Company Biography
In January of 2002, John Ferrer and his wife Deborah started their own corporation, a large custom furniture
manufacturer located in Boston, MA. Their initial accounts were in the Northeastern region of the United States,
and they annually observed a constant profit increase. By March of 2006, they were able to grow the company
enough to go from five distribution and manufacturing plants to 10 to allow shipping to 48 states. Although they
have two retail stores, one located in Phoenix and one in Boston, their primary source of revenue is online catalog
sales. They have 10 manufacturing plants and distribution centers throughout the country.
John and Deborah’s corporation is known throughout the industry for its exceptional customer service and
superior quality. The contemporary designs lend themselves to a younger market, and the customer base is
predominantly upper-middle class because it is one of the highest priced furniture companies in the market. Part
of the appeal of John and Deborah’s brand is their consistent involvement with the local communities to create
green gardens. They have also been a major contributor to organizations that build houses for people in need.
One of their primary strengths is their vertical integration. They have a team of in-house designers saving the
company design costs and allowing the flexibility to rapidly change designs as the market changes. Their products
have been featured on several prominent home design and gardening shows and have been endorsed by several
well-known designers.
Because of the recent housing market sales decline (8% from 2005–2006), home renovations have slowed
significantly. This has impacted the amount of furniture and fixture sales and continues to impact revenue.
Furniture sales in the United States have decreased significantly, and John and Deborah have recently been
discussing the possibility of global expansion.
Another potential threat to their company is that many higher-end brands have been marketing aggressively and
creating lines for popular retail stores. These allow the lower-income consumers to have access to high-end brands
at a much lower price point. So far, these lines have been incredibly successful and have significantly increased
profits for competitors. Many of these competitors have also had great success in the global marketplace with
these lower cost replicas.
John and Deborah know that it is time to seriously consider expanding their business. They want to be able to
make it through the economic crisis and rely on other ways to increase sales and business. They are open to
looking into the global market, but they want to be sure that it is the right move for the business. They have
requested an advisory board meeting next month in which you will present the global marketing strategy. As the
market strategist, you will play a key role in helping the board decide if this is the right move for the company.
The Problem
You are sitting in Deborah Ferrer’s office. After the customary small talk, Deborah sits forward and states, “I am
very impressed with the work that you have done as the strategic marketing manager. Since John and I started this
company in Boston, we have seen continuous growth, but nothing like what we have seen since you started.
However, the housing market is really starting to impact our profits. This last quarter’s numbers were not looking
good.”
You reply, “The crisis has really hit us hard. We have some stiff competition, too, with the other brands creating
retail knock-offs.”
She counters, “We’ve had great success with your strategies in the domestic markets, but we do need to think of a
new approach and strategy. I have complete faith in your abilities to take this company exactly where it needs to
go. I must say that we are really counting on you, and I know that you will follow through.”
“I will make sure that we do well. Do you have any new projects for me?” you ask.
Deborah smiles and says, “You know me well. I do have a new project for you. I sent you an e-mail just before our
meeting. I’m curious if expanding in a global market would be a good move for our company. I would like you to
look into this for me.”
“Our team is definitely up for the challenge,” you say with enthusiasm.
Deborah shakes hands with you warmly, and you make your way out of the meeting. As you drive out of the
parking garage, you think about your success with the company. You cannot wait to get started.
Emerging Global Marketplace
Introduction
A global strategy is the organization’s strategic guide that ensures revenue acquisition is
not limited to state borders to influence globalization. The global strategy is required to help the
company make more sales by attracting customers and offsetting the domestic downturn
(Cuervocazurra 3). Deborah as the CEO of Wal-Mart should support a global strategy to ensure
global marketing perspectives are reviewed by Tiffany before global marketing plan is
developed. Tiffany should also identify foreign countries where multinational companies have
supported a global strategy in its business operations. All research by Tiffany and Deborah
should reveal the aspects of global business strategy, which include the adoption of global
ambition, global positioning and global business system. Therefore, the paper discusses how
business growth has been influenced by the emerging global marketplace.
Global Strategy
A global strategy determines the ambitions, positioning and business system that a
business company use to explore different international markets. Global ambition prioritizes the
significance of a region where a business company is established. The global positioning
analyzes the customer segments used to determine the volume of purchased commodities. Also,
the global business system incorporates HRM to ensure there is an increase in the company’s
profitability. According to Mària (6) global strategy and multi-domestic strategy are used by
organizations in an attempt to realize full local responsiveness through marketing strategy and
product offering customization to align to different national circumstances. Both global strategy
and multi-domestic strategy provided ideas and essential elements for the invention of a
transactional strategy (Cuervocazurra 5). However, a global strategy when used by a business
company in new counties ensures only minor modifications are made to products and services in
the market. When the multi-domestic strategy is used, all market business units are changed with
products to ensure they are the same with host state.
