eBay in Japan

Case Study Contents

  1. Introduction
  2. eBay – Company Background
  3. Pierre Omidyar – The founder of eBay
  4. Early Days – From AuctionWeb to eBay
  5. Meg Whitman and the growth of eBay
  6. eBay – Quick Facts
  7. eBay’s International Expansion
  8. Exhibit I – eBay’s Net Revenue by Territory
  9. eBay and its entry in Japan
  10. Exhibit II – Yahoo Japan and eBay comparative data (in 2001)
  11. Why eBay failed in Japan?
  12. Stiff competition from Yahoo Japan
  13. Not adapting to local culture and practices
  14. No first-mover advantage
  15. Low-key Marketing and Advertising
  16. The return of eBay to Japan
  17. Questions for Discussion
  18. Exhibit III: Selected Financial Data for five years
  19. Exhibit IV: eBay stock performance graph

     

Case Abstract

Issues/Information Covered

  • eBay’s entry strategy in Japan
  • eBay company background
  • Why eBay failed in Japan?

Introduction

“We were late to the market and entered when Yahoo!/Softbank had gained a lot of momentum through its Internet portal. eBay is committed to the Asian market and may return to the Japanese market when economic conditions are better and when they have a strategy that addresses the issues they currently face in Japan.”
– an eBay spokesperson in 2002.

Ever since its entry in Japan in 2000, eBay, the US online auctioneer was struggling. By the end of 2001, many analysts felt that eBay Japan should admit defeat and sell a majority stake in the venture to a bigger local player. But even then, eBay would face an uphill struggle. In February 2002, eBay, announced its decision to exit from the Japanese market after it failed to gain a foothold in Japan lagging behind market leader, Yahoo Japan. The company also announced that its Japanese language site would be closed and 17 jobs would be cut. All its Japanese customers would be directed to its US based auction operations/site. At the time, eBay was the number one auction site in all of the other 18 countries in which it operated and one of the few successful internet companies, having seen its profits soar even amid the dot-com implosion. eBay’s strategy in Japan had failed. Japan was a rare failure for the company.

Japan was critical to eBay’s success because it was the world’s second-largest Internet market. The gap had to be closed soon otherwise Yahoo Inc. could easily beat it in the rest of Asia. Yahoo Japan was the No. 1 or No. 2 portal everywhere except China. In December 2007, Yahoo Japan and eBay made a deal to link their auction sites and make it easier for their respective users to bid on and buy goods available on each other’s sites. A new website by name “Sekaimon” (‘gateway to the world’ or ‘global shopping’ in Japanese) – www.sekaimon.com – was launched in December. The site allowed Yahoo Japan users to bid on items listed on eBay’s US site using their Yahoo Japan ID. The deal made cross-border bidding easier and gave eBay another chance to woo Japanese consumers…

Keywords: eBay, Japan, International Expansion Strategy, Entry Strategy, local culture and practices, Yahoo Japan, Pierre Omidyar, Meg Whitman, first-mover advantage, AuctionWeb, Sekaimon, Internet Auction, Online selling and bidding, Online Marketplaces, PayPal, Skype, Half.com, Rent.com, Shopping.com, StubHub, Alando AG, iBazar S.A., NeoCom Technology Co Ltd., EBay’s international operations, online shopping business, Sanook, TOM Online

Warren Buffett – The Investment Leader

Case Study Abstract

This leadership case study on Warren Buffett, Chairman of the Berkshire Hathaway, outlines the leadership (entrepreneurial) skills of the world’s most successful investor. The case covers Buffett’s childhood years, the initial years of his career and how he went on to become one of the richest men in the world with his investing skills. His role in building Berkshire Hathaway and his investing style (understand the investment tenets followed by Buffett) is also briefly covered.

     

Case Study Contents

  1. Introduction
  2. Warren Buffett – Early Days
  3. Buffett’s tenets of buying a business or stock
  4. Buffett’s Investing Strategies
  5. Buffett’s Management Style and Criticism
  6. Questions for Discussion
  7. Exhibit 1: Berkshire Hathaway – Operating companies – Insurance and non-insurance businesses
  8. Exhibit 2: Selected Financial Data for the Past Five Years
  9. Exhibit 3: Subsidiaries of Berkshire Hathaway
  10. Exhibit 4: Common Stock Investments by Berkshire Hathaway (12/31/2007)
  11. Exhibit 5: Berkshire’s Corporate Performance vs. the S&P 500

Introduction

Warren Edward Buffett (Buffett) is the 77-year-old CEO of Berkshire Hathaway Inc. and regarded by many as the world’s greatest investor. He is among the richest persons in the world and his estimated net worth is about $62 billion. He is known for his investing style “value investing” and is the most famous disciple of value investing’s inventor Benjamin Graham .

