Case Studies 1

SUPPLY CHAIN MANAGEMENT WEEK 4-LECTURE 1

CHAPTER 7

DR. ISMAIL CIVELEK

MAKING GLOBAL COMPETITIVE MOVES • Apple vs Microsoft

• McDonald’s vs Burger King

• McDonald’s vs Starbucks

• Coca Cola vs Pepsi

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GLOBAL COMPETITIVE MOVES

• Cross-area subsidization within the same business

• Use of counterparties in countries or regions

• Globally coordinated sequence of moves

• Targeting of actual and potential global competitors

• Developing plans for each competitor

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GLOBAL COMPETITIVE MOVES

• Cross-area subsidization is using profits from one country or region in which a business participates to subsidize competitive actions in another country or region.

• The global strategy levers can provide a worldwide platform of competitive advantage.

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GLOBAL COMPETITIVE MOVES

• Counterparty is a special case of cross-subsidization in which an attack by a competitor in one country or region is countered by a response in another.

• Such a counterparty has the intention of retaliating where the competitor can be hurt most.

• For example, a business attacked in its home country retaliates in the home country of the attacker.

• Coca-Cola and Pepsi have used this global strategy lever in their worldwide competition.

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GLOBAL COMPETITIVE MOVES

• Globally integrated competitive strategy also requires that competitive moves, such as price changes and the introduction of new products or programs, be coordinated across countries or regions in their timing.

• Actual and potential global competitors need to be identified and a worldwide competitive strategy developed for each one.

• The strengths and weaknesses of each targeted competitor need to be analyzed.

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GLOBAL COMPETITIVE MOVES IN SERVICE INDUSTRY

• Coordination can be easier for those service businesses that reproduce a strong core formula around the world (such as franchising hotels and restaurants).

• Coordination can also pose a challenge in such cases when ownership is dispersed (as in franchising).

• Coordination may also be less necessary where both production and consumption occur locally, and central support plays a minor role.

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SPEED OF GLOBALIZATION

• Successful global companies transfer their competitive advantages quickly and effectively around the world.

• Timely global transfer of critical capabilities and advantages is probably the single biggest factor in the success of overseas subsidiaries and hence the overall global strategy.

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