Merchandise trade today accounts for less than 2 percent of all the foreign exchange transactions around the world.

A)   Merchandise trade today accounts for less than 2 percent

of all the foreign exchange transactions around the world. Can

one deduce that merchandise plays an insignificant role in

today’s economies? Why or why not?

B)   . A major cereal manufacturer produces and markets standardized

breakfast cereals to countries around the world.

Minor modifications in attributes, such as sweetness of the

product, are made to cater to local needs. However, the core

products and brands are standardized. The company entered

the Chinese market a few years back and was extremely

satisfied with the results. The company’s sales continue to

grow at a rate of around 50 percent a year in China.

Encouraged by its marketing success in China and other Asian

countries, and based on the market reforms taking place, the

company started operations in India by manufacturing and

marketing its products. Initial response to the product was

extremely encouraging and within one year the company was

thinking in terms of rapidly expanding its production capacity.

However, after a year, sales tapered off and started to fall.

Detailed consumer research seemed to suggest that while the

upper-middle social class, especially families where both

spouses were working, to whom this product was targeted,

adopted the cereals as an alternative meal (i.e., breakfast) for a

short time, they eventually returned to the traditional Indian

breakfast. The CEOs of some other firms in the food industry

in India are quoted as saying that non-Indian snack products

and the restaurant business are the areas where multinational

companies (MNCs) can hope for success. Trying to replace a

full meal with a non-Indian product has less of a chance of

succeeding. You are a senior executive in the international

division of this food MNC with experience of operating in

various countries in a product management function. The CEO

plans to send you to India on a fact-finding mission to determine

answers to these specific questions. What, in your opinion,

would be the answers:

a. Was entering the market with a standardized product a


b. Was it a problem of the product or the way it was


c. Given the advantages to be gained through leveraging

of brand equity and product knowledge on a global

basis, and the disadvantages of differing local tastes,

what would be your strategy for entering new


C)   Globalization involves the organization-wide development

of a global perspective. This global perspective requires globally

thinking managers. Although the benefits of globalization

have received widespread attention, the difficulties in developing

managers who think globally has received scant attention.

Some senior managers consider this to be a significant

stumbling block in the globalization efforts of companies. Do

you agree with the concerns of these managers? Would the lack

of truly globally thinking managers cause problems for implementing

a global strategy? And how does the proliferation of

e-commerce affect the way these managers conduct business?

1.Why would a firm such as Vodafone need to have a global

marketing strategy even though its product development, as

well as the rest of its marketing strategy, needs to be localized

for tech-savvy consumers in Japan?

2. What alternative strategy might Vodafone have used to set

a strong market position in Japan from the very beginning?

3. What implications can you draw from Vodafone’s loss of its

Japan unit with regard to global firms’ tapping into the convergence

among global consumers?

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