A simple, honest man with grandfatherly looks, Buffett is considered an intellectual genius who makes rapid decisions and decides on a major purchase with just a few days of research. He has figured consistently among the top five in the Forbes magazine’s list of the 400 richest Americans (the elite Forbes 400). In the early 90s he was number one and was the only person in the top five ……

Case Updates/Snippets

  • Buffett’s Biggest Acquisition – In November 2009, Buffett acquired US railroad company Burlington Northern Santa Fe Corp (BNSF) in a USD 26 billion takeover. BNSF is one of the biggest US transporter of products such as corn and coal. Buffet’s company Berkshire had already owned 23% of the nation’s second-largest railroad operator. This acquisition was the biggest Buffett had made in his career of 44 years running Berkshire. Buffet believed that the acquisition was a good asset for Berkshire to own over the next century as it was a business that was going to be around for 100 or 200 years.
  • In the 1960s, Warren Buffett bought Berkshire Hathaway, a working textile mill in New England. Later, he shut down production realizing that it could never be a profitable business. However, he retained its name for his holding company. Berkshire has major investments in companies (and household names) such as beverage giant Coca-Cola (1988), US bank Goldman Sachs (2008), the world’s largest retailer Wal-Mart, Nestle and oil giant Exxon Mobil..
Keywords: Warren Buffett, Leadership, Investment leader

Will restructuring help Starbucks Turnaround?

Case Study Contents

  1. Introduction
  2. Exhibit I: Stock performance graph of Starbucks for past five years
  3. The Starbucks Story
  4. Starbucks – Early Days and Background Note
  5. Building of the Starbucks Brand
  6. Entry into International Markets
  7. Starbucks – Quick facts
  8. Starbucks – Timeline
  9. The Restructuring Moves
  10. Reorganization
  11. No warm breakfast sandwiches but new beverages
  12. Transforming the in-store experience
  13. Renewed customer rewards program and a social network, my starbucksidea.com
  14. Retraining Employees – The Baristas
  15. Slowing down expansion in the U.S.
  16. Job Cuts
  17. Reorganizing the Entertainment Unit
  18. Questions for discussion
  19. Exhibit II: Selected Financial Data

     

Case Study on Starbucks TurnaroundIntroduction

“Fiscal 2008 is a transitional year for Starbucks and, while our financial results are clearly being impacted by reduced frequency to our U.S. stores, we believe that as we continue to execute on the initiatives generated by our transformation agenda, we will reinvigorate the Starbucks Experience for our customers.”

– Howard Schultz, Chairman, President and Chief Executive, Starbucks.

Starbucks, the leading retailer, roaster and brand of specialty coffee in the world, has been struggling amidst a faltering economy, its own rapid growth (international expansion and growing presence in 44 countries) and increased competition from cheaper rivals. In the first three months of 2008 its net income fell to $108.7m (£54.7m) down 28% from the same period of 2007. Starbucks wants to turnaround its business by providing customers with the distinctive ‘Starbucks Experience’ and building on Starbucks legacy of innovation. As Starbucks shares have tumbled over the last year, (see exhibit I) a very important question is: Is Starbucks still the romantic coffee shop it used to be?

Starbucks has struggled to maintain its differentiation in the face of growing competition. The company had 125 stores when it went public in 1992, now has over 15,000 stores in 44 countries. Customers are simply not visiting Starbucks stores at the rate they once did. In recent times, Starbuck’s has suffered the effects of the crisis in the housing market, which has put a pinch on sales. Starbucks has also suffered from rising costs of storefront space and wholesale prices for coffee and dairy products. In the second half of last year, Starbucks’s same-store sales — a significant number watched by Wall Street — declined for the first time.

Howard Schultz (Schultz) returned in early January as Chairman and Chief Executive and announced a series of changes as part of Starbucks’s Turnaround plan. …. This management case study highlights Starbucks strategy to turnaround its business by providing customers with the distinctive ‘Starbucks Experience’ and building on the Starbucks legacy of innovation

Keywords: Starbucks, Turnaround Strategies, Corporate Restructuring, Coffee Retailing, Specialty Eateries, Howard Schultz, Baristas, retraining employees, mystarbucksidea.com, customer rewards program

