Question:
Discuss about the Risks and Opportunities of Participation.
Strategic competitive analysis is focused on identifying the competitors along with analyzing certain strategies for determine weaknesses and strengths associated with the company’s services and product. A competitive analysis serves as a vital part of the selected companies marketing plan. The objective of the paper is conduct strategic competitive analysis of the selected companies (Amine and Raizada 2015). Nestle Company and Coca Cola Company are selected in order to analyze target markets and mode of entry within food and beverages industry. In addition, Toyota Company and Ford Company are selected in the paper in order to analyze globalizing value proposition within car industry. Strengths and opportunities attained from the selected competitive strategies by the chosen companies will be analyzed in the paper. Moreover, certain recommendations will also be provided to the companies so that these strategies make them evolve with time along with decreasing their threats and weaknesses.
Based on the likings of its target market in different regions of the world, Nestle Company has decided to implement certain effective market entry strategies to attain competitive edge over its business rivals. For instance, Nestle has attempted to buy local companies in China and modified its own product portfolio based on the demands of the Chinese market (Ang, Benischke and Doh 2015). As numerous Chinese consumers find coffee a bit bitter and do not prefer such taste, Nestle has attempted to develop an innovative formula to offer these consumers with “Smoovlatte” that is a coffee beverage almost tasting like an ice cream. The target market in this nation prefers the company to position itself as a company that offers them healthy food. In entering the international market the company has used its brand name as a strength in order to attain increased sales along with increasing its market share that encompass all its customized products which fits better in its target market profile (Ashton, Richards, Galatsanou and Bollman 2014). Nestle has always used acquisition method as an effective market entry strategy for expanding and penetrating within new global markets that decreases all the local barriers to its competition.
Based on the successfulness of the strategy implemented by Nestle Company in capturing its target market through suitable modes of entry, several recommendations have been provided that can facilitate the company in attaining competitive advantages. Considering the same, it is recommended that Nestle needs to implement strategic discipline in selecting the target market it needs to serve (Crane et al. 2014). The company also needs to decide the perfect time to enter into a target market along with measuring the considerable advantages of the direct as well as indirect presence in several regions of the world. Considering the weaknesses of the company’s market entry strategy and quality measure that recalls for product recalls, Nestle must decide to decentralize its market entry strategy units into 7 subunits dealing with different product lines. For instance, single subunit for coffee and beverages along with another one just focusing on milk products and ice cream. Moreover, to address such weaknesses in its strategy, the company is recommended to bring all its management level staff from all through the world for a two week training in its headquarter (Gereffi and Luo 2015). Such training will facilitate the company in ensuring that all its staff are familiarized with their global culture, new market entry strategy along with offering them access to the organizations top management.
Coca Cola has attained several opportunities through selection its target market along with implementing suitable market entry mode (Getz and Robinson 2014). Based on the demands of the international target market, Coca Cola Company has decided deviate its focus from manufacturing normal product and concentrated on expanding its beverage varieties. Considering the need of its target market, Coca Cola has developed mixed fruit drinks, high calorie energy drink and basic water drinks. Coca Cola follows different market entry mode strategies to enter the international market such as joint ventures, exporting, and licensing, financing and foreign direct investment. Along with reporting its new beverages and special syrups, the company also exports its merchandises to all its foreign companies and distributors. Coca Cola attained several benefits in franchising market entry mode strategy (Kim and Mauborgne 2014). This strategy used by the company is manufactured-sponsored wholesalers manufacturing process. Coca Cola attained the opportunity of franchising its finished products and selling them to retailers in global target market. Moreover, licensing also served as most effective entry mode for the company as it offered the company with advantages of export market opportunities, diffusion of new products and decreased risk manufacturing relationships.
Based on the demands of its global target market that desires innovative beverages and non-alcoholic sparkling drinks from Coca Cola, it is recommended that the company must select market entry mode of foreign direct investment through acquisitions (London, Pogue and Spinuzzi 2015). This can provide the company with advantages of direct ownership of facilities within the global target market along with attaining opportunities like technology, capital and workforce. Direct ownership market entry strategy must be implemented by Coca Cola Company as this can provide the company with increased control on its operations along with capability to address its consumer’s demands along with its competitive environment. Another market entry more strategy that is recommended to Coca Cola is through strategic alliance or joint venture with renowned companies in target country as this might facilitate the company in sharing risks and resources needed to enter global markets (Kim and Mauborgne 2014). There are several benefits that can be attained by Coca Cola in partnership market entry strategy that includes successful and profitable market entry, technology strain, risks and rewards sharing, joint product advancement along with successful confirmations of government regulations. Exporting market entry strategy is also recommended to Coca Cola that can facilitate the company in making direct sale and marketing of domestically manufactured products to all its target countries.
Over the past years, Toyota Company was observed to struggle for coming up with innovative design after maintaining a successful setting of superior quality cars (London, Pogue and Spinuzzi 2015). Through the company was attaining increased profits the company was dealing with issues regarding ensuring the consumers the future of its manufactured cars with less environmental concerns. Futuristic global value proposition strategy of the company as per the demands of its target consumers provided Toyota with several opportunities to manufacture hybrid cars that can use electricity as well as liquid fuel simultaneously. Global value proposition strategy of Toyota is to address the un-met needs of its target consumers. The company has developed its cars based on the needs of its consumers worldwide those love their cars and can easily accept change particularly if it is based on their physical well-being and comfort (Meyer and Thaijongrak 2013). Considering the same, Toyota Company has developed its value proposition of offering hybrid cars based on consumer demands. Such global value proposition strategy of the company has been effective enough in serving as a key to the business for the reason that the company that develops value proposition strategies based on future trends will be more successful than a company that develops value proposition strategies based on instant trends. Global value proposition strategy of Toyota Company has generated a strong differential between the companies and is business rivals.
