Management and Organizational Studies 4410A/B Lecture Notes - Lecture 3: Joe Fresh, Joint Venture, Franchising

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 4410A/B
• Professor: Raymond Leduc

Document Summary

Week 3 - industry analysis continued + competition. Related diversification similar: pros have information available, information, cons - Unless the industry has strong profit potential, entering it may be very risky. Executives need to be sure that their firm can recoup the expenses that it absorbs in order to diversify: e. g. pharmaceutical very expensive entry costs, legal, r&d, marketing, etc. Unless one side or the other gains a competitive advantage, diversification should be avoided. Pressure for local responsiveness pressure to change product to meet local needs: consumers tastes and preferences, differences in infrastructure or traditional practices, differences in distribution channels, demands of host governments. Pressure for cost reductions: commodity-type product, universal needs of customers, competitors use a low-cost position. International strategy low pressure for cost reduction and low pressure for local responsiveness. Global strategy high pressure for cost reduction, low local responsiveness. Multidomestic strategy low pressure for cost reduction, high local responsiveness. Licensing, exporting, franchising, contract manufacturing, jv/strategic alliances, fdi.