Case Updates/Snippets

  • Starbucks “Via” the instant coffee market – In September 2009, Starbucks unveiled a brand of instant coffee called “Via” across all U.S. locations made with 100% natural roasted arabica coffee. The company believes the “ready brew” coffee will change the way people drink coffee. The global instant coffeee business is valued at $21 billion and instant coffee constitutes 40% of overall global coffee sales.
  • Starbucks CSR – Starbucks buys 40% of its coffee beans through fair trade. As its commitment to Corporate Social Responsibility, the company pays a price well above the market rate to poor and small growers.
  • Coffee Drinking Trends – The National Coffee Association’s 2009 study of drinking trends revealed that a majority, more than 80% of coffee drinkers get their coffee at home and only 18% drink at work. Just 5% of respondents drink their coffee at restaurants and 10% take a cup with them during their commute.
  • Great business turnarounds – In the final three months of 2009, Starbucks posted a 4% growth in total sales and a 200% rise in profits, to $353m. In what is being seen as the one of the great turnarounds of the decade, earnings of Starbucks have jumped to 241.5 million US dollars (£149 million) in the quarter – more than three times the 64.3 million dollars (£39.7 million) seen a year earlier. In 2008, Schultz’s decision to resume the roles of CEO and President, has certainly helped the turnaround. Schultz had relinqu­ished the position in 2005.
  • In one day, Starbucks sells 8.2 million paper cups of coffee on average. Around 20 percent of Starbucks’ revenues are from International markets.(as per news reports in September 2011)

Related Articles:

Restructuring at Unilever – Path to Growth Strategy

Case Study Contents

  1. Introduction to Unilever’s Restructuring Initiatives
  2. History of Unilever
  3. The 1880s – Lever & Co and Sunlight Soap – A revolutionary product
  4. Lever Brothers – Growth with acquisitions and new product introductions
  5. 1930 – Unilever is born
  6. Unilever – Rapid Growth with diversification
  7. Unilever N.V. and Unilever PLC
  8. Unilever’s Path to Growth Strategy
  9. Key focus areas of the Path to Growth Strategy
  10. Organizational Restructuring
  11. Foods and Home and Personal Care as two separate Global Units
  12. Unilever’s Brand Restructuring
  13. Brand focus strategy ‘nourishing the core’
  14. Major components of Brand Strategy under PGS
  15. Brand Acquisitions and Consolidation Strategy
  16. Brand Disposal Strategy at Unilever
  17. Marketing and Distribution
  18. Advertising
  19. Simplifying Business Processes
  20. Supply Chain Restructuring
  21. Questions For Discussion
  22. Exhibit 1: Unilever – Turnover and profit for the last 12 years
  23. Exhibit 2: Sales Growth of Unilever
  24. Exhibit 3: Comparative Data on Unilever’s close competitors
  25. Exhibit 4: List of Unilever’s Major Brands

     

Case Study Abstract

The case study highlights Unilever’s business strategy focusing mainly on its restructuring initiatives. The case analyzes in detail the key elements of Unilever’s restructuring plan ‘Path to Growth Strategy’ initiated in early 2000.

Buy and instantly download case PDF to read more…

Case Study Keywords: Unilever, organizational restructuring, FMCG, fast moving consumer goods, Path to Growth Strategy, organizational structure, branding strategies, supply chain management, corporate restructuring, brand portfolio management, Lever Brothers, Foods and Home and Personal Care categories, Patrick Cescau, Anglo-Dutch consumer product company, Dove soap, Lipton tea and Ben & Jerry’s ice cream, William Hesketh Lever, Sunlight soap, Margarine Unie, P&G, Tide, Brooke Bond and Faberge/Elizabeth Arden, Simplifying business processes, Keki Dadiseth, Snuggle, Vaseline, Close-up, Ponds, Dove, Persil, Bird’s Eye, Knorr, Sunsilk, Calvin Klein, Lipton, Magnum and Omo, Brand focus strategy nourishing the core, • Expanding brands into new markets, Brand Acquisitions and Consolidation Strategy, Slim-Fast Foods Co, Bestfoods acquisition, Brand Disposal Strategy, Supply Chain Restructuring, Management Case Study

Get more information on Unilever’s strategies, decision-making, marketing, brand management, innovation, acquisition strategies, corporate culture and human resource management in this book: Renewing Unilever: Transformation and Tradition

CSR Initiatives at Tesco

Case Study Contents

  1. Introduction
  2. CSR Approach and Initiatives
  3. Tesco’s ‘Computers for Schools’ initiative
  4. CSR KPIs with Tesco’s Steering Wheel framework
  5. ‘Every Little Helps’ Approach and CSR Recognitions
  6. Tesco and the Environment
  7. Carbon calorie counter and carbon footprint labeling measure
  8. Reducing carbon emissions from transporting goods
  9. Exhibit: List of CSR Initiatives by Tesco
  10. Regeneration partnerships
  11. Benefits of regeneration partnership

    12. A TESCO carry bag displaying a CSR initiative by the company

  12. Tesco’s Ethical trading policy
  13. Tesco – Company Background
  14. Tesco – History
  15. Tesco – Company Timeline
  16. Store Formats
  17. Tesco: Quick Facts
  18. Financial Highlights – Five Year Summary
  19. Exhibit: Tesco Corporate Responsibility Review 2007 – Corporate Responsibility Key Performance Indicators (KPIs)
  20. Related Reading
  21. Questions for Discussion

     

Case Study Abstract

The focus of this case study is the Corporate Social Repsonsibility (CSR) initiatives of Tesco, UK’s biggest retailer.

