of target market
Income level of target market
Perception of foreign products (my country !)
9. College of Business Administration
Aligning firm strategy with country
branding
Where are these pictures from? 9
10. College of Business Administration
Brand Building for Low Cost Competitors
Human Resource Management
Policies designed to reduce costs and minimize turnover
Rewards for cost saving ideas
Marketing
Team up with governmental promotion events
Low-cost methods to promote products (Internet,
billboards)
Let other firms take the lead
Operations and logistics
Efficient delivery schedule; shared containers if small
Some vertical integration 10
11. College of Business Administration
Brand Building for Differentiators
Human Resource Management
Policies designed to enhance innovation and new ideas
Recruitment of entrepreneurial thinkers, best local talent
Marketing
Co-sponsor promotions with government. Take the lead!
Celebrate history and culture-let it flow into products
Operations and logistics
Emphasize service! It adds competitive advantage for quality
firms.
Maybe vertical integration to control quality 11
12. College of Business Administration
Strategic Group Map of Restaurant Industry
High Pizza
Restaurants
Dominos,
Int’l
Pap John’s, Chains:
Price / Quality / Image
etc
TGI
Fridays, Steak
Houses:
Chili’s, etc Ruth’s
Chris, Gourmet
Smith & Local
Wollensky’
s
Medium
Fast Food
Chains: Sandwic
McDonalds h
Burger Coffee
King Shops:
KFC Houses: Subway,
Starbucks
Juan National etc
Valdez, etc Theme
Restaurants
: ChiChi’s Diners
T’anta
Low Donut Discounter
s s
Limited menu Medium variety Broad variety Broad-category
Product Line / Merchandise Mix
13. College of Business Administration
Strategic Groups: Competitive Positioning
Expensive .
Price Catena Zapata,
French Bordeaux
Traditional
Bodegas Norton,
Other Malbecs
Discount
Low High
Quality
14. College of Business Administration
A few examples of firms that are leveraging
national brands
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15. College of Business Administration
Linking Country Brand and Image to
Products (or not!)
Catena Zapata- Argentina
Ajegroup and PISCIS- Peru
Samuel Adams- USA-Boston
D& Bond- Ecuador
Tam-Brazil
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16. College of Business Administration
Catena Zapata- Argentina
Leveraging the image of Argentina and the mountains of
Mendoza
Vineyard started in Mendoza in 1902 by Nicola Catena,
Italian immigrant
Grandson, Nicholas, received Ph.D. In Economics and
taught at Cal-Berkeley while studying California wines
Since 1980s high quality, differentiation, strategy focused
on premium Malbecs and Chardonnays
Cautious brand extension
Different brands for Argentine and Foreign Markets 16
17. College of Business Administration
Ajegroup- Peru, global image
Kola Real - Background
Ajegroup Corporation, created in 1988 by Eduardo and Mirta
Añaños
Founded in Ayacucho, Peru
Initially sold soft drinks in returnable beer bottles
Original competitive edges were location and cost
Big Cola
18. College of Business Administration
International Expansion
Country Year Mkt Share
Peru 1988 15-20%
Venezuela 1999 10%
Ecuador 2001 10%
Mexico 2002 4%
Costa Rica 2004 8%
Exports to Guatemala and Nicaragua
Thailand, Colombia, Brazil 2006-2008
19. College of Business Administration
Update 2012
Ajegroup International Growth
Peru, Ecuador, Colombia, Brazil, Venezuela, Mexico, Central
America, Thailand
NEW: Vietnam, India, Indonesia
Next: China
New Products: beer, juice, sport drinks, energy drinks, water
Some concentrate purchased from outside suppliers (COTT,
USA)
More than 10,000 employees and over US$ 1 billion in
revenues
20. College of Business Administration
A Peruvian Product from the Andes
The firm specializes in Rainbow Trout
High quality focus with packaging/seasoning tailored to
client preferences
PISCIS has 40 different products (i.e. Grill-Ready BBQ trout
for Norway)
21. College of Business Administration
PISCIS, exports
Currently exports are destined for 8 nations:
Norway
Canada
Sweden
USA (Costco)
Poland
Germany
Mexico
Bolivia
Recent entry into Argentina and Brazil
23. College of Business Administration
Samuel Adams Boston- USA
Colonial roots, a true American brand
Visionary Founder – Jim Koch
Craft Brew Segment Leader
Domestic Focus
Sells Internationally to Build World Class Brand Image
Only US Beer to adhere to German Brewing Standards
Constant innovation yet under same „Rebel Patriot‟ theme
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24. College of Business Administration
D & Bond, Quito Ecuador,
emphasizing the English
D & Bond is one of the leading sweater manufacturers and
retailers in Ecuador
D & Bond exports sweaters and other woven
items to five other countries in Latin America:
Colombia, Mexico, Brazil, Bolivia and Chile
Emphasizes the English roots of one of the founders,
Rosalind Bond of Scotland
Recently expanded into related products such as
jeans and kitchen items.
26. College of Business Administration
Tam Airlines, Brazil
Proud to be Brazilian
Founded by Captain Rolim Adolfo Amaro in 1976 and now
has over 40% of Brazilian market
Started as a regional airline within Brazil
Currently member of Star Alliance
In talks with LAN to form LATAM
What is Brazilian about TAM:
Still embraces spirit of founder
“Passion for Flying” “Command at Service” “Spirit to Serve” trace
back to Captain Amaro
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