I got a lesson from the first lecture that critical thinking is important. In the lecture note, critical thinking is described as “the intellectually disciplined process of actively and skillfully conceptualizing, applying, analyzing, synthesizing and/or evaluating information gathered from, or generalized by, observation, experience, reflection, reasoning or communication, as a guide to belief or action (Scriven & Paul, 2001). In my definition of critical thinking was “different thinking from other people usually think”. My definition is similar to this sentence “Don’t take it as it is” in the lecture. In any other area of studying or working, critical thinking is essential because we can learn more when we think critically. It makes innovation on our life.
The topic of week 2 is company situation analysis. For doing this I choose the company ‘Boost Juice Bars’. In order to do company situation analysis, Gmmso provides several criteria such as company background, mission statement, profit for past three years, corporate-level strategies, business-level strategies, competitors and method of international involvement. I was interested in corporate-level strategies and business-level strategies, because I could not understand the difference between corporate-level strategies and business-level strategies. But doing research, I could understand. The corporate-level strategy is the direction an organization takes with the objective of achieving business success in the long term. For example, it deals with the level of diversification, and the reason for diversification. Thus, it is more likely to focus on internal things in the company. However, the business-level strategy is a bit different from the corporate-level strategy. It is a long-term approach to implement a firm’s business plans to achieve its business objectives. In other word, it is related to the questions such as “who will the product or service serve?” “And “what kind of needs will the product or service satisfy?” In addition, there are five generic business-level strategies which are overall low-cost provider, broad differentiation, best cost provider, focused low-cost, and focused differentiation. Most firms employ one strategy from the five. I analyzed Boost Juice Bar employs focused product differentiation, because the company has 80 different drinks. These drinks are totally different from other competitors’ drinks. Also, Boost Juice Bar is leading the industry. It means that they can choose the price of products and costs which are cost leadership.
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I could compare Boost Juice Bar and its competitors which are Easyway, Cha Time, and Goulburn Valley Juice. Boost Juice Bar is involved internationally, because the company has expanded internationally with stores in Asia, Europe, Russia and the Middle East through franchising. Competitors such as Easyway and Cha Time use franchising as well. These three companies have similar forms in doing international business.
In week 3, I had to analyze industry which Boost Juice Bar is involved. Competitive analysis of the industry uses Porter’s five forces framework which are threat of new entrants, threat of substitutes, determinants of supplier power, determinants of buyer power, and determinants of competitive rivalry. This is quite important when analyzing competitiveness of the industry. For example, if the threat of new entrants is high, competition will increase because the company will be competing with many other companies. And if competition is high, profit potential usually decreases because demand decreases. Therefore, I had to find out financial information for the last two years.
Also, I had to find out strengths, weaknesses, opportunities, and threats (SWOT) of the company. I have done this a lot of time in previous semesters. However, I could know this more in detail. First of all, strengths are things that the company can use to obtain a competitive advantage. For example, it could be good reputation, cost advantage, exclusive access to resources and access to distribution channels. Boost Juice Bar has those things as strengths. In opposite sight, weakness makes a company to be apart from competitive advantages. It is like weak brand name, bad reputation and high costs etc. It is important to find out opportunities and threats of the company. Opportunities are something like finding a niche market, taking advantage of new technology, and taking advantage of relaxed trade barriers and regulations. However, threats exist in various forms. Recently, consumers’ tastes are rapidly changing. Additional regulations and trade barriers are often occurred. Overall, to reach business goals and objectives, it is important to make more strengths, and make back-up plan to reduce risks from threats. In addition, the company always has to look at opportunities and able to grab the opportunities.
In week 4, our group decided the company as JB HiFi. Briefly, JB HiFi is an electronic device retailer in Australia. We got to start to do module 2. In module 2, we should choose host countries. We choose the United Kingdom, Germany, Canada, Japan, China and South Korea. To select countries, the first thing I considered was the similarities between Australia and host countries. Definitely, it is easy to be involved in the country if many aspects are in common. Therefore, the PESTLE framework and six segments of environmental analysis were used. The PESTLE framework categorises environmental influences to six main types: political, economic, social, technological, legal and environmental. Through this framework, the possibility of success or failure is measured. The six segments of environmental analysis consist of demographic, economic, political/legal, socio-cultural, technological and global. Thus, this analysis was more likely to focus on internal things. Moreover, I learned about the CAGE distance framework. The word CAGE is from cultural distance, administrative distance, geographic distance and economic distance. In each category, there are four sections which measure the distance. Therefore, we could select and analyze host countries by PESTLE framework, six segments of environmental analysis and CAGE distance framework.
