When I was still in China last year, I could find some beautifully decorated moon cakes sold in Starbucks. This year, it started to sell tea drinks in China. These two great innovations are part of Starbucks’s localization strategy. As its dominant status in China market is threatened by CostaCoffee and Shangdao Coffee, it has to renew its products that can attract more consumers.

In China, people prefer to chat sitting in a laid-back style tea shop rancher than having coffee. However, there are few tea shops that can satisfy this kind of requirement of customers. Most tea shops in China are small shops which are roughly decorated and not able to provide a desirable chatting atmosphere. Thus, it gives Starbucks an edge to sell tea drinks in its beautifully decorated stores. Also, as most of the locations of Starbucks are situated in prosperous business areas, it also leverages its brand image and value proposition : provide white collar workers and busy students with comfortable environment  for their social lives. I am pretty sure that this decision will make huge profits by attracting mountains of business people.

Mid-autum day is one of Chinese important traditional festivals.Chinese people like to give moon cakes as a present to their friends and co-workers. Starbucks make nicely decorated and packed moon cakes to satisfy the requirement of customers in China. Plus, the moon cakes sold in Starbucks have special flavours that others don’t have, such as coffee flavour.

Pedigree is a subsidiary of Mars,Incorporated.It has now become the biggest pet food manufacturer in the world by obtaining consumers’ trust with its profession in pet caring and a positive publicity.

One of Pedigree’s slogan is that every dog deserves professional nutrition. The company developed recipes based on research from THE WALTHAM Centre for pet nutrition. All of its products are designed to solve different problems of dogs of different breeds and ages.For example, the product for adult dogs have a special formula that can provide mature dogs with complete nutrition and nourishment. For puppies, Pedigree provide the special puppy recipe that includes DHA for healthy brain development and phosphorus for healthy teeth and strong bones development. In this way, Pedigree wins consumers’ trust and gains a huge market share with its profession.

Pedigree also differentiates itself by making a dog lover image. Recently, the giant company has launched a donation and adoption campaign for homeless dogs. On the official website of Pedigree, it is not hard to find the videos for the campaign. The videos make viewers pretty impressive by telling stories of abandoned dogs that can make people moved deeply. This is not all Pedigree has done for building its brand position. Pedigree’s official website provides not only introduction of its specialized products but as well professional tips and knowledge for pet keepers of how to keep their pets both mentally and physically healthy.No wonder why can Pedigree dominate the pet market.

Reference: Pedigree Official Website(http://www.pedigree.com/03Adoption/)

Pedigree Petfoods, Wikipedia

Lats year, one of the biggest toy maker in the world, Mattle, closed its first flagship store in China, which means its ambition of dominating the market in China has failed. There are several reasons listed below according to my analysis.

Cultural background in the States is totally different from that in China, leading to the fact that a fairly different strategy is needed. In the States, parents are more willing to buy toys for their children. However, in China, parents are more likely to send their children to various kinds of classes rather than buying toys for kid. Most Chinese parents have the traditional though that playing toys is a waste of time and does no good for kids. Although China is changing now as well as its culture, education system almost remains the same which results in immense stress burdened by children. In order to solve this, Mattle should corporate with the government. There is no doubt that every overseas company has to work closely with the Chinese government due to the authoritarian political system in China. Mattel can work with the government and use the word of the government’s mouth to swift Chinese parents traditional thoughts. The company can advocate that playing toys is one of the best ways to improve children’s learning skills and IQ which is helpful for study.

Another reason for the failure of Mattle lies in the design of Barbie dolls. I had my own Barbie when I was a little girl. I can understand Chinese little girls feelings pretty well. Most of the Barbie dolls Mattle sell in China are of American style: pretty lady with blond long hair, wearing some trashy clothes. American kids would feel that is pretty good-looking and charming ,whereas Chinese kids would have an opposite feeling. Aesthetic taste in China is way far from similar with that in the States. Chinese aesthetic value is more interested in soft, sweet personalities and girls with black long hair. Recommendations for Mattle also involves changing the design of the product and making it more related to the Chinese culture.

Reference: Why Barbie Stumbled in China and How She Could Re-invent Herself, Forbes( May 4th, 2012)http://www.forbes.com/sites/helenwang/2012/10/24/why-barbie-stumbled-in-china-and-how-she-could-re-invent-herself/

After the switch of the CEO of P&G, there has been a slight change in its strategy in 2013. In 2013, the consumer goods giant mainly focus on slashing costs, taking a competitive advantage and making innovations to attract consumers.

