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MKT 550 - GLOBALIZATION AND BUSINESS STRATEGY TAKE- HOME FINAL EXAM DUE DATE: 03.06.2020, 9:00 A.M. THE QUESTIONS IN THIS EXAM ARE DIVIDED INTO FOUR GROUPS. YOU ARE ASKED TO CHOOSE THREE OF THESE GROUPS AND ANSWER THE QUESTIONS WITHIN EACH OF THEM. EACH GROUP IS WORTH 35 POINTS. NOT MORE THAN 4 PAGES. GROUP 1: Dunkin' Donuts Dunkin' Brands - www.dunkinbrands.com - runs a chain of quick service restaurant companies. The company is split into three business segments: Dunkin' Donuts, Baskin-Robbins and Togo's. Retail outlets are operated in a franchise format either through operating agreement, license agreement or joint venture. Dunkin' Donuts (www.DunkinDonuts.com) claims to be the world's largest coffee and baked goods chain, serving 2.7 million customers per day at approximately 8800 stores in 31 countries that include approximately 6,400 Dunkin' Donuts locations throughout the United States. This figure compares with the 15,011 stores of coffee chain Starbucks, whose baked goods are usually prepared out of shop. Most Dunkin' Donuts stores are franchises. Dunkin' Donuts' most significant presence overseas is in the Philippines, Indonesia, South Korea and Thailand. Dunkin' Donuts' international locations are mainly concentrated in Asia-Pacific and Latin America. Founded in 1950 in Quincy, Massachusetts, by William Rosenberg, Dunkin' Donuts became famous for their varieties of donuts and the wide range of bakery products - muffins, bagels and donut hole treats. Dunkin' Donuts is also the place for beverages - from freshly brewed hot coffee in up to nine flavors, to refreshing iced coffee and chocolate beverages. Dunkin' Donuts has seen a revival since 2003 as a result of new product innovation, as well as the addition of breakfast sandwiches. While the company is included in the bakery segment, which is more mature, it also competes with the stronger growing coffee specialist segment. As a result, Dunkin' Donuts has expanded the variety of its menu, including the launch of a new smoothie yoghurt drink, backed by heavy advertising. Dunkin' Donuts has large expansion plans, expecting to grow by 15,000 outlets by 2015 in an attempt to be more competitive with coffee specialist chain Starbucks by having more conveniently and ubiquitously located outlets. In 2006, Dunkin' Brands, Inc. was purchased by a group of investors: Bain Capital LLC, the Carlyle Group and Thomas H. Lee Partners, L.P. from Pernod Ricard, South Africa, following Pernod's acquisition of Allied Domecq PLC, Dunkin' Brands' former parent company. Dunkin' Donuts has many strengths: quality and freshness, flavour and variety, good value, convenient locations and strong brand presence. However, the company has to deal with powerful, new competitors, including Starbucks and Krispy Kreme. Dunkin' Donuts continues to be a major brand with $5.5 billion in sales (2008). Success is attributed to extensive market research conducted before a product is launched. Additionally, corporate training enforces the company standards to deliver a consistent product year after year and across all restaurants and franchises. Dunkin' Donuts does not target one customer segment; rather, it reaches across all demographic strata. Its promotional campaigns and diversity of locations support this strategy. To meet market demand, the company is expanding into the coffee market by offering specialty coffee drinks in addition to its standard drip coffee. But Dunkin' Donuts will not deviate from its original product offering and continues to offer the consumer quality, convenience and variety. QUESTIONS: 1. (10 POINTS) Dunkin' Donuts wants to get a better market position in Europe, and set up a meeting in London with potential franchisees from different European countries in order to negotiate franchising deals that could provide a higher growth in this region. What potential dangers should the US negotiator be aware of in this kind of cross-national negotiation? 2. (10 POINTS) What is Dunkin' Donuts' value perception and positioning strategy? 