WRITTEN RESPONSE #4 MGNT 4670
1) What are the two types of pressures that firms competing in the global marketplace typically face? Pressures for cost reductions and Pressures to be locally responsive Under what types of conditions do these pressures arise?
Pressures for cost reduction:
Intense in industries of standardized, commodity type product that serve universal needs
Meaningful differentiation on non-price factors is difficult
Major competitors are based in low-cost locations
Consumers are powerful and face low switching costs
Liberalization of world trade and investment environment
Pressures for local responsiveness:
Differences in consumer tastes and preferences
Differences in infrastructure and traditional …show more content…
Why do you think the company chose acquisition as an entry mode? The company wanted to attain a greater market share by gain direct control over distribution, tight control of operations. Local differences in the way ATMS are used, it required to customize the product to perform multiple functions, so acquisition local manufacturing could help facilitate local customization, no risk of losing technical competence to a competitor, and the company can realize learning curve and location economies
a) Diebold entered China via a joint venture, as opposed to a wholly owned subsidiary. Why do you think it chose joint venture as an entry mode? In China, since no substantial indigenous competitors were open to acquisition, majority ownership position by joint venture would be an alternative for Diebold in China.
b) Describe the types of pressures for local responsiveness which Diebold encountered in expanding international. How did these pressures influence Diebold’s decisions about their international strategy? Differences in consumer tastes and preferences in the way ATM are used and the demand for ATMs in global market, Diebold changed their strategy from selling their product via distribution agreements to setting up wholly owned subsidiaries in most markets.
c) Based on the changes Diebold had to make as it expanded internationally, is Diebold pursuing a localization strategy or a global