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11 Cards in this Set
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High Fashion Fights Recession |
Demonstrates the crippling effect to high end brands post recession (2008) - High end brands traditionally do not provide discounts, coupons or price wars - Key issue was managing rivalry among competitors and manage customers - Of 5 forces threat of substitutes relatively insignificant - Dominated by big 3: LVMH, Gucci group, Burberry - Many firms quietly cut prices, apart from LVMH which "gained a market share in the crises" - their sales grew from $24B in 2008 to $29B in 2011 - Most firms prev targeted "aspirational" customers to fund their growth which decreased post recession - Customers - aspirational, recession, economically depressed - Move from Japan as target market to developing economies such as China ( and BRIC countries) |
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Emerging Markets: From Copycats to Innovators |
Issue of emerging MNCS (eg Acer, Foxconn, Tata) copying innovative strategies from western MNC's and gaining advantage in developing economies - In West Copying is a negative connotation and stems lack of creativity; in the East being a copycat is indicative of a conscientious student who mirror's the masters moves. - Western firms relying on innovative edge e.g. "Ownership Advantage" - Key capabilities of emerging MNC's is their learning abilities. - Idea of "reverse innovations" - developing new products & services in emerging economies |
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Areas of Innovation for Emerging Multinationals: |
1) Dramatic cost & price reductions that open the vast potential of base-of-the-pyramid markets; e.g. Tata Nano Car 2) Leapfrog to latest technologies due to their lack of financial & psychological attachments to legacy technologies; e.g. China's BYD battery maker 3) Frugal innovations that may have a ready market among poor people in developed economies |
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Case Discussion Questions: High Fashion Fights Recession |
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1) Using the five forces framework, how would you characterise the competition in the luxury goods industry? |
Emerging Economies vs Developed Economies
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2) How much bargaining power did consumers as buyers have during the Great Recession? |
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3) Why was discounting looked down upon by industry peers, all of which were differentiated or focus competitors? |
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4) What would be the likely challenges in emerging markets for luxury goods firms? |
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Case Discussion Questions: Copycats to Innovators |
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1) What are the core resources and capabilities of emerging multinationals from emerging economies? |
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2) What are the core resources and capabilities of most multinationals from developed economies? |
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