3. (15 POINTS) How has Dunkin' Donuts responded to competitive changes in the global marketplace? GROUP 2: Zalando - how can the online apparel retailer turn financial losses into positive profits? www.zalando.com I. Synopsis Zalando is an online provider of shoes and fashion items. The company offers a variety of products for women, men and children with over 1,500 international brands. It also provides a combination of services including delivery and returns, a service helpline and a returns policy of up to 100 days. The company operates in Sweden, Belgium, the Netherlands, Switzerland, Spain, Austria, Denmark, Finland, Luxembourg, Italy, France, the UK, Poland and Norway. It is headquartered in Berlin, Germany, and employs around 7,500 people. II. Situational analysis (SWOT analysis) Strengths: Weaknesses: - Supply chain management competence - Costs are still on a relatively high level (because - High number of different products of free return/high return rate) - High degree of value creation for customers - Net profit margin is lowegative (free return, etc.) - Relatively high brand awareness - Focus on the European market Opportunities: Threats: - Get more market share from online fashion - The online fashion industry is fragmented and - Get more market share of the off-line apparel characterized by intense competition sales - Some of Zalando's current and potential future competitors have longer operating histories, a larger customer base and wider reach or better economies of scale than them QUESTIONS: 1. (10 POINTS) Compare and evaluate Zalando's and Asos' key competitive advantages and strategies in the world online apparel market. 2. (10 POINTS) Discuss and evaluate the screening criteria that you would you use for Zalando's selection of new markets outside its current 14 countries. End up with a ranking list of the three most attractive countries. 3. (15 POINTS) Discuss and evaluate the pros and cons for Anders Holch Andersen and Bestseller, regarding the investments in Zalando and Asos. GROUP 3: Tetra Pak - how to create B2B relationships with the food industry on a global level www.tetrapak.com I. Synopsis Tetra Pak is a leading manufacturer and supplier of carton packaging for milk, fruit juice and drinks. The company primarily operates in Europe, Asia and the United States. Tetra Pak delivers packaging products and solutions in more than 170 countries around the world. It operates over 40 production plants and nine machine assembly plants. The company offers products in five categories: packages, processing equipment, filling machines, distribution equipment and service products. The packaging products include a range of liquid as well as food packaging products. Tetra Pak offers these products under Tetra Brik, Tetra Classic, Tetra Fino, Tetra Gemina, Tetra Prisma, Tetra Recart, Tetra Rex, Tetra Top, and Tetra Wedge brands. In addition, the company also offers different varieties of drinking straws. Tetra Pak provides packaging solutions for dairy, cheese, ice cream, beverages and prepared food. The company also develops, produces and markets distribution equipment, such as accumulators, cap applicators, cardboard packers, conveyors, crate packers, film wrappers, line controllers and roll container packers. The service products portfolio provides automation services, environmental services, improvement services, installation services, maintenance services, parts and logistics services, quality management services, remote services and training services. II. Situational analysis (SWOT analysis) Strengths: - World market leader in packaging solutions: The company delivers packaging products and solutions to more than 170 countries around the world. - Strong portfolio of pioneering innovative products: Tetra Pak has been in the forefront of innovations related to packaging. The company is the pioneer in the area of aseptic processing liquid food packaging. It also developed the world's first aseptic carton bottle for white milk. It is a bottled-shaped package made from renewable paper board with an injection-moulded top. The company owns more than 5,100 individual patents for the packaging and processing of liquid and semi-liquid food. - Global footprint enabling to reach diverse markets: Tetra Pak's operations are geographically diversified. The company's global focus provides exposure to a broader range of growth opportunities and the flexibility to expand operations in fast-growing regions. Weaknesses: - Overdependence on packaging solutions segment: Although Tetra Pak offers a range of processing solutions like processing equipment, filling machines, distribution equipment and service products; it depends on the packaging solutions segment for the majority of its revenues. Opportunities: - New product launches could help Tetra Pak sustain its world leadership position: For example, in 2012 Tetra Pak launched the next-generation of Cheddar cheese block-forming unit. The new Tetra Tebel Blockformer enables cheese manufacturers to improve environmental performance, reduce costs and minimize product loss. New product launches would help the company to increase its brand image by driving end-market demand and topline and bottom-line growth - Tetra Pak expansion in China and India could tap growth opportunities in booming dairy markets. - Tetra Pak forecasts a growth of about 30 per