1. Introduction

“Corporate Social Responsibility makes sound business sense. The key to our approach is our integrated business system, where environmental and social performance is managed alongside financial performance. This means we have a year-on-year program of focused action to drive improvement.” – Terry Leahy, Group Chief Executive, Tesco in “Tesco CSR Review,” 2001-02

Corporate Social Responsibility (CSR) at Tesco (UK’s largest retailer and one of the top supermarket operators in the world) is an important part of its corporate structure. Tesco’s CSR initiatives across several internal and external activities include local regeneration projects, being environmentally conscious, and community issues. A special focus is given to recycling, use of organics, use of energy and water, as well as its charity and community initiatives. These efforts reflect in its day to day activities.

Every year Tesco publishes its ‘Corporate Social Responsibility Review’ outlining its approach, implementation and policies in the coming year and the accomplishments in the past year. (Refer Tesco Corporate Responsibility Review 2007 – CSR KPIs on page 12) Tesco’s CSR strategy is basically “to earn the trust of our customers by acting responsibly in the communities where we operate, by maximizing the benefits we bring and working to minimize any negative impacts.” Tesco’s board members discuss the CSR strategy with performance reviews every quarter. The board and the executives receive quarterly updates on CSR performance, using which future risks and opportunities are evaluated…

2. CSR Approach and Initiatives

Tesco can influence society at large owing to its size and scale of operations and it does so by encouraging its employees and customers to become more socially responsible. Tesco is of the view that it has a major role to play in promoting health food among its customers and strives to make health food available at affordable prices. The company has adopted several initiatives over the years to fulfill its responsibility to society. These include charity, fund raising for a cause and promoting education. These efforts are not limited to the UK but extend to other countries in which Tesco operates…

Case Study Keywords: Tesco, Retailing, CSR, Corporate Social Responsibility, corporate responsibility index, FTSE4 Good Index, Sport for Schools and Clubs Tesco, Carbon calorie counter and carbon footprint labeling measure, Kids Carbon Calculator, Regeneration Partnerships, Ethical Trading Policy, Steering Wheel Framework, Terry Leahy, Computers for schools, Environment, Every Little Helps approach, Business Ethics Case Study, Management Case Studies

Related Case Studies on TESCO

Case Study Snippets/Updates

Tesco's Market Share in the UK

  • Tesco, Europe’s biggest retailer is nicknamed the Big Brother of the shopping world.

Case Study on Ryanair, the biggest low-cost European Airline

Case Abstract

Ryanair was the first budget airline in Europe, modelled after the successful U.S. low cost carrier, Southwest Airlines. Ryanair is one of the oldest and most successful low-cost airlines of Europe. This case study on Ryanair highlights its low fares business model, its business strategies and operations. The case further incorporates the history and business description of Ryanair, its’ operations and challenges as a budget airline. Features and benefits of the low cost business model are also discussed.

     

Table of Contents

    Introduction

  • RyanAir: The ‘Southwest’ of European Airlines in 2007
  • A year earlier…Ryanair, hedged fuel and a performance to envy
  • Exhibit 1: Summary Table of Results and Key Statistics
  • Exhibit 2: Ryanair Passenger Growth in Millions

    • History of Ryanair

  • Ryanair’s initial efforts as a low-cost carrier
  • 1990 – Restructuring at Ryanair
  • The growth of Ryanair

    • Analyzing the Low-cost Business Model

  • Ryanair Low Fares Strategy and Standardized Operational Model
  • Advantages of using secondary or airports located outside city
  • Lower Wage bills
  • Ryanair.com and Online booking of tickets
  • Paid-for extras – Sources of additional revenue
  • The easyJet challenge
  • Ryanair – Failed merger bid and other Controversies
  • Ryanair / Aer Lingus merger failure
  • Ryanair and EU
  • Some low-fare carriers around the World
  • Exhibit 3: List of Approved and prohibited mergers by the EU in the airline industry
  • Exhibit 4: Features and Benefits of the Low Fares business model
  • Exhibit 5: Comparative performance data of some major European LFA
  • Exhibit 6: Oil Prices Comparison, 1994 – 2007
  • Exhibit 7: Map of the European Union
  • Questions for discussion