Countries for Globalization
Globalization involves the integration of companies, people and governments with the
help of technology. Globalization improves communication and develops industries. Nigeria,
India and the Democratic Republic of Congo are countries that need globalization. Globalization
will improve efficiency in conducting business operations and improve the furniture industry in
DRC (Mària 8). India has a variety of hardwood trees used at the furniture industry to attract
foreign revenue after furniture products are exported. In addition, Nigeria and DRC have a
variety of softwood trees and hardwood trees, which are used as electrical posts and for
developing furniture industry. Development of the furniture industry is disadvantageous in
countries that need globalization since most of the plants that attracted rainfall have been cut
down. A global strategy should not influence environmental degradation through cutting down of
trees but regulate exploitative operations of furniture industries.
Country to Choose
The democratic republic of Congo is the best country where a global strategy can be
applied to ensure the furniture industry is revolutionized so that products can increase demand in
international market. DRC is in the tropical region and the landscape is covered by plenty of
trees. Trees easily grow in Congo and cutting more trees for industrial use is beneficial to the
furniture industry (Mària 10). DRC is a country with natural forests and anyone opposing my
idea of integrating a global strategy to use excess trees for furniture industry would agree DRC is
a forested country that rarely experience drought.
Recommendations
There is a need to benchmark developed companies like 50 pharmaceutical Company for
entrepreneurs to make better preparation regarding global expansion. Entrepreneurs should
conduct a benchmark exercise in US governmental agencies that understand the impact of global
expansion to business operations (Rynarzewska 5).However, business employees should be
committed to their operations to ensure they register remarkable progress in business before
undergoing benchmarking.
Works Cited
Cuervocazurra, Alvaro. "Global strategy and global business environment: the direct and
indirect influences of the home country on a firm's global strategy." Global Strategy
Journal, vol. 1, no. 3-4, 2011, pp. 2-8.
Mària. "Responsible Leaders for Inclusive Globalization: Cases in Nicaragua and the
Democratic Republic of the Congo." Journal of Business Ethics, vol. 93, no. S1, 2010,
pp. 3-11.
Rynarzewska, Ania . "Emerging Markets: Service Quality Versus Value in Russia." The
Sustainable Global Marketplace, 2014, pp. 2-7.
Worked Case Example: Implementing a Global Strategy
When Katie was invited to an operations meeting a few months ago, she was
excited. Katie had just found out that she would lead a global strategy to
expand her eyewear company into the Asia Pacific region. She remembered
her experience from more than a year ago when she was the associate
director of operations, opening a new plant in Latin America. Although the
plant had been busy, working two shifts daily, sales were sluggish, and the
business development team had been researching new global locations for
another plant to stabilize and increase company sales in the long-term.
The company's headquarters are located in the United States in Minneapolis,
MN. It is a 60-year-old manufacturer of contact lenses and eye care products.
During the past decade, Katie's company had implemented a global strategy
that included some centralized control related to product development, but
decentralized control with local decision making in each country’s local
market. The overriding advantage of this strategy is cost efficiencies and
faster product development.
As the meeting to discuss the opening of the new plant began, Katie’s
supervisor, Jane, the president of worldwide operations, announced the time
line for opening a new plant in Hangzhou, China. Ultimately, it would take
about 18 months for operations to begin for the plant in this region. In this
brainstorming session, Jane set out the corporate and global objectives at the
business level as follows:
1. Operations currently being conducted in the Dallas, TX facility will be
moved within the next year to Hangzhou.
2. Employees in Texas will be offered a relocation package to move to
China as trainers.
3. U.S. managers from the Operations department in the California and
New York offices will be offered a relocation package to begin
recruiting local employees from the surrounding towns and in
Hangzhou.
4. Effective today, the strategy officially begins.
Jane displayed a slide on the screen that recounted the success of the Latin
America global strategy implementation and some of the initiatives that she
wanted to follow for China, along with some of the failings that needed to be
reworked.
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Worked Case Example: Implementing a Global Strategy
The list on the slide was as follows:
Proposed Global Implementation Strategy for
Implementation
Latin America
Strategy
Implementation
Strategies to Keep
Preplanning phase
U.S. general counsel
related to laws, taxes
researched and
and financial
presented legal and
implications of doing
economic uncontrollable
business in Latin
variables to board in
America
advance.
On-site management
The operations team
of plant with local
moved from U.S. offices
communities and
as an advance party 6
government
months in advance of
groundbreaking.
Plant purchasing
decisions
Human resources
decisions
The on-site manager had
carte-blanche on major
purchasing decisions
once they were
communicated and
approved by corporate
office and executive
management.
The human resources
department partnered
with the team for early
prospecting of employee
recruitment.
Hangzhou, China Plant
Latin America
Implementation
Strategies to Rework
Improve understanding
of all laws, taxes and
financial implications of
doing business in Latin
America region.
