New User Special Price Expires in

Let's log you in.

Sign in with Facebook


Don't have a StudySoup account? Create one here!


Create a StudySoup account

Be part of our community, it's free to join!

Sign up with Facebook


Create your account
By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here


by: Elizabeth Gruber

Test PSC1001

Elizabeth Gruber
GPA 3.9

Preview These Notes for FREE

Get a free preview of these Notes, just enter your email below.

Unlock Preview
Unlock Preview

Preview these materials now for free

Why put in your email? Get access to more of this material and other relevant free materials for your school

View Preview

About this Document

Introduction to Comparative Politics
No professor available
Class Notes
25 ?




Popular in Introduction to Comparative Politics

Popular in Political Science

This 7 page Class Notes was uploaded by Elizabeth Gruber on Saturday March 5, 2016. The Class Notes belongs to PSC1001 at a university taught by a professor in Fall. Since its upload, it has received 32 views.

Similar to PSC1001 at University


Reviews for Test


Report this Material


What is Karma?


Karma is the currency of StudySoup.

You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 03/05/16
Chapter 6: Global Competitors  The Globalization of Competition o Global Firm vs. Global Firm  Ex. Procter & Gamble (US-based) vs. Unilever (European- based)  Ex. Aerospace industry – global buyers and costly R&D  Airbus and Boeing  George Yip – competition strategies  Cross-country subsidization o Use profits from one country to subsidize competitive actions in another country o Ex. Bic used profits from France to attack competitor (Scripto) in Britain, and then in US  Scripto had no idea b/c subsidiaries were largely independent of one and other  Counterparry o Defending against a competitive attack in one country by counterattacking in another country o Ex. Fuji entered US – Kodak counterattacked in Japan  Globally coordinated moves o Mounting a coordinated assault in which competitive moves are made in different countries o Ex. Global rollouts  Competing MNCs don’t have time to learn from one market in order to respond in another  Targeting of global competitors o Identifying actual and potential global competitors and selecting an overall posture  Coke vs. Pepsi  Coke leads Pepsi 2:1  Key battlegrounds: o Russia  Pepsi entered 30 yrs before Coke  Coke still prevailed o China  Close in China  Coke paid for sponsorship rights in the Olympics  Some bottlers handed out Pepsi shirts along the torch route -> 10% of Chinese consumers though Pepsi was an Olympic sponsor o India  Coke left when India passed a law requiring the company to share its formula with local partners  When the law was repealed  Coke delayed coming back  Pepsi made the market a priority o Pepsi was established when Coke returned  Coke purchased local company with strong market share – but still trails Pepsi  Competition remains fierce o Coke accused of hoarding recycled Pepsi bottles o Dunkin’ Donuts and Starbucks  Entering India within months of each other o Both firms apply Kip’s strategies  Coordinate strategies across markets  Leverage knowledge and experience from many national markets  Employ vast global resources o Global Firm vs. Local Firm  Strategies for Local Firms  Global firms often become inflexible o They don’t want to change the strategies that have been successful elsewhere  Strong local firms watch global firms’ strategies in other countries o Prepare for global firms’ entry  Niraj Dawar and Tony Frost: 4 Strategies for Small Local Firms o Defender  Leveraging local assets in market segments where MNCs may be weak  Knowledge of local tastes and customs  Relationships with local distributors and suppliers  Ex. Restaurants in Turkey bring back local dishes to compete with multinational fast-food chains o Extender  Expanding into foreign markets similar to their own, using successful practices and competencies that they have already developed in their home market  Ex. SAB (South African Breweries, now SAB Miler PLC) used its experience with primitive distribution channels and antiquated production facilities when entering Eastern Europe o Contender  Upgrading capabilities to take on MNCs  Expanding resources to invest in necessary R&D expenditures and larger scale production that the industries demand  Seek out niches that are underserved by competitors  Ex. Arcelik o Dodger  Local firm “dodges” competition by finding a way to cooperate with its more powerful competitors  Many local firms sell out to a multinational firm that wishes to acquire them  Abruptly changes the competitive dynamics of the market  Ex. Heinz in Indonesia  Unilever bought local Bango brand  Improved distribution system  Surpassed Heinz in the market o Success depends on the type of industry  Customization to local markets = competitive asset -> defender & extender  Buyer needs vary relatively little among markets & both economies of scale in production and high R&D costs favor enterprises with global strategies and vast resources -> contender & dodger  Cultural Attitudes Toward Competition  Competition in Europe o Major source of MNCs o Family-owned businesses play a greater role o Suspicious of the stock markets  Push companies to focus on short-term goals o Anti-trust laws imported from US  Different goal – ensure fairness among competitors in the unified