Introduction – RyanAir: The ‘Southwest’ of European Airlines in 2007

Ryanair, Europe’s biggest low-fares airline (LFA ) reported its third quarter results for 2007 with net profits dropping 27 percent compared to a net profit of 48 million a year earlier. Ryanair cited poor market conditions, fuel costs (oil prices at $90 a barrel) and concerns on recession in the UK and many other European economies for its current performance and not so strong future profit expectations. With average winter fares dropping almost 5 percent its’ underlying net profit in the three months to end December fell to 35 million euros ($52 million). Other factors that contributed included doubling of airport charges combined with reduction of winter capacity at Stansted , significant cost increases at Dublin Airport combined with longer sector lengths and staff costs which increased by 18 pct to 67 million euros. Ryanair’s net profit figure excluded a one-off gain of 12.1 million euros ($17.99 million) arising from the disposal of 5 Boeing 737-800 aircraft…

History of Ryanair

Ryanair was set up in 1985 and is one of the oldest and most successful low-cost airlines of Europe. In fact, Ryanair was one of the first independent airlines in Ireland. In 2001, many believed that Ryanair was like the Wal-Mart and Southwest Airlines of Europe. Ryanair transformed the Irish air services market where other airlines like Avair failed to compete with the more powerful national carrier Aer Lingus.

Ryanair’s initial efforts as a low-cost carrier

Ryanair began by offering low-cost no-frills services between Ireland and London. Ryan brothers – Catlan, Declan and Shane Ryan were the founding shareholders of Ryanair. Ryanair was set up with a share capital of just £1, and a staff of 25. Tony Ryan, their father and the chairman of Guinness Peat Aviation (GPA), an aircraft leasing company lent Ryanair its first airplane, a fifteen-seater turbo prop commuter plane. Ryanair’s first cabin crew recruits had to be less than 5ft. 2ins. tall so as to be able to operate in the tiny cabin of the aircraft. …Download full-text of this case study to read more.

Case Updates/Snippets

  • Ryanair operates on more than 1,000 routes across Europe. Ryanair was founded in 1985 offering small flights from Ireland to England.
  • Low-cost model in US – Ryanair’s entry in the US market – In 2008, Ryanair announced plans to operate in the United States. The plan includes forming a sister company that would begin servicing within three years. However, the start date has been delayed. Low-cost airline model attempts in the U.S. include Skybus in 2007 (which shut down within 10 months of operation) and Spirit Airlines (which shifted to the low-cost model in 2007).
  • In recent years, fares have declined in the U.S. with budget carriers like Southwest Airlines and JetBlue Airways operating. However, the US airline industry has been struggling to match Europe where the cost of flying is very less.
  • In 2011, Ryanair’s total passenger traffic included Spain market traffic (32.2 million passengers) at about 20 per cent followed by Italy and the UK. Last year, Ryanair became the biggest passenger carrier in Spain.

Wal-Mart’s Supply Chain Management Practices

Case Study Abstract

The focus of this case study is the supply chain of the world’s largest retailer, Wal-Mart. Wal-Mart in recent years has struggled with its supply chain. The big question is: Will Wal-Mart be able to revive the competitive advantage it had in the past with its efficient supply chain? This case discusses the supply chain management practices of Wal-Mart over the years. A brief of Wal-Mart’s past distribution, logistics and inventory management processes is covered. The use of innovative Information Technology (IT) practices to enable the supply chain is discussed and highlighted. The benefits or competitive advantage Wal-Mart derived over the years from its supply chain management practices is also covered.

     

Table of Contents

  1. Introduction – Can Wal-Mart sustain its Supply Chain Advantage?
  2. Wal-Mart in US Retail Market
  3. Wal-Mart – Company Background
  4. Wal-Mart – Timeline

    5. Wal-Mart Supply Chain Management Case Study

  5. Wal-Mart: Quick Facts (Revenues, Total Employees and Stores, Competitors, Major Brands/Labels, Business/Growth Strategy)
  6. MANAGING THE SUPPLY CHAIN – THE WAL-MART WAY
  7. Pricing and Procurement Strategy
  8. Supply Chain Integration through Product/Process Knowledge Sharing
  9. Supply Chain Partnerships
  10. Distribution Strategy
  11. Logistics Management
  12. Cross Docking
  13. Inventory Management
  14. Store Formats
  15. Wal-Mart – International operating formats
  16. Related Reading
  17. Questions for discussion
  18. View sample pages of this case study
Case Study Keywords: Wal-Mart, Supply Chain Management, Retailing Strategy Case Study, Logistics and Distribution, IT enabled supply chain, Information Technology, Supply Chain Partnerships, supply chain integration, information sharing, inventory management, retail store formats, cross docking, pricing and procurement, Sam Walton, discount stores, walmart.com.

