Atlas Eléctrica recommendation:
External strategy:
1) Buy La Indeca and the store chain La Curacao:
- Why: To keep market shares and leadership in Central America, deeper market coverage.
- How: Take long-term loans
- Alternative: It will kill the company if other competitors buy La Indeca (Mabe, Whirlpool, LG, Samsung in Mexico)they would take market shares from Atlas Eléctrica and by the time wipe out the company from Central America where Atlas Eléctrica has the biggest market shares.
2) Focus on Central America:
- Why: to keep the market leadership in that region deeper coverage to its natural market. It will strengthen the company - and prepare it to expand or to win market shares in The Caribbean and South America. First it must strengthen its financial situation in order to have the resources to expand in other regions (it will need to put emphasis on marketing and to develop products that correspond to customer needs in the other regions especially regarding stoves).
3) Keep the focus strategy:
Why: Its cheaper to keep the old customers than finding new ones!
The middle-income segment is the largest consumer group and the brand names are aimed at this particular target group, so Atlas Eléctrica should keep focusing on this segment until the market is ready for more product lines.
Refrigerators and stoves are the main product lines in which Atlas Eléctrica has its core competences. They are also working fine due to the production system.
The market is not ready yet for more product lines even though the economy is growing because the purchasing power is not that strong compared with the ones in South America. Therefore there is not yet profit to gain by di...
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...et demands and enter new markets. These have different market characteristics and therefore the similarity theory does not fit the environment anymore.
Strategy organisation
Atlas Eléctricas vision is to be the leading company in the markets where it operates with competitive products worldwide. This does not match with the current organisational design which has a domestic functional organisation structure. Atlas Eléctrica will have to redesign its organisational structure into a more international oriented structure in order to correspond to the strategy, otherwise it will not be able to realise the strategy. This may be a difficult task for Atlas Eléctrica since its corporate heritage is based on the country similarity theory and since it has acted according to what is familiar right from the beginning.
Breaking into new markets helps the company grow and brings in new customers, which leads to higher profit margins.
Lincoln Electric is a multinational the manufactures’ welding products. The company’s headquarters is located in Euclid Ohio. They have sales offices in 160 countries; this company has 42 factories. They have contracts with 19 nations too. The business model of this company has been studied at Harvard University.
General Electric (GE) is a public company that provides services in the following segments: Energy, Technology, Infrastructure, Capital Finance, as well as Consumer and Industrial. GE, along with 3M and Siemens, all compete in the Diversified Machinery Industry whose products range from large turbines and medical equipment to laundry machines and coffee pots. This is a unique industry that has pure competition where companies have products that are mechanically the same, but is completely open for differentiation of those products. Products will lack value if they are not differentiated from their competitors’ products in the eyes of the consumer. Additionally, innovation is extremely important in this industry causing those who do not innovate to lose profitability quickly.
...ries such as Spain, Belgium, UK, Japan, and China. Future growth can be obtained through positioning current brands in those emerging markets.
Domestic Expansion: Growth has been at 20% p.a. during the last years and Telepizza is positive for an ongoing growth by comparisons to the US-market. TP knows on the other hand that market penetration is going to be a tough job since there is already a TP in every Spanish city with more than 20.000 inhabitants,. Hence, domestic growth can mainly be obtained by upsizing the volume per order.
