FINAL REPORT SUBJECT GLOBAL STRATEGIC MANAGEMENT critically present your understading about global positioning

UNIVERSITY OF UEH BUSINESS SCHOOL FACULTY OF INTERNATIONAL BUSINESS MARKETING FINAL REPORT SUBJECT: GLOBAL STRATEGIC MANAGEMENT Instructor: MSc Do Ngoc Bich Class Code: 22D1BUS50310901 Student: Nguyen Phuong Uyen Grade - Class: K46 - FTC01 MSSV: 31201024693 Ho Chi Minh City, June 5th, 2022 TIEU LUAN MOI download : skknchat123@gmail.com moi nhat TABLE OF CONTENT Question 1…………………………………………………………………………………… a Critically present your understading about global positioning ……………………4 Choices of countries……………………………………………………………………4 Value proposition………………………………………………………………………4 b Analyse global positioning of a global firm …………………………………………5 Choices of countries……………………………………………………………………5 Value attribute,,,,………………………………………………………………………5 Customer segment ……………………………………………………………………6 Degree of worldwide standardization ……………………………………………….6 Question 2………………………………………………………………………………….…7 a Discuss reasons leading to joint venture failure (support with relevant evidences and numbers, explanation) …… …………………………………………………….7 Valuation mistakes……………………,,……………………………………………7 Integration Time,……………………………………………………………………7 3.Culture Management ………………………………………………………………8 4.Synergies … ………………………………………………………………………….9 5.Straying too far… ………………………………………………………………… 10 Lacking of project governance…………………………………………………… 11 b Analyse one failure of global brands and present all lessons that you can taken from (causes and results analysis – link with 2a) …………………………………………11 Culture aspect……………………………………………………………………….12 Synergies problems………………………………………………………………….12 Appendix…………………………………………………………………………………….13 TIEU LUAN MOI download : skknchat123@gmail.com moi nhat TIEU LUAN MOI download : skknchat123@gmail.com moi nhat DECLARATION I confirm that this is my own work and the use of all materials from other sources has been properly and fully acknowledged Signature: Uyen Phuong Nguyen Date: 5th June 2022 TIEU LUAN MOI download : skknchat123@gmail.com moi nhat 1.a) *Global positioning talks about choice of countries and value proposition It consists of two types of choice: - First, the choice of countries in which the company wants to compete and the role that those countries play in the global portfolio In particular, there are five types of country where global positioning occurs: • Key countries are critical for the long-term competitiveness of the company because of their size, growth or available resources.(Germany, the UK and France are important nations in Europe) • Emerging countries exhibit a high growth rate for a particular industry (China, India would fit that description) • Platform countries can serve as ‘hubs’ for setting up regional centers – global factories that are ‘platforms’ for further development ( Carrefour, the French hypermarket conglomerate, has exploited Taiwan as a strategic expansion platform in Asia) • Marketing countries have attractive markets without being as strategically critical as the key countries ( Vietnam in Asia, Tunisia in North Africa ) • Sourcing countries have a strong resource base but limited market prospects ( Malaysia for rubber, or Saudi Arabia for petroleum) - Second, the defining of the numerous value propositions for the company's products or services, as they relate to the categories and regions in which the company wishes to compete  Value proposition consists of the selection of value qualities, client segmentation, and the degree of standardization: • Value characteristics are product/service elements that customers value when making a purchasing choice •Customer segments are specific groupings of customers that want comparable value attributes (shared value curve) • Degree of world standardization of products/services: TIEU LUAN MOI download : skknchat123@gmail.com moi nhat + A standardized value proposal provides the same sort of consumer segment with a similar or standard value attribute everywhere over the world + An adaptive value proposition tailors the value proposition to different regions - The choice of global positioning depends on the company’s decisions on the: • Scope of targeted client groups (broad/focused player) • Approach of making a value proposition in several nations (standardized/adaptive) • Adoption of generic strategies adopted (differentiation or cost leadership) 1.b/ *Pepsi Company - Choices of countries: Pepsi International is a world renowned brand that produce one of the largest carbodinated drinks in the world and is the second largest food and beverage company Pepsi is producing Cola for more than 100 years and it has dominated the world market for a long time Although its head office is in New York City, the company operates almost all over the world - Value attributes: Pepsi’s generic competitive advantage approach is product positioning and differentiation It emphasizes quality and values in consumer goods and continued to refine its beverage and snack portfolio to meet changing consumer demands For example, in 2016, the corporation introduced Pepsi Zero Sugar - a beverage with reduced sugars and saturated fat to produce a healthier and more nutritious beverage Moreover, differentiation marketing strategies help highlight the distinctiveness of the product like the “Pepsi Challenge,” where consumers blindly taste both Pepsi and Coke and choose which one they prefer The cost leadership generic approach is used on Pepsi's goods to gain a competitive edge through cost or pricing Pepsi beverage products are priced lower than competitors such as Coca Cola’s The company ensures that its many products are readily available and affordable, which is appealing to different income segments TIEU LUAN MOI download : skknchat123@gmail.com moi nhat - Customer segment: PepsiCo is known for its broad and multi-segment customer base where it targets