Case Questions for Discussion

  1. Wal-Mart’s focus on supply chain management is responsible for its leadership in the retail industry. Discuss the distribution and logistics practices adopted by Wal-Mart. How far has Wal-Mart’s supply chain contributed to its competitive advantage? Explain.
  2. Companies that have significant buyer power and are very focused on exerting price pressure on their suppliers rather than seeking increased profitability through business process innovations. Support this statement with examples/best practices from your own field.
  3. Wal-Mart has always used innovative information technology tools to supplement its supply chain. In a few words, explain how use of IT tools/enabled processes have benefited Wal-Mart. How has IT impacted you/your department?
  4. What steps can Wal-Mart take in order to revive/sustain its supply chain advantage?
  5. Wal-Mart invited its major suppliers to develop profitable supply chain partnerships. Discuss how good/bad is sharing knowledge/critical information with vendors/suppliers or even customers?
  6. “It’s not a sale; it’s a great price you can count on every day to make your dollar go further at Wal-Mart.”, as quoted in the article, “Pricing Philosophy,” posted on www.walmart.com. Comment.

Other Case Studies on Wal-Mart

Case Updates/Snippets

  • Wal-Mart’s new slogan – In September 2007, Wal-mart changed its slogan to “Save Money. Live Better.” Wal-Mart’s earlier slogan for 19 years was “Always Low Prices.”
  • Benefits of shopping at Wal-Mart – According to a study by research firm Global Insight, Wal-Mart saves American families $2,500 each year. This figure rose from $2,329 in 2004 by 7.3 percent.
  • Wal-Mart’s new slogan in 2011: Wal-Mart’s latest tagline is “Low Prices. Every Day. On Everything.”
  • Wal-Mart Online – Wal-Mart has 10,000 stores globally with annual revenues of more than $400 billion and 200 million weekly shoppers. According to Internet Retailer, it ranks six as in the largest Internet retailer list. Wal-Mart trails Amazon.com Inc, Staples Inc, Apple Inc, Dell Inc and Office Depot Inc. Wal-Mart does online business in United States, the UK, Canada and Brazil and does not reveal the percentage of online sales. Its digital technology unit called @WalmartLabs targets smartphones and social networking audience.

Tesco takes on US Wal-Mart

Case Abstract:

This case study focuses on Tesco’s expansion plan and its entry strategy in the U.S. which places it directly against competitor and retail giant Wal-Mart.

     

Tesco in US Retail Market

UK’s largest retailer Tesco and one of the top supermarket operators in the world, plans to open a thousand-strong chain of discount stores in the US. Tesco plans to invest more than $250m (£120m) [$2.5 billion over the next five years] in its US business launch. This expansion plan and entry strategy places it directly against competitor retail giant Wal-Mart. Many UK retailers have found it difficult to survive or compete in the US retail market. The US retail market is most competitive in the world, a fact well-known to British retailers Sainsbury’s and Marks & Spencer which failed to attract US customers.

Case Study Contents

  1. Introduction – Tesco in US Retail Market
  2. Tesco – Company Background and Timeline
  3. TESCO at a Glance
  4. Localization Strategy – Tesco in South Korea
  5. Tesco’s Business Strategy in the US – Healthy food, No waiting
  6. Store Formats
  7. Financial Highlights
  8. Related Reading
  9. View sample pages of this case study

This case study covers the following issues:

  • Assess Tesco’s globalization strategies
  • Examine and analyze the entry and expansion strategies of Tesco in US
  • Study how Tesco localized its retail practices in US
  • Understand Tesco’s efforts to integrate its global best practices with local strategies in US
Case Study Keywords: Tesco, Globalization Strategy, Localization Strategy, International Business, International Expansion and Entry Strategies, Retail Store Formats, supermarkets

Case Snippets/Updates:

  • The world’s third-largest retailer: Tesco is the world’s third-biggest retailer by sales behind U.S. retail chain Wal-Mart Stores Inc. and French retail chain Carrefour SA.
  • Tesco has 4,331 stores worldwide. In 14 countries, Tesco employs 470,000 people. (Jan 2010 figures)
  • Top five supermarket groups in the U.K. – Tesco, Asda, Sainsbury, Morrisons and Co-op/Somerfield. These five groups have around 85% of grocery retail in the U.K. market.
  • Tesco’s market share in U.K. – Tesco has approx 30% market share of British grocery retail
  • By September 2009, Tesco had around 126 stores open in the U.S.
  • Tesco’s U.S. operations (Fresh & Easy) reported a GBP85 million trading loss in the first half of the year (six months to August 31, 2009).
  • A report on European Retail Forecast by RetailNet Group (RNG) indicates that, by 2014 the top 15 European retailers would capture 66% of retail sales growth (from 43% in 2009). The report covers more than 200 major retailers, 880 store banners (more than 2,12,000 stores) from more than 41 countries and includes major retailers Wal-Mart, Tesco, Aldi and Carrefour. These retailers account for over 47% of all retail sales across Europe.

