Solution Manual For Global Marketing, 9th Edition by Svend Hollensen Ana Bogdanovic

Instructor’s Manual Global Marketing Ninth Edition by

Svend Hollensen Ana Bogdanovic

Contents Chapters

Pages

Part I Case Study: H&M: sustainability concerns don’t stop the fashion giant

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Case Study 1.1: The end of globalization – or just a temporary challenge?

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Case Study 2.1: LifeStraw: Vestergaard transforms dirty water into clean drinking water

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Case Study 3.1: Accor Hotel Group: balancing global efficiencies with local adaption

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Case Study 4.1: Clusters and the creative class – the coming together of structures and people who drive and shape competitiveness

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Part II Case Study: The BYD journey in the international market for electric vehicles

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Case Study 5.1: E-scooter market failures – a lesson in insufficient market research?

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Case Study 6.1: The G-20 and the economic and financial crises: what on earth is globalization about? Protests against the globalization

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Case Study 7.1: Cultural differences in international marketing – the case of IKEA’s marketing communications

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Case Study 8.1: The impact of digitalization on internalization and competitiveness for SMEs 30 Part III Case Study: The end of JIT – adapting to international supply chain shortages

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Case Study 9.1: Jarlsberg®: the king of Norwegian cheeses is deciding on entry modes into new markets

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Case Study 9.2: Jissbon: is acquisition the right way to gain market shares in the Chinese condom market?

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Case Study 10.1: Lysholm Linie Aquavit: international marketing of the Norwegian Aquavit brand 40 Case Study 11.1: Franchising – key to expansion or out of fashion?

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Case Study 12.1: Corporate withdrawals

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Case Study 13.1: Car-sharing – when a great product fails to succeed in some markets

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Part IV Case Study: McDonald’s international marketing approach – does it still work, or has it come to an end?

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Case Study 14.1: Danish Klassic revisited: launch of a cream cheese in Saudi Arabia, and the challenges that followed

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Case Study 15.1: Getting pricing right and not being greedy – competition and market forces

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Case Study 16.1: Third-party websites change the rules of the distribution game

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Case Study 17.1: True Gum: an organic chewing gum producer is looking for international expansion in Vietnam

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Part V Case Study: Bioko Treats – premium chocolate from Ghana

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Case Study 18.1: Next Retail – shifting emphasis for growth

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Case Study 18.2: Mace Group – harnessing local to drive international marketing excellence

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Case Study 18.3: Typeform – bringing Silicon Valley to Barcelona

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Part I Case Study H&M: sustainability concerns don’t stop the fashion giant Answers 1. Describe the sustainability challenges H&M faces and how these challenges impact its business model.

H&M – like its competitors – faces significant sustainability challenges primarily due to the environmental and social impact of its fast-fashion business model. The key challenges include: 

Environmental impact: The fast-fashion industry is known for its high consumption of water, energy and non-renewable resources. Production processes contribute to pollution, carbon emissions and textile waste. For H&M, this means that its business model, which relies on rapid production cycles and low-cost materials, is difficult to align with growing environmental concerns.

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Social impact: H&M has faced criticism for poor labour practices in its supply chain, including providing low wages and unsafe working conditions in developing countries. The pressure to keep costs low has led to exploitation in countries like Bangladesh and Cambodia.

These challenges impact H&M’s business model by creating a tension between on the one hand maintaining low prices and high volume, which are central to the fast-fashion model, and on the other hand the need to address sustainability concerns. As consumer awareness of these issues grows, H&M risks losing customers to more sustainable competitors if it fails to adapt. Meanwhile, the entire fast-fashion industry and fashion overall risk losing purchase power.

2. How has H&M innovated within the fashion industry, and what role does this innovation play in the company’s sustainability efforts?

H&M has been a pioneer in the fast-fashion industry by innovating in several key areas: 

Supply chain management: H&M’s ability to rapidly design, produce and distribute new collections has set a standard in the industry. The company’s control over its stores and centralized distribution system allows it to quickly respond to market trends and consumer demands.

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Use of customer data: H&M has leveraged data analytics through its H&M Club loyalty programme to gather detailed insights into customer behaviour, which helps in inventory management and market segmentation.

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Sustainability initiatives: H&M has introduced collections made from sustainable materials like organic cotton and recycled polyester. It also runs a global garment collection programme for recycling used clothing. However, numerous controversies and scandals underline that these initiatives have not always been as innovative and sustainable as promised.

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Steven Hollensen & Ana Bogdanovic, Global Marketing, 9e, Instructor’s Manual

These innovations have improved operational efficiency and reduced waste. However, the effectiveness of these efforts in counterbalancing the overall environmental impact of the fastfashion model remains debatable, and there is a long way to go before we can talk about sustainable fashion in a genuine, convincing way.

3. Evaluate the impact of consumer culture and fast fashion on H&M’s sustainability challenges.

Consumer culture, particularly in the context of fast fashion, is centred around frequent consumption of low-cost, trendy clothing. This culture drives H&M’s business model, but also exacerbates its sustainability challenges, as the following show: 

Overconsumption: The fast-fashion model encourages consumers to purchase new items regularly, leading to increased textile waste and environmental degradation. H&M’s frequent release of new collections is difficult for H&M to reconcile with its sustainability goals. For consumers, overconsumption may result in both financial and social problems.

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Throwaway culture: Fast fashion promotes a disposable mentality towards clothing, where garments are worn only a few times before being discarded. This contributes to the environmental impact through increased landfill waste and resource depletion.

While H&M has made efforts to promote more sustainable consumer behaviour, such as through recycling initiatives, the core of its business model still relies on high consumption rates, which remains a significant barrier to achieving true sustainability.

4. What strategies has H&M implemented to address its sustainability challenges, and how effective are these strategies?

H&M has implemented several strategies to address sustainability challenges: 

Conscious collections that use more sustainable materials like organic cotton and recycled polyester.

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Garment collection programmes that encourage consumers to return unwanted clothing to the H&M stores for recycling, aiming to reduce textile waste.

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Fair living wage strategies to ensure workers in the supply chain have fair wages. In addition, these strategies address some of the social concerns associated with fast fashion.

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The company has increased its use of renewable energy in its factories and in other parts of the supply chain.

These strategies represent steps in the right direction, but their effectiveness is still limited by the fundamental nature of the fast-fashion model. The core issue is that so long as H&M’s business depends on high volume and rapid turnover, the overall impact of these sustainability efforts may not be sufficient to counteract the negative effects of fast fashion.

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5. How does H&M’s fast-fashion model create both opportunities and challenges in terms of sustainability?

Opportunities: 

Scalability allows H&M to implement sustainability initiatives that can have a significant impact, such as widespread recycling programmes or sourcing sustainable materials in large volumes.

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Strong market position means that H&M’s sustainability initiatives put pressure on its competitors and the industry overall to become more sustainable.

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With a global presence and strong brand recognition, H&M can influence a large number of consumers towards more sustainable behaviours.

Challenges: 

Overconsumption – or, at least, too high consumption. H&M’s fast-fashion model depends on frequent purchases and low prices, which are inherently inconsistent with sustainable consumption.

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Resource depletion and environmental degradation.

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Public scrutiny: H&M is under constant scrutiny from stakeholders regarding environmental and social practices. It’s a challenge for H&M, but good for consumers and society in the transition towards a more sustainable society.

6. Given the ongoing criticism of fast fashion, is H&M’s business model sustainable in the long run?

H&M's fast-fashion business model faces significant long-term sustainability challenges. While the company has made efforts to address these issues, the inherent tension between rapid, high-volume production and environmental and social sustainability remains unresolved.

In the long run, H&M may need to fundamentally rethink its business model and gravitate towards the increasingly popular slow-fashion principles, which represent a criticism towards fast fashion but also provides a solution. Hence, H&M could possibly shift towards slower fashion, circular fashion practices, or other innovative approaches that prioritize sustainability without compromising profitability. Otherwise, the growing consumer demand for ethical and sustainable fashion could undermine H&M’s market position.

7. How do competitors like Zara, ASOS and Shein compare to H&M in terms of addressing sustainability concerns?

Competitors face similar sustainability challenges as H&M, given their reliance on fast fashion: 

Zara and the sister brands in the Inditex Group have implemented sustainability based on the initiative ‘Closing the Loop’, which focuses on recycling and using sustainable fabrics.

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ASOS has introduced several sustainability initiatives, including carbon reduction, ethical sourcing, and information to buyers on its products’ sustainable performance. Yet its focus on fast-paced fashion cycles makes it difficult to reconcile these initiatives with its overall environmental impact.

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Steven Hollensen & Ana Bogdanovic, Global Marketing, 9e, Instructor’s Manual

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Shein has been heavily criticized for its ultra-fast-fashion model, which poses both environmental and social sustainability challenges. While it has begun to take steps towards sustainability, such as launching a recycling programme, it lags behind H&M and Zara in addressing these concerns.

All these brands, like H&M, operate on fast-fashion models that present ongoing challenges to achieving sustainability. The fundamental conflict between the fast-fashion business model and the growing demand for sustainability is very difficult to reconcile, and that challenge applies to the industry overall.

8. Can fast fashion ever be truly sustainable, and what role does H&M play in this debate?

The concept of fast fashion, with its emphasis on rapid production and consumption, is fundamentally at odds with the principles of sustainability. To make the fashion industry truly sustainable, consumption, waste and environmental impact must be reduced. While H&M and other fast fashion brands can make incremental improvements, such as using more sustainable materials and improving labour practices, the question remains whether these efforts can offset the inherent unsustainability of the fast-fashion model.

H&M plays a significant role in this debate as one of the industry’s largest players. Its actions will likely influence how other companies approach the balance between profitability and sustainability, and its innovative initiatives have both a direct effect on H&M’s sustainability performance, and an indirectly effect by influencing consumers and competitors, which need to take more steps in a sustainable direction.

Case Study 1.1 The end of globalization – or just a temporary challenge?

Answers 1. Describe the historical evolution of globalization from the nineteenth century to the present. 

Early globalization (late nineteenth and early twentieth centuries): Driven by advancements in transportation (e.g. steamships, railroads) and communication (e.g. telegraph, telephone). This era laid the groundwork for increased international trade and interconnectedness.

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Post-World War II acceleration: Globalization significantly accelerated after World War II, fuelled by trade liberalization, technological innovation (e.g. container shipping, air travel), and the establishment of international institutions like the World Trade Organization (WTO), International Monetary Fund (IMF) and World Bank. This period saw a rapid expansion of international trade and investment.

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Late twentieth-century boom: The late twentieth century witnessed a further surge in globalization with the rise of the internet and mobile communication. This facilitated instant information exchange, further reduced trade costs, and accelerated the integration of global markets and cultures.

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Contemporary challenges (twenty-first century): The text highlights several challenges to 8

globalization in the present day, including: 

Supply chain disruptions: Events like the COVID-19 pandemic, the war in Ukraine, and geopolitical tensions have exposed vulnerabilities in global supply chains.

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Nationalism and protectionism: Rising nationalist sentiments and protectionist policies have led to increased trade barriers and a focus on domestic interests.

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Geopolitical tensions: Conflicts and trade disputes, particularly between major powers like the USA and China, have created uncertainty and hindered international cooperation.

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Environmental concerns: A growing awareness of environmental issues has led to a push for local sourcing and a reduction in the carbon footprints associated with global trade.

Steven Hollensen & Ana Bogdanovic, Global Marketing, 9e, Instructor’s Manual

2. What were the key technological advancements and institutional developments that facilitated this process, and how did they specifically benefit trade and marketing, respectively?

Technological advancements: 

Transportation: Evolving from steamships and railroads to container shipping and air travel, transport innovations drastically reduced shipping times and costs. This broadened market access for trade and expanded marketing reach to new customer bases, enabling faster delivery and just-in-time inventory management.

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Communication: From the telegraph and telephone to the internet and mobile devices, communication advancements have enabled faster information exchange. This has facilitated trade negotiations and marketing’s ability to quickly disseminate product information and engage directly with international customers.

Institutional developments: 

Trade liberalization (GATT/WTO): By establishing international trade rules and reducing barriers, these institutions have fostered a more predictable and accessible trading environment. This has directly benefitted trade by lowering tariffs, and has supported marketing by creating a more stable international market.

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Financial stability and development (IMF/World Bank): These institutions have provided financial assistance and promoted economic development, which has spurred international trade and investment. This has opened new markets for trade and provided marketing with opportunities to expand into emerging economies.

In essence, technological advancements have streamlined the movement of goods and information, while institutional developments have created a more open and stable environment for international trade and marketing to flourish.

3. Identify and analyze the major contemporary challenges to globalization discussed in the case study. How do these challenges affect the strategies and operations of multinational companies?

The case study identifies several major contemporary challenges to globalization: 1. Supply chain disruptions: Events like the COVID-19 pandemic, the war in Ukraine, and other geopolitical tensions have revealed the fragility of global supply chains.

