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10. Local manufacturing and purchasing has reduced costs and serves a strategic purpose for Haier in becoming a localized brand. The downside to this is that Haier is subjected to higher labor and land costs in the U.S. And Europe. In addition, the company faces a human resources challenge in dealing with local workforces around the world.
11. The parent Haier Group fully owns Haier America. According to the Haier America website, the U.S. subsidiary is considered to be Haier Group's "sales and marketing arm of the Americas" (HaierAmerica.com, 2010). As such, Haier America fills a key role in revenue generation, but there is only a limited role for the company in information transfer. By virtue of building a factory, however, Haier America is established as a major internal component of the Haier Group, due to the company's high level of commitment to the American market.
12. Haier's market entry…
De Jear, D. (2007). SuccessFactors chosen by Whirlpool Corporation to drive global employees initiatives. Success Factors.com. Retrieved April 4, 2010 from http://www.successfactors.com/press-releases/detail/?id=1086102
Ho, E.. & Farhoomand, A. (2007). Haier: How to turn a Chinese household name into a global brand. Harvard Business Review. September 25, 2007
Lin, T. (2007). Lessons from China: Haier Group has achieved extreme success through unique performance-management systems. Strategic Finance. Retrieved April 4, 2010 from http://www.allbusiness.com/accounting/3902389-1.html
Haier America website. (2010). About Haier America. Retrieved April 4, 2010 from http://www.haieramerica.com/en/aboutus/
Haier's global competitive position is defined by the bargaining power of suppliers, substitute products and services, bargaining power of buyers and potential new market entrants. The core competencies and profitable growth through value creation that Haier has been able to attain is more attributable to leveraging subsidiary skills to create localization strategies. What emerges from an analysis of the economies of scale attained by streamlining its own value chain is the fact that Haier has the ability to define localized strategies very effectively without losing global sales and value chain momentum in the process. Haier's decision to only concentrate on those most competitively-entrenched markets could have led to pressures for cost reductions and the continual pursue of low-cost pricing strategies that would have impacted profitability. Instead, Haier concentrates on location-based economies of scale, translating local market intelligence and attaining greater market insights while reducing costs through the experience effect.
This provides two strong disincentives to innovate. hat is left is a Chinese state that discourages the development of the most tried-and-true means of economic development -- competition and innovation -- and instead relies on wealth transfer due to currency manipulation as the foundation of its success.
The role of government in an economy, therefore, should be limited if long-term sustainable growth is the objective. For totalitarian capitalism to be the superior system would require that system to develop competencies that enable its economies to compete globally. Thus far, these competencies have only emerged in the Chinese firms that have access to estern systems -- Lenovo's Hong Kong roots place it into estern-style competition for example. ithout competencies, you have short-term success built on an artificial and unsustainable economy, rather than long-term success. The estern style emphasizes a limited role for government and the power of market forces. The totalitarian…
Huang, Y. (2008). Just how capitalist is China? MIT Sloan Research Paper 4699-08.
No author. (2008). The long march backwards. The Economist. Retrieved March 21, 2010 from http://www.economist.com/culture/displaystory.cfm?story_id=12333103
No author. (2010). The spirit of enterprise fades. The Economist. Retrieved March 21, 2010 from http://www.economist.com/business-finance/displaystory.cfm?story_id=15331470
Krugman, P. (2010). Taking on China. New York Times. Retrieved March 21, 2010 from http://www.nytimes.com/2010/03/15/opinion/15krugman.html?hp
l billion in 2007. This growth can be seen to represent the increasing interest of Chinese firms in acquiring resources, technology and brands outside of their own country (Carpenter & yman, 2009).
Lenovo was able to seal the deal essentially by acting like a estern firm. It did not approach the deal from the same perspective as say, the way that CNOOC did with its unsolicited bid and ultimately failed bid for Chevron. Lenovo had a strategic alliance with IBM prior to the deal, so that the latter's management and shareholders understood the strategic value of the deal. For Lenovo, it was able to maintain relationships with IBM, including taking some of its talent back to China with it.
Lenovo traded on the Hong Kong exchange, giving it the transparency needed by estern investors. Moreover, this also lent liquidity to Lenovo shares, allowing them to be used in the deal.…
Wong, J. & Chan, S. (2003). China's outward direct investment: Expanding worldwide. China: An International Journal. Vol. 1, 2, 273-301.
Schuller, M. & Turner, A. (2005). Global ambitions: Chinese companies spread their wings. Im Fokus. Retrieved November 23, 2009 from http://www.giga-hamburg.de/ifa/kostenlos/ca/0504/Fokus-Schueller.pdf
Hamm, S. (2005). Lenovo and IBM: East meets west, big time. Business Week. Retrieved November 23, 2009 from http://www.businessweek.com/magazine/content/05_19/b3932113_mz063.htm
Fuhrman, P. (2009). Private equity and strategic M&A transactions in China. China First Capital. Retrieved November 23, 2009 from http://www.chinafirstcapital.com/blog/archives/202
It is noteworthy that most recently the government started soliciting opinions from legal academies, interested groups and the general public when drafting a major piece of legislation, to achieve democratic lawmaking and advance further compliance with the law (Lo, V.I., 2007).
The most important economic event at this stage or in the years following the 1978 economic reform in China is undoubtedly its accession to WTO at the end of 2001. Following 15 years of numerous negotiations and adjustments of policies, China eventually entered the mainstream world economy and started enjoying the benefits and facing the challenges of WTO.