Additional Reading: Related Cases/Articles on Tesco

Nokia’s Business Strategy in India

Case Study Abstract

The focus of this case study is the business strategy adopted by Nokia in the Indian Mobile devices market. This case study summarizes Nokia’s business strategies in India. Nokia has proven itself as one of the most recognized brands
in India in the past decade or so. This case also discusses in brief some of the marketing strategies of Nokia in India and examines how the Nokia brand has emerged.

     

A Nokia Priority Dealer Store in Hyderabad India
Pic: A Nokia Dealer Store in India

This case study covers the following issues:

  • Assess Nokia’s globalization strategies
  • Examine and analyze the entry and expansion strategies of Nokia in India
  • Analyze Nokia’s efforts to localize its practices in India market.

Nokia – Company Overview

Nokia Corporation (Nokia) is a global manufacturer of mobile devices headquartered in Espoo, Finland. Nokia operates through four business groups: Mobile Phones, Multimedia, Enterprise Solutions and Networks. In Q3 2007, Nokia sold over 111.7 million units worldwide, marking a 26 per cent, year-on-year growth. Nokia India had revenues of more than $3.5 billion in 2006…

Case Study Contents

  1. Nokia – Company Overview
  2. Company History
  3. Nokia Timeline
  4. Nokia in India
  5. Locations and Subsidiaries
  6. Mobile Devices Industry in India – Business Description
  7. Restructuring
  8. Distribution challenges – Getting to the Rural Market
  9. Understanding the versatile Indian market
  10. Nokia – Branding Strategy
  11. SRK in Nokia ad campaign
  12. Nokia India Recognitions and Awards
  13. Related Reading
  14. View sample pages of this case study
Case Study Keywords: Nokia in India, Mobile devices industry, Handsets, Cellular phones, Expansion and Entry Strategy, Business Strategy Case Study.

Additional Reading: Articles on Nokia

Case Snippets/Updates:

Essence of Nokia India’s business strategy according to Nokia India’s Managing Director, Mr D Shivakumar (As quoted in “Nokia’s biz strategy to increase India market share” in 2009)

