please answer the discussion questions 4. Is globalization inevitable in the wor
ID: 396045 • Letter: P
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please answer the discussion questions
4. Is globalization inevitable in the world today? Can the drivers of globalization be controlled nation-states? Minicase A Global European Consumer? In 1983 Leif Johansson was a manager at Electrolux, a Swedish appliance maker. Electrolux was ready for expansion beyond the small Swedish market. Johansson was swayed by studies that showed Europe was becoming more homogeneous. In particular the study showed that unexpected parts of Europe had increased pasta consumption. It was assumed that all types markets would begin to show the same type of homogeneity. Johansson envisioned being able to sell the same appliance models across all of Europe, as is done in America. He persuaded his supe riors to purchase Zanussi, an Italian appliance manufacturer, to increase Electrolux's European of European market share. A decade later, Johansson, now Electrolux's president, has found that lifestyles in Europe are not quite as homogeneous in the appliance market as they are in the pasta market. The different parts of Europe show drastic differences in preferences when it comes to refrigerators. These pref erences are mostly derived from cultural differences. In northern Europe, customers prefer larger refrigerators because they shop weekly in supermarkets. They also prefer to have the freezer on the bottom. In southern Europe, customers prefer smaller refrigerators because they shop almost daily at outdoor markets. They prefer the freezer on top. In Britain customers prefer mostly freezer, abou 60 percent, as they eat lots of frozen foods. Because of such strong preferences, Johansson foune that he was unable to pursue his corporate vision of selling the same models of appliances to all a Europe. To compete in Europe, Electrolux has found that it must have 120 basic designs with 1,500 var ants. The company has come to realize that its strategic vision for Electrolux in Europe was wron The idea of only a few brands did not work due to the cultural differences. Johansson had to revie his strategic vision and alter it to fit the European market. He found he had to alter his products f each country. His new goal is "to be a good Frenchman in France and a good Italian in Italy. N strategy is to go global only when I can and stay local when I must." Johansson is still trying to expand the market of Electrolux. He still feels a global strategy important for Electrolux, only he has learned that culture must be taken into account in each n market. Electrolux is growing. The company has entered the American market and is looking to er the former Soviet Union and Asia. Source: Adapted from William Echik on, DISCUSSION QUESTIONS I. How is the European environment different from that of the United States? What factors Electrolux The Trick to Sell g in Europe, e September 2 1993, p 8. r 2. Are there any circumstances under which there will be a single homogeneous market for h 3. Can you identify products for which there is, or could be, a homogeneous market in a 4. Identify and explain the functional strategies (e.g., distribution channels, advertising, purch responsible for the fragmentation of the European home appliance market? appliances in Europe? Europe? that a company like Electrolux could use to take advantage of the European Union's co marketExplanation / Answer
1. The European environment is different from that of United States as below:
2. Yes, the lifestyle of the Europeans is that they prefer less TV shows and give importance for conversations. This class of people forms a single homogenous market for the Television sets. A homogenous market is the market where the consumers have similarities or something in common. The products have little differences in features and designs. Hence, they can be perfect substitutes for each other. People with this lifestyle would prefer any type of Television sets if there are minor differences in their design and features.
3. Products that have a homogenous market in all of Europe are:
4. Distribution channels- Since the electronic appliances market is always a growing market in Europe, Electrolux needs to plan its facility and supply chain strategies well enough to accommodate the supply and demand of the European market.
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