David Hughes Professor of Agribusiness and Food

Transcript:David Hughes Professor of Agribusiness and Food:
David Hughes Professor of Agribusiness and Food Marketing, Imperial College, London “they’ve got nowhere else to go. Their domestic markets are saturated, so they are looking for countries with large populations, high population growth, per capita GDP edging toward consumer levels, high income levels, and low supermarket presence. Countries with all five of these characteristics are a good bet, and companies rush to get there before everyone else.” Who is he talking about? Tesco UK Main competitors Tesco’s market share International expansion strategy Why? Where? [USA; Poland; Slovakia; Japan; South Korea; China] 3. How? Tesco in Japan 2001-03: research in retail markets and consumer purchasing patterns Entry in2003 by acquisition: bought a Japanese discount supermarket chain with 78 stores using brand name Tsurukame Continued expansion through acquisition Tesco in Poland Entry in 1995 Now has 100+ hypermarkets 2006 bought 220 convenience stores from Casino [a French rival] Vodafone buys into India's Bharti Vodafone Group, the world's biggest mobile phone company, has agreed to buy a 10% stake in Indian firm Bharti Tele-Ventures for $1.5bn (£841m). India now Nokia's second market Mobile phone maker Nokia says India has overtaken the US to become its second largest market in terms of sales. 2005 2007 Vodafone buys into India's Bharti Vodafone Group, the world's biggest mobile phone company, has agreed to buy a 10% stake in Indian firm Bharti Tele-Ventures for $1.5bn (£841m). India now Nokia's second market Mobile phone maker Nokia says India has overtaken the US to become its second largest market in terms of sales. 2005 2007 Why have companies such as Vodafone and Nokia chosen to target developing countries as a source of revenue? To examine the meaning of global sourcing and its impact on different stakeholders “Make” - insource Benefits And Risks Of “Make” v “Buy” Benefits: Low risk of intellectual capital loss and technical know-how High level of control Cost savings retained in the business Risks: Large investment required to establish infrastructure, technology and personnel High systems/technology maintenance costs Benefits: Guaranteed and significant cost reductions Focus on core competencies Supplier will get Increased scale advantages from having many clients Risks: Higher risk of loss of intellectual capital and technical know-how Costs savings shared with supplier “Buy”-outsource To examine the meaning of global sourcing and its impact on different stakeholders Make v. Buy Decision ? What is Globalisation ? The increased freedom and capacity of individuals and firms