Multinationals are now forced to re-evaluate their ‘just-in-time’ inventory strategies and 9

consider diversification of suppliers, near-shoring or reshoring operations, and building greater redundancy into their supply chains to enhance resilience. This often means increased costs and potentially lower efficiency.

2. Nationalism and protectionism: The rise of nationalist sentiment and protectionist policies, including tariffs and trade barriers, has created a less predictable and more challenging environment for multinationals. Companies must adapt their strategies to navigate these barriers, potentially by localizing production or adjusting pricing strategies to account for tariffs. Market access becomes more complex and potentially more costly.

3. Geopolitical tensions: Increasing tensions and conflicts between major global powers, like the USA and China, have added significant uncertainty to the international business landscape. Multinationals must carefully assess and manage political risks, potentially by diversifying their operations across different regions to reduce dependence on any single market. Long-term investment decisions have become more difficult, and companies may be forced to make rapid adjustments to their strategies in response to changing geopolitical dynamics.

4. Environmental concerns: A growing awareness of the environmental impact of globalization, including carbon emissions from transportation and resource depletion, is pushing companies to adopt more sustainable practices. Multinationals are facing pressure to reduce their carbon footprint, source materials responsibly, and minimize waste. This can lead to increased costs in the short term, but may enhance brand reputation and long-term sustainability.

These challenges are forcing multinational firms to rethink their global strategies and operations.

The emphasis is shifting from pure efficiency and cost minimization towards resilience, adaptability and sustainability. Companies are adopting more regionalized or localized approaches, diversifying their operations, and investing in technologies and practices that reduce their environmental impact.

The era of relying solely on globally integrated, low-cost supply chains is giving way to a more nuanced approach that balances global reach with local responsiveness and risk management.

4. Are there more challenges that are not mentioned in the text? 

Growing inequality: Globalization can exacerbate income inequality both within and between countries. While some people benefit greatly from increased trade and investment, others may be left behind, leading to social unrest and a political backlash against globalization.

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Technological disruption: Rapid technological advancements can create winners and losers in the global economy, potentially displacing workers and creating new challenges for businesses to adapt. This can further fuel anti-globalization sentiment if the benefits of technology are not widely shared.

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Cybersecurity threats: Increased interconnectedness creates greater vulnerability to cyberattacks and data breaches, posing significant risks to businesses and national security.

This can undermine trust in global systems and lead to calls for greater national control over data and technology.

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Pandemics and health crises: The COVID-19 pandemic demonstrated the vulnerability of the globalized world to infectious diseases. Future pandemics or health crises could further disrupt supply chains, restrict travel, and fuel nationalist sentiment.

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Climate change: While mentioned briefly, the full scope of climate change as a challenge to 10

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globalization has not been fully explored. Climate-related disasters, resource scarcity and migration flows could significantly disrupt global trade and investment patterns.

Social and cultural resistance: Globalization can lead to cultural homogenization and a loss of local traditions, sparking resistance and backlash from communities seeking to preserve their cultural identity.

Regulation and governance: The complex and fragmented regulatory landscape across different countries can create challenges for multinationals operating in a globalized world.

Harmonizing regulations and establishing effective global governance mechanisms are ongoing challenges. These additional challenges further complicate the picture of globalization and highlight the need for a more nuanced and multifaceted approach to managing the risks and opportunities of an interconnected world.

5. How have geopolitical shifts, e.g. those emerging from the war in Ukraine and US–China tensions, altered international trade patterns, and what implications do these changes have for marketers?

Geopolitical shifts have led to significant changes in international trade patterns: 

The war in Ukraine has led to the formation of new trade alliances, with countries in the West seeking alternatives to Russian energy, and Russia deepening ties with non-Western nations like China and India.

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Increased protectionism is reflected in increased tariffs and trade barriers, pushing companies to reshore or near-shore their production to avoid geopolitical risks and the higher costs that tariffs result in.

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Companies are diversifying their supply sources to avoid dependence on unstable regions, leading to the development of more resilient, though potentially more costly, supply chains.

For marketers, these changes imply a need to understand and adapt to new trade dynamics and consumer preferences that vary by country, and changes in preferences that the shifts may result in.

Marketing strategies may also have to shift to align with a less globalized and more locally adapted situation where the distinct cultural, political and economic characteristics of various markets are emphasized more than before.

6. How can marketers navigate the balance between international effectiveness and local responsiveness in an increasingly fragmented international market?

Marketers can navigate this balance by: 

Combining global efficiency with local adaptation through standardizing core brand elements while allowing for adaptations to meet local tastes, cultural nuances and regulatory requirements.

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Using data, technology and management techniques to gain insights into local markets, and quickly respond to changes in markets while still being aligned with the overall international strategy.

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Collaborating with local businesses, civil society, etc., to gain a deeper understanding of the market and build stronger connections with local consumers.

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7. Do you believe the current challenges to globalization are temporary or that we’ll see a long-term shift towards de-globalization?

The current challenges suggest both. Some of them speak for temporary disruptions such as the effects of the COVID-19 pandemic, which caused temporary shocks to globalization. However, historical trends suggest that trade and global connections tend to recover and even grow stronger over time, although it may not seem like it in the short run.

Unfortunately – from a marketing perspective and the perspective of developing societal welfare – there are strong reasons to believe it is a long-term shift: The rise of protectionism, geopolitical tensions and environmental concerns are all to varying extents difficult to combine with globalization. The world might move towards a more multi-polar economy, with distinct regional blocs prioritizing self-sufficiency and local production. While globalization is unlikely to reverse entirely, it is likely to evolve into a more complex and multifaceted phenomenon where marketers need to adapt to a world where global and local dynamics are more intertwined and fragmented than they used to be.

Case Study 2.1 LifeStraw: Vestergaard transforms dirty water into clean drinking water Answers 1. Vestergaard has successfully implemented a ‘doing good’ strategy that integrates humanitarian goals with profitability. Describe the key components of Vestergaard’s business model that contribute to its success. How does Vestergaard balance its humanitarian mission with commercial viability?

Vestergaard’s business model is built on the integration of social impact and profitability, often referred to as ‘humanitarian entrepreneurship’. The key components that contribute to its success include: 

Social impact – Vestergaard’s products, such as LifeStraw, are designed to solve critical health issues like water-borne diseases in vulnerable populations. The focus on creating life-saving products allows the company to fulfil a strong humanitarian mission.

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Innovative and affordable products that are simple to use and work everywhere, since they require no electricity or complex maintenance. LifeStraw, for example, provides clean drinking water at a low cost, hence being affordable in developing countries where they are mostly needed.

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Partnerships with international non-government organizations (NGOs) and governments, which helps reach the intended customers while keeping distribution costs low.

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Vestergaard balances social engagement and profitability by developing new products and expanding their reach while also ensuring financial sustainability.

Vestergaard achieves this balance between its humanitarian mission and commercial viability by focusing on a niche market with a critical need for its products, ensuring a steady demand. By maintaining a strong brand reputation for social impact and sustainability, Vestergaard attracts funding and support from a wide range of stakeholders, including governments and charitable 12

organizations.

2. Discuss how Vestergaard is balancing global efficiencies with local responsiveness.

Vestergaard’s international marketing strategies builds on standardizing the company’s core technologies and product designs, ensuring consistent quality and efficiency across global markets.

This standardization helps the company achieve global efficiencies, such as lower production costs and efficient, streamlined operations. Meanwhile, Vestergaard adapts its products and marketing approaches to meet the different needs and preferences of the various local markets. For instance, the LifeStraw Family and Community units are tailored to fit the specific water-purification needs of households and institutions in developing countries.

Balancing global efficiencies (through standardization) with local responsiveness (through adapting to local needs and conditions) is an approach that has been important to Vestergaard and its success.

Steven Hollensen & Ana Bogdanovic, Global Marketing, 9e, Instructor’s Manual

3. Evaluate the role of sustainability in Vestergaard’s marketing strategy. How does Vestergaard leverage its sustainability initiatives to enhance its brand and market position?

Sustainability plays a crucial role in Vestergaard’s marketing strategy. The company integrates sustainability in several key ways: 

Product design designed to minimize environmental impact. Again, let’s take LifeStraw as an example: it eliminates the need for boiling water, reducing deforestation and carbon emissions, while the long-lasting insecticidal nets reduce waste by lowering the frequency of replacements.

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Initiatives such as the Carbon for Water programme in Kenya, which combines water purification with carbon emission reductions

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Ethical sourcing and production with a focus on supply chain sustainability from a social as well as an environmental perspective.

Sustainability initiatives not only appeal to consumers and organizations that prioritize sustainability, but also positions Vestergaard as a preferred partner for governments, NGOs and other stakeholders focusing on public health and environmental goals.

From a marketing perspective, Vestergaard’s commitment to sustainability is a key differentiator in the market, enhancing its competitive advantage and opening doors to markets.

4. Given the limited purchasing power in Vestergaard’s target markets, what challenges does the company face in reaching its customers, and making the sales profitable?

Vestergaard faces several challenges in reaching customers with limited purchasing power and ensuring profitability: 

The primary challenge is making products affordable for low-income populations in developing countries. Although Vestergaard’s products are low-cost, even these prices can be too high for developing countries.

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Reaching remote and under-served areas where clean water is most needed requires complex and costly logistics. Hence supply chains and marketing channels must deal with poor infrastructure and weak retail network coverage.

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Marketing is difficult in developing countries, where there is no only less purchase power, but also difficulties in identifying customers and presenting the product advantages to them.

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Educating potential users about the benefits of the products is essential but challenging in areas with low literacy rates and limited access to information. 

Vestergaard often relies on NGOs, governments and international organizations to fund and distribute its products. This dependency can be risky if funding or partnerships are reduced or withdrawn.

5. What are the most critical factors in the further internationalization process of Vestergaard?

The further internationalization of Vestergaard will depend on several critical factors such as: 

Adaptation to local needs in various markets: As Vestergaard expands into new markets, it must be prepared to adapt its products and strategies to meet the specific needs of local markets, taking into account cultural, environmental and economic conditions.

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Political system and regulatory compliance differ across countries and must be dealt with in order to successfully sell Vestergaard’s products. For instance, health and safety standards are crucial and differ substantially across countries and regions.

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Building and maintaining strong partnerships with NGOs, governments and international organizations is vital for scaling operations and entering new markets.

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Maintaining a focus on sustainability and innovation will be essential, and success in these areas will facilitate further expansion.

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Vestergaard should continue to develop new products that solve emerging health and environmental challenges while minimizing environmental impact.

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As Vestergaard continues expanding, it will face various risks, including political instability, economic fluctuations, and supply chain disruptions. Developing robust riskmanagement strategies will be critical to mitigating these risks and ensuring sustainable growth.

Case Study 3.1 Accor Hotel Group: balancing global efficiencies with local adaption Answers 1. How does Accor balance global efficiencies with local adaptation in its marketing strategy, and what are the benefits and challenges associated with this balance? Do you think Accor has got the balance right?

Accor’s approach to standardization enhances its competitive advantage by achieving significant cost efficiencies and ensuring consistent quality across its operations globally. Standardization allows Accor to benefit from economies of scale in areas such as purchasing, training and enterprise systems, including the reservation system and the loyalty programme Accor ALL. This approach not only reduces operational costs but also builds customer trust, as guests know what to expect from any Accor-branded hotel. Furthermore, Accor ALL – which is not unique to Accor, all major hotel chains have similar programmes – contributes to maintain high customer retention and loyalty, driving repeat business across diverse markets. Accor ALL is a perfect example of balancing standardization with the opportunity to individualize offers and benefits across brands and consumer segments. A traveller can benefit from the same programme for both business and leisure 14

travel, provided the company and tax authorities accept it.

2. Discuss the role of local adaptation in Accor’s international marketing strategy. How does this influence customer satisfaction and brand differentiation?

Local adaptation plays a crucial role by allowing the company to draw benefits from diverse consumer preferences and cultural nuances. This approach is vital in the hospitality industry, where guest experiences are influenced by local culture and management practices; for example, by empowering local hotel management to tailor services and by offering brands like MGallery that emphasize locally-inspired experiences. Such local adaptation increases customer expectations but also differentiates Accor’s brands, making them more appealing to travellers who seek out more unique and authentic experiences.

3. Evaluate the potential challenges Accor might face in balancing global efficiencies with local adaptation. How can these challenges impact the company’s overall strategy?

Balancing global efficiencies with local adaptation presents several challenges for Accor. Too much emphasis on standardization might lead to a lack of flexibility in local markets, potentially alienating customers who seek personalized and culturally relevant experiences. Conversely, excessive local adaptation could harm brand consistency and increase operational complexities, leading to higher costs and inefficiencies. These challenges can impact Accor’s overall strategy by potentially undermining its global brand strategy of consistent quality, while also risking profitability if local adaptations are not managed effectively. At the end of the day, the Accor Group is a huge, multinational operation, so the risk of not always getting things right is significant. To mitigate these risks, Accor must continuously assess and fine-tune its balance between global and local strategies, ensuring both are aligned with the company’s overall strategy and objectives.

