MM04 International Marketing
Transcription
MM04 International Marketing
MM04 International Marketing Assignment – I Last Date of Submission: 15th October 2014 Maximum Marks: 100 Assignment Code: 2014MM04B1 Attempt all the questions. All the questions are compulsory and carry equal marks. Section-A 1. Distinguish between the ethnocentric and polycentric approach to international Marketing? Under what circumstances is the polycentric strategy a preferred approach for International Marketers? Give examples to support your answer 2. Discuss the critical cross cultural challenges encountered by international marketing Managers? Discuss how these challenges can be addressed by multinational firms? 3. Explain why the Uruguay round of GATT is one of the most prominent rounds of trade negotiations? After WTO replaced GATT - What are the pivotal issues related to Emerging economies which WTO needs to address immediately? 4. Explain the difference between the Theories of Absolute Advantage and Comparative Advantage related to foreign trade? Briefly describe the concept of the Factor Endowment Theory of Foreign Trade? Do you perceive that the assumptions of these trade theories are realistic? Section-B Case Study: Global Environmental Scanning Google's Problems in China Google was founded by Larry Page (Page) and Sergey Brin (Brin), who were students at Stanford University, California, USA. While at Stanford, Page logged on to the World Wide Web, looking for a topic for his doctoral thesis. He decided to work on the link structure of the Web. He found that though links from one page to the other could be followed easily, it was important to keep track of the backlinks as well. He started working on back links and called his project 'Back Rub.' Brin joined Page in working on Back Rub. Together, they created a ranking system which ranked the links depending on their importance. They came up with an algorithm called PageRank which took into account the number of links to a particular site and the number of links into the linking sites. Google Meets 'The Great Firewall' On January 25, 2006, the US based Google Inc. (Google), the world's largest search engine, announced that it was ready to censor the content that it made available in China. Google's Chinese website www.google.cn would be censored by the company itself on the basis of the instructions of the government. Before this, the government agencies in China used to censor the content on Google's site that violated the regulations imposed by the Chinese government on Internet usage and access in MM04/July 2014 Page 1/6 China. The topics that were sensitive for the Chinese government included Tiananmen Square, Tibet, the Dalai Lama, Taiwan independence, human rights and the Falun Gong spiritual movement. Google had been providing services for users in China through its global search engine www.google.com, which has its servers in the US. This meant that the content had to pass through Chinese firewalls, which often stalled the browser and slowed it down. The slowdown was also associated with filtering and censorship carried out by the Chinese government and Internet service providers (ISPs). For this reason, Google decided to place its servers in China and agreed to self-censor the content and let the users know of it. However, human rights activists and advocates of freedom of the press all over the world expressed their displeasure at Google's move. After censorship, users searching for 'Falun Gong spiritual movement', for example, would be directed to sites and articles condemning the movement; sites that supported the movement were omitted from the search. Google was of the view that after censoring its content, the company's website would become easily accessible in China. The company announced, "In order to operate from China, we have removed some content from the search results available on Google.cn, in response to local law, regulation or policy." Google also announced that users would be informed whenever access was restricted. A survey carried out by China Interne Network Information Center in August 2005 revealed that Google was losing market share to its competitor Baidu.com, which had emerged as the leading search engine in China. Google in China In September 2000, Google began operating a search engine in Chinese by offering 24 million web pages in Chinese language as localization had tremendous customer appeal and Chinese internet users preferred consulting internet sites having Chinese language. By 2002, Google had gained lot of popularity in China owing to its simplicity and ability to carry out searches effectively. During that time, the Chinese government was blocking several websites through IP filters intermittently. The blocking increased during times of heightened security like the anniversary of Tiananmen Square events, the national party congress, etc. But users of Google could circumvent the government censorship through cached pages... Google Loses Market Share By early 2004, users in China had thought that Google was unreliable and