cent in global consumption of milk and other dairy liquid products from 2010 to 2020. This provides more sales for Tetra Pak's packaging filling systems. In developing countries the emergence of middle-class, urbanization and the expansion of modern shopping habits by busy, health-conscious and well-informed consumers are raising the consumption of packaged milk. Threats: - Intense competition could lower Tetra Pak margins: Tetra Pak primarily competes with companies such as, Rexam, International Paper Company, Smurfit-Stone Container Corporation, Bemis Company, Caraustar Industries, Graphic Packaging and others. The company competes on the basis of price, quality, delivery, technology and innovation. Besides, the company competes worldwide with a number of other manufacturers and distributors that produce and sell similar products. QUESTIONS: 1. (15 POINTS) Which 'P' of the marketing mix should Tetra Pak concentrate on in the development of its global marketing plan? 2. (20 POINTS ) Would it be relevant for Tetra Pak to work with Global Account Management (GAM)? If yes, how should it be organized and which organizational set-up should Tetra Pak make use of? GROUP 4: Will coronavirus reverse globalisation? (April 2020) By Jonty Bloom https://www.bbc.comews/business-52104978 Globalisation has been one of the buzzwords of the past 25 years. It may seem a rather strange concept, since any economic historian will tell you that people have been trading across vast distances for centuries, if not millennia. You only have to look at the medieval spice trade, or the East India Company, to know that. But globalisation is really about the scale and speed of international business, which has exploded in the past few decades to unprecedented levels. Easier travel, the world wide web, the end of the Cold War, trade deals, and new, rapidly developing economies, have all combined to create a system that is much more dependent now on what is happening on the other side of the world than it ever was. Which is why the spread of coronavirus, or Covid-19 to be specific, has had such an immediate economic effect. Professor Beata Javorcik, chief economist at the European Bank for Reconstruction and Development, says that the pace of change in the global economy over just the past 17 years has been profound. "When we look back at 2003, at the Sars epidemic, China accounted for 4% of global output," she says. "Now China accounts for four times as much, 16%. So that means that whatever is happening in China affects the world to a much larger extent." Globalisation helps to explain while nearly every major car plant in the UK has shut down - they are dependent on sales and components from around the world. When both collapsed, they just stopped making cars. China's wealth and health therefore matter to us all far more than they used to, but this is not just a matter of scale - there is also a deeper problem with globalisation. Ian Goldin, professor of globalisation and development at Oxford University, and author of "The Butterfly Defect, How Globalization Creates Systemic Risks, And What To Do About It", says that "risks have been allowed to fester, they are the underbelly of globalisation". That, he says, can be seen not only in this crisis, but also in the credit crunch and banking crisis of 2008, and the vulnerability of the internet to cyber-attacks. The new global economic system brings huge benefits, but also huge risks. While it has helped raise incomes, rapidly develop economies and lift millions out of poverty; that has come at the increased risk of contagion, be it financial or medical. So what does this latest crisis mean for globalisation? For Prof Richard Portes, professor of economics at London Business School, it seems obvious that things will have to change, because firms and people have now realised what risks they had been taking."Look at trade," he explains. "Once supply chains were disrupted [by coronavirus], people started looking for alternative suppliers at home, even if they were more expensive.\"If people find domestic suppliers, they will stick with them... because of those perceived risks." QUESTION: (35 POINTS) Please read the article above and write an essay discussing the following questions by applying a marketing perspective: - What are the effects of the coronavirus on globalization? - How is this extreme and unexpected situation transforming both consumer behavior and business practices in the global market? - How global marketing managers can both manage the coronavirus crisis and plan for the future? How can they adapt to new emerging changes in consumer behavior? Please do not forget to cite the sources that you use while answering these questions