In terms of cutting costs, the company has launched a plan of slashing non-manufacturing positions which is predicted to save $ 3 billion.Using less expensive packaging materials is also one of the ways to save money. The giant company has cut its capital spent on marketing meanwhile. These solutions seem to be effective which can be proved by its growing market share. Based on the macro environment, due to the economic recession in the States, people spend their money more carefully than before, they are more likely to purchase cheaper products. Thus, gaining a low price advantage these days is very necessary. Some individuals would doubt that cutting the cost of marketing leads to less sales. However, P&G has made a fairly smart way to solve this: advertise for a variety of brands at once.

In order to make a better and continuous differentiation, P&G never stops innovation, keeping close relation with outside company and virtual technology. One of the latest innovative products of P&G is a kind of diaper of Swaddlers which can keep babies dry for 12 hours.

Reference: P&G CEO Switch Will Not Lead to Big Strategy Change,REUTERS( May 24th, 2013)(http://www.reuters.com/article/2013/05/24/us-procter-ceo-call-idUSBRE94N0G420130524 )

                    Strategic Focus, Company Strategy (http://www.pg.com/en_US/investors/company_strategy.shtml)

Due to rigid government regulations for TV shows, people nowadays in China are more willing to spend their leisure time by watching on-line videos rancher than string in front of a TV, watching some tedious TV programs. This results in the trend that China’s on-line market is becoming the largest.Mountains of on-line video firms have emerged. Among them all, LeTV is the most innovative one.

LeTV applies the most innovative and a very unique operating pattern. It innovated to try to open the door of smart TV era. In China, most of the on-line video companies slash costs by using pirated contents. Unlike them, LeTV acted totally different: it bought license of the contents. LeTV made the decision based on its accurate prediction on the macro environment: there is a trend that in China, content license will be increasingly important. These days, other companies need to spend a lot of money on buying license while LeTV is able to increase its revenue by selling the license.

Last year, the firm launched the first smart TV which is a part of its unique operating pattern: a combination of “software” and “hardware”. The smart TV is one of their “hardware”.TVs have larger screens which can offer a better viewing experience than iPads and smart phones. Based on this idea, LeTV decided to start the smart TV era as well as paid on-line videos in China. On-line video companies make little revenue by making free videos and ads. In this way, LeTV can not only attract consumers on-line but also off-line on TVs.

Referencehttp:The Chinese Stream,The Economist( Nov. 9th,2013)//www.economist.com/news/business/21589434-chinas-online-video-market-largest-and-most-innovative-world-it-also-most

Netflix has quadrupled its earnings by promoting its original content in the latest quarter(CBC news, Netflix passes HBO with 3.1 million U.S. subscribers,Oct 21).

In the Comm 101 class, we have discussed which strategy Netflix should take: make its own content, corporate with GOOGLE or ABC,HBO etc. In the class, I believed that Netflix should corporate with HBO and ABC for the reason that if it liaise with HBO and ABC, not only it can expand its content, but also share subscribers with these two giant cable companies and lower cost of buying TV shows. But now, I changed my mind— making its own content is the best way to make it more profitable.

By making its original series, it can attract mountains of loyal customers who only stick to Netflix rather than HBO or ABC. This can decrease the threat of substitutions. Now, Netflix is facing with the problem of whether it should raise the price due to the impact of inflation. Price increasing will restrict the growth of viewers or even make Netflix lose some of its consumers. However, after the success of its first original TV show, House of Cards, it is more reasonable and acceptable to jack up the price due to the fact that people are more willing to pay more because of the only access to their favourite series. Though, it costs more to generate its own TV programmes, it can pass the costs to consumers by increasing price.

Reference:CBC New, Netflix passes HBO with 3.1 million subscribers, 2013.10.21)

Hai Di Lao, a Chinese hot pot chain, is launching its first retail store in the U.S. and also have started several retail stores in Singapore.

Hai Di Lao positions itself as excellent customer experience through providing an entertainment-filled waiting area with board games and hand massages. It uses extraordinary service as a great competitive advantage. According to my own experience, most of the restaurant chain in China is features with tasty food, leading to the trend that tasty food becomes one of the feature of the whole frame. To stand out, Hai Di Lao differentiate itself through excellent services which most of the restaurants cannot provide.