more than one customer with its diverse products to better capture the market and satisfy their customers There are three ways for Pepsi to classify customers : through age, behavior and psychology + Age segmentation Demographically, PepsiCo is known to classify its market based on age where the company's major segment is those within the age of 15-45 These are individuals who are still strong and have no worries about carbonated drinks and will always buy the original PepsiCo product Pepsi has over 22 brands that reach diverse consumers based on age, gender, income levels, and such like demographics.and the association of pepsi image with youth as well as the vitality favorable helped position the image of Pepsi so high + Behavioral segmentation Behavioral segmentation is another way through which PepsiCo has classified its market The group being targeted here includes benefits sought such as those seeking enjoyment and taste of those refreshing beverages or spending time Personality as well includes those users who are easy-going, ambitious, and determined in their activities + Psychopathic segmentation The company has products that fit in all the classes from the working class, middle class, to the upper class This is because the products are packaged in diverse sizes and prices start from lowest to highest which makes the product affordable for nearly all classes and income levels - Degree of worldwide standardization: PepsiCo applied the adaptive value proposition The company has created a diverse product line of complementary goods and beverages globally to address the requirements and changing behaviors of customers Since nutritionists continually say that soft drinks are bad for people’s health due to their high sugar content, Pepsi tries to provide several nutritious and healthier alternatives for the expanding nutritions market The company introduced Aqua Minerale water and juice, a healthy drink with more flavors for its Kevita Master Brew Kambocha brand and Tropicana Probiotics Moreover, they also develop TIEU LUAN MOI download : skknchat123@gmail.com moi nhat several flavors of drinks with customer tastes and preferences in mind - For example, to capture the market share of Latin community, Pepsi launched a whole grain oats-based food item called Three Minutos a/ Valuation Mistakes: To complete an M&A transaction, a significant amount of information needs to be exchanged If the original information was inaccurate or could not be supported by market-based data, it would likely change the original offer The investment in the assets may look good on paper, but practically they may not be the revenue-generating areas after the closure of the deal When the original terms are not properly valuated, the company can pay an inaccurate bidding price for the target, making it less controllable 2/ Intergration time Several deal makers were unable to lessen the time of uncertainty for their workers, customers, and suppliers throughout the M&A processcompare to sucessful ones Since acquiring a firm normally necessitates big investments, the company's owners and management want to see a speedy return on investment The prolong integration could inflate the expense of the integration process and make it impossible for the organization to expedite the return on investment.However, too quick an integration is not good either - as the company may take incorrect or uninformed decisions and overlooked important aspect TIEU LUAN MOI download : skknchat123@gmail.com moi nhat 3/ Culture Management Cultural differences are one of the reasons why almost two-thirds of M&A failed Part of the problem is when integrating companies are in the same or similar businesses, their top executives tend to assume they are “similar” and dismiss the need for deep cultural analysis TIEU LUAN MOI download : skknchat123@gmail.com moi nhat Businesses tends to neglect culture-related issues or address them late and inadequately, or worse, unaware of the problem since everyone pays lip services to the agreed-upon new methods This research graphic below shows how pervasive the problem is from the perspective of executives involved in mergers 4/ Synergies There is a significant difference in the degrees of synergy attainment between successful and failed deal-makers: although 83 percent of successful deal makers can meet their synergy goals, fewer than half of failed deal makers can TIEU LUAN MOI download : skknchat123@gmail.com moi nhat 10 - Companies struggle to obtain M&A synergies for three main reasons First, corporations prioritize capturing short-term financial synergies over taking a holistic approach By narrowing the scope, they frequently miss many "hidden" synergies and fail to build high-performing supply chains with strong long-term potential that give sustained value to consumers and stakeholders Second, during M&A due diligence, corporations may miss the two companies' overall business and operational "compatibility," resulting in operational synergies that are out of sync with market needs Finally, businesses vastly underestimate the complexity, resources, and managerial focus required to carry out a successful integration and realize anticipated benefits 5/ Straying too far M&A that takes the acquirer beyond its core line of business is more likely to fail, and crossborder M&A had a higher likelihood of failure than those within the same country There are 75% of deals failed when expanding into a new industry through acquisition This is due to some company models are just not as relevant in various regions of the world, or the acquirer's competitive capabilities may not be applicable to the new industry TIEU LUAN MOI download : skknchat123@gmail.com moi nhat 11 6/ Lacking of project governance Almost all sucessful acquisation applied this method, while it’s muchh less common among failed businesses As the