QUESTION 1: Why does Microsoft’s traditional strategy of “one-size-fits-all” not work well in emerging markets like India? What is different about these markets? How do customers differ both in their characteristics and in the way they use technology?
Microsoft employs a globalization strategy which entails the standardization of all products despite the market that it is targeting thus the “one-size-fits-all” tag, this strategy works on the premise that all markets have the same requirements thus the standardization.
However emerging markets such as India, China and Brazil have certain peculiarities that companies need to take into account before formulating strategies. These markets, though termed as growing economies, still have a lot of its population living in poverty or just above the poverty line and thus the prices of products and services are critical. (Atsmon, Kertesz &Vittal,2011) noted that in emerging markets urbanization occurs in pockets known as clusters and this is where organizations need to focus their efforts on these clusters instead of having the regular nationwide approach. In terms of technology the poverty levels do not allow many people to have access to personal computers and those that have access cannot afford to pay for the software that is requires therefore many pirate.
QUESTION 2: What steps did Microsoft have to take in order to develop products that are customized to Indian customers?
In response to the inaccessibility of personal computers to individuals Microsoft has partnered with Posta India to create information kiosks that allow people to access computers especially in the rural areas because Posta already had a large existing network. The software offered uses English, Hindi and 19 other local dialects and has most of the windows functionalities, this increased Microsoft’s penetration of the Indian market.
(Reagan, 2004) reports that Microsoft decided to launch Windows XP starter in India, this was in response to the proliferation of pirated versions of Microsoft operating systems which was robbing the company of revenue. To further serve the needs of the Indian market the software operates in Hindi which is widely spoken with the option of future inclusion of other local dialects and was selling at a reduced cost of $35. This captured the Indian market and increased sales.
- What is behind Ford’s One Ford vision? What is the company hoping to accomplish with this strategy?
In its quest to become the leading automobile company in an increasingly competitive business environment, Ford formulated the One Ford vision in an effort to reach out to all its departments such as manufacturing, design, sales and customer service. The vision provides a roadmap of where the company wants to be and what the company has to do in order to get there; it gives the company unity of purpose.
With the help of this strategy Ford aims to be a global company that is innovative and one that fulfills the needs of its customers, employees, investors and the community at large. This strategy will use the lean manufacturing system that will reduce loss of important resources and cut costs, all these will increase the profit posted by the company. It will also ensure that the entire company works effectively as this strategy provides a clear picture of what and where the company wants to be.
2. What are the advantages of creating global models like Ford is planning with its One Ford vision? Do you see any problems with this one-size fits-all approach?
The biggest advantage of global models is that they create clarity for a company while increasing the company’s competitive advantage, in the case of Ford different branches manufactured different cars making management and strategizing very difficult. With a global strategy companies are able to produce high quality products because of the increased attention paid as opposed to focusing on many different products. This strategy cuts cost especially in manufacturing as the prototypes are the same; advertising is also made easier and cheaper as one product is being advertised throughout the world.
This one-size-fits-all approach does not focus on the specific needs of particular markets, this is especially true for emerging markets that are the new frontiers for companies yet they have very peculiar characteristics. The other danger associated with global models is that sometimes they focus too much on the company leaving out the needs of the consumer, this leads to little innovation causing defeat by more customer focused competitors.
QUESTION 1: GE used to have a preference for acquisitions or greenfield ventures as an entry mode, rather than joint ventures. Why do you think this was the case?
GE has interests in many sectors because of its diversification strategy, greenfield ventures gave GE the opportunity to design and create the venture the in a way that fit its mission and strategy. Acquisitions allowed GE full control of all operations, decision making and the profits made, a luxury that is not found in joint ventures as the needs of the other partner have to be considered and profits have to be shared according to the shareholding of the partners.
QUESTION 2: Why do you think that GE has come to prefer joint ventures in recent years? Do you think that the global economic crisis of 2008-2009 might have impacted upon this preference in any way? If so, how?
In a joint venture everything is shared, this includes profits, decision making and even risks. The global economic crisis of 2008-2009 impacted on GE’s decision to go the joint venture way as this avenue allows for the reduction of risks. Because of its global strategy GE has operations all over the world; joint ventures give GE the ability to take advantage of the existing partners’ knowledge of the market and customers. The cost of getting into a new venture is reduced because the other partner also contributes, this allows GE to spread its risks and also free up capital that can be used in other ventures which allows for more diversification. Lastly today most governments stipulate that all foreign investors must form joint ventures with locals so as to be given certification; GE’s change of preference may also be due to the need to comply with the laws in host countries.
Atsmon.Y. Kertesz, A. & Vittal, I.(2011). Is your emerging-market
strategy local enough? McKinsey Quarterly. Retrieved From
Regan, K. (2004). Microsoft Releases Low-Cost Windows XP for India. E- Commerce Times