In terms of business ethics, I believe that they are relative according to different backgrounds and environments. For instance, in China, because of some political challenges, food safety is one of the biggest concerns and the regulations of food safety are not trust-worthy. As a result, Chinese individuals have gotten used to the unsafe food and they don’t have a strong awareness of food safety. In this case, Hai Di Lao can use blended soup to slash its costs by purchasing much cheaper materials as well as simplifying the producing process. Blended soup is not likely to trigger its status in China whereas it won’t be the same in the U.S and Singapore. As people in the U.S and Singapore are more aware of food safety and the governments are more efficient, Hai Di Lao has to review the work they’ve  done regarding to business ethics. Blended soup will not be helpful anymore in overseas markets.

Reference:Hai Di Lao, Chinese Hot Pot Chain, Plans To Bring ‘Noodle Dance’ To The U.S.(Rachel Tepper,5/22/2013)

According to a report about total smartphone subscribers in the U.S in 2013, iPhone ate up all its competitors including its biggest rival, Samsung. However, the war of the two giant companies is far from over.

In term of brand positioning, Apple differentiate itself by building up a image of great innovation. When people talk about Apple, “creative and expensive” immediately pop out in their mind. On the other hand, Samsung is more affordable for most people, which works as a cost advantage for Samsung. Unlike Samsung, Apple build its competitive advantage by continuous innovation which can be proved by the latest iPhone 5s. In my personal perspective, Apple is more successful in leveraging brand positioning. People can easily connect such words like Steve Jobs, creativity and smart with Apple. However, it is more difficult to think about the characteristics of Samsung. Every company has to make up his own characteristic in the way that authors make up the characters of their stories. Apple is more like a real human being who has clear features and cannot be replaced, whereas the features of Samsung are not that clear.

Still, there are a lot we can learn from Samsung. If you are a big fan of Korean dramas, you can find that all of the people in the play use Samsung. I was very impressed by this kind of method of marketing. Samsung take advantage of the influential Korean dramas to boost its sales. K-pop stars are fairly popular in Asia and fans of the K-pop stars just follows their idols to buy Samsung. Also, Korean dramas have the fashionable image which Samsung have built through sponsoring the drama making.

Reference:

Apple’s iOS ate up Android, Blackberry U.S. market share losses this summer(Oct. 4),Daniel Dilger

http://appleinsider.com/articles/13/10/05/data-bites-dogma-apples-ios-ate-up-android-blackberry-us-market-share-losses-this-summer

Starbucks and Costa are two leading coffee companies in the world. In China, Starbucks is much more crowded than in Costa. It is also the same in other parts of the world.

Starbucks position itself as relaxing, high-quality and convenient. with a main market target of white-collar workers and youngsters. The coffee shop is nearly everywhere in the city which relates to its image of convenient and easy to buy. By publishing Starbucks music DVDs , it has not only reach a consistent branding, but also made a great consumer insight of their products. The CEO of Starbucks recently made some political announcements ( suggesting no guns in Starbucks ) which helped the giant company to enhance its friendly and laid-back image. However, compared with Costa, it gains less credibility in terms of its quality.

Costa mainly target on upper middle class people. It position itself as high-quality and  high-quality lifestyle. It differentiate itself from other coffees by “the perfect cup in four Ms”, which means freshly ground beans extracted by perfect machines and perfect skills. Costa obtains a better reputation for quality than Starbucks. However, its brand positioning is not that relevant to consumers nowadays especially when it expands to other markets out of Europe. People are now living in a fast pace, leading to their preference for more relaxed environment.

Financial Times: Costa tops table of coffee outlets

http://www.allegra.co.uk/pdf-files/2007-05-28-ft.pdf

Xiaomi, the nation’s leading smartphone company in China, just held its press conference a few days ago. Compared with Apple, it still has a long way to go, but it has grown up in an extremely high speed.

In terms of operation, it has the same business structure as Dell- selling products directly to customers online. This helps it slash operating costs and its inventory, building a competitive advantage for it. It doesn’t have to pay for the costs to the network operators and retail stores. As it has the channel directly connected to consumers, it has launched a customer voting system as a form of democracy, customizing the products and building closer relations with consumers at the same time. In this case, it is able to predict the demand accurately as well.

However, Xiaomi still has a great problem in operation. It gains a bad reputation for its low quality which is the main reason why it is threatened by other competitors. It should focus more and do some enhancement on supervising the producing process in order to improve the quality of the products.

http://www.economist.com/news/business/21586344-xiaomi-often-described-chinas-answer-apple-actually-quite-different-taking-bite-out