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Case 1: eBay in Japan: Strategic and Cultural Missteps (Japan)
1. Ebay's Entry Strategies
Ebay used Licensing strategy in which it made its assets available to another company. It might have also used joint venture.
They failed because, it only concentrated on growing and expanding, rather than coming up with a good and sound company. They also overlooked what consumers desired in their products as they were concentrating on growth. They also rushed in cementing their market share and overlooked the problems they were facing, (Prakash & Baharani, 2008).
2. Disadvantages of Not Being The First Mover
They will not have the initial occupants of a market segment; this is because first movers like Ebay gain control of resources that followers will never match. Followers will also get every opportunity has already been utilized by the first mover, (Prakash & Baharani, 2008).
3. Cultural Misunderstandings In This Case
Though being the first mover created overwhelming advantage for Ebay, but in some cases, like this, first products to be introduced to the market never succeed. Therefore, Ebay's products were the victims of the disadvantages of first movers. These disadvantages included; the effects of free riders, the uncertainties of markets or technological resolution, shifts in technology or even changing customer needs, an then lastly incumbent inertia.
4. Current Ebay's Status In Japan
Ebay entered Japan in 2000, after having international ventures that were succeful, however, it could not get enough mileage in the country, hence exited in 2002 from Japan, so by the time am reading this case, Ebay is not in Japan.
Case 2: Alibaba Case Alibaba: Competing in China and Beyond
1. Factors that led to Alibaba sustaining leadership position in China.
Being the first mover in China's market made him enjoy huge opportunities Chinese internet market. By having the biggest IPO in world over, provided enough capital for expansion, hence enjoyed economies of scale. Another factor was the increase in internet usage, hence ready markets. He head already been exposed to internet while still in the U.S, hence much acquitted in the area of internet. His venture acceptance up to US$5 million, increased his capital, and added some expertise in his business. His concentration on SME gave him an advantage as he explored the area fully. The company also retained its employees both in good and bad times, hence gained employee loyalty. It also had very determined aggressive and adaptable leaders, (Bidwai, 2010).
2. factors that led to Taobao's success as compared to Ebay
They include; as compared to Ebay, the launched of Toaboa was on a popular trading site in china, other than Ebay, which was unpopular, this provided it with more advertisements to sell and more members wanted to join, hence received more charges.
The challenges faced by Alibabain running business in China were; the faced the problem of having ambiguous brand and management that was so much diluted. On top of which, Google and Baidu's entrance to the market, resulted to stiff competition. The company also had weak model of revenue, on top of experiencing banks that were not networked. The usage of credit cards was also limited. At the time of entrance, the Chinese government was controlling internet businesses.
3. Alibaba's business model.
The model is sustainable as it targets both developed and developing nations, which may offer untouched markets. It also entails learning the culture of the inhabitants, on top of low costs being incurred
To expand globally, it needs to diversify its services and engage in joint ventures with other companies in the host countries. It needs also to extent its membership to other countries, (Deresky, 1997).
Case 3: ABB CASE ABB: Strategic rise, Decline and Renewal.
1) Factors which caused key areas to go awry and how they affected performance of the business
Asea Brown Boveri (ABB) deals in goods and systems of advanced technology which are industrial, commercial and financial. Percy Barnevik was the chief architect of the company and was also the CEO. It merged in 1987 and Percy Barnevik rose to be the CEO. He mainly aimed at forming a firm that would ensure both a great level integration and national responsiveness of the highest level. He sought to make ABB a $29 billion firm employing 200000 and above workers globally.
He selected 10 managers to manage the matrix structure where almost 60 firms with global presence but with a market nationally and an umbrella of grouped local companies that were 1300 that were established (ABB Ltd, 2010). His ideals were to attain global competitiveness, development of local markets, the geocentric/world global innovation of a process of learning and development, adopt and adapt the strategy of a local market. The main key factor of awry performance was the concentration on the local market and a structure that would not suit the company at the specific time. The numerous employees also had a high cost of production and the challenge of language was also barrier to success.
2) Key strategic initiatives implemented by the various CEOs appointed after Barnevik's tenure.
Other CEOs included Jürgen Dormann; Jörgen Centerman; and Göran Lindahl where in 2001 further acquisitions of companies were done to avoid crumbling (ABB Ltd, 2010). Lindhal fragmented the markets and the product line. This ensured a better catchment and more diversity. The launch of major customer divisions has initiated growth and better customer care measures. ABB has undergone major restructuring and expansion to global markets in Eastern Europe and Asia (ABB Ltd, 2010). The markets were split into three automation and product and contracting. There was also reorganization of the customer focus parts which were utilities, manufacture and consumer, process industries, and oil, gas and petrochemicals (ABB Ltd, 2010). There was also an additional two divisions.
3) Pros And Cons Of Matrix Structures
The pros include; since there is no sole decision made there is comprehensive consultations that help make informed decisions. It is also effective because many firms have a centralized functions that have support globally and regional branches. It works well with firms that are restructuring or new firms. It is also a powerful way to drive change and generally helps customers to find a reliable solution.
The cons it normally creates conflicts and confusion in the firm due to numerous consultations. It has a high cost to implement in an organization and they are sometimes not sustainable due to inefficiencies (ABB Ltd, 2010). They also make companies not adjust to market structures.
The five major restructuring was due to the desire to make new impacts through the use of complex strategies that the company could not handle. There was introduction of other regions and new lines of products instead of specializing and earning a brand name in their market niche.
4) Assessment of ABB's Current Corporate Culture.
ABB's corporate culture has not change much from Percy Barnevik's time though there has been major restricting the matrix remains a key instrument in the organization (ABB Ltd, 2010). The firm has remained numb on major acquisition which makes them loose out on major revival strategies.
5) Comment on these strategic options.
The strategy of ABB seeking small "bolt on" acquisitions to existing product areas rather than via major acquisitions that could take the company into new areas (e.g aerospace) could be a well calculated move to stay afloat this would be good to sell the goodwill of an international company to upcoming companies rather it has wasted their opportunities of making it to the top through large mergers and acquisitions. This move may be well calculated to avoid losing its identity to other large firms.
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