07 May DISCUSS THE PRESSURES FOR LOCAL RESPONSIVENESS AND GLOBAL STANDARDIZATION FACED BY EACH FIRM. W
Assignments
Discussions: Individual Activity
Topic 1. Local Responsiveness & Global Standardization.
Select two large MNEs, one consumer oriented (e.g., Colgate-Palmolive, KFC) and one industrial (e.g., DuPont). You choose the companies.
Use http://www.GlobalEdge.msu.edu You must select different MNEs. It is first-come, firstserved. “Reserve” your two MNEs quickly. Post a response in Discussions to Topic 1. In the “Subject” box/line state the MNEs you selected.
Discuss the pressures for local responsiveness and global standardization faced by each firm. Which experiences the greater pull toward local responsiveness? Why? Which faces a greater need for global standardization? Why?
Topic 2: Technology’s Impact on Importing/Exporting (Alibaba Mini Case Study)
International trade is crucial for nations to maintain their standard of living, and the global distribution of a wide range of goods. Technological innovations and advances in
communications are the engine of growth. The Internet and information technologies (ICT) have facilitated and expedited international business transactions, from delivery to payment (Burinskiene, 2013).
Hinz, Eckert, and Skiera (2011) stated that innovations in communication, the Internet, and search engines have dramatically expanded the range of products that online retailers can profitably promote. Anderson (2006) argued that innovations in e-commerce and search engines enhance the efficiency of online retail by encouraging the entry of innovative new products. This results in a long tail of niches, while simultaneously decreasing the market share of blockbuster products. Anderson also argued that Internet innovations reduce the marginal cost of products, allowing online retailers to focus on previously ignored tail products. According to Kendall and Tsui (2011) technological innovations that lower fixed costs relative to variable costs, attract marginal manufacturers which leads to long tails in industries characterized by horizontal differentiation.
Evans (2009) stated that online retailers operate in long tail markets where distribution costs are low and inventory may be virtually unlimited. He also argued that advanced search engines, such as Google, Yahoo, and Bing, are “fundamentally Long Tail systems” (p. 9); they have
enabled online retailers to sell their niches “all the way down the vanishing point of the tail” (p. 6).
Companies such as Alibaba have capitalized on technological advances and huge production potential of China to export products worldwide. These exports range from small retail products to large B2B shipments. Global buyers use Alibaba’s website to shop around for price and variety.
Requirements
Visit Alibaba’s website (www.alibaba.com) and search for exporters of a B2B product; describe your experience.
If you are an importer, what are the advantages and disadvantages involved in using Alibaba?
Visit Amazon’s website (www.amazon.com); what is the difference between Amazon’s and Alibaba’s websites? In a Forbes article: “Alibaba and the 40,000 thieves” it was alleged that Alibaba sells an unprecedented torrent of sham and counterfeit goods,” and that neither the big brands manufacturers, nor the Chinese or American government pressure can do much about it. Forbes stressed that only Jack Ma, the man who oversees the world’s largest online retailer can; however, closing down the fakes would undermine his empire (Schuman & Ho, 2015, p. 100). Provide your take on that, and explain your rationale. What steps should Alibaba take, if it intends to dominate the global retail market?
Sources used in the development of the Alibaba Mini Case Study (not required reading!):
Anderson, C. (2006). The Long Tail: Why the future of business is selling less of more. New York, NY: Hyperion
Burinskiene, A. (2013). International trade, innovations and technological achievement in countries. DAAAM International Scientific Book, 795-812.
doi:10.2507/daaam.scibook.2013.48
Evans, M. P. (2009). The aggregator blog model: How a blog leverages long tail economics. Journal of Information Science & Technology, 6(2), 3-21. Retrieved from www.jist.info/
Hinz, O., Eckert, J., & Skiera, B. (2011). Drivers of the Long Tail Phenomenon: An empirical analysis. Journal of Management Information Systems, 27(4), 43-69. http://dx.doi.org/doi:10.2753/MIS0742-1222270402
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