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4. Analyze how Accor’s diverse brand portfolio might affect its international marketing efforts. What are the advantages and disadvantages of managing such a wide range of brands?

Does Accor have too many brands? The answer is yes, but the issue could be approached in different ways. Accor’s diverse brand portfolio allows the company to cater to a broad range of market segments, from economy to luxury, enhancing its market reach and customer base. The advantage of this approach is that it allows Accor to target specific customer needs and preferences, offering tailored experiences that align with different market positions. However, managing a wide range of brands also presents significant challenges, including the complexity of maintaining brand coherence and the increased costs associated with managing and marketing multiple brands. This complexity can strain resources and lead to inconsistent brand messaging if not carefully coordinated. Moreover, there is a significant risk that brands are too similar, and both from a management and a customer perspective it makes little sense, if any, to offer brands that are very similar. Doing so adds complexity and costs in operations, and marketing and may confuse customers. Effective international marketing for such a diverse portfolio requires robust strategies that balance global brand standards with the unique positioning of each brand.

5. How does Accor’s sustainability initiatives, such as the Planet 21 programme, integrate with its global and local strategies? What impact do these initiatives have on Accor’s brand image and customer loyalty?

Accor’s sustainability initiatives reinforce Accor’s commitment to reducing its environmental footprint and promoting responsible tourism, which is increasingly important to consumers, business and leisure travellers alike. In local markets, the Planet 21 programme allows flexibility in adapting sustainability practices to specific regions, such as sourcing local, sustainable food 15

products or engaging in community-based environmental projects. These initiatives also make sense from a marketing perspective as it’s relatively easy to communicate the efforts, hence enhancing Accor’s brand image as a responsible and forward-thinking company, which is particularly important among environmentally conscious travelers. The focus on sustainability also differentiates Accor from its competitors, appealing to a growing market segment that values corporate social responsibility. Nevertheless, new steps must continuously be taken as major competitors are working on their sustainability, too.

Case Study 4.1 Clusters and the creative class – the coming together of structures and people who drive and shape competitiveness Answers 1. Explain how clusters contribute to the enhancement of innovation and productivity within a region. What role does the proximity of companies play in this dynamic?

Clusters contribute to innovation and productivity by creating a dense network of interconnected businesses, suppliers and institutions such as universities that facilitate the creation and flow of knowledge and ideas. The close geographical proximity of companies within a cluster enhances frequent interactions, collaboration and competition, which are crucial drivers of innovation. This proximity allows for the easier sharing of information, quicker access to specialized skills, and more opportunities for collaboration with universities and research institutions. These interactions foster a dynamic environment where new ideas can rapidly be tested, refined and brought to market, thereby enhancing the overall productivity and competitiveness of the area.

2. Discuss the relationship between the creative class and clusters in driving economic growth. How do these elements interact to create a competitive advantage for regions?

The creative class and clusters interact synergistically to drive economic growth by fostering environments that attract talent investment, and innovation. The creative class – comprising individuals who generate new ideas, technologies and cultural content – thrives in clusters where there is a concentration of qualified individuals and resources. Clusters provide the necessary infrastructure, such as universities and research centres, and a dense network of businesses that facilitate collaboration and knowledge-sharing. This environment attracts more creative talent, which in turn fuels further innovation and economic activity. Regions that successfully cultivate both a vibrant creative class and robust clusters gain a competitive advantage, as they become hubs for innovation and economic development, attracting more businesses, investment and skilled workforces. On top of this, creative people prefer to live in areas that have these characteristics.

3. Analyze the impact of government support on the development of clusters. Compare the role of government in the success of Silicon Valley, Silicon Roundabout and Linköping Science Park.

Government support plays a significant role in the development and success of clusters, but its impact can vary depending on the context. In Silicon Valley, the cluster grew organically with minimal direct government intervention, relying more on a culture of entrepreneurship, venture capital and leading universities like Stanford. In contrast, the Silicon Roundabout in London benefitted significantly from local and national government support, which helped create a favourable environment for tech startups through policy incentives, infrastructure investments and 16

promotional efforts. Similarly, Linköping Science Park received substantial support from local government, particularly through proactive urban planning, such as building excess office space to attract companies. These examples show that while clusters can emerge with varying levels of Steven Hollensen & Ana Bogdanovic, Global Marketing, 9e, Instructor’s Manual

government involvement, strategic government support can be crucial in accelerating the growth and competitiveness of clusters by creating an environment that fosters innovation and attracts talent and investment.

4. What are the potential risks and challenges associated with the growth of clusters and the creative class in urban areas? How can these challenges be mitigated?

The growth of clusters and the creative class in urban areas can lead to risks and challenges, including rising living costs, gentrification and socio-economic inequalities. As clusters attract businesses and high-income professionals, the demand for housing and services increases, driving up prices and potentially displacing lower-income residents. This can exacerbate social tensions and reduce the diversity that often fuels creativity and innovation. Additionally, over-reliance on a specific industry within a cluster – which is far from always the case, but some clusters do have a rather one-sided industry structure – can make the region vulnerable to economic downturns in that sector. To mitigate these challenges, policymakers and urban planners need to ensure the development of affordable housing, inclusive policies that support diverse communities, and investment in education and training to equip a broader population with the skills needed to participate in the cluster economy. Universities could contribute to mitigating the problems by promoting the admission of students from diverse backgrounds. Fostering economic diversification within clusters can help reduce the risk of economic volatility.

5. How can marketing strategies be leveraged to promote the development of clusters and attract the creative class to a region? What key elements should these strategies focus on?

Marketing strategies can play a pivotal role in promoting the development of clusters and attracting the creative class to a city, region or urban area by highlighting the region’s strengths and opportunities. Crucial to the growth of clusters is that regions attract not only companies and investors but also the necessary creative talent. Strategies to attract talented and creative individuals should focus on such key elements as the quality of life, availability of infrastructure and resources, and the presence of a supportive ecosystem for innovation and entrepreneurship. Marketing efforts should emphasize the region’s cultural amenities, educational opportunities, transportation systems, and potential for professional growth. Additionally, showcasing successful businesses, local talent, and collaborative opportunities with universities and research institutions can further enhance the region’s appeal. Effective marketing should also address concerns about living costs and inclusivity, ensuring that the region is perceived as a welcoming and vibrant place for creative professionals and businesses.

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Part II Case Study The BYD journey in the international market for electric vehicles Answers 1. What strategic advantages has BYD gained from its international manufacturing presence, and how does this contribute to its success in the international market for electric vehicles?

BYD’s global manufacturing presence offers several strategic advantages such as risk diversification. By establishing manufacturing plants in various countries, BYD reduces its exposure to risks associated with political instability, fluctuating currencies, tariffs and supply chain disruptions. It contributes to economies of scale, enabling the company to produce vehicles more cost-effectively. Local production allows BYD to better tailor its products to meet the specific needs and preferences of different markets. It also helps the company comply with local regulations and reduce transportation costs while contributing to reposition BYD as a global player rather than a Chinese brand.

2. Discuss the challenges BYD might face in maintaining its profitability in light of the ‘electrification backlash’ experienced in Europe and the USA in 2023. How should the company adapt its strategy to overcome these challenges?

The electrification backlash in Europe and the USA, partly driven through reduced incentives, presents several challenges for BYD. While charging infrastructure will be developed over time, and high EV prices are going down, media reports on consumer reluctance to rent or buy EVs may itself make it more difficult to accomplish the transition. A possible shift back to internal combustion engine (ICE) vehicles would limit BYD’s growth potential. BYD could adapt to the situation of EV resistance through focusing on improving the cost-effectiveness and performance of its EVs, making them more attractive to price-sensitive consumers even without subsidies. BYD could also consider diversifying its product range to include hybrid vehicles in markets where the transition to full EVs is slower, thereby hedging against delays in EV adoption.

3. Evaluate the impact of geopolitical tensions on BYD’s ability to expand into Western markets, particularly the USA. How can BYD navigate these geopolitical barriers to successfully enter these markets?

Geopolitical tensions between China and Western countries, especially the USA, significantly impact BYD’s expansion efforts. Unfavourable buyer perceptions build on a generally negative attitude towards Chinese products combined with market access barriers such as tariffs, trade restrictions, and political resistance to Chinese companies. BYD could navigate these barriers by establishing manufacturing facilities in target markets, as BYD is doing in Turkey and maybe in European Union countries following tariffs on Chinese cars being introduced in 2024. This would also improve local acceptance. BYD could also form alliances with local companies or brands, and use local people in marketing to enhance brand perception and appeal to environmentally conscious consumers.

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Steven Hollensen & Ana Bogdanovic, Global Marketing, 9e, Instructor’s Manual

4. Considering BYD’s commitment to sustainability, how might the issues related to human rights and responsible sourcing in the automotive supply chain affect its brand reputation? What steps should BYD take to address these concerns?

Human rights and responsible sourcing issues, particularly in relation to materials sourced from regions like Xinjiang, could severely damage BYD’s reputation. Allegations of forced labour and unethical sourcing practices could lead to consumer backlash, especially among socially conscious buyers in Western markets, hence constituting a reputational risk. If sustainability claims are perceived as disingenuous due to unresolved human rights issues, the company could face accusations of greenwashing. BYD should implement and communicate robust due diligence processes to ensure that its supply chains are free from human rights abuses. Independent audits of the supply chain can help verify ethical sourcing practices and build consumer trust, thereby enhancing BYD’s credibility.

5. Analyze the significance of BYD’s diversification into renewable energy solutions, such as solar panels and energy storage systems, in supporting its international expansion and brand positioning. How does this diversification align with international trends?

BYD’s diversification into renewable energy is strategically important. As the world moves toward adopting greener energy sources, BYD’s expansion into solar panels and energy storage aligns with the international shift toward renewable energy sources, appealing to both consumers and investors interested in sustainability. Offering a comprehensive range of green energy solutions enhances BYD’s brand as an innovator in sustainability, reinforcing its position in the EV market. In addition, diversification allows BYD to stand out from competitors that are focused solely on automotive production, providing a more integrated approach to sustainability. In addition, it spreads risks and provides additional revenue streams.

6. Given the stereotypes and initial market perceptions of Chinese cars, how has BYD managed to shift these perceptions in international markets, and what can it learn from the experiences of Japanese and South Korean automakers in earlier decades?

BYD has managed to shift negative perceptions of Chinese cars through several strategies, such as technological Innovation with advanced battery technology, the production of attractive, high-quality electric vehicles and strategic branding. By investing in branding and leveraging high-profile ambassadors, BYD has been able to position itself as a premium, environmentally responsible brand. As has been the case with Japanese and South Korean car brands, placing a focus on quality and reliability, and balancing international standardization with adaptation to local market needs and preferences have strongly contributed to these countries’ success as car building nations.

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Case Study 5.1 E-scooter market failures – a lesson in insufficient market research?

Answers 1. What were the primary factors that led to the initial rapid expansion of the e-scooter market, and why did this expansion eventually stagnate?

The primary factors behind the rapid expansion of the e-scooter market included the perceived environmental benefits, the flexibility and affordability of e-scooters, and the desire of companies to capitalize on the emerging trend. Cities like Paris quickly embraced e-scooters, integrating them into the urban mobility system. However, this expansion led to market oversupply, cannibalization, and unsustainable business models due to aggressive pricing strategies and a lack of understanding of local market demand. The rapid growth was not accompanied by sufficient marketing research, resulting in operational inefficiencies, regulatory challenges and safety concerns that ultimately led to market stagnation.

2. How did insufficient marketing research contribute to the failures of e-scooter companies in international markets?

Insufficient marketing research led to several missteps in the international expansion of e-scooter companies. These companies often entered new markets without a deep understanding of local regulations, cultural attitudes toward shared mobility, and competitive landscapes. This lack of research resulted in oversupply, poor market segmentation, and pricing strategies that were not sustainable in the long term. Furthermore, inadequate research failed to anticipate the negative impact of safety concerns and the regulatory responses in different cities, leading to operational disruptions and financial losses.

3. What role did regulatory challenges and safety concerns play in the decline of the escooter market, and how could better marketing research have mitigated these issues?

Regulatory challenges and safety concerns were significant factors in the decline of the e-scooter market. Many cities lacked clear regulations when e-scooters were first introduced, leading to chaotic rollouts and an increase in accidents and injuries. In response, cities like San Francisco and Paris imposed strict regulations and fines, disrupting operations and increasing the costs for escooter companies. Better marketing research could have identified these potential challenges earlier, allowing companies to engage with local governments, plan for regulatory compliance, and implement safety measures proactively, thus mitigating the negative impact on their businesses.

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4. How did the lack of a profitable business model affect the sustainability of e-scooter companies, and what strategies could have been employed to avoid this pitfall?