Choose a local partner
earlier in the process to
help the U.S.
management team
understand the culture,
language, and
subcultures.
Consider delays in
purchasing construction
materials based on
travel time, inventory
availability, and worker
attitudes based on local
culture relative to fulltime work weeks.
Implement recruitment
marketing earlier in the
process.
This slide was all-telling because it reminded the team of the overall success
of implementing the global expansion strategy in Latin America, but there
were several important benchmarks that needed advance attention to make
the China plant’s implementation successful. Next, Jane displayed a “Lessons
Learned” summary slide, as follows:
In summary, the potential for success included the various teams in the
United States communicating regularly with the team in Latin America. The
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Worked Case Example: Implementing a Global Strategy
potential for failure is a cause for concern in China based on some of the
weak links related to understanding the local culture and adjusting the time
line to a more polycentric attitude, meaning that the team adjusts to the
uniqueness of the local culture. During the Latin America implementation,
some of the U.S. team members displayed an ethnocentric way of doing
business, meaning they did not consider the local cultural nuances and
proceeded with the plan based on their own domestic culture.
Jane moved to the next slide, showing notes on competitive advantage. She
asked Katie to update the team on the strengths, weaknesses, opportunities,
and threats (SWOT) analysis that was conducted.
“The marketing and business development teams have conducted massive
research on why our company should move operations into China,” explained
Katie. “The primary tool to determine if China is a viable endeavor is a SWOT
analysis.” Katie's SWOT analysis is as follows:
SWOT Analysis of Hangzhou, China
Strengths
Weaknesses
Few lens and eye care
More customers in this
providers are directly
region wear eyeglasses
located in the Asia Pacific
over contact lenses.
region.
Internet shopping allows
More customers are
customer convenience
considering contact lenses.
when refilling product.
Opportunities
There is potential for
expansion of eye care
product line for both
surgery recipients and
eyeglass wearers.
Expand product offerings
through online and
partnership channels.
Threats
There is an emerging trend
to consider corrective
surgery, eliminating the
need for contact lenses
More Internet companies
eliminate the need for a
physical plant.
“Surprisingly,” explained Katie, pointing at the slide, “based on the SWOT
analysis, we determined that there is potential to start a partnership with
over-the-counter drug and eyeglass and eye care companies to promote our
products online. We identified this as a growth opportunity that can most
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Worked Case Example: Implementing a Global Strategy
likely yield at least $1 million in revenue during the first two years of opening
the plant.”
In implementing a global strategy in China, Katie's company was considering
economic viability based on its three Es of operations in China, as follows:
Economies of scale in producing lens care products for the entire
Pacific Region
Efficiencies in using China’s resources and labor
Extending the product life cycle of older products by recasting them
for the Asia Pacific markets for first-mover advantage in these
emerging markets
Finally, Jane displayed the last slide. Another tool that the company used to
test the market was a political, economic, social, and technological (PEST)
analysis. A PEST analysis allowed the company to examine the external
macroenvironment where the company will be operating, as follows:
PEST Analysis of Potential Plant Operations in Hangzhou, China
Political
Political stability
Factors
Environmental regulations
Trade restrictions and tariffs
Economic
Factors
Potential for growth is excellent
Low interest and exchange rates
Social
Factors
Growing population
Age of target customers are primarily eyeglass
and lens care wearers
Locals citizens want to work for the plant
Technological
Factors
Research and development (R&D) activity is
robust
Automation is innovative and aligned with
United States
The political factors were examined regarding government policies and legal
issues that the company must abide by in all plant operations. Employment
laws were defined and addressed by the human resources department.
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Worked Case Example: Implementing a Global Strategy
Currently, the political situation in China is stable, but it will constantly be
monitored by the company in China, and U.S. teams will try to anticipate any
impacts on business. Economically, China is a good base of operations
because of the potential growth and return on investments for stakeholders.
Monetary interest and exchange rates are low. Social factors show that the
population is growing, so the potential for new customers in the Asia Pacific
region is huge. Also, from the population, there is no shortage from the local
citizenry who will want to work at the China plant. Technology is innovative in
China and aligned with the United States for constant updates and changes to
technology for increased production and efficiencies. Combined with the
SWOT competitive analysis, the PEST analysis found that China has the
potential for success in expanding and implementing the global strategy for
the company.
In conclusion, Katie realized this was a challenging and rewarding leadership
role. She will also design a 5-year vision plan about how the company will
benefit from the plant operations in China related to a return on investments
of stockholders with new products targeted at eyeglass and lens care wearers
in this region and around the globe. The activities in the plant will constantly
be monitored, and the business development team will continue to look for
new opportunities to fill this focused, niche market. The product development
team will also look at trends in eye care and how new products can continue
to deliver products the global customer wants and needs.
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