started using alternative search engines. Elliot Schrage, Vice-president, Global Communications and Public Affairs of Google said that Google was seven times slower than its rival Baidu and Google itself was not happy with the way its services were being operated in the country... The Launch of Google.cn Google wanted to have a major presence in China. The market was lucrative because of its size. China had the second largest number of Internet users after the US. Google felt that only a local presence could help it to provide better and more reliable services to customers. To operate in China, Google needed an Internet Content Provider license, which required it to filter its content. In April 2005, after obtaining permission from the Ministry of Information Industry in China, Google announced the opening of a representative office in Shanghai (Mainland China), and registered the URL www.google.com.cn... MM04/July 2014 Page 2/6 The Road Ahead Analysts opined that with Internet users would have a better experience after the launch of Google.cn, and Google may once again emerge as the most preferred search engine in the country. According to findings reported by Keynote Systems in January 2006, Google was in a strong position to challenge Baidu in the Chinese search engine market. The study concluded that Chinese users, once they started using Google, preferred it to any other search engine... 5. Discussion Questions: a. b. c. MM04/July 2014 Briefly examine the problems faced by Google in China. Outline the relevance of assessing the legal and business environment in the Chinese online media industry? Evaluate the impact of government regulations on the operations of foreign Internet companies like Google in China? Where did Google go wrong? Page 3/6 MM04 International Marketing Assignment – II Assignment Code: 2014MM04B2 Last Date of Submission: 15th November 2014 Maximum Marks: 100 Attempt all the questions. All the questions are compulsory and carry equal marks. 1. Section-A Explain the global segmentation and positioning strategies of firms like Coke and Mc-Donalds in emerging economies like India? Do both MNCs offer customized and adapted products in India for achieving business success? Give examples to support your answer 2. Discuss in details the contribution of E-commerce and e-business in promoting global trade volumes? Give examples of sectors which have benefitted immensely with the rapid advancement of IT? 3. What are the external factors influencing international prices of imported products? Give two examples of Firms adopting Market Skimming and Penetrative Pricing Strategies? 4. Describe the characteristics, capital involvement and ownership status of the following modes of entry into global markets:a) b) c) d) Franchisee Operations Joint Ventures and alliances Wholly Owned Subsidiary Licensing Section-B Case Study Coca-Cola's Business Practices: Facing the Heat in a Few Countries Introduction From January 1, 2006, the University of Michigan in the US put on hold the sale of the products of The Coca-Cola Company (Coca-Cola) in all its campuses, thus becoming the tenth US University to do so. The ban was the outcome of a relentless campaign by student activists and trade union groups, who accused Coca-Cola of violent labor practices in Colombia and creating environmental problems in India. The University of Michigan issued the orders for the ban based on the recommendation of its University Dispute Board. This was following the inability of Coca-Cola to meet the deadline of December 31, 2005 that required agreeing on a protocol on the findings of the commission formed by a set of universities in the US. The commission had offered to investigate the company's labor practices and that of its bottlers in Colombia. Coca-Cola did not want the findings of the commission to have any legal consequences but the attorneys in an earlier lawsuit against Coca-Cola and its bottlers in Colombia insisted that the findings should be legally admissible in court of law in the US. MM04/July 2014 Page 4/6 Coca-Cola's annual contracts with the University of Michigan, which had over 50,000 students, were worth around US$ 1.4 million in sales in 2005. The campaign by student activists and trade union groups to ban Coca-Cola had been going on for several years in different countries. Coca-Cola was accused, along with its bottling partners, of hiring paramilitary death squads in Colombia to kidnap, intimidate, or kill its union leaders and other workers at its bottling plants. Since 1989, around eight union leaders of Coca-Cola's plants in Colombia had been murdered and many others abducted and tortured. In India, Coca-Cola had to face opposition from the local people around its factory in Plachimada, Kerala, who charged that the company was responsible for the draining of the underground water table. Coca-Cola's Business Practices Coca-Cola had always believed that it conducted its business with responsibility and ethics. The company's business practices were aimed at creating value at the marketplace, providing