  1. Do not underestimate competition
  2. Do not rest on laurels
  3. Be modest, flexible and open to change

Nokia and the Indian Market

  • Nokia’s Entry in India: Nokia entered India in 1995.
  • Third Largest Telecommunication Market: India ranks third globally after China and U.S. in terms of the largest telecommunication market.
  • 500 million mobile subscribers in India: The Indian market is adding about 10 million users a month. Nokia sees the Indian market as a growth opportunity particularly in the country’s rural areas. Rural penetration in India is still very low at 13%. By 2010, Nokia estimates that there will be around 500 million mobile phone users in India as compared to 427 million. According to Standard Chartered Bank’s annual forecast, India will have signed up its 500 millionth mobile subscriber sometime in December 2009 or January 2010. So, it took India 12 years (from 1997 when the mobile revolution began) to grow from zero to 500 million subscribers. However, analysts estimate it will take only five years to add the next 500 million.
  • Nokia’s market share in India: Nokia has more than half the share of India’s mobile handset market. In 2009, an IDC report indicated that there were about 28 new handset vendors in India. Nokia led with a 54.1% market share in the fragmented Indian market, while the new vendors accounted for 17.5%. Samsung and LG followed with markets shares of 7.7 percent and 5.4 percent respectively.
  • Update (Mar, 2012) – Nokia had a market share of approx. 38% in 2011 compared to 49.3 per cent in 2010 in India. Its revenues were Rs 12,929 crore in 2010-11 and Rs 12,900 in the 2009-10. The Indian market accounts for 12 per cent of worldwide sales for Nokia.
  • Nokia’s manufacturing facilities in India: Nokia’s manufacturing facility in Chennai, Tamil Nadu (South India) exports half its production to more than 59 countries. Nokia has invested $250 million since its launch in 2006.
  • Mobile Microfinance – In 2009, Nokia piloted a scheme in two Indian states where it sold handsets on a weekly installment of 100 rupees ($2) over 25 weeks. Nokia planned to rollout the microfinance offer in 12 Indian states.
  • India not a low-end market segment – 81 percent of the India’s mobile users are in urban areas. Nokia anticipates such customers would drive demand for high-end phones.
  • Increasing Competition from new mobile handset manufacturers’ entry into India: In one quarter of 2009 alone, twenty-seven new mobile handset manufacturers entered the Indian market to introduce entry-level models (and other models with features such as dual SIM cards and full QWERTY keyboard) for the price sensitive Indian consumer.
  • Mobile handset sales in India: By year ended June 30, 2009, mobile handset sales in India was 100.9 million compared to 94.6 million, a year ago.
  • Nokia’s strong distribution in India: In India, Nokia has 2 lakh retail outlets and 700 support centers across 400 cities and towns.
  • Nokia’s competitors in India: Motorola, Sony Ericsson, Spice, MacroMaxx, Karbonn, Lava, Lemon, Oscar.
    Maxx Mobile – In less than two years after entering the Indian mobile phone market, Maxx Mobile captured around four percent market share by offering around 45 models and having a presence across India with its 500 service centres. With such a strong distribution network the company wants to increase it market share to about 10 percent in the next two years (by 2012). In 2010, ‘Micromax Mobiles’ was second on the list of fastest rising search terms and the fourth most searched brand name on Google India website (Zeitgeist 2010).
  • Nokia’s ‘Made for India’ phones: In 2000, Nokia introduced the Nokia 3210 with a Hindi menu. In 2003, Nokia launched the Nokia 1100, a first Made for India phone.
  • India’s Most Trusted Brand: Nokia ranked as India’s topmost trusted brand in the The Economic Times-Brand Equity’s annual ‘Most Trusted Brands’ survey for 2010. In 2004, Nokia ranked 71 and moved to 44 in 2006 as India’s most trusted brand. In 2007, it ranked in the top ten at number 4. Nokia has since held the number one slot for three years consecutively.
  • Nokia’s biggest advertising/marketing campaign in India: In December 2011, Nokia launched its biggest ever campaign in India called the ‘The Amazing Everyday’. The idea behind Nokia’s global campaign is to engage customers with the idea that “hidden away in the everyday landscape are billions of little adventures”.
  • In February 2011, Nokia entered into an alliance with Microsoft. Nokia began using the Windows operating system on its smartphone range called Lumia.
  • In June 2012, Nokia announced that it plans to cut 10,000 jobs and close 2 research facilities in Germany and Canada and a factory in Finland after its sales decreased by 29 percent with losses at $1.2 billion in the first quarter. However, India operations are unlikely to be affected by the job cuts, a spokeswoman from Nokia India confirmed./li>

Wal-Mart in Japan

Case Abstract:

The focus of this case study is the hurdles faced by retailing giant Wal-Mart in the Japanese market. WalMart’s best practices in retailing like Every Day Low Prices (EDLP) and Rollback to the Japanese market through its joint venture with Seiyu…In December 2005, Wal-Mart acquired a controlling 50.9 percent stake in Seiyu. However, Wal-Mart has since found it difficult to save the company even after investing more than one billion dollars. The company is revamping stores in hopes of drawing new customers. After exiting from Germany and South Korea last year (because it could not adapt to local tastes), Wal-Mart wants to maintain its presence in Japan. Success in Japan is important to Wal-Mart because a strong presence in the world’s No. 2 retail market is a key driver to future business growth.

     

Introduction – Wal-Mart in US Retail Market

Wal-Mart is the world’s largest retailer with $345 billion in sales for the fiscal year ending Jan. 31, 2007. Wal-Mart Stores, Inc. includes Wal-Mart Supercenters, discount stores, Neighborhood Markets and SAM’S Club warehouses. Wal-Mart employs 1.9 million associates worldwide ….

Case Study Contents

  • Introduction – Wal-Mart in US Retail Market
  • Wal-Mart – Company Background
  • Wal-Mart – Timeline
  • Wal-Mart: Quick Facts
  • Wal-Mart’s turnaround quest: Will Wal-Mart’s mass-market formula work in Japan?
  • Wal-Mart increases stake in Japan’s Seiyu to 95%
  • Localization Strategy – WalMart’s failure in Germany and South Korea
  • Cost-Leadership Strategy- WalMart’s core philosophy – EDLP
  • Cheap stuff at cheap prices – Japanese consumer mindset
  • Is Wal-Mart the only one struggling in Japan?
  • Will Seiyu get to U.S.-style EDLP in Japan?
  • Store Formats
  • Related Reading
  • View sample pages of this case study
Case Study Keywords: Walmart, Wal-Mart Stores Inc., Japanese Retail Industry, Every Day Low Prices EDLP, Carrefour, Daeiei, Aeon Co., Sam’s Clubs, Consumer Behavior, Low cost strategies, Localization Strategies, Pricing Strategy, IT systems, Supply Chain and Logistics, supermarkets
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