Month: September 2010

Categories
Strategies&Tactics

SWOT analysis on producing and selling “green cars” to China

Reference source:
http://english.people.com.cn/90001/90778/90860/6962327.html
Diagram source:
http://money.163.com
In April, Beijing Auto Expo opened with the theme of “Imagining the Green Future”, and sent a signal of potential trend of car manufacturing in Chinese market. Here are the strengths, weaknesses, opportunities and threats that green auto manufacturers should consider before entering Chinese market.

Strengths:
The labour and raw materials costs are low. If manufacturing plants and selling places are both in China, considerable transportation cost can be saved.
Expanding to a new market can increase businesses’ risk-bearing ability.

Weaknesses:
Companies outside China have limited information and knowledge about the industry.
Marketing and R&D costs can be high; and most of them will be irrecoverable sunk costs.

Opportunities:
China is the world’s largest auto market. People’s demand for cars is predicted to have a sustained and fast growth as their income (affordability) increases every year.
Chinese government provides financial incentives to encourage new-energy car manufacturers. Sales volume and growth rate of automobiles in China
Chinese Oil price is high so cars with less oil consumption are desirable.
Chinese green car market is not saturated.

Threats:
Future uncertainty in Chinese government policies and fluctuation of exchange rate may exist.
Future cost of labour and price of raw materials may rise because of inflation.

Categories
Marketing Strategies&Tactics

KFC’s brand positioning in China

Reference source:
http://resources.alibaba.com/topic/531563/KFC_s_localization_strategy_in_China_.htm

KFC is the most popular fast food restaurant in China, though it only ranks 7th in the US market where it comes from. I think a major reason of the success is its great brand positioning. It leveraged points of parity and difference at the same time.

KFC recognized itself as a fast food restaurant, when it first entered Chinese market 23 years ago and people had no idea what the westerners’ fast food. Knowing that Chinese people love to eat chicken, KFC introduced its products by creating an image of “The US Fried Chicken Expert” in customers’ mind. Using “chicken” as the frame of reference to attract customers, it also emphasized on its unique US-flavor taste.

As more competitors like McDonalds entered fast food market in China, KFC speeded up research and development and come up with attractive new products continously to reinforce its market leader position. It became the first fast food restaurant with an idea of product localisation, as its advertisement shows——”We produce fast food that caters to Chinese taste”. KFC involves more Chinese ingredients and recipes into new products successfully; and most of them were still designed based on what KFC was famous for——fried chicken.

Categories
Business Ethics Marketing

Comments on advertisement of Adderall(a prescription phychostimulant)

Reference Source: http://www.newyorker.com/reporting/2009/04/27/090427fa_fact_talbot
Adderall
This is a direct-to-customer prescription drug advertisement in the US called “Adderall”. The man with a big thumb up says “can’t pass without it”. Clearly, it mainly targets at the students’ market. With a great brand positioning, it is likely to get into customers’ mind easily. As a result, this psychostimulant has become very popular in the US schools and universities. It can help students concentrate, feel confident, keep themselves awake and achieve academic success.

However, I believe there are always some reasons behind why it is categorized as a “prescription drug” rather than an OTC. And it is irresponsible and unethical for such a prescription drug advertisement to present nothing on side-effects of this prescription drug. It misleads students to purchase it blindly instead of educating them about the drug itself. Customers do need a balanced view. Adderall has a lot of side-effects that can cause health risks. But some students simply take it as candies and don’t even bother to discuss with professional doctors to get prescription. Attracted by Adderall’s advertisement, students trade pills among themselves. Suppose things go wrong, the private illegal sellers will be in big troubles, won’t Adderall face negative publicity consequently?

Categories
Business Ethics

BP accident How do we judge if a business is a good global citizen?

Reference source: http://www.thejakartaglobe.com/analysis/once-lauded-bp-exposes-corporate-citizenship-sham/385622

In this case, BP should be blamed and accountable for its blind pursuit of profit, exploitation of environment and death of workers in US. And of course, BP is now paying for cutting the costs that should not be cut. It loses brand image and customer loyalty that cost it even more to recover.

However, one should not simply judge the ethics of a business by only one or two events. A responsible business does not only work hard to be legal or avoid negative externalities, but also trys to provide employment opportunities, taxes for governments to spend on meaningful projects, operate efficiently to offer world-wide customers cheap products with high quality in a mutually beneficial way. Creating social wealth, improving people’s living quality and happiness are also crucial. Theoretically,  if social benefits exceed social costs associated with the business activities, no matter where they operate, the company is definitely a “good” global citizen, and vice versa. I agree that actions like protecting environment, saving eco-system, and ensuring workers’ safety are perfectly moral. Nevertheless, it’s hard to analyse and quantify the potential externalities like safety risks. Theories sometimes ignore the unpredictable benefits and costs, but time will tell.

Categories
Uncategorized

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