Deconstructing Zara Handout Version
Deconstructing Zara Handout Version

Deconstructing Zara Handout Version

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  • Pages: 8 (3987 words)
  • Published: June 24, 2018
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1. The global economy may be viewed as a pyramid. The growing number of opportunities at the base of the pyramid highlights the role this bottom tier will play in the years to come. How would you take advantage of this often-ignored level if you were occupying a top management position at a prominent MNE? ANS: The global economy can be viewed as a pyramid. The top of the pyramid consists of one billion people with per capita income of $20,000 or higher. The second tier consists of another billion people making $2,000 to $20,000 a year.

A lot of the world’s populations, about 4 billion people, live at the base of this pyramid, making less than $2,000 a year. (one billion??????????????? 20? ,another billion make 2?? 20??? , ????????? 4B? , make ?? 2??? ) Marketers have focused on the top two levels and ignore the bottom tier. It is much easier to market to consumers with higher incomes. An increasing number of countries located in this bottom tier also have a big opportunity to make more money. In the emerging world, marketing is different. There is no guarantee media choices will be available or that your product will be a success(marketers ????????? ?????????? ,????? ,???? ,????????? ). The challenges in the bottom of the pyramid require innovation, such as identifying special price points, as well as long-term commitment. Many consumers at the base of the pyramid may be uneducated, but they are brand conscious. Companies need to think outside the box and identify win-win strategies for this emerging consumer market(????????? ,?????????? ,??????? ,????????????????? ). Although individuals living in

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developing economies have less purchasing power than their counterparts living in the developed countries, they still have needs and wants.

Global firms capable of fulfilling these needs will make a profit and emerge as global marketers. (?????????????? ,??????? ) 2. Describe the differences among the three economic systems. ANS: A pure market economy is described by an “invisible hand” of market forces noted by Adam Smith in the Wealth of Nations in 1776. The government takes a hands-off approach known as laissez faire. The government only performs functions the private sector cannot perform. (???????????? ,?????????? ,???????????? ) A pure command economy is defined by a government taking, in the words of Lenin, the “commanding height” on the economy.

All factors of production should be government controlled, and all supply, demand, and pricing are planned by the government. ( Former Soviet Union)(???? ,???????? ,??????????????? ) A mixed economy has elements of both a market and command economy. It boils down to the relative distribution of market forces versus command forces. (???? )???? (China) 3. Define how Hofstede’s power distance and uncertainty avoidance dimensions influence the style of decision making in the U. S. ANS: For example, in Brazil, the richest 10% have 50% of the national income, but everyone accepts it as the way it is.

Sweden, on the other hand, has a lower power distance where the richest 10% only get 22% of the national income. Managers in high power distance countries have a stronger role to manage their business. Managers in low power

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distance countries should take advantage of the greater communication between power levels, gaining insight and perspective from all individuals. Uncertainty avoidance. Individuals in high uncertainty avoidance cultures place a premium on job security and retirement benefits. Managers in high uncertainty avoidance cultures (Greece) often strictly follow guidelines, rulebooks, and corporate codes.

Mangers in low uncertainty avoidance countries (US China) rely more on experience and training. This gives the members more room to adapt in the face of a problem. 4. List and explain six basic rules of thumb for venturing overseas. ANS: The first is to be prepared. Traveling internationally is always difficult to predict, so attempting to plan and have enough materials or knowledge to face an unexpected situation is important. Second, slow down. The culture is very complex. Third, establish trust. It is important to establish trust despite those differences. This is the only bond international business persons can share.

Fourth, understand the importance of language. While not every manger will be able to learn the local language of their international business, and every manager may not need to, it is important to respect other languages. They are neither good nor bad, but merely an aspect of conducting international business. Fifth, respect cultural differences. It is necessary for managers to avoid ethnocentrism, the selfish mentality where they consider their own culture, ethics, and norms as rational and morally right. Sixth, understand that no culture is inherently superior in all aspects.

Neither the culture of the manager nor that of the local business is perfect. Much of culture is neither good nor bad, but simply the way those individuals conduct their daily lives. Therefore, it is important to not impose cultural values on others but also to not take it personally when others may attempt to do so. 5. Identify the three categories of tangible resources, and provide an example for each category. ANS: The first category is financial resources and capabilities, meaning the depth of a firm’s financial pockets. The capabilities include abilities to generate internal funds and raise external capital.

Example: Hainan’s ability to raise capital through tapping into Soro’s pool of funds. (???? ) The second is physical resources and capabilities, such as plants, offices and equipment, their geographic locations and access to raw materials and distribution channels. Amazon and the growth of the largest physical book warehouse in key geographic location is an excellent example. (????? ) Technological resources and capabilities, the third category, include skills and assets that make leading edge products and services supported by patents, trademarks, copyrights, and trade secrets.

Example: over 60% of Canon’s products have been introduced since 2005. 6. Identify the three categories of intangible assets, and provide an example for each category. ANS: Human resources and capabilities: This represents the knowledge, trust, and talents embedded within a firm that is not captured by its formal tangible systems and structures. Hainan Airlines’ top managers are well known for their youth, competitive orientation, and Western training. Innovation resources and capabilities: A firm’s assets and skills to (1) research new products and services, and (2) innovate and change ways of organizing.

Some firms such as Sony are

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