market  US favors the consumer  Europe favors the firm o European governments intervene to save failing companies more than the US  Might be changing  Ex. Airlines post-9/11 – European governments didn’t bail them out as much as US governments did  Competition in Japan o More intense than in US and Europe o Horizontal keiretsus  Keiretsus = “order or system”  Six large industrial groups  Group companies  Technically independent  Publicly owned  Loosely coordinated by minority cross-shareholdings  Keiretsus banks  Helps members out in times of trouble  Ex. Mazda and the Sumitomo Bank  Shares of ownership in group companies o despite low returns o prevent takeovers by competitors o Weak companies are never forced out of the market o Gov’t made it clear that it would allow banks to fail -> Banks became more weary about propping up group companies o US companies are now buying into Japanese firms  Competition in Emerging Markets o Traditionally wary of competition o Competitors from emerging markets are beginning to enter international markets  Experience working successfully in adverse conditions  Ultra low-cost production  Frugal innovation  Ability to develop new products quickly and cheaply o Major firms in emerging markets  State-owned enterprises th  Second half of 20 century – governments wanted to decrease their dependence on commodity exports o Rapidly industrialized  Private sector couldn’t meet expectations -> state-owned enterprises  Advantages o Priority access to financing o May be protected from bankruptcy o May be granted monopoly positions o Possible trade protection  Disadvantages o Forced to accept agendas o Large global impact on the oil industry despite trend towards privatization  Business groups  Different from large corporations o Exclusively or almost exclusively concentrated in their home markets o Participate in many industries  Group businesses are often interlinked – hold partial shares of each other  Aim to work for the good of the whole  Managers move between businesses within the company o Builds trust  Core centered around a bank or an insurance company o Became a competitive advantage when financing was scarce  Began as family owned enterprises o Families still play a large role today  MNCs are more threatening to business groups than they were before o Lifting of protectionist policies -> business groups are more vulnerable o New technology o Quality products at competitive prices o Global brands o Strong financial resources o Compete for the best management o Business groups’ competitive advantage in managing government relations is becoming less significant  In response to new threats – groups are rethinking strategies that have worked well in the past  Some say groups should become more like MNCs  New Global Players  Firms from developing countries have become major regional and global competitors  Home Country Actions and Global Competitiveness o The Country-of-Origin Advantage  Consumers usually favor products from developed countries over those from less developed countries  Not limited to products or consumer markets  Exists for services and in industrial buyers  Complicated by the fact that MNCs produce products in multiple countries  Managing Country of Origin Perceptions  Move production to a country with positive country-of-origin effect  Use a channel that distributes already accepted complementary products  Communication and persistence  Beyond Quality o Consumer Ethnocentrism  Some consumers are disinclined to purchase foreign products completely  Believe that they result in job loss and hardship at home  Retailers may tend to stock more domestic products  Responses to ethnocentrism will likely be limited b/c of the interdependency of the world economy o Consumer Animosity  Political objections to purchasing products from a specific country  Stable  Results from historical relations between countries  Situational  In response to current economic or political event  Social media can further contribute to this animosity  Sometimes proves short-lived  Disruptions from consumer animosity can linger


Buy Material

Are you sure you want to buy this material for

25 Karma

Buy Material

BOOM! Enjoy Your Free Notes!

We've added these Notes to your profile, click here to view them now.


You're already Subscribed!

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

Why people love StudySoup

Steve Martinelli UC Los Angeles

"There's no way I would have passed my Organic Chemistry class this semester without the notes and study guides I got from StudySoup."

Allison Fischer University of Alabama

"I signed up to be an Elite Notetaker with 2 of my sorority sisters this semester. We just posted our notes weekly and were each making over $600 per month. I LOVE StudySoup!"

Bentley McCaw University of Florida

"I was shooting for a perfect 4.0 GPA this semester. Having StudySoup as a study aid was critical to helping me achieve my goal...and I nailed it!"

Parker Thompson 500 Startups

"It's a great way for students to improve their educational experience and it seemed like a product that everybody wants, so all the people participating are winning."

Become an Elite Notetaker and start selling your notes online!

Refund Policy


All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email


StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here:

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.