The lack of a profitable business model was a critical issue for e-scooter companies. Many companies focused on rapid expansion and market share rather than profitability, engaging in aggressive pricing strategies that conditioned consumers to expect low prices. These unsustainable models led to financial distress as companies struggled with high maintenance costs, short e-scooter lifespans, and the need for frequent rebalancing. To avoid this pitfall, companies could have conducted more thorough market research to understand true demand, consumer willingness to pay, and local market conditions, allowing them to develop pricing strategies that balanced growth with profitability.

5. What lessons can future e-scooter companies learn from past market entry failures to ensure long-term success in the international market?

Future e-scooter companies can learn several lessons from past market entry failures, including the importance of conducting comprehensive marketing research to understand local market dynamics, regulations and cultural attitudes toward mobility. Companies should engage with local stakeholders, including governments and urban planners, to develop strategies that complement existing mobility systems rather than disrupt them. Additionally, building a sustainable business model that prioritizes long-term profitability over rapid growth is crucial. Companies should also invest in safety measures, environmental sustainability and consumer education to build trust and ensure a positive reception in new markets.

Case Study 6.1 The G-20 and the economic and financial crises: what on earth is globalization about? Protests against the globalization Answers 1. Do you think the G-20 could do a better marketing job in communicating its views to the global audience? What would you do to minimize the extent and impact of protests?

The G-20 could improve its communication strategy by being more transparent and engaging with the global audience about its decisions and the benefits of globalization. This could involve proactive communication through various organizations and influential individuals to explain how globalization benefits not just corporations but also individual consumers and society overall. To minimize protests, the G-20 could proactively engage in dialogue with activist groups before summits to address their concerns and integrate their feedback into policy discussions. Emphasizing the G-20’s role in addressing global issues like inequality, climate change and poverty could help reduce the perception that it only serves the interests of wealthy nations and large corporations, which are regularly targets of criticism when the G-20 is running meetings.

2. Why was the G-20 established, and what are its main objectives?

The G-20 was established in 1999 in response to the financial crises of the late 1990s, and to address the lack of representation of key emerging-market countries in global economic governance. The main objectives of the G-20 are to bring together major industrialized and developing economies to discuss and coordinate global economic policies, enhance financial stability, and promote sustainable economic growth. The G-20 aims to foster international 21

cooperation and address global challenges such as financial crises, trade imbalances and climate change.

3. What were the key arguments of the anti-globalization groups?

The key arguments of the anti-globalization groups include the belief that globalization disproportionately benefits wealthy nations and multinational corporations at the expense of developing countries and the people who live there. Anti-globalization critics argue that globalization increases income inequality, undermines local governance, and erodes cultural identities. Anti-globalization groups are concerned that global institutions like the WTO, the World Bank and the G-20 prioritize corporate profits over social and environmental wellbeing, leading to the exploitation of labour, environmental degradation and the marginalization of small businesses.

Moreover, they criticize the lack of debt relief for poorer nations and the impact of trade policies that favour rich countries.

4. How could these protests affect the operations of multinational companies?

Protests against globalization, particularly at high-profile events like G-20 summits, can negatively affect multinational companies in several ways. These protests can damage the public image and reputation of companies associated with controversial policies or practices, leading to boycotts or loss of consumer trust. Companies might also face disruptions in their operations, supply chains or marketing activities, especially if protests escalate into violence or lead to increased scrutiny of their practices. Protests can push companies to reconsider their strategies in terms of corporate social responsibility and sustainability to avoid becoming targets of activism – which is not a bad thing.

5. How can companies mitigate the negative impact of protests at events like G-20 summits?

Companies can mitigate the negative impact of protests by proactively engaging in corporate social responsibility (CSR) and sustainability practices that align with the concerns of protesters. This includes supporting local communities, emphasizing sustainable products, and transparently communicating these efforts to address sustainability more clearly. By showing a genuine commitment to social and environmental responsibility, companies can build trust and reduce the likelihood of being targeted by protests. But even well-intentioned companies can be subject to criticism. They should therefore integrate stakeholder engagement strategies into their marketing plans, involving activists and protesters, non-government organizations (NGOs) and local communities in discussions to understand and address their concerns. Effective crisis communication plans should be in place to quickly address any negative publicity or misinformation, and companies should monitor public sentiment to stay ahead of potential issues.

By acting quickly in such cases, companies can largely mitigate the negative impact of protests.

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Case Study 7.1 Cultural differences in international marketing – the case of IKEA’s marketing communications Answers 1. How does IKEA balance international consistency with local adaption in its marketing communications?

IKEA balances international consistency with local adaptation in its marketing communications by employing a strategy that blends standardization with sensitivity to cultural differences. This approach allows IKEA to maintain a cohesive international brand identity while ensuring that its marketing messages resonate with local consumers across diverse cultural contexts.

1. International consistency: IKEA maintains a consistent brand image rooted in Scandinavian simplicity, functionality and affordability. This consistency is reflected in its global marketing campaigns, which emphasize the core values of the brand, such as well-designed and affordable home furnishings. The company uses similar visual aesthetics and messaging to convey its brand identity across different markets.

2. Local adaptation: IKEA tailors its marketing communications to align with the unique preferences and lifestyles of consumers in various countries. This includes the following examples: 

In China, IKEA emphasizes space-saving furniture solutions due to the limited living space in many Chinese homes. The marketing campaigns incorporate elements of Chinese culture, such as the importance of family, to build emotional connections with consumers.

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In the USA, IKEA highlights affordability, sustainability, and the ability to personalize spaces, reflecting American values of individualism and environmental consciousness.

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In Middle Eastern countries, IKEA adapts its marketing to local customs and religious practices, such as adjusting store hours during Ramadan and showcasing products that cater to large family gatherings.

3. Challenges and balance: The balance between international consistency and local adaptation is delicate. Over-customization can dilute the brand identity, while under-customization can lead to cultural mismatches and alienate consumers. IKEA’s approach involves continuous monitoring and adaptation of marketing strategies to stay relevant and resonate with local audiences while ensuring international strategies are implemented.

Overall, IKEA’s strategy involves understanding and respecting cultural sensitivities, collaborating with local partners, and leveraging cultural insights to avoid missteps and maintain a strong brand reputation globally.

2. What was the controversy IKEA faced in Saudi Arabia, and what lessons can be drawn from it?

The controversy IKEA faced in Saudi Arabia occurred in 2012 when the company published a catalogue that had images of women airbrushed out. This decision was perceived as an endorsement 23

of gender inequality, which led to a backlash against IKEA. The company, known for promoting itself as a progressive and inclusive brand globally, faced criticism for not aligning with its values of gender equality and inclusivity. In response to the backlash, IKEA issued an apology and committed to more culturally sensitive yet inclusive practices in the future.

The following lessons were drawn: 1. Cultural sensitivity: The controversy highlights the importance of cultural sensitivity in international marketing. Companies must be aware of local customs and norms, but they also need to balance these with their global brand values and commitments.

2. Consistency with brand values: It is crucial for international companies to maintain consistency with their brand values across all markets. Compromising on these values can lead to reputational damage and consumer backlash.

3. Inclusive practices: The incident underscores the need for inclusive practices that respect cultural differences while promoting equality and diversity. Companies should strive to find ways to adapt to local cultures without compromising on their core values.

4. Proactive engagement: Engaging with local cultural consultants and partners can help companies navigate complex cultural landscapes and avoid missteps. This proactive approach can provide valuable insights and help in making informed decisions.

Overall, the IKEA controversy in Saudi Arabia serves as a reminder of the delicate balance required in international marketing between respecting local cultures and maintaining a consistent global brand identity.

3. How does IKEA tailor its product offerings in different markets to meet local preferences?

IKEA tailors its product offerings in different markets to meet local preferences by adapting its range to align with the unique needs and lifestyles of consumers in various regions. Here are some examples of how IKEA customizes its product offerings: 1. Space-saving solutions: In markets like China and other Asian countries, where living spaces are often smaller, IKEA emphasizes space-saving furniture. Products such as foldable tables and storage beds are promoted to cater to the compact living conditions typical in cities like Tokyo and Hong Kong.

2. Furniture size: In North America, IKEA offers larger sofas and king-sized beds to cater to that market’s preference for bigger furniture. This contrasts with European catalogues, which might showcase more compact and space-saving designs suitable for smaller homes.

3. Cultural sensitivity: In Middle Eastern markets, IKEA adapts its product offerings to reflect local customs and religious practices. For example, during Ramadan, IKEA showcases products that cater to large family gatherings and emphasize hospitality, a core value in Middle Eastern cultures.

4. Design preferences: In the USA, IKEA highlights contemporary Scandinavian design, affordability and sustainability, reflecting American values of individualism and environmental consciousness. The ability to personalize spaces with unique and stylish furniture is emphasized.

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By tailoring its product offerings to meet local preferences, IKEA ensures that its products resonate with consumers in different markets, enhancing its appeal and relevance globally.

4. What are the challenges IKEA faces in maintaining a consistent international brand identity while adapting to local markets?

IKEA faces several challenges in maintaining a consistent international brand identity while adapting to local markets. These challenges include: 1. Balancing standardization and adaptation: IKEA must find the right balance between standardizing its brand identity globally and adapting its offerings to fit local cultural preferences. Over-customization can dilute the brand identity, while under-customization can lead to cultural mismatches and alienate consumers.

2. Cultural sensitivity: Navigating cultural differences requires a deep understanding of local customs, values and norms. IKEA must ensure that its adaptations do not compromise its global brand values, such as inclusivity and equality, which can be challenging in markets with differing cultural expectations.

3. Logistical and operational constraints: Implementing localized marketing strategies and product offerings requires significant resources and coordination. IKEA must manage complex logistics across various markets to ensure that local adaptations align with its international brand ambitions.

4. Avoiding controversies: Missteps in cultural adaptation can lead to controversies or scandals, as seen in past incidents in Saudi Arabia and Russia. IKEA must continuously monitor and adjust its strategies to prevent backlash and maintain a positive brand reputation.

5. Collaborating with local partners: While collaborating with local marketing agencies and cultural consultants can provide valuable insights, it also adds complexity to the coordination of efforts with the overarching international brand strategy.

Overall, IKEA must continuously navigate these challenges to ensure that its marketing strategies resonate with local audiences while maintaining a consistent brand identity globally. This requires ongoing monitoring, adaptation and a commitment to cultural sensitivity and inclusivity.

5. Discuss an example where IKEA’s lack of cultural sensitivity led to a backlash in a specific market. What was the outcome?

An example of IKEA’s lack of cultural sensitivity leading to backlash occurred in Saudi Arabia in 2012 when the company published a catalogue with images of women airbrushed out. This decision was perceived as an endorsement of gender inequality, clashing with IKEA’s global brand values of inclusivity and gender equality. The move sparked significant criticism and negative media attention, as it contradicted the progressive image IKEA promotes worldwide. In response to the backlash, IKEA issued a public apology, acknowledging that the decision did not align with the company’s values. The incident prompted IKEA to reassess its approach to cultural adaptation, committing to more culturally sensitive yet inclusive practices in future marketing efforts. This experience underscored the importance of balancing local cultural norms with the company’s global brand identity, highlighting the need for careful consideration and respect for cultural differences while maintaining core brand values.

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Case Study 8.1 The impact of digitalization on internalization and competitiveness for SMEs Answers 1. How does digitalization specifically lower the traditional barriers to internationalization for SMEs? Provide examples from the case study.

Digitalization lowers traditional barriers to internationalization for small and medium-sized enterprises (SMEs) by providing cost-effective tools and platforms that reduce the need for a physical presence in foreign markets. For example, SMEs can leverage e-commerce platforms like Shopify to set up online stores, allowing them to reach international customers without investing in physical stores or distribution networks offshore. Additionally, digital tools like Google Analytics and social media insights enable SMEs to conduct market research and understand consumer behaviour in different markets at a fraction of the cost and time previously required. This facilitates informed decision-making and reduces the risks associated with entering new markets.

2. What are the key competitive challenges that digitalization introduces for SMEs, according to the case study?

Digitalization introduces several competitive challenges for SMEs, including intensified competition as more firms, both local and international, can easily enter the market. This is exemplified by the case of SMEs facing competition from global giants like Amazon when they enter new markets. Additionally, digital platforms increase price transparency, leading to more informed and demanding consumers. SMEs must also contend with the challenge of maintaining direct customer relationships, as platforms like Booking.com and hotels.com can intermediate these relationships, potentially eroding brand loyalty and margins.

3. Discuss the implications of the born global theory in the context of digitalization for SMEs, as presented in the case study.

The born global theory suggests that some SMEs, particularly those in technology-driven sectors, internationalize rapidly from inception, bypassing the incremental steps of traditional models like the Uppsala model. In the context of digitalization, this is increasingly feasible as digital tools and platforms allow SMEs to access global markets quickly and efficiently. For instance, companies like Spotify, which leveraged digital distribution and cloud computing, were able to expand internationally almost from the start. This rapid internationalization is driven by the need to capitalize on the niche markets and innovative products that digitalization makes accessible.