In response to WTO requirements, China underwent a "make-over" in many aspects. A brief summary of China's WTO promises is shown in Figure 9A. According to the WTO agreement, China is subject to reviews by the WTO in the 8 years following its accession. The most recent one was announced in…
Bailey, P., China in the Twentieth Century. 2nd ed. 2001: Wiley-Blackwell. 296.
Brainard, S. Lael, "An Empirical Assessment of the Proximity-Concentration Trade-off between Multinationals Sales and Trade," American Economic Review, Sep. 1997, pp. 520-544.
Chow, G.C., THE IMPACT OF JOINING WTO ON CHINA'S ECONOMIC, LEGAL AND POLICAL INSTITUTIONS, in International Conference on Greater China and the WTO. 2001:Hong Kong.
Clarke, D.C., Legislating for a Market Economy in China. The China Quarterly, 2007(191): p.567-585.
Fall of Fujimori
The film Fall of Fujimori captures the modern dictatorship of President Alberto Fujimori in Peru. Fujimori comes to rise in 1990 when insurgents and poverty appears to be dominating Peru, and he represents the poor and the disenfranchised population. The support Fujimori gained from this faction of people helped him win the elections for the office of the Presidency. Though, after being sworn in as President, the President launches a "War on Terror" against the guerrilla organization called Shining Path, which he wins. Ten years after the beginning of his reign, Fujimori is accessed of "kidnapping, murder and corruption" and flees from Peru to Japan, "where was in exile for four years" (PS, Documentaries with a Point-of-View, 2006). The documentary illuminates Fujimori in a rather personal light by interviewing him one-on-one, where it is noted that he was "nervous, gracious, diffident and anxious to tell his story"…
PBS, Documentaries with a Point-of-View,. (2006). The fall of fujimori. Retrieved from http://www.pbs.org/pov/falloffujimori/film_description.php
The U.S. Department of Commerce reports that services to foreign clients brought Americans $131 billion in 2003. This was in addition to offshore services for U.S. customers, which grew by $7 billion.
The report shows that labor-intensive production and administrative work has grown in low-cost places, while talent sensitive activities have grown in the United States (Malachuk, 2004). This is a major benefit of outsourcing.
Weidenbaum (2005) argues that many American employees are able to keep their jobs because outsourcing allows their companies to stay competitive. Companies in higher-labor-cost economies can stay competitive and thus preserve jobs that remain (Jones, 2005). Many employees as a result will get new or better jobs because the company's financial strength has been enhanced. For example, when a company outsources upgrades for its software system, the domestic demand for basic programmers may decrease, but there will be an increased need for higher-paid systems integrators…
Feldman, W. & Feldman, P. (2005). In or out? Journal of Property Management, 70 (1), Jan/Feb, 32-35.
Jones, D. (2005). Offshoring...benefits the consumer. USA Today, accessed 7/14/06: JOE139485141905.
Kinetz, E. (2005). Trading down. Harper's, 311, July, 62-64.
Malachuk, D. (2004). Offshoring is a two-way street. National Real Estate Investor, 46 (5) May, 76.
Indesit has a number of sources of competitive advantage. It has a brand that is widely recognized in Europe, and with that strong distribution channels and a good reputation among consumers. The company has a good executive team that was able to run the company without incident when CEO Milani was in a motorcycle accident. The company's products are generally popular, for example the Aqualtis washing machine that challenged the company's factories to keep up with demand. Indesit, by virtue of its manufacturing and supply chain strategies, has also been able to undercut the industry leaders, which gives it the ability to succeed in the markets around the periphery of Europe, where consumer significantly less likely to afford premium brands relative to those in Europe's most developed economies.
Some of these advantages are transferrable to a global context, but some are not. Brand recognition and distribution networks are local advantages…
Ernst, D. & Kim, L. (2001). Global production networks, knowledge diffusion, and local capability formation: A conceptual framework. Nelson & Winter Conference, Aalborg, Denmark. Retrieved November 13, 2014 from http://www.druid.dk/conferences/nw/paper1/Ernst_and_Kim.pdf
Houston, M., Ratneshwar, S., Ricci, L, & Malter, A. (2010). Dynamic strategic goal-setting: Theory and initial evidence. Review of Marketing Research. ISSN: 1548-6435.
Moen, O. (2002). The born globals: A new generation of small European exporters. International Marketing Review. Vol. 19 (2/3) 156-172.
Porter, M. (2008). The five competitive forces that shape strategy. Harvard Business Review. Retrieved November 13, 2014 from https://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy
This is the largest chain of specialist coffee shops in India. Other brands, such as Cafe Coffee Day Xpress Kiosks offer takeaway coffee and other hot drinks and are found at busy locations, such as airports and railway stations. Additional competitors, neither of which are as dominant as Cafe Coffee Day include Cafe Mocha and Qwiky's. Cafe Mocha operates 50 upscale locations in major metro areas and caters to the upscale younger workers who have higher-than-country average per capita incomes. Qwiky's operates a smaller chain of outlets called coffee pubs, with the goal of creating ambience and a sense of relaxed atmosphere while selling higher-end coffees and specialty drinks.
The rise in coffee drinking is part of the transition to more branded consumption in India, and is led by the growth of branded coffee cafe chains such as Barista, Cafe Coffee Day and Qwiky's (KPMG 18).
3e. Context (Environmental) Analysis…