excellent working conditions, protecting the environment, and strengthening the communities in the places of operation. Commitment to quality and a code of business conduct were evolved to ensure good business practices. According to Coca-Cola, its commitment to quality was reflected in every facet of its business. These included commitment to product quality, quality in business processes, and in its relationships with suppliers and retailers. The quality system was reviewed constantly so that the performance bar for these standards was always kept high. The quality guidelines were communicated to all business units and their implementation reviewed. The company introduced the Coca-Cola Quality System (TCCQS) to achieve these quality objectives of delivering the highest quality standards in respect of efficient business processes, product quality, and relationships with suppliers and buyers. i.e. offering TOTAL QUALITY MANAGEMENT across all business dimensions. Labor Practices in Colombia Colombia is widely considered as one of the most dangerous countries in the world for trade union activists and union leaders. The country was in the midst of a four-decade-old civil war involving leftist guerrillas, right-wing paramilitary groups, and government forces. The civil war claimed approximately three thousand lives a year including those of many trade union leaders and workers. It was reported that in 2000, three out of every five trade unionists killed in the world were from Colombia. In 2001, SINALTRAINAL, a Colombian labor union, charged that CocaCola and its bottlers Panamerican Beverages (Panamaco), Bebidas y Alimentos De Uraba, and CocaCola Femsa, were linked to the violence against its union members in Colombia. Around eight union leaders of Coca-Cola's plants in Colombia had been murdered since 1989, and many others had been abducted and tortured. Coca-Cola was accused of hiring paramilitary death squads to kidnap, torture, or kill union leaders and intimidate worker union activists at its bottling plants... Trade Practices in Mexico Mexico was a very important market for Coca-Cola as the country was second, after the US, in terms of per capita consumption of soft drinks in the world. The Mexican market for soft drinks was estimated at US$ 6.6 billion for the year 2004. Over the years, some of the highest profit margins for Coca-Cola in its overseas operations came from Mexico. Coca-Cola was the number one seller of soft drinks in Mexico with a 70% market share. Coca-Cola's largest bottler in Mexico was Coca-Cola Femsa (CCF) in which Coca-Cola had a 40% stake... Environment & Product Issues in India In India, Coca-Cola was accused of draining the underground water table, of releasing improperly treated industrial effluents, and of selling products containing pesticide residues above standard limits. MM04/July 2014 Page 5/6 The focal point of the environmental accusations in India was the Coca-Cola plant located in Kerala. Coca-Cola, through its subsidiary in India, The Hindustan Coca-Cola Beverages Pvt. Ltd., had established a bottling plant at Plachimada locality in Palakkad district in Kerala. The unit was established in 1998-99 in a 40-acre plot that had previously been used for irrigation of paddy and other food crops. The factory site was located in the proximity of a main irrigation canal that drew water from a nearby barrage and reservoir... Boycott of Coca-Cola Products In July 2001, SINALTRAINAL, with the help of United Steelworkers of America (USWA) and the International Labor Rights Fund (ILRF), filed a lawsuit against Coca-Cola and its Colombian bottlers at a court in Miami, Florida, under the Alien Tort Claims Act (ATCA) of the American Judicial System. It accused them of being responsible for a campaign of murder and intimidation against its unionized workers and charged that it was using right wing paramilitary groups for the purpose. The US judge dismissed these charges against Coca-Cola in Colombia but approved the charges against the local bottlers in Colombia... Coca-Cola's Response Coca-Cola opened an exclusive website, www.cokefacts.org, to address these allegations, especially those related to Colombia and India. In an official statement featured on the website, Coca-Cola claimed that the allegations against the business practices in Colombia were false. Two different judicial enquiries in Colombia, one by a Colombian court and the other by the Colombia Attorney General, had found no evidence against Coca-Cola or its bottlers linking them to the murders of the union members. Coca-Cola also quoted a judgment in the lawsuit at Miami, Florida, wherein the judge had dismissed the charges against Coca-Cola, Columbia... 5. Discussion Questions: a. What are the issues and allegations faced by Coca-Cola in Colombia, India, and Mexico? b. Examine the challenges faced by multinational companies due to the rise in consumer activism? c. What other options are available to Cocoa Cola for fighting the allegations made concerning pesticide content in beverages? MM04/July 2014 Page 6/6