Based on the success of the globalizing value proposition strategy of Toyota, the company is recommended to focus on its positioning strategy which pertains to marketers offering design along with its product image for attaining an exceptional place in the minds of target market of the company (Moodie et al. 2013). Efficient product positions should be maintained by Toyota that can facilitate the company to develop consumer focused value proposition that in turn offers a basis to its target market for purchasing a particular product. Globalised value proposition strategy of Toyota must be focused on providing superior quality fuel efficient cars that comes with different colors and variations. The company is also recommended to position it with unique selling proposition for all its distinct versions. Such positioning strategy might offer Toyota Company with opportunities of selling exceptional value to its target consumers and attain global positioning in an innovative and different manner (Nielsen and Lund 2014).
Ford Company has attained numerous opportunities in globalizing is value proposition strategies. The globalised value proposition strategies of Toyota are described under:
Based on the opportunities that can be attained by Ford Company, the company is recommended to develop more innovative value proposition strategies and position itself as a leading manufacturer of cars. Ford Company is recommended to develop innovative design after maintaining a successful setting of superior quality cars. Through the company must focus on attaining increased profits the company was dealing with issues regarding ensuring the consumers the future of its manufactured cars with less environmental concerns (Riasanow, Galic and Böhm 2017). Futuristic global value proposition strategy of the company as per the demands of its target consumers must focus on providing Ford with several opportunities to manufacture hybrid cars that can use electricity as well as liquid fuel simultaneously. Value proposition strategy of the company must focus on developing car products online along with developing personalized models of the cars within the company’s website. The company must focus on selling its products through offering maintenance and support service to its target consumers for making its international value proposition strategy successful.
Conclusion
The objective of the paper is conduct strategic competitive analysis of the selected companies. Nestle Company and Coca Cola Company are selected in order to analyze target markets and mode of entry within food and beverages industry. In addition, Toyota Company and Ford Company are selected in the paper in order to analyze globalizing value proposition within car industry. It is gathered from the paper that Based on the likings of its target market in different regions of the world, Nestle Company has decided to implement certain effective market entry strategies to attain competitive edge over its business rivals. Coca Cola has attained several opportunities through selecting its target market along with implementing suitable market entry mode. Based on findings it is recommended that efficient product positions should be maintained by Toyota that can facilitate the company to develop consumer focused value proposition that in turn offers a basis to its target market for purchasing a particular product.
Reference List
Amine, L.S. and Raizada, D., 2015. Market Entry into the Newly Opened Indian Market: Recent Experiences of US Companies in the Soft drinks Industry. In Proceedings of the 1995 Academy of Marketing Science (AMS) Annual Conference (pp. 287-292). Springer International Publishing.
Ang, S.H., Benischke, M.H. and Doh, J.P., 2015. The interactions of institutions on foreign market entry mode. Strategic Management Journal, 36(10), pp.1536-1553.
Ashton, W., Richards, G., Galatsanou, E. and Bollman, R., 2014. Food & beverage processing industry growth pathways to 2020. Brandon, M: Rural Development Institute. See: https://www. brandonu. ca/rdi/files/2011/02/RDI-Food-Processing-Report-2014. pdf.
Crane, A., Palazzo, G., Spence, L.J. and Matten, D., 2014. Contesting the value of “creating shared value”. California management review, 56(2), pp.130-153.
Gereffi, G. and Luo, X., 2015. Risks and opportunities of participation in global value chains.
Getz, D. and Robinson, R.N., 2014. Foodies and food events. Scandinavian Journal of Hospitality and Tourism, 14(3), pp.315-330.
Kim, W.C. and Mauborgne, R.A., 2014. Blue ocean strategy, expanded edition: How to create uncontested market space and make the competition irrelevant. Harvard business review Press.
London, N., Pogue, G. and Spinuzzi, C., 2015, July. Understanding the value proposition as a co-created claim. In Professional Communication Conference (IPCC), 2015 IEEE International (pp. 1-8). IEEE.
Meyer, K.E. and Thaijongrak, O., 2013. The dynamics of emerging economy MNEs: How the internationalization process model can guide future research. Asia Pacific Journal of Management, 30(4), pp.1125-1153.
Moodie, R., Stuckler, D., Monteiro, C., Sheron, N., Neal, B., Thamarangsi, T., Lincoln, P., Casswell, S. and Lancet NCD Action Group, 2013. Profits and pandemics: prevention of harmful effects of tobacco, alcohol, and ultra-processed food and drink industries. The Lancet, 381(9867), pp.670-679.
Nielsen, C. and Lund, M., 2014. An introduction to business models.
Ofreneo, R.E., 2016. Auto and car parts production: can the Philippines catch up with Asia?. Asia Pacific Business Review, 22(1), pp.48-64.
Pananond, P., 2013. Where do we go from here?: Globalizing subsidiaries moving up the value chain. Journal of International Management, 19(3), pp.207-219.
Riasanow, T., Galic, G. and Böhm, M., 2017. Digital Transformation In The Automotive Industry: Towards A Generic Value Network.
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