3M's Global Coordination Strategies
Added on 2019-09-23
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Assignment Title – In-depth research report of Colgate-Palmolive company.Assignment Length – 3,000 wordsReferences – 20 sources Submission Deadlines – 01st June 2018Assessment BriefYou are required to conduct in-depth research of Colgate-Palmolive company. Write a report of 3,000 words evaluating the importance of and nature of Colgate-Palmolive company within a broader global industry context. How to write the reportReport structure – 3,000 words1) Table of content2)Abstract – What is the purpose of writing this report and the scope3)IntroductionWrite on the history of the company – 01 paragraphWhat’s the status of the company today (current status) – 01 paragraphWrite on how the company’s future will be – 01 paragraph4)Body of the report 4.1. Part 1 – Why is the company important – Write on the importance of the company to the world/ to consumers - 1/2 paragraphWhy the company should be in the global industry – The importance and advantages/benefits for Colgate-Palmolive company in going global - 1/2 paragraph4.2. Part 2 - What type of organizational structure Colgate-Palmolive is using and why 1.Select the organizational structure the company is using – Write on neoclassical structure as Colgate-Palmolive is using it (refer page 39 item no 5 in the referral I’ve sent) and write on the benefits the company gets by using it. 2.Then write on coordination systems Colgate-Palmolive is using (Select one coordinating system from page 40 and write a small paragraph) 3.Then write on the control system “the clan control system” (refer page 42 as Colgate-Palmolive isusing it) 1
4.3. Part 3 – Communication mix Write on how Colgate-Palmolive do advertising, personal selling, sales promotion, public relations, direct marketing in order to suit their products to different cultures/ countries. (as Colgate-Palmolive is supplying goods all over the world)4.4. Part 4 – Marketing mix (4 Ps)Product – Write a paragraph including some product strategies which Colgate-Palmolive is using– e.g :- new product development strategy, product life cycle, brand recognition/identity strategy,diversification, product positioning, product differentiation etc.. Price - Write a paragraph including some pricing strategies which Colgate-Palmolive is using – e.g :- cost leadership strategy, pricing for market penetration, price skimming, economy pricing or pricing at a premium, cost-plus strategy, psychology pricing, bundle pricing etc.. (refer page 17 & 18)Place – Write on where they are selling there products and howPromotion -Write on promotions strategies – the push-pull mix (whether Colgate-Palmolive is using the push or pull strategy? Why they are using it? And the advantages of using it? Refer page 19 -Write on branding strategies Colgate-Palmolive is using – (refer page 20 & 21)-Write on some promotional ways which Colgate-Palmolive is using – e.g social media, point of sale promotion, end up marketing, product giveaways, branded promotional gifts, after sale customer surveys etc..4.5. Part 5 – Distribution and production (product portfolio)1.Distribution strategyWrite on the distribution strategy Colgate-Palmolive is using – Write Colgate-Palmolive is using intensive distribution channel. Draw a sketch as in the image below. And write a small paragraph on how they are distributing goods to other countries by intensive distribution channel and the benefit for the company and consumers in using it. 2.Production strategy 2
Write on some production strategies the company is using from the below strategies (some strategies are there in page 2 and 3) 1.Business strategies-Differentiation strategy-Cost leadership strategy-Market segmentation strategy-Economies of scale2.Competition priorities-Price, quality, delivery, product mix, service, eco friendly products3.Competitive advantages-Flexible response -Low cost 4.6. Part 6 – Logistics 1.Write on some global supply chain strategies Colgate-Palmolive is using by referring page 24.2.Write on the global manufacturing configuration Colgate-Palmolive is using by referring page25. 3.Write on what are the information technologies used by Colgate-Palmolive by referring page 26 and 27. 4.7. Part 7 – Quality management Write on the quality management strategies Colgate-Palmolive is using by referring to page 27 and 28. 4.8. Part 8 – Service aspects-Write on how Colgate-Palmolive is doing strategic service management(SSM) by referring page 30 -Write on the best practices, standards, certifications Colgate-Palmolive is using by referring topage 30 and 31 4.9. Part 9 – Marketing strategies the company usesWrite on Porters five forces model of Colgate-Palmolive – Bargaining power of buyers, Competitive rivalry, Bargaining power of suppliers, Threat of new entrants, Threat of substitutes. 4.10. Part 10 – What are the business strategies already implemented by the companyWrite on strategies used by multinational organizations – As Colgate-Palmolive is using multi domestic strategy write on a paragraph of how they use it. And write on the advantages and disadvantages of using multi domestic strategy to the company and to consumers (refer page 09).4.11. Part 11 – Write why doing CSR is important to Colgate-Palmolive company Include any other areas if needed 3
5)Conclusions6)Recommendations - Write on new requirements/ideas needed for Colgate-Palmolive to be more successful in their business. 7)References – 20 references** Please refer the referral below when writing the assignment (from page 5 to 51)4
