Do you agree with Harvard recommendations

International Business

 

Do you agree with Harvard recommendations

 

Case Studies

CASE STUDY (20 Marks)

In 2008, Starbucks announced that they would be closing 600 US stores. Up to that point, Starbucks stores had added new offerings, including wifi

and music for sale, but started to lose its warm “neighborhood store” feeling in favor of a chain store persona. Harvard Business Review points out that in this situation, “Starbucks is a mass brand attempting to command a premium price for an experience that is no longer special.” Meaning, in order to keep up, Starbucks would either have to cut prices, or cut down on stores to restore its brand exclusivity. HBR’s case study shares three problems with the growth of Starbucks: alienating early adopters, too

broad of an appeal, and superficial growth through new stores and products. Harvard recommends that Starbucks should have stayed private, growing at a controlled pace to maintain its status as a premium brand.

Answer the following question.

Q1. Do you agree with Harvard recommendations? Give reasons in support of your answer.

Q2. What are the advantages of keeping bonded stores? Explain.

 

CASE STUDY (20 Marks)

The case presents an overview of Nokia’s entry and expansion strategies in India. In the past more than one decade, Nokia has emerged as one of the most recognized brands in India, surpassing some of the Indian business conglomerates in terms of revenues. The marketing strategies adopted by Nokia in India are very user friendly and the Nokia brand has become synonymous to mobile phones in the country. While Nokia considers India as one of the most important markets for its future growth, the company has been facing stiff competition in the recent years from Korean players like Samsung and LG. The case highlights Nokia’s strategies to compete with Korean companies and its product expansion plans in the near future.

Answer the following question.

Q1. Discuss the expansion strategies adopted by Nokia in India.

Q2. Debate the Challenges faced by Nokia in the Indian market

 

CASE STUDY (20 Marks)

EU Trade Commissioner Karel De Gucht, the Belgian Minister of Foreign Affairs Steven Vanackere representing the Presidency of the Council of the European Union (EU), and the Korean Minister for Trade Kim JongHoon today signed a Free Trade Agreement (FTA) between the EU and South Korea. This FTA is the most ambitious trade agreement ever negotiated by the EU and the first with an Asian country. Today’s signature signals a significant step on the road to its implementation and is one of the main events of the EUKorea Summit taking place in Brussels today. “The agreement between the EU and South Korea marks a significant achievement in improving our trade links. It will provide a real boost to jobs and growth in Europe at this critical time. This wide ranging and innovative deal is a benchmark for what we want to achieve in other trade agreements”, said Commissioner De Gucht. “Tackling the more difficult nontariff barriers to international commerce can cut the costs of doing business as much if not more than getting rid of import duties.” The text of the FTA was initialed between the European Commission and South Korea on 15 October 2009. Since then the text of the Agreement was translated into Korean and 21 EU languages. All EU Member States have signed the FTA ahead of today’s official signing ceremony. The date of provisional application will be 1 July 2011, provided that the European Parliament has given its consent to the FTA and the Regulation of the European Parliament and of the Council implementing the bilateral safeguard clause of the EU South Korea FTA is in place. The EU Member States will have to also ratify

the agreement according to their own laws and procedures. One study estimates that the deal will create new trade in goods and services worth €19.1 billion for the EU; another study calculates that it will more than double the bilateral EU South Korea trade in the next 20 years compared to a scenario without the FTA. The agreement will remove virtually all import duties between the two  economies as well as many nontariffbarriers. It will relieve EU exporters of industrial and agricultural goods to South Korea from paying tariffs. Once the duties are fully eliminated, EU exporters will save € 1.6 billion annually. Half of these savings will be applicable already on the day of the entry into force of the Agreement. The FTA will also create new market access in services and investment and will make major advances in areas such as intellectual property, procurement, competition policy and trade and sustainable development.

Answer the following question.

Q1. What are the objectives and contents of the recent free trade agreement signed between the European Union and South Korea?

Q2. What are the economic underlying principles of this agreement?

Q3. Why has the agreement been questioned both in the EU and South Korea?

Q4. Why are Japanese businessmen worried about the agreement? Why are Japanese policymakers trying to sign a similar deal with the EU?

CASE STUDY (20 Marks)

Advertising costs money, which many businesses find themselves short of these days. But forgoing ad spending in favor of better profits can be a mistake. Experts say that in a slump, one of the best things you can do is adopt or increase your advertising strategy to attract customers. During a recession, this is especially true, as other businesses may be cutting back on their ad spending, making your voice even more prominent to customers. After seven years of growth, building from 30 to 300 locations, Firehouse Subs’ growth fizzled, and company leaders realized they had to do something about it. So they returned local advertising fees collected from franchisees, not to put in their pockets, but to take hold of their own local marketing. Sales fell even more, revealing that this was not a good strategy at the time. Instead, Firehouse reclaimed their local marketing fee, and then gave franchisees the option to take part in a new marketing campaign, requiring them to pay double for local marketing, but in return, becoming part of an $8 million advertising campaign poised for success. Experts commend Firehouse for having the courage to ask franchisees for more money where it was needed, even when times were tough.

Answer the following question.

Q1. Why proper advertising is necessary, during recession period?

Q2. Give an overview of the case.

 

Do you agree with Harvard recommendations

 

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