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COUNTRY OF ORIGIN AND MARKET PRESSURE

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COUNTRY OF ORIGIN AND MARKET PRESSURE

  1. 1. COUNTRY OF ORIGIN AND MARKET PRESSURE Simona-Diana Saptebani MSc. International Marketing Master Thesis 2012-
  2. 2. Agenda:  Findings  Market Pressure  Value Chain  The smile of value creation  Location and control  Reflections and conclusions
  3. 3. Findings: The origin of the brand is more important than the origin of the product!
  4. 4. Market Pressure: Competitive pressure to reduce costs Market making flexibility more valuable Cost Flexibility High Low LowHigh
  5. 5. Research and development Production Marketing Sales and service Value Chain: Intangible resources High value added Intangible resources High value added Tangible resources Low value added
  6. 6. The Smile of Value Creation: R&D, Design, Commercialization Manufacturing Marketing and Brand management, Specialized logistics, After-sales services Value added R&D knowledge Marketing knowledge Location 1 Location 2 Location 3 Location 4 Location 5 Input Market Intangibles Advanced economies Tangibles Emerging market economies
  7. 7. Value added R&D knowledge Marketing knowledge Loc 1 Loc 2 Loc 3 Loc 5 Loc 6 Input Market APPLE (US) R&D, Product Design, Commercialization Chip Design (UK) ARM Holdings Parts – touchscreen Balda (Germany) Parts chips Samsung (Korea) NXP Semiconductor (The Netherlands) Assembly Inventec (Taiwan) Hon Hai Precision Industry (Taiwan) Advertising (US) TBWA/Chiat/Day APPLE (US) Marketing, Brand management After--sales services Loc 4 Loc 7 The Smile of Value Creation:
  8. 8. R&D, Design, Commercialization Manufacturing Marketing and Brand management, Specialized logistics, After-sales services Value added R&D knowledge Marketing knowledge Location 1 Location 2 Location 3 Location 4 Location 5 Input Market Creation Creation The Smile of Value Creation:
  9. 9. Strategic choice – Location and Control: 1. Onshore in-house 3. Captive Offshore 2. Onshore outsourced 4. Offshore outsourced Concentrated Dispersed Geographical location strategyControlstrategy SpecializationVerticalIntegration
  10. 10. Reflections:  is product specific  is more concerned with companies from advanced countries  offers just a guideline, do not offers details
  11. 11. Companies from advanced economy countries producing hybrid products (electronics) when facing market pressure should consider outsourcing or relocation of the parts of the value chain that bring less value to the products. However there should be considered the control and the specialization implications in that decision. Conclusions:
  12. 12. Thank you for listening!

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