New international business developments, trends and markets5
Approaches to value chainTo create value, an MNE must develop a compelling value proposition (why a customer should buy its goods or use its services) that specifies its targeted markets (those customers for whom it creates goods or services).This analysis, whether done on a nation-by-nation, region-by-region, or worldwide basis, requires managers to make and sell products that exceed customers’ value expectations.The MNE translates this mandate into a committed-to excellence framework that, subject to industry conditions,•Builds value by making products for lower costs than competitors (the strategy of cost leadership) or•Making products for which consumers willingly pay a premium price (the strategy of differentiation).1.Cost leadershipThe MNE implementing a cost leadership strategy aims to be the industry’s low-cost producer for a given level of quality.Offering standardized products to the biggest possible market at the lowest competitive price, it reduces its costs relative to rivals by•streamlining product design,•investing in state-of-the-art technologies and processes,•running operations smoothly,•applying rigorous controls, and•leveraging its distinctive competencies.In the kingdom of the cost leadership strategy, costs lower than those of rivals translates superior efficiency into strategic success.A cost-leadership strategy is a vital advantage in highly competitive industries,such as the airline, steel, mortgage, white goods, and package delivery markets. Companies such as Southwest Airlines, UPS, Haier, Thai Union Frozen, Citigroup, ArcelorMittal, Cemex, Ranbaxy Laboratories, Virgin Mobile, and Foxconn practice it. Industries marked by intense rivalry push MNEs to offset high capital requirements by exploiting the economies of large scale standardization.In the ruthless game of low-cost competition, increasing volume puts pressure on less efficient competitors. In the event of a price war, for example,the low-cost leader can cut prices, thereby imposing losses on rivals while still earning some profits.Even without a price war, as the industry matures and prices decline, the MNE that makes the lowest-cost products outlasts rivals.Today, many Chinese companies apply the cost leadership strategy, outperforming rivals by combining efficient manufacturing operations, inexpensive labor, global distribution, state support, and growing scientific and technological sophistication.2.DifferentiationAs we see in consumer electronics, software, entertainment, wealth management, or fashion markets— typically do not emphasize cost leadership.6
They opt for differentiation, creating value by•generating insights into consumer behavior,•developing cutting-edge products,•designing high-profile marketing programs,•quickly moving products to market.The differentiation strategy fixates on accelerating innovation, not relentlessly reducing costs, as the basis for sustainable value creation.Its goal is to develop products that offer unique attributes to customers who perceive them as superior to alternatives and thus willingly pay a premium price.Differentiation requires developing competencies that rivals find hard, if not impossible, to match or copy.•The sleek design of an Apple iPad•engineering sophistication of a Lexus sedan,•customer service at a Ritz-Carlt•premium real estate slots for Zara shops,•efficiency of Google’s search algorithm,besides generating profits, sets high standards that rivals struggle to outdo.7
Managing the value chainAn MNE’s competitiveness depends on efficiently distributing value activities and effectively linking them so that the different parts become a single whole.Distributing value activities around the world involves configuration. Linking them involves coordination.Configuration and coordination, flip sides of the value chain coin, are intrinsically related. Still, each hasunique characteristics.1.ConfigurationNo matter how big or small, every MNE looks to put value activities in the highest productivity spot in the world.In theory, configuration ranges from concentrated (performing all value-chain activities in one location) to dispersed (performing different value-chain activities in different locations).MNEs configure value activities to exploit location economies, specifically the efficiencies one captures by performing a value activity in the most productive location given prevailing economic, political, legal, and cultural conditions.Location decisions are subject to the unpredictability of the prevailing economic, legal, political, and cultural conditionsMNEs must pay particular attention to business environment quality, innovation context, economies of scale, and resource costs to set configuration parameters.Business Environment Quality Countries recognize MNEs’ sensitivity and take steps to improve their location economics. Techniques include•reducing capital requirements for start ups,•streamlining property registration,•expediting regulatory review,•liberalizing labor regulations.Often, opportunistic governments recruit foreign investors, promising business-friendly markets that offer•flexible operating requirements,•lower tax rates,•cheap financing,•responsive public policies.Innovation ContextThe application of new ideas benefits consumers, companies, and countries. Consumers enjoy rising living standards. Companies fortify competitiveness. Governments fuel economic growth.Developments in genetics, robotics, nanotechnology, and computing will overturn many mainstream practices.8
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