4. How can SMEs use digital tools to maintain competitive differentiation in an increasingly crowded international market, as discussed in the case study?

SMEs can maintain competitive differentiation by using digital tools to create unique value propositions and enhance customer experiences. For example, Spotify’s use of data analytics to personalize user experiences is a key differentiator that helped it compete against traditional music distribution channels. SMEs can also use digital marketing strategies to target specific customer

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segments more effectively and build brand loyalty. Additionally, continuous innovation and staying ahead of digital trends are crucial for differentiation. By adopting new technologies and exploring emerging platforms, SMEs can position themselves as market-driving rather than market-driven, which can create significant competitive advantages.

5. What are the risks associated with digitalization for SMEs, particularly in terms of profitability, as highlighted in the case study?

While digitalization offers numerous opportunities for international expansion, it also introduces risks, particularly concerning profitability. Many digitally-driven SMEs – such as those mentioned in the case study like Klarna, Moleskine, VOI and HelloFresh – have faced significant profitability challenges despite rapid growth. The increased competition and price transparency brought by digitalization can erode margins, making it difficult for SMEs to sustain profitability. Moreover, their reliance on third-party platforms, which can charge high fees, further squeezes profit margins.

SMEs must carefully manage their pricing strategies and cost structures to avoid falling into the trap of growing without profitability.

6. Analyze the potential risks and challenges that SMEs might face when using TikTok as a key platform for international marketing. How can these risks be mitigated? Provide examples from the cases mentioned to support your answer.

While TikTok offers SMEs powerful opportunities for international marketing, it also presents significant risks that must be carefully managed. Cultural sensitivity and the potential for miscommunication require SMEs to thoroughly research and understand the diverse audiences they aim to reach. The risk of negative viral reactions underscores the need for careful content planning and monitoring, with a readiness to respond to feedback swiftly. Choosing the right influencers is crucial to ensure brand alignment and authenticity, as partnering with the wrong ones can damage a brand’s image. Additionally, while leveraging trends is important, SMEs must avoid over-reliance on them to maintain their brand identity and authenticity. By addressing these challenges strategically, SMEs can effectively use TikTok to expand their reach and build strong connections with global audiences.

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Part III Case Study The end of JIT – adapting to international supply chain shortages Answers 1. What role did the COVID-19 pandemic play in exposing the vulnerabilities of the Just-InTime (JIT) system, and how has it shifted the way companies approach international supply chain management?

The COVID-19 pandemic significantly exposed the fragility of JIT by disrupting tightly synchronized international supply chains. JIT’s reliance on real-time deliveries and minimal inventory left companies unable to meet sudden shifts in demand or handle interruptions in supplier operations. Industries like automotive and healthcare faced severe shortages due to missing key components, such as semiconductors and medical supplies. As a result, companies have shifted their approach from prioritizing efficiency to enhancing resilience. This involves diversifying suppliers, investing in safety stock, and embracing other methods such as Just-in-Case (JIC) models to mitigate risks. Moreover, companies are increasingly leveraging new technologies such as AI and data analytics to gain better visibility and agility, allowing them to adapt quickly to various types of disruptions, and other unforeseen events.

2. How do geopolitical tensions and rising protectionism affect international supply chains, and what strategies can companies adopt to mitigate these challenges?

Geopolitical tensions, such as trade wars or protectionist policies, can disrupt international supply chains by imposing tariffs, increasing transportation costs, and limiting access to critical resources.

For example, the US–China trade tensions have raised concerns over reliance on Chinese suppliers, increasing costs and reducing the availability of certain goods.

To mitigate these risks, companies are adopting strategies such as bringing production closer to manufacturing and key markets – near-shoring and reshoring – working with multiple suppliers across different regions to avoid over-dependence on any one source, and establishing facilities in politically stable regions to ensure a more resilient supply chain. Diversifying suppliers, markets, etc., helps reduce the impact of geopolitical events on company operations.

3. How are consumer sustainability concerns influencing international supply chain strategies, and what are the trade-offs for companies trying to balance cost efficiency with sustainability?

Consumer concerns about sustainability are driving companies to rethink their global sourcing strategies, especially regarding the environmental and social impact of production in countries far away from their markets. Consumers in developed economies increasingly favour locally sourced, ethically produced products, pressuring companies to reduce their carbon footprint and ensure fair labour practices. This change, however, may involve some conflicts. For instance, sourcing closer to home – or from certified ethical suppliers – can raise production costs, which may conflict with consumer expectations for low prices. Companies that fail to adapt to sustainability trends may face reputational damage, while those that do adapt may gain a competitive advantage, particularly in environmentally conscious markets.

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4. How does JIT’s reliance on international suppliers increase the vulnerability of supply chains, and what role does supplier reliability play in mitigating these risks?

JIT’s focus on minimizing inventory and relying on timely deliveries from international suppliers increases the vulnerability of supply chains to disruptions like natural disasters, pandemics, wars, geopolitical tensions, and transportation delays – all of which include a number of subcategories.

When supply chains are stretched across multiple continents, even a minor disruption at one point can lead to failures across the entire system. Hence, supplier reliability is critical to mitigating these risks. Companies need to establish long-term relationships with trusted suppliers to ensure reliability. But that’s not enough, even reliable and trusted suppliers can fail because of factors within or beyond their scope of control.

Through advanced digital tools, suppliers’ risk profiles can be monitored, enabling companies to predict potential disruptions and adjust accordingly.

By improving supplier reliability and using technology to gain real-time insights, companies can better manage international supply chain risks while still benefiting from JIT efficiencies, although the idealized visions of JIT when the concept first emerged may not be fully realized. Over time, and particularly in the past decade with several supply chain disturbances, resilience has become more important for companies, something that leads to compromises with JIT advantages.

5. Given the current challenges with JIT, how can a hybrid approach combining Just-InTime and Just-In-Case improve supply chain resilience, and in what industries might this hybrid model be most effective?

A hybrid approach that balances JIT’s efficiency with the resilience of JIC is emerging as a solution to current international supply chain challenges, creating more robust supply chains. The JIC model allows companies to largely continue benefiting from JIT’s cost savings while maintaining buffer inventories and flexibility to absorb shocks. For instance, in the automotive industry, where semiconductor shortages have caused production halts, companies are maintaining critical inventory stockpiles to avoid future disruptions.

This hybrid model is especially effective in industries with high-demand volatility, such as electronics, where rapid technological advancements and shifting consumer preferences require both flexibility and efficiency.

6. Why do you think JIT became so widely accepted, despite obvious inherent conceptual disadvantages?

Just-in-Time (JIT) was widely accepted in businesses due to the significant advantages it offered, which often outweighed its disadvantages. Advantages included reduced inventory costs, improved efficiency by producing only what is needed, when it is needed, increased flexibility, lower waste, and leaner operations.

Despite these advantages, the inherent risks of JIT, such as vulnerability to supply chain disruptions and dependence on reliable suppliers, were often mitigated through effective supply chain management and contingency planning. In the 1990s, there were fewer disturbances compared to more recent years, and the improvement potential was much bigger, as supply chain effectiveness and efficiency were not as developed at the time as today.

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Case Study 9.1 Jarlsberg®: the king of Norwegian cheeses is deciding on entry modes into new markets Answers 1. What kind of market entry mode would you generally suggest for Jarlsberg®: a) In Scandinavia: Given the cultural and geographical proximity, Jarlsberg® could consider using a hierarchical mode, such as establishing its own sales subsidiary. This approach would provide high control over operations and brand management, which is beneficial in a region where the brand might already have recognition and a strong market presence. b) In Asia: For Asia, Jarlsberg® might opt for an intermediate mode, such as joint ventures or franchising. This approach would assist in managing sociocultural differences and mitigating potential risks. Collaborating with local partners can provide valuable insights into consumer preferences and regulatory environments, while also sharing the risks associated with entering a new and diverse market. These suggestions are based on the general principles outlined in the text, considering factors such as sociocultural distance, market size, and risk.

2. What are the general motives for choosing a hierarchical mode (own subsidiary) in the USA? The general motives for Jarlsberg® choosing a hierarchical mode, such as establishing its own subsidiary, in the USA include: 1. Control over quality and production: By having its own subsidiary, Jarlsberg® can maintain strict control over the quality and production processes. This is crucial for ensuring that the cheese meets the high standards associated with the Jarlsberg® brand, especially given the use of a secret cheese culture and premium-quality milk.

2. Brand management and market presence: Having its own subsidiary allows Jarlsberg® to directly manage its brand image and marketing strategies, which is important in a competitive market like the USA where brand differentiation can lead to higher consumer appeal and loyalty.

3. Adaptation to local market needs: Operating through a subsidiary enables Jarlsberg® to better understand and respond to local consumer preferences and trends, ensuring that its products are well-suited to the tastes and demands of American consumers.

4. Long-term commitment and investment: Establishing a subsidiary signals a long-term commitment to the market, which can strengthen relationships with local distributors, retailers and consumers, enhancing Jarlsberg®’s market position and growth potential.

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5. Protection of intellectual property: By managing operations internally, Jarlsberg® can better protect its proprietary cheese-making techniques and recipes from potential misuse or imitation by external partners.

These motives reflect the strategic advantages of using a hierarchical mode to secure market presence and control in a large and competitive market like the USA. 3. Which entry mode should have been preferred by Tine (manufacturer of Jarlsberg® cheese) when the Norwegian export subsidies for cheese were phased out in 2020?

When the Norwegian export subsidies for cheese were phased out in 2020, Tine, the manufacturer of Jarlsberg® cheese, should have started considering shifting its entry mode strategy. Given the context provided in Case 9.1, the preferred entry mode for Tine would likely have been to establish local production facilities in key markets, such as the USA, where it already has a production facility in Ohio. This approach aligns with the hierarchical mode of entry, which involves high control and resource commitment but allows Tine to maintain quality control and adapt to local market conditions without relying on export subsidies. This strategy would help Tine mitigate the impact of losing export subsidies by reducing dependency on exports from Norway and leveraging local production to maintain competitiveness and market presence.

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Case Study 9.2 Jissbon: is acquisition the right way to gain market shares in the Chinese condom market?

Answers 1. What are the differences between the international strategies of Humanwell & CITIC and the other three competitors?

Based on Case 9.2, the differences between the international strategies of Humanwell & CITIC and the other three competitors can be summarized as follows: 1. Humanwell & CITIC’s strategy: 

Acquisition approach: Humanwell & CITIC acquired Ansell’s Personal Healthcare division, which included condom brands like Jissbon, to strengthen its position in the Chinese market and globally. This acquisition strategy allows it to leverage existing brand recognition and market share.

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Focus on local brands: Jissbon, a brand with significant recognition in China, was originally a local brand acquired by Ansell and then by Humanwell & CITIC. This indicates a strategy focused on leveraging local brands to penetrate the market effectively.

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Production base strategy: Humanwell & CITIC have production bases in China, which aligns with the company’s strategy to manufacture products locally for the Chinese market, ensuring compliance with local regulations and reducing costs.

2. Other competitors’ strategies: 

Reckitt Benckiser (Durex): Durex is a true international brand with strong positions in major markets worldwide. The strategy focus is on maintaining a global presence and leveraging brand reputation across different regions.



Church & Dwight Co (Trojan): This company primarily focuses on the US market, where it holds a dominant position. Its strategy is more regionally focused, with a limited international presence compared to Durex.



Okamoto Industries: Okamoto is home-market-oriented, with a significant share in Japan but limited exports. Its strategy is focused on maintaining dominance in the domestic market while exploring opportunities abroad.

Overall, Humanwell & CITIC’s strategy involves acquiring established brands to quickly gain market share and leveraging local production to cater to specific regional demands, whereas its competitors have varied strategies ranging from global brand presence to regional dominance.

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2. Which entry mode would you recommend for Humanwell & CITIC’s international sourcing of condoms?

For Humanwell & CITIC’s international sourcing of condoms, using an intermediate mode such as a joint venture or strategic alliances with local manufacturers in key markets would be the recommended approach. This approach offers several advantages: 1. Shared control and risk: Intermediate modes allow Humanwell & CITIC to share control and risk with local partners, which can be beneficial in managing uncertainties and complexities in international markets.

2. Local expertise and market knowledge: Collaborating with local partners can provide valuable insights into consumer preferences, regulatory requirements and distribution channels, which are crucial for effective market penetration.

3. Flexibility and adaptability: Intermediate modes provide more flexibility compared to hierarchical modes, allowing Humanwell & CITIC to adapt quickly to changes in market conditions or consumer demands.

4. Cost-efficiency: By leveraging existing local production facilities and networks, Humanwell & CITIC can reduce the costs associated with setting up new operations and can benefit from economies of scale.

5. Brand recognition and trust: Partnering with established local entities can enhance brand recognition and trust among consumers, especially in markets where local brands are preferred.

Overall, intermediate modes strike a balance between control, risk and flexibility, making them a suitable choice for Humanwell & CITIC’s international sourcing strategy in the condom market.

