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Tag Archive 'strategy'

Adaptation, aggregation, and arbitrage strategy are used to create value globally. Adaption strategy is the most used global strategy. Adaptation strategy refers to a company meeting local requirements or preferences. Considering the variety of all parts of the world, adaptation is essential globally.

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Industry clustering occurs because of geographical natural advantages such as a certain climate or an abundance of a certain resource. However, industry clustering also occurs because of relative advantages, which the industry itself creates organically through economic forces. Interdependencies develop between facilities, customers, suppliers, technology, and labor markets.

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Bad International Strategies

The story of EBay in China is about as straight-forward as it gets. In 2004, EBay decided to begin operations in China. Envisioning a threat, the Chinese e-commerce Alibaba decided to counter EBay with an auction site of their own. In the hope of gaining market share, EBay began heavily advertising on websites and billboards. This was their first mistake. Alibaba, realizing that Chinese customers prefer TV advertising, invested heavily in that medium. Additionally, Alibaba tailored their auction site to the needs of Chinese consumers, while EBay continued to use Western concepts that did not fit as well with Chinese culture. Finally, Alibaba focused on customer satisfaction (Wang, 2010).

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The general consensus is that General Motors operates a Product Pyramid profit model. This model is characterized by offering a myriad of product options that cover a wide range of buyer preferences. High volume, low profit products make up the bulk of sales, with low volume, high profit products providing excellent margins.

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There are four stages in the typical evolution of an industry: emerging, growth, maturity, and decline. Mature industries are marked by slow growth. Firms involved in a mature industry focus on market segments that represent high growth, further refining their strategy as a differentiator, and generally manage to cut costs by streamlining processes.

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