Global vs Local
Competitive strategies: Global vs. local
© Professor Daniel F. Spulber
Global competitive strategies The G5 Platform strategy Network Strategy Intermediary strategy Entrepreneur strategy Investment strategy
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Global competitive strategies
• Home, supplier, partner, and customer countries of competitors – differences as sources of competitive advantage • Differences in global value connection • Differences in products, brand, technology • Differences in impacts of political, legal and regulatory climate – trade agreements, home country policies Design global competitive strategies for competitive advantage
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Global competitive strategies
Competitive advantage must be relative to both global and local competitors: Unilever in US: Breyers, Nestlé in US: Dreyers Ben and Jerry’s, Good Humor, Klondike, Popsicle
The great ice cream battle
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UNILEVER in India – Kwality Wall Hindustan Lever faces successful local competitor • Gujarat Cooperative Milk Marketing Federation (GCMMF): India's largest food products marketing organization. • Two million farmers in the cooperative • Slogan: “A taste of India” • PRICE: 10 rupees (20 cents): 100 milliliter Amul ice cream versus 80 milliliter Hindustan Lever Kwality Wall vanilla ice cream • ADVERTISING COSTS: Amul: 1% of sales versus Hindustan Lever: 10-15% of sales on advertising
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Umbrella brands: Nestlé products in the supermarket. Some products carry both global brand and local brand.
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Global platform strategy The global challenge Global market size: standardization Local differentiation: customization
Strategy: Determine best combination of global and local activities for competitive advantage
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Global platform strategy
Forces calling for global products (standardization): • Convergence in customer preferences and income across target countries with economic development and trade • Competition from successful global products • International brand awareness • Cost benefits from
© Professor Daniel F. Spulber
Global competitive strategies The G5 Platform strategy Network Strategy Intermediary strategy Entrepreneur strategy Investment strategy
2
Global competitive strategies
• Home, supplier, partner, and customer countries of competitors – differences as sources of competitive advantage • Differences in global value connection • Differences in products, brand, technology • Differences in impacts of political, legal and regulatory climate – trade agreements, home country policies Design global competitive strategies for competitive advantage
3
Global competitive strategies
Competitive advantage must be relative to both global and local competitors: Unilever in US: Breyers, Nestlé in US: Dreyers Ben and Jerry’s, Good Humor, Klondike, Popsicle
The great ice cream battle
4
UNILEVER in India – Kwality Wall Hindustan Lever faces successful local competitor • Gujarat Cooperative Milk Marketing Federation (GCMMF): India's largest food products marketing organization. • Two million farmers in the cooperative • Slogan: “A taste of India” • PRICE: 10 rupees (20 cents): 100 milliliter Amul ice cream versus 80 milliliter Hindustan Lever Kwality Wall vanilla ice cream • ADVERTISING COSTS: Amul: 1% of sales versus Hindustan Lever: 10-15% of sales on advertising
5
Umbrella brands: Nestlé products in the supermarket. Some products carry both global brand and local brand.
6
Global platform strategy The global challenge Global market size: standardization Local differentiation: customization
Strategy: Determine best combination of global and local activities for competitive advantage
7
Global platform strategy
Forces calling for global products (standardization): • Convergence in customer preferences and income across target countries with economic development and trade • Competition from successful global products • International brand awareness • Cost benefits from