The Lincoln Electric Company corporate culture today is an extension of that which the founder John C. Lincoln and his younger brother James F. Lincoln instituted over a century ago. The company today remains a profitable, growing and admired organization. Its culture has been analyzed and utilized as an example in business education for many years. The success of the company can be attributed to: the efficiency their corporate philosophy and culture has instilled in their employees; meeting the needs of the customers; and lastly rewarding the shareholders. The gist of their corporate mindset is summed up by the past President, Mr. Willis “Lincoln Electric differs from most other companies in the importance it assigns to each of the groups it serves. (He) identifies these groups, in the order of priority as (1) customers, (2) employees, and (3) stockholders”(Sharplin, Arthur, 1989) According to Carpenter, Taylor, and Erdogan (2009), “When entrepreneurs establish their own businesses, the way they want to do business determines the organization’s rules, the structure set up in the company, and the people they hire to work with them.” James F. Lincoln was strongly influenced by religious teachings which he incorporated into his business ethics. According to Lincoln:
GE uses a two-part strategy for sales it is power segment using both a differentiation and cost-leadership style. The sale of actual power generators requires the use of a cost strategy which has reflected with both negative and positive result. The negative impact created a small profit margin due to rival Siemens (Bromels, 2016). The positive impact is due to the company’s innovation which should lower its threat for a substitute. Power plant generators are larger purchased items with some model’s selling in upwards of 125 million each; this reduces the threat of entry into the field due to the cost associated with manufacturing these units allowing GE to use its economies of scale cost driver (Eaton, 2014). Now GE uses a differentiation strategy with its power division as a whole. A positive approach that the business strategy offers is the threat of entry into the industries is reduced due to GE’s reputation for innovation; expanding into digital technology also expands it quality and customer services offered to its consumers. GE has survived its completion by leading with leadership permitting the company to retain its employees allowing for decrease turnover, retaining knowledge and positive productivity among the organization (Stephans, 2016). GE is also attracting new young talent to expand its digital technology. By having a wide range of differentiation in the power industry it is allowing GE to increase its service and even expand into servicing its rivals’ equipment. A negative that can be seen with this strategy involves rivalry among its major existing competitor Siemens. GE has been able to capture revenue from Siemens with its service contracts however some of the services are in the power of the buyers. If buyers do not wish to expand its services into the digital transition GE could see erosion of its
General Motors is knocking on the door to world class business performance. Ohmae’s five stages of global operation support General Motors aspirations. From stage one to stage five there are significant differences to becoming a global organization. For instance, stage one, states that a company supports arm’s length customer export activity by a domestic company that links up with local and distributors to function. This stage represents the entry level global corporation. General Motors is at stage 4 of Ohmae’s five stages of becoming a global corporation, because it has exemplified the following traits: Systems and tools used globally not just at headquarters, R&D, Engineering and other business operations have a global focus, and all support functions are applied globally. (MFGO 601, WK. #2 Lecture Notes) An example of Ohmae’s, stage ...
Each company must worry about the threat of new products being created that can make their product obsolete. Every product of General Electric has the threat of substitute. Being very well-diversified means that GE is spreading the risk of failure in every market.
IKEA is more than a furniture store they are a company driven by values (IKEA, 2014). The company seeks to make their consumers lives easier by providing them with modern, innovative, inexpensive products which they use to tackle daily home activities. IKEA Group has 298 stores in 26 different countries (IKEA, 2014). The company’s vision is “to create a better everyday life for the many people” (IKEA, 2014, para 1). Using innovative techniques for creating, producing, and marketing their products IKEA can provide consumers with durable products for reason...
Why would a company go international? There are many reasons why companies would go international, but generally a company goes international so they can seek opportunities in domestic markets, or they seek solutions to problems that cannot be solved through domestic operations. There are many profitable possibilities by going internationally and these include greater profit potential, offers new locations to sell products, it may provide better access to needed raw materials, it may access to financial resources from many nations, and lastly it may allow labour-intensive activities to locate in countries with lower labour costs. For a small business to become an international business they must use five guidelines the first is global sourcing, exporting and importing, licensing and franchising, joint ventures, and wholly owned subsidiaries. The first two are market entry strategies and the remaining are direct investment strategies.
There are high entry costs to enter the market. The large industry competitors already have captured the market share.
emerging or new market. It can originate from new technology or new market opportunities (Eliashberg, J., Lilien, G. L., & Rao, V. R. 1997). Literature defines product development as exploiting an untapped market opportunity and turning it into a value product for customer satisfaction. Development and introduction of a new product requires extensive research on understanding customer needs, market structure, emerging trends and analysing the internal & external competitive market environments. To evaluate customer satisfaction previous researches provide strong relationship between customer satisfaction and product quality, product features and value for money. ***
Nokia, the leader of mobile phone manufacturers, has a successful strategy in the emerging markets. According to the case study, Nokia has been extremely successful in the past 15 years. They had the longest and the most complex supply chain, held almost 40 percent
Products are not standardized and vary by country in terms of type, packaging and specification. This increases production time, production costs, lead tim...