We finished module 2 by doing country evaluation and conclusion & recommendation. Country evaluation is directly related to criteria selection. Criteria selection was that which sub criteria will be included in our analysis. Once we put information of the country and data, it shows a graph that which country is more favorable. Conclusion and recommendations are summarizing our findings from entire module 2. In our group case, Canada and the United Kingdom are the most favorable countries, because these two countries have potential market opportunities, similar to Australian in terms of political, economical, socio-cultural, technological, legal and environmental.
In week 8, I learned about the Porter Diamond which is determinants of national competitive advantage. There are four parts, and one part associates with the other three parts. The four parts are firm strategy, structure, and rivalry; domestic demand conditions; related and supporting industries; country factor endowments. This model looks at clusters of industries, where the competitiveness of one company is related to the performance of competitors and other factors tied together in the value chain, in customer and client relation, or in a local or regional contexts (Porter, 1990).
I had to finish module 3 which are in-depth market analysis. In module 3, I compared two countries which the United Kingdom and Canada in terms of country entry condition, and financial and market entry condition. One of interesting things is that Canada eliminated corporate taxes while the UK imposes 20-24 percent. From my finding, it says ‘in Ontario the corporate capital tax was eliminated in 2010 for all corporations, although it was eliminated effective 2007, for Ontario corporations primarily engaged in manufacturing or resource activities’. In British Columbia the corporate capital tax was eliminated in 2010. From this kind of policy, I could understand that the federal government and many Canadian industries have started to expand trade with emerging Asian markets, in an attempt to diversify exports and imports. Another interesting thing is income taxes. In Canada, income taxes are progressive with the high income residents paying a higher percentage than the low income residents. However, Canadian Centre for Policy Alternatives found that the richest pay the lowest rates of income taxes among all income groups.
In week 10, I could find Foreign Market Entry strategies. This is included BUS201, BUS202, BUS301, and BUS305. Thus, it is regarded as one of the most important topic in International Business. There are seven strategies which are importing or global sourcing; exporting; countertrade; foreign direct investment; collaborative venture; licensing; and franchising. Briefly, importing or global sourcing are buying products and services from foreign sources. Exporting is producing products and services in home country and selling them to other countries. Countertrade is international transaction in which payments are made in products or services rather than cash. Foreign direct investment is investing capital and securing ownership of a factory, subsidiary, or other facility at host country. Collaborative ventures make similar equity investment abroad, but in partnership with another company. Licensing is that a firm permits a foreign partner to use its intellectual property and get paid. Franchising is a kind of retailing like McDonalds, KFC, and so on. Also, franchising makes internationalize easily.
Module 4 is entry strategy and the global marketing management plan. In this module, 4P’s strategy and plan are used. Firstly, product should be analyzed whether it is global product or not. If the product is global product, it should have specific aspects such as utility, compatibility, adaptability and universality. Secondly, pricing also has specific aspects such as affordability, marketability and sustainability. When you determine price, you should consider competitiveness, goals and market positioning. Thus it requires strategic pricing. Thirdly, promotion is a communication between seller and buyer. Therefore, it should have message on it. There are various ways to promote. For example, TV advertisements, online advertisements, newspaper, radio, viral and so on. Lastly, distribution is also important. You should think about whether it has intermediaries or not. If it has intermediaries, you have to find out the number and its cost. Depends on intermediaries, it could be easy to control and access or not. It is good to know buyer behavior, because if buyer wants a product frequently, then it should be close to buyer.
In week 12 lecture, I was asked to think of three dot points. First one is ‘strategy = resources + capability’. Strategy is how a company is going to reach their goals and objectives. To success in their industry they have to have efficient resources allocation and capability for doing that. Second one is ‘sustainable competitive advantage’. As time goes by, the competition in any industries goes tight. Thus, to survive in this high competition environment, firms must have sustainable competitive advantage. Third one is ‘opportunity vs risks’. There is no opportunity without risks. This problem always comes together. For example, exporting has low risk and low return, but FDI has high risk, and high return. Therefore, it is important for firms to analyze their firm and industry, and to match their strategy with their goals and objectives.
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