3. Which entry model would you recommend for Humanwell & CITIC regarding the Chinese market?

For Humanwell & CITIC regarding the Chinese market, a hierarchical mode of entry is recommended, specifically through establishing wholly-owned subsidiaries or maintaining strong local production facilities. This approach is suitable for several reasons: 1. Control and brand management: As Jissbon is already a well-established brand in China, maintaining full control over production and marketing can help ensure consistent brand management and quality assurance, which is crucial given the competitive landscape and consumer concerns about product safety.

2. Market size and growth potential: The Chinese condom market is large and expected to grow significantly. A hierarchical mode allows Humanwell & CITIC to fully capitalize on this growth by directly managing operations and strategically expanding the company’s market presence.

3. Regulatory compliance and local adaptation: Operating through wholly-owned subsidiaries ensures compliance with local regulations and standards, which is important for maintaining trust and credibility among consumers, especially in a market that has had safety scandals in the past.

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4. Competitive advantage: By having direct control over production and distribution, Humanwell & CITIC can respond more swiftly to market changes and consumer preferences, providing a competitive edge over other brands that may rely on external manufacturing or partnerships. Overall, a hierarchical mode provides Humanwell & CITIC with the necessary control and flexibility to effectively manage its operations and brand in the Chinese market, leveraging its existing market share and addressing local consumer needs.

4. What are the pros and cons of Humanwell &CITIC acquiring a European competitor? In your opinion, is it a good idea?

Pros of Humanwell & CITIC acquiring a European competitor: 1. Market expansion: Acquiring a European competitor would provide Humanwell & CITIC with immediate access to the European market, potentially increasing its market share and presence in a region with significant demand for condoms.

2. Brand portfolio diversification: The acquisition would allow Humanwell & CITIC to diversify its brand portfolio, leveraging the acquired company’s established brands and reputation in Europe to enhance its own competitive position.

3. Operational synergies: The acquisition could lead to operational synergies, such as shared technology, production facilities, and distribution networks, which can reduce costs and improve efficiency.

4. Enhanced innovation: Access to new technologies and expertise from the European competitor could enhance Humanwell & CITIC’s product development capabilities, leading to innovative products that cater to diverse consumer needs.

5. Regulatory compliance: Having a local presence through acquisition can facilitate compliance with European regulations, which might be more stringent than in other regions.

Cons of Humanwell & CITIC acquiring a European competitor: 1. Cultural and operational challenges: Integrating a European company could pose cultural and operational challenges, including differences in management styles, corporate culture and business practices.

2. High costs and risks: Acquisitions involve significant financial investment and risks, including the potential for overvaluation of the target company and unforeseen liabilities.

3. Regulatory hurdles: The acquisition process may face regulatory scrutiny and approval challenges, especially in Europe where antitrust laws are stringent.

4. Market saturation: The European market for condoms might be saturated, making it difficult to achieve significant growth without substantial investment in marketing and innovation.

5. Brand dilution: There is a risk of brand dilution if the acquired company’s brands do not align well with Humanwell & CITIC’s existing portfolio or if integration is poorly managed.

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Conclusion Acquiring a European competitor could be a good idea for Humanwell & CITIC if the company carefully evaluates the target company’s market position, financial health, and strategic fit with their existing operations. The acquisition should be pursued if it aligns with the company’s long-term strategic goals of expanding its global footprint and enhancing it product offerings. However, it must be prepared to manage integration challenges and ensure that the acquisition adds value to the company’s overall business strategy. Conducting thorough due diligence and having a clear postacquisition integration plan would be crucial for success.

Case Study 10.1 Lysholm Linie Aquavit: international marketing of the Norwegian Aquavit brand Answers 1. What unique production process differentiates Lysholm Linie Aquavit from other spirits, and how does this add value to the brand?

Lysholm Linie Aquavit undergoes a unique ageing process in sherry casks that travel by sea across the equator twice. This journey, lasting four-and-a-half months, enhances the aquavit’s flavour through the gentle rocking of the ship, temperature variations, and the sherry cask maturation. This distinct production method adds heritage and storytelling value to the brand, appealing to consumers seeking artisanal and premium craft spirits with a unique background.

2. How has Lysholm Linie Aquavit adapted its marketing strategy to appeal to modern, international consumers?

Lysholm Linie Aquavit has repositioned itself as a premium craft spirit rather than as a traditional, seasonal drink. The brand emphasizes its rich Norwegian heritage, the artisanal ageing process, and its sustainable practices by promoting local ingredients such as Norwegian water, herbs and potatoes. Additionally, the company has focused on digital and experiential marketing, leveraging social media and collaborations with bartenders to introduce aquavit as a versatile cocktail ingredient, appealing to younger consumers who value authenticity and craft alcohol.

3. What role has digital and experiential marketing played in the global expansion of Lysholm Linie Aquavit?

Digital and experiential marketing have been key to Lysholm Linie Aquavit’s international growth.

Through social media campaigns, influencer collaborations and content marketing, the brand tells its unique story, emphasizing traditional production and modern craftsmanship. Experiential marketing – such as aquavit tastings, food pairings and distillery tours – has helped engage consumers and create brand loyalty. These strategies have been especially useful in reaching younger, craft-conscious audiences in competitive international markets.

4. What are the challenges Lysholm Linie Aquavit faces in maintaining and growing its international market presence?

Lysholm Linie Aquavit faces several challenges, including declining alcohol consumption among younger consumers and increased competition in the global spirits market. The brand’s focus on aquavit, a niche product, limits diversification, making it vulnerable to changes in consumer preferences. Furthermore, relying heavily on international distributors (as seen in markets like 35

Germany) presents challenges in controlling brand messaging and direct consumer engagement.

Maintaining relevance in a shifting global marketplace will require creative marketing strategies and potential product innovation.

Steven Hollensen & Ana Bogdanovic, Global Marketing, 9e, Instructor’s Manual

5. What are the main advantages and disadvantages for Anora of using export modes, compared with other entry modes, for its Linie Aquavit?

Using export modes, such as working with foreign-based intermediaries/distributors, means lower risk and costs, hence enabling Anora to enter new markets without the substantial financial commitment or risk associated with setting up wholly owned subsidiaries or foreign direct investments. Moreover, export offers it flexibility in scaling operations and adjusting its presence in various markets without long-term commitment. Partnering with experienced local distributors also gives access to local knowledge of such things as consumer behaviour, regulatory requirements and distribution networks. An example mentioned in the text is Eggers & Franke, the company’s distributor in Germany, which helps the company navigate local market dynamics and expand its reach in Europe.

According to the Uppsala model, companies tend to enter foreign markets through less resourceintensive modes, such as exporting, before escalating to more resource-heavy approaches as their market knowledge and experience increase. This fits well with smaller or niche products like Linie Aquavit, where direct investment might not be feasible or necessary in every market.

Export modes also come with some disadvantages, such as limited control over the brand and how the product is marketed and positioned. Local distributors may prioritize their own interests or promote other products over, in this case, Linie Aquavit, which could negatively impact brand perception. If a distributor fails to execute effectively, it could limit Anora’s access to retailers or end consumers and give false information about the potential of a market. It’s difficult to know whether lack of consumer interest or a lousy distributor is the main explanation of a failure. Finally, export could lead to a loss of profit margins since profits are shared with intermediaries.

In conclusion, Anora must balance the benefits of flexibility and the reduced risk associated with export modes with the potential downsides of limited control and lower margins.

6. What should be the main criteria for selecting new distributors in new markets?

When selecting new distributors for Linie Aquavit, Anora should consider the distributors’ knowledge and experience about local markets, including familiarity with consumer cultures and preferences, competitive dynamics, and regulatory requirements. For the purpose of marketing, adapting to local tastes and trends is crucial in making the brand resonate well with local customers while retaining its overall meaning. The distributor should have an extensive distribution network that can cover key sales channels such as retail, hospitality and tax-free outlets, as in the case of Eggers & Franke. Moreover, distributors should have experience handling high-end, artisanal brands and so be able to maintain Linie Aquavit’s strong brand image. Distributors who already work with other premium brands are more likely to understand the brand’s value proposition and communicate it effectively to consumers.

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Case Study 11.1 Franchising – key to expansion or out of fashion?

Answers 1. What advantages does franchising offer companies seeking international expansion?

Franchising offers several advantages for companies looking to expand internationally, such as rapid market entry by partnering with local entrepreneurs who have in-depth knowledge of the region, and a lower level of investment as the local entrepreneur/franchisee invests their own capital in setting up and operating the local outlets. Franchising also leverages local expertise, as franchisees possess knowledge of local markets, cultural preferences and regulations, allowing the business model to be adapted to local conditions more effectively. The strength of the franchisor brand attracts both franchisees and consumers. Franchisors are able to grow their global presence without directly managing operations.

2. What are some challenges associated with maintaining consistent service quality in a franchising system?

Maintaining consistent service quality across a franchising network is challenging due to decentralized control, cultural differences and varying management capabilities. This all results in variations in service quality and inconsistencies in customer experience or product delivery. While franchisors provide training and support, it can be difficult to enforce strict adherence to brand standards across diverse locations.

3. How do the challenges of franchising differ from those of licensing, and how are these two models distinct?

Franchising and licensing differ in scope and management. The key distinction is that franchising involves the entire business model and ongoing operational support, while licensing focuses mainly on the right to produce or sell a specific product or technology.

A franchisee operates under the franchisor’s complete business model, which includes branding, operations and marketing. Challenges include maintaining consistent service quality, brand control, and managing the relationship between franchisor and franchisee.

Licensing is typically product-focused, where a licensee has the right to sell or produce a product using the licensor’s intellectual property. The challenges in licensing are more about protecting intellectual property rights and ensuring royalty payments are made. Unlike franchising, licensing allows for more flexibility in operations and management.

4. Using McDonald’s and Starbucks as examples, how do different franchising models influence international expansion strategies?

McDonald’s employs a traditional franchising model where it grants franchisees the right to operate under its brand while following a standardized business model. This model focuses on tight control over franchisees to ensure consistency in product quality and service. McDonald’s success in global expansion is often attributed to its strong franchisee training programmes and audits, ensuring it maintains brand identity and uniform customer experience across different countries.

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Starbucks initially used a franchising model for global expansion, but gradually shifted towards licensing and joint ventures, particularly in markets where maintaining brand control and service quality is critical. Licensing allowed Starbucks to retain direct control over branding, and customer experience, ensuring consistency across its stores worldwide while adapting to local tastes and preferences.

5. What do you think about the future of franchising?

The future of franchising remains promising, but will likely evolve to address several emerging trends and challenges. As consumer preferences shift, franchising will need to adapt in a couple of ways, including incorporating more flexibility to cater to local tastes and preferences, while still drawing on the advantages of standardization. Companies that enter franchising arrangements will need to strike a balance between maintaining brand consistency and allowing franchisees to adapt to cultural differences.

The strong appeal of online shopping, particularly among the younger consumers, and digital platforms will continue to impact traditional franchising models, pushing franchisors to integrate e-commerce strategies into their operations. Franchises that can combine physical stores with strong online presences are likely to succeed in the future.

There is a risk that standardized approaches are seen as boring among young audiences. To counter this, franchises will need to differentiate themselves by offering distinct value propositions that go beyond just consistency.

Moreover, consumers are increasingly prioritizing sustainability and ethical business practices.

Franchises that adopt environmentally friendly operations, ethical sourcing, and community engagement initiatives will have a competitive advantage.

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Case Study 12.1 Corporate withdrawals Answers 1. What are the primary reasons companies withdraw from markets, despite the appeal of those markets?

Companies withdraw from markets for several reasons. The primary reasons include poor economic performance, such as low profits caused by high costs or intensive or intensified competition.

Additionally, external factors like political instability or regulatory hurdles may force companies to withdraw from a market. Governance challenges, including cultural differences and high administration and coordination costs, can also make operations in certain markets unsustainable.

2. How do country risks contribute to market withdrawal, and what examples illustrate this?

Country risks, such as political instability, economic uncertainty and regulatory changes, play a significant role in market withdrawals. IKEA’s exit from Russia in 2024 followed geopolitical tensions after Russia’s invasion of Ukraine in 2022, and Coca-Cola’s withdrawal from Myanmar was due to rising political risks following the 2021 coup. These situations demonstrate that external factors, often beyond the control of businesses, can make it too risky or unprofitable to continue operations.

3. Why might unrelated expansion increase the likelihood of market withdrawal?

Unrelated expansion, or diversification, increases the complexity of running the business, both for administrative reasons and since expansion into markets, and/or products that do not align with the company’s core competencies, tend to increase governance costs and complicate management. As a consequence, it becomes increasingly difficult to achieve economies of scale or scope. As a result, companies face increased pressures to exit such markets. For example, Uber withdrew from South Korea in 2024 due to regulatory hurdles and fierce local competition, which made it difficult to sustain profitability in an unrelated market.