PMI requires a lot of time, resources and effort, companies need welldefined project governance to assign accountability, define functional authority and focus resource and capital better and more efficiently However, failed deal makers tend to neglect the comlexity of this process and lack the necessary skills to deal with the transformation issues, which leads to failed acquisition 2.b/ Volvo is a Swedish multinational manufacturing conglomerate with its headquarters in Gothenburg While Renault is a French car manufacturer founded in 1898 by Louis Renault and his brothers The two companies developed a good partnership over time and eventually becoming alliance partners in 1990 The Volvo-Renault strategic partnership was "one of the largest and most notable agreements in Europe, creating a formidable world-class rival" Despite TIEU LUAN MOI download : skknchat123@gmail.com moi nhat 12 its enormous success, the collaboration only lasted three years, dissolving in 1993 The merger between Renault and Volvo was unsuccessful due to both cultural and synergies aspects Cultural aspects: The most significant issue was a clash of cultures, as each firm has its own culture and way of doing things The French and Swedes, in particular, had opposing views on their respective government roles, power distance, working style, and language To begin with, the government's weight and role are different in France and Sweden; in France, government control over industry was quite strong, while in Sweden it was very weak Second, there are variances in power distances because Volvo's structure was decentralized and there was a balance between the different powers, whereas Renault's distance power is quite high and so the structure was very centralized Furthermore, the Swedish work culture is more grouporiented, whereas the French are more individualistic Finally, there is a lack of cooperation among white-collar workers They have distinct beliefs about job handling and product development, which caused communication issues In fact, some newspapers stated that Renault's personnel spoke in French during some confrontations, and Swedish saw this as a manner of excluding them It is critical for organizations working together to be able to communicate and understand each other's intentions Poor communication makes it difficult for these businesses to resolve misunderstandings and problems caused by diverse cultures The failure of Renault and Volvo is a clear example of how culture plays a vital part in the development of alliance relationships; it is necessary to achieve integration, balance, and a compromise between the cultures of different enterprises involved in a strategic alliance 2/ Synergies problem: - Power conflict: Although the alliance was first promised to be an equal partnership, it quickly turned into more of a takeover due to the French Golden Share regulation The merge would have left Volve shareholder with a 35% stake in the combine company while the French government control the remaining This had led to an unfair balance of power between the two firms, advantage for Renault and no gains for Volvo’s shareholders - Management problem: Renault and Volvo have different organizational structure While Volvo is a decentralized management structure which is able to respond faster and share information; TIEU LUAN MOI download : skknchat123@gmail.com moi nhat 13 Renault has a centralized structure which is greatest control by top management This difference in management styles will cause delay the decision making in the strategic alliance Moreover, there is a lack of trust in the management team, as both companies worry about losing strategic control over the alliance rather than working towards the partnership's common goals * Appendix - Lasserre, Philippe, Global Strategic Management the fourth edition (2018) - Ellen Shi, Failed Collaboration : Volvo and Renault: The Attempted Merge (2021), retrieved August 10, 2021 from https://www.studocu.com/en-ca/document/university-ofmanitoba/introduction-to-organizational-behaviour/failed-collaboration-gmgt-2070-project/ 18624688 - Shelly Lu, Reasons M&A Deals Fail (2018), retrieved 13th February, 2018 from https://www.securedocs.com/blog/6-reasons-m-a-deals-fail - PwC’s M&A Integration Survey Report, Success factors in post-merger integration (2017) retrieved from https://www.pwc.de/de/deals/success-factors-in-post-merger-integration.pdf th - Bernadine Racoma, How Pepsi adapts around the world (2019) retrieved 18 July 2019 from https://www.daytranslations.com/blog/how-pepsi-expands/ - Deloitte Consulting LLP, Mergers and Acquisitions Operational Synergies (2013) retrieved from https://www2.deloitte.com/content/dam/Deloitte/us/Documents/manufacturing/us-manauto-maoperationalsynergiespov-part1-110713.pdf - Sandeep Pitrola, Analysing The Complexities Of Pepsico’s Operations in the global environment (2017) retrieved from https://www.academia.edu/36359790/ANALYSING_THE_COMPLEXITIES_OF_PEPSICOS_ OPERATIONS_IN_THE_GLOBAL_ENVIRONMENT - Margherita Russo,Strategic Alliances in Global Markets (2017), Retrieved from https://boa.unimib.it/retrieve/handle/10281/153661/218692/phd_unimib_759771.pdf TIEU LUAN MOI download : skknchat123@gmail.com moi nhat ... 1…………………………………………………………………………………… a Critically present your understading about global positioning ……………………4 Choices of countries……………………………………………………………………4 Value proposition………………………………………………………………………4 b Analyse global positioning. .. companies worry about losing strategic control over the alliance rather than working towards the partnership's common goals * Appendix - Lasserre, Philippe, Global Strategic Management the fourth... greatest control by top management This difference in management styles will cause delay the decision making in the strategic alliance Moreover, there is a lack of trust in the management team, as