4. What are some of the cultural and operational challenges companies face that can lead to withdrawal from a foreign market?

Cultural and operational challenges include poor understanding of local consumer preferences, failing to adapt business models to the local context, and struggling with coordination between home and host country operations. For example, Target’s failure in Canada was due to logistical issues, supply chain inefficiencies, and a lack of brand recognition. Similarly, Tesco’s Fresh & Easy stores in the USA struggled with cultural differences and operational inefficiencies, leading to Tesco’s withdrawal.

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5. What strategies can companies use to reduce the likelihood of market withdrawal?

Companies can reduce the likelihood of market withdrawal by conducting thorough market research to better understand local consumer behavior, culture and market conditions. Adapting business models to fit local conditions, engaging in risk management to mitigate risks, and learning from experience in foreign markets – an area where companies that have expanded a lot have a significant advantage – can also help prevent costly withdrawals.

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Case Study 13.1 Car-sharing – when a great product fails to succeed in some markets Answers 1. What are the primary benefits of car-sharing, and why has it been considered a sustainable alternative to traditional car ownership?

Car-sharing offers benefits such as cost savings and convenience for the user, while the whole of society benefits from reduced environmental impact, as fewer cars need to be built, and potentially there is less car usage – although this last point remains contentious. Car-sharing eliminates the need for individual car ownership by allowing users access to a fleet of vehicles for short-term use, thus reducing the financial burden of owning a car (maintenance, insurance, changing seasonal tyres, parking, etc.). It also addresses urban challenges like traffic congestion and pollution. By promoting shared vehicle usage, car-sharing helps reduce the overall number of cars on the road, which can decrease greenhouse gas emissions, fuel consumption and urban space dedicated to parking. Releasing public space may in turn make city centres more attractive for inhabitants and visitors.

2. What are the key challenges that car-sharing companies face in achieving profitability and wider market adoption?

Car-sharing companies face several challenges, including: 

High operational costs: Expenses related to parking, vehicle maintenance, insurance and fleet management are substantial. Insurance costs are high as the cars are driven by many users, and shared cars tend to suffer more damage than individually owned cars.



Competition: Car-sharing competes with other mobility options, such as ride-sharing services (Uber, Lyft), rental cars, public transportation, and micromobility solutions such as e-scooters and bikes. In many larger cities, ride-sharing is very competitive and prices are low, hence making it a cheaper and more convenient option than car-sharing in many cases.



Regulatory hurdles: Varying local laws on zoning, parking and insurance complicate operations and price-settings. From the customer perspective, a standardized pricing models is easier, but it doesn’t reflect the varying costs in different areas.



Technology and infrastructure: Easy booking and high parking availability are critical for customer satisfaction. Achieving scale and efficiency in the face of these obstacles has been difficult for many car-sharing companies.

3. Why has car-sharing succeeded in some markets, such as Western Europe, but struggled in others?

Car-sharing has succeeded in regions like Western Europe due to factors such as higher levels of urbanization. Densely populated cities with limited parking and higher traffic congestion make car-sharing a convenient alternative to car ownership. Environmental awareness is high in many European cities, and government support has been stronger. European Union policies, local 41

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government subsidies, and some integration of car-sharing with public transport networks (e.g. in Berlin and Vienna) have helped car-sharing get a foothold. In contrast, markets with less government support or where personal vehicle ownership is more culturally ingrained have seen slower adoption.

4. How does free-floating car-sharing differ from station-based car-sharing, and what are the challenges associated with free-floating systems?

Free-floating car-sharing allows users to pick up and drop off cars at any location within a defined area, offering greater convenience and flexibility compared to station-based systems, where cars must be picked up and returned to specific locations. However, free-floating systems face challenges including costly fleet redistribution, following from cars accumulating in certain areas.

Free-floating models also struggle to maintain profitability due to the higher operational costs associated with repositioning vehicles and managing fluctuating demand. The use of the freefloating option tends to be less planned by users compared to those using station-based car-sharing.

Moreover, research shows that free-floating car-sharing competes more with other transportation modes, such as public transit and biking, and doesn’t contribute significantly to reducing car ownership.

5. What role does consumer behaviour play in the adoption of car-sharing, and why might car ownership remain appealing despite the benefits of car-sharing?

Consumer behaviour is crucial in understanding the adoption of car-sharing. While cost and convenience are significant motivations, many consumers still value the sense of ownership that comes with having their own vehicle. This psychological attachment can make car ownership very appealing among some car users, despite the environmental and cost benefits of car-sharing.

Additionally, consumers may be hesitant to rely solely on car-sharing due to concerns about vehicle availability, convenience, and the perceived complexity of using a shared service. Overcoming these behavioural and psychological barriers is essential for car-sharing to gain broader acceptance.

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Part IV Case Study McDonald’s international marketing approach – does it still work, or has it come to an end?

Answers 1. How does McDonald’s balance international standardization and local adaptation in its marketing strategies? Provide examples, related to McDonald’s and the fast-food market, of advantages and disadvantages of these two approaches for the company and its customers, respectively.

McDonald’s balances international standardization with local adaptation by maintaining a core product offering (e.g. Big Mac, French fries and Happy Meal), while customizing some menu items to suit local tastes. For instance, McDonald’s offers a McAloo Tikki in India, shrimp burgers in Japan, and rice-based dishes in Indonesia. This strategy allows the brand to maintain international consistency, benefiting from economies of scale, while also appealing to local preferences.

However, the emphasis on standardization is much stronger than on local adaptation.

Standardization brings numerous advantages such as brand consistency and customers knowing what to expect, as well as operational efficiency since standardization allows for streamlining processes and supply chains.

2. How does McDonald’s approach to marketing and standardization relate to cultural sensitivity in marketing, e.g. menu adaptations, different cultures and consumer habits?

Relate to your own background.

Despite the strong focus on standardization, McDonald’s has successfully managed to relate to various cultures while maintaining its core offerings. For instance, in Hindu India, McDonald’s introduced the McAloo Tikki and removed beef products from its menu. In Middle Eastern countries, the food is certified halal, in compliance with local dietary laws. So McDonald’s must adapt to a combination of sensitivity to cultural values and religious beliefs, and local laws.

3. Describe the main sustainability challenges for McDonald’s. Consider McDonald’s international supply chain, including sourcing, transportation, packaging, marketing and delivery. Discuss whether McDonald’s can enhance its sustainability efforts without compromising on its business model.

McDonald’s faces several sustainability challenges, including, but not limited to, its environmental impact, packaging waste, and supply chain emissions. The latter are significant for beef, which is still a predominant product. Deforestation linked to palm oil and soy sourcing adds further ecological concerns. To an extent, McDonald’s can enhance sustainability without compromising on its business model, but it would be a challenge. Sourcing sustainable beef and reducing plastic usage are steps that have been taken, along with promoting plant-based menu items, and improving energy efficiency in restaurants. However, many consumers who buy from McDonald’s enjoy beef, and the relatively low prices leave little room for increasing costs without passing them on to customers. The question then becomes whether customers are willing to pay a higher price for higher sustainability performance.

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Steven Hollensen & Ana Bogdanovic, Global Marketing, 9e, Instructor’s Manual

4. Evaluate how increasing health consciousness among consumers should impact McDonald’s marketing strategies. How can the company address health concerns while maintaining its brand and product appeal? What changes in product, price and marketing communications would you suggest?

These are important considerations when preparing the business model for the future. McDonald’s should adapt to rising health consciousness by offering healthier menu options, such as plant-based and low-calorie items, vegan burgers and salads. McDonald’s provides transparent nutritional information already, but the health implications of making the right food choices could be emphasized more clearly. In terms of products, more affordable healthy options such as plant-based and organic alternatives could be introduced, and to convince restaurant guests to purchase them they should also be aesthetically appealing and taste good. Maintaining competitive pricing for healthier items is crucial to be true to McDonald’s brand and business model: it’s a fast-food restaurant, so prices have to be appealing. In terms of marketing, McDonald’s could aim to reframe the brand as one that offers both indulgence through its classic items such as Big Mac, and healthier alternatives, targeting health-conscious consumers through digital campaigns and influencers, hence making the latter appeal to younger and more sustainability-oriented market segments.

5. Do you think consumers would appreciate a stronger emphasis on sustainability? And would they be willing to pay for it? If it is very different in different markets, how does a more differentiated approach fit with McDonald’s standardized business model?

Consumers are valuing sustainability, but their willingness to pay for it varies by market. In developed markets, such as Europe and North America, consumers are more likely to support sustainability and may be willing to pay a premium. In developing markets, where price sensitivity is higher, customers may prioritize cost over sustainability. A differentiated approach could mean offering sustainable products at a higher price level, while allowing price-conscious customers to opt for conventional lower-cost items. The downside of such an approach is that many consumers may not have or take the opportunity to enjoy greener choices.

6. How does McDonald’s position itself against competitors like Subway, KFC and regional fast-food chains that may offer more localized or healthier options? What strategic marketing adjustments can McDonald’s implement to differentiate itself in increasingly competitive markets?

McDonald’s differentiates itself by leveraging its global brand and classic offerings, but faces competition from local and healthier competitors. One opportunity is to localize menu offerings with regional flavours and ingredients, another is to develop and promote healthier product lines.

The customer experience could be enhanced by investing in restaurant environments, digital platforms, etc.

7. How do you think consumer preferences will develop in the next 5 to 10 years? What impact will it have on McDonald's marketing strategies?

While it’s difficult to know about the future, it’s likely that we will see an increased demand for sustainability as scrutinizing sourcing increases with customers and regulators alike expecting reduced carbon footprints and less packaging waste. Health-conscious eating is likely to become more important and digital platforms will grow, reflecting consumers wanting faster, more convenient and more personalized food services.

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8. Has McDonald’s business model, refined over many decades, come to an end? Do you think that McDonald’s must rethink its entire business model and strategy? What type of changes would you suggest?

McDonald's business model has not reached an end, but it requires adaptation to changing consumer expectations such as a stronger focus on health-orientation, sustainability, working conditions for the people involved in the supply chain, and drawing advantages from digitization. Changes might include a stronger focus on local adaptations and a more diversified business model that adapts to a stronger personalization in consumer desires and needs.

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Case Study 14.1 Danish Klassic revisited: launch of a cream cheese in Saudi Arabia, and the challenges that followed Answers 1. What were the main challenges Danish Cheese Overseas faced when launching Danish Klassic in Saudi Arabia?

The main challenges were strong competition from established brands like Kraft and Puck, which already had dominant market shares, and marketing struggles, Despite the company making significant investment in TV commercials, print ads and in-store promotions, the product failed to create the desired impact. The brand's marketing strategy struggled to differentiate Danish Klassic from its competitors and connect with Saudi consumers in a meaningful way.

2. How did unforeseen macroenvironmental changes, such as population growth and economic shifts, affect the cheese market in Saudi Arabia?

The expected population growth in Saudi Arabia did not materialize as predicted. Instead of reaching 20 million by 2000, the population was only 16.2 million. This slower growth reduced market demand. Additionally, consumption patterns were affected by economic reforms like Vision 2030 and the shifting of focus away from a reliance on oil. These changes, combined with economic pressures like Saudization, impacted industries reliant on expatriates and foreign goods, including the cheese market, which further affected Danish Klassic’s ability to grow.

3. How did the Muhammad cartoon controversy of 2005 impact Danish cheese brands, particularly Danish Klassic, in Saudi Arabia?

The Muhammad cartoon controversy led to widespread boycotts of Danish products across many Islamic countries, including Saudi Arabia. Danish goods, particularly dairy products like those from Arla Foods (the parent company of Danish Klassic), were heavily affected. Sales plummeted, forcing Arla to halt production in Riyadh and lay off employees. Although Arla launched a largescale ad campaign to repair its reputation, the damage was significant. However, by 2009 the situation had improved and sales began to recover.

4. How did Danish Cheese Overseas try to position Danish Klassic in the Saudi Arabian market, and why did the product fail to meet sales expectations?

Danish Cheese Overseas positioned Danish Klassic as a premium cream cheese, using aggressive marketing through TV commercials, print ads and in-store promotions. The product was presented as healthy, nutritious and long-lasting, also emphasizing its convenience. However, despite this significant investment in marketing, the brand struggled to overcome the dominance of established competitors like Kraft. The packaging and brand differentiation were also not compelling enough to make consumers shift away from their preferred choices.

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Steven Hollensen & Ana Bogdanovic, Global Marketing, 9e, Instructor’s Manual

5. What strategies could Danish Cheese Overseas have adopted to improve the chances of Danish Klassic's success in Saudi Arabia?

To improve the chances of success, Danish Cheese Overseas could have undertaken the following initiatives: 

Targeted local tastes and preferences: Conducted deeper market research to better align the product with local taste preferences and consumption habits.



Customized packaging: Adapted the product’s presentation to local consumer preferences by using familiar packaging, such as glass containers, which were more popular in the region.



Leveraged local partnerships: Collaborated with local distributors and influencers to build stronger brand recognition and trust.



Enhanced product differentiation: Emphasized the product’s unique selling points, such as the health benefits or superior taste, in a more culturally relevant manner.

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Case Study 15.1 Getting pricing right and not being greedy – competition and market forces Answers 1. What are the key factors a company must consider when determining the optimal price for a product or service?

Companies must consider the 3 Cs when setting prices: 

Costs: Ensure that prices cover costs, including fixed and variable costs, to avoid financial losses.



Competition: Analyze competitor pricing and value propositions to ensure competitiveness.



Customer: Understand customer perceptions of value and their willingness to pay.

Market conditions such as supply and demand, economic trends, and purchasing power also play a role in determining the optimal price.

2. How do Apple and Ryanair illustrate different pricing strategies, and what makes them successful?

Apple uses a premium pricing strategy, charging higher prices by leveraging its strong brand, reputation for innovation and customer loyalty. Its success lies in delivering superior product quality and maintaining customer loyalty, allowing it to charge higher prices without losing significant market share.

Ryanair applies a competitive pricing strategy, focusing on low prices by cutting costs and maximizing efficiency in operations, e.g. by only running one type of aircraft, the Boeing 737.

Ryanair’s success comes from high load factors, affordable ticket prices, and additional revenue from optional services like baggage fees and seat selection.

3. What is marginal-cost pricing, and why might it be unsustainable for businesses in the long term?

Marginal-cost pricing involves setting a price equal to the cost of producing one additional unit.

While this approach promotes efficiency and optimal resource allocation, it can be unsustainable in the long term for industries with high fixed costs. If prices are set too low, companies may fail to cover overall production costs, leading to financial losses. In industries like telecommunications or streaming, where fixed costs are high, relying solely on marginal-cost pricing may not be practical.

Fixed costs and costs for investing in new products must always be covered.

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4. What pricing challenges do companies face when customers perceive prices as ‘too high’ or ‘too low’?

When prices are too high, customers may perceive the company as greedy, leading to brand damage and loss of loyalty. This can result in a decline in market share as customers seek more affordable alternatives, and get annoyed by greedy practices. Conversely, setting prices too low may give the impression of inferior quality, limiting a company’s ability to invest in innovation and customer service, and reducing profitability. Striking a balance between profitability and perceived value is crucial for long-term success.

5. How does IKEA's cost-leadership strategy enable it to maintain competitive pricing while delivering value?

IKEA’s cost-leadership strategy involves maintaining tight control over its supply chain, offering flat-pack designs to minimize shipping and storage costs, and encouraging self-assembly by customers to lower production and logistics costs. This approach enables IKEA to offer welldesigned, functional furniture at low prices, making it affordable to a wide range of consumers. This strategy contributes to its global success while keeping costs low and maintaining high value for customers.

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Case Study 16.1 Third-party websites change the rules of the distribution game Answers 1. How have third-party websites changed the traditional power balance in distribution channels?

Third-party websites have shifted the power balance by introducing a new intermediary between the provider and the customer. Traditionally, companies had more direct control over sales and customer relationships by distributing through their own channels. However, with third-party platforms like Booking.com or Expedia, these websites now wield significant power. They can largely dictate terms to businesses, charge high commissions, and take over customer relationships, potentially diluting brand loyalty and increasing fees over time. Accordingly, companies benefit from being careful to not use third-party websites too extensively.

2. What are the short-term and long-term effects of using third-party websites for capacity utilization?

In the short term, using third-party websites helps companies increase sales and fill unused capacity, especially during off-peak times. This can improve profitability, as the additional revenue often exceeds the commission costs.

In the long term, however, over-reliance on these platforms can lead to several drawbacks: 

Higher commissions are charged by the third-party websites as they gain more market power.

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A growing percentage of bookings coming through these platforms reduces a company’s direct interaction with its customers, something that is getting even more complicated as third-party websites become aggressive in their communications.

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Loss of customer loyalty and brand control as the third-party platforms become the primary point of contact for consumers.

3. How do companies like Marriott and Delta Air Lines mitigate the risks of over-reliance on third-party websites?

Marriott uses its Marriott Bonvoy loyalty programme to encourage direct bookings, offering exclusive benefits, discounted rates and flexible cancellation policies to customers who book directly through its website. This helps Marriott maintain customer relationships and reduce reliance on third-party platforms.

Delta Air Lines integrates its SkyMiles loyalty programme to encourage customers to book directly through its website or app. Delta also offers a best-fare guarantee, promising customers that they will receive the lowest price when booking directly, which further incentivizes direct engagement and allows Delta to gather customer data for personalized marketing.

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Steven Hollensen & Ana Bogdanovic, Global Marketing, 9e, Instructor’s Manual

4. What are the potential dangers of third-party websites taking over customer relationships, and how can companies address this issue?

When third-party websites take over customer relationships, companies risk brand dilution and losing direct access to customer data, making it harder to build loyalty and provide personalized service. Over time, this can weaken a company’s market position and increase its dependence on third-party platforms. Companies can address this by: 

developing loyalty programmes that incentivize direct bookings (e.g. Marriott Bonvoy, Delta SkyMiles)



offering exclusive deals or perks for customers who book directly through their websites, such as price guarantees or special discounts

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investing in digital tools to enhance the direct customer experience, like personalized recommendations or better customer service.

5. What strategic decisions did Nike make to reduce its dependence on third-party platforms like Amazon, and what benefits did this bring?

Nike decided to reduce its reliance on third-party platforms by adopting a direct-to-consumer strategy that included: 

offering exclusive products and limited-edition items through its own channels



investing in digital technologies to enhance the shopping experience, such as personalized product recommendations and augmented-reality features for trying on shoes.

The benefits of this strategy include: 

greater control over the brand and the customer experience

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direct access to customer data, allowing Nike to provide a more personalized shopping experience

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increased brand loyalty and differentiation, as customers are drawn to exclusive products only available through Nike’s own channels.

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Case Study 17.1 True Gum: an organic chewing gum producer is looking for international expansion in Vietnam Answers 1. What challenges is True Gum likely to face when entering the highly competitive global chewing-gum market?

True Gum faces several challenges in the global chewing-gum market: 

Dominance of multinational players: The market is dominated by giants like Mars Wrigley, Mondelez and Lotte, which hold a large share of the global market and have significant brand recognition, distribution networks and resources.

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Consumer habits: Traditional gum consumers are used to sugar-laden or artificially sweetened products. Convincing them to switch to True Gum's biodegradable, plastic-free and natural ingredients might take time.

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Distribution channel competition: True Gum needs to choose between traditional retail (supermarkets) or more niche distribution channels, such as health food stores or online platforms, where some of its plastic-free competitors have succeeded.

2. What communication strategies should True Gum use to successfully promote its product in Vietnam?

True Gum should adopt a localized communication strategy to resonate with Vietnamese consumers. It should include the following elements: 

Emphasize health and sustainability: Vietnam’s urban middle-class is becoming more health-conscious and environmentally aware. Marketing that highlights True Gum’s organic, biodegradable and plastic-free qualities will appeal to this growing demographic.

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Leverage local influencers: Collaborating with local influencers, especially those advocating for sustainability and health, can help build credibility and brand awareness quickly.

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Social media and digital marketing: Vietnam has high internet and smartphone penetration, so a strong presence on platforms like Facebook and Instagram will be essential. Creative campaigns that align with local culture, such as eco-friendly challenges, could boost engagement.

3. What distribution strategies should True Gum adopt to enter the Vietnamese market?

To establish a foothold in Vietnam, True Gum should consider the following distribution strategies: 

Retail partnerships: Collaborate with eco-conscious retail chains, organic food stores, and convenience stores in urban areas where demand for sustainable products is growing.

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Steven Hollensen & Ana Bogdanovic, Global Marketing, 9e, Instructor’s Manual



E-commerce platforms: Vietnam’s e-commerce market is booming. Selling through platforms like Shopee and Lazada, which have vast reach and popularity among younger consumers, will help True Gum tap into the tech-savvy market.



Direct-to-consumer: Building a direct sales channel through its own website could help True Gum maintain greater control over pricing and branding, while also creating stronger customer relationships.

4. How can True Gum differentiate itself from its competitors in the chewing-gum market?

True Gum can differentiate itself through: 

Unique selling points: Emphasizing its plastic-free, biodegradable composition and natural ingredients like chicle sap sets it apart from most traditional gums that contain synthetic components.

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Sustainability focus: True Gum can build a brand image around environmental consciousness, appealing to eco-conscious consumers.

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Transparency in sourcing: Highlighting the ethical sourcing of chicle from Central America, where local farmers benefit from sustainable practices, can create a positive brand association and resonate with socially responsible consumers.

5. How should True Gum design its social media marketing plan for the European market?

To effectively promote True Gum in Europe, the company should adopt the following social media marketing strategies: 

Content that emphasizes sustainability: Create posts and campaigns around environmental protection, reducing plastic waste, and the benefits of natural, biodegradable products.

Engaging visuals and informative videos can help educate consumers.



Influencer collaborations: Partner with European sustainability advocates, health bloggers, and influencers in vegan or eco-conscious spaces. Their endorsement can lend credibility and reach True Gum’s target audience.

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Interactive campaigns: Launch social media challenges (e.g. #PlasticFreeGum) where users post about switching to plastic-free products like True Gum. Offering rewards or giveaways can boost engagement.

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Localized messaging: Adapt content to resonate with individual European countries’ cultural values and environmental concerns.

6. What promotional strategies should True Gum use for the US market?

True Gum’s promotional strategy for the US market should focus on sustainability and health benefits. Highlighting the fact that the gum is plastic-free, plant-based and biodegradable will appeal to the growing environmentally conscious consumer base in the USA. Social media platforms such as Instagram and TikTok should be leveraged for influencer marketing and interactive, eco-friendly challenges. Furthermore, partnerships with health food stores like Whole Foods and organic food bloggers can increase brand visibility.

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Steven Hollensen & Ana Bogdanovic, Global Marketing, 9e, Instructor’s Manual

7. Prepare a social media marketing plan for Europe.

A social media marketing plan for Europe should include the following elements: 

Target audience: Health-conscious, eco-friendly consumers, vegans and young professionals.



Social media platforms: Instagram, Facebook, YouTube and TikTok.



Educational posts: Explaining why True Gum is better for the environment and for personal health.



Challenges and campaigns: Encourage users to switch to plastic-free gum with hashtags like #GumWithoutPlastic.



Collaborations: Partner with European eco-friendly influencers and organizations like Greenpeace to boost credibility and reach.

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Part V Case Study Bioko Treats – premium chocolate from Ghana Answers 1. What are the planning steps Jeanne should follow if she is going to launch her brand in international markets? (Use Figure 18.1 to help you.)

Students should focus on the process steps for international marketing planning.

2. Outline some of the environmental factors that Jeanne should investigate further which may impact on the sale of her premium chocolate.

Refer to Part IV – designing the international marketing programme – for general points, such as import controls, tariffs, price elasticity and government controls on pricing. You may refer to your prior understanding of the macroenvironmental factors (e.g. using PEST or PESTLE) and of social factors. The case mentions trends in chocolate consumption towards artisan products and regional differences in taste. Culture may affect attitudes towards country of origin, or the times of year and types of occasions on which chocolate is in demand.

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Case Study 18.1 Next Retail – shifting emphasis for growth Answer 1. As Next develops its partnership with Myntra, what measures should be put in place to ensure clear judgments can be made about the ongoing success of the collaboration?

Next should look at putting in place key behavioural and output controls as their partnership develops. This may include output controls such as monitoring expenditure, sales and profits, as well as people and process monitoring such as personal interaction between teams and the usefulness of training. Key performance indicators will need to be established to evaluate marketing overall, and responsibility for this will need to be clearly allocated to individuals and teams.

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Case Study 18.2 Mace Group – harnessing local to drive international marketing excellence Answers 1. What is driving the new strategy adopted by Mace?

Mace’s home market has matured, and so, while the company is a leader in its field, in order to grow it has begun to look for more opportunities to leverage its expertise globally.

2. As the team builds on work which has identified key global accounts, would you recommend a central or a local team lead any negotiations for new contracts? Explain your reasoning.

The restructure is enabling the company to manage core aspects of the brand and marketing campaigns centrally, and so a matrix structure would be the most appropriate structure, as it will enable central and local expertise to be combined.

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Case Study 18.3 Typeform – bringing Silicon Valley to Barcelona Answers 1. What caused the problems for teams at Typeform? What are the implications for this?

The challenges for Typeform appear to have arisen because there was a lack of appreciation of the different work cultures in the countries in which it operates.

The implications for this are costly in terms of staff turnover and the company’s ability to serve customers and innovate products and services 2. What advice would you give to senior leaders at Typeform?

Developing a clear vision for the company which embraces the different cultures could have kept employees more engaged. Alongside this, a clear measure about performance – particularly behavioural performance – may help clarify expectations among teams across national boundaries.

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