The Global Economy. A Symposium for Community College Educators. November 12-13, 2014

Transcription

1 The Global Economy A Symposium for Community College Educators November 12-13, 2014

2 Charlé LaMonica Director, World View Carol Tresolini Vice Provost for Academic Initiatives, UNC at Chapel Hill Scott Ralls President, NC Community College System

3 Emerging Markets in a Global Economy: From Contract Manufacturing to Branding Jan-Benedict E.M. Steenkamp C. Knox Massey Distinguished Professor of Marketing & Marketing Area Chair World View Community College Symposium: The Global Economy Friday Center for Continuing Education, Chapel Hill, November 12, 2014

4 My father s teenage world My teenage world My daughter s world

5 This no longer satisfies emerging markets

6 Hon Hai vs. Apple who grabs the value chain profits? 30 Net Income Margins (%) Hon Hai Apple 5 0

7 Why do brands matter? Quality guarantee Attracts top talent Prestige Eases consumer decision making Generates demand Inspires trust Emotional satisfaction

8 Why will emerging market companies develop their own global brands? Financial benefits Reduced cost competitiveness

9 The end of cheap China Comparing the world s top-25 export economies

10 Why will emerging market companies develop their own global brands? Profit margins Reduced cost competitiveness Keep company fate in own hands: Brand power = market power

11 Brand power in 2014 Source: Author s calculations based on Interbrand 2014 and Yahoo Finance Brand Global brand value ($billion) Global brand value as % of firm value Apple % Google % Coca Cola % IBM % Microsoft % General Electric % Samsung % Toyota % McDonald s % Mercedes-Benz % BMW % Intel % Disney % Cisco % Amazon %

12 In Huawei (#94), the Chinese telecommunications and network equipment provider, makes Best Global Brands history as the first Chinese company to appear on Interbrand s ranking..

13 Why will emerging market companies develop their own global brands? Financial benefits Reduced cost competitiveness Keep company fate in own hands: Brand power = market power The Great Deceleration?

14 Why will emerging market companies develop their own global brands? Financial benefits Reduced cost competitiveness Keep company fate in own hands: Brand power = market power The Great Deceleration? The march of history

15 A few Chinese and Indian inventions Magnetic compass Movable sails and rudder Mass production of steel Porcelain Canal locks Gunpowder Mechanical clock Smallpox inoculation Silk Movable type (printing) Paper money Button Calico Chess Prefabricated homes Cotton cultivation Zero (number) Cataract surgery First global religion Abacus Paper making

16 Why will emerging market companies develop their own global brands? Financial benefits Reduced cost competitiveness Keep company fate in own hands: Brand power = market power The Great Deceleration? The march of history National pride Why doesn t China must its own Nike? Its own Nokia? Its own Carrefour? We need to have our own Nike! Our own Nokia! Our own Carrefour! (Jun Jie Ge, Vice Chairman of Bright Food Group)

17 How emerging market firms firms can become branded powerhouses Capabilities Evolution of companies Strategies Development of world-class capabilities Manufacturing Supply chain R&D Marketing OEM Supplier Selling own brands + OEM Branded company Pathways for creating global brands Asian tortoise route B2B to B2C route The diaspora route The brand acquisition route Positive campaign route The cultural resources route The natural resources route The national champions route

18 Why should Western countries (managers) care? A golden rule in strategic management is to understand your competitors. This is a crucial prerequisite for being able to develop effective counterstrategies.

19 Why should Western managers care? A golden rule in strategic management is to understand your competitors. This is a crucial prerequisite for being able to develop effective counterstrategies. You can t make the same mistake twice. The second time, it s not a mistake, it s a choice.

20 Why should Western managers care? A golden rule in strategic management is to understand your competitors. This is a crucial prerequisite for being able to develop effective counterstrategies. You can t make the same mistake twice. The second time, it s not a mistake, it s a choice. Use emerging market routes for global advantage Hyundai i10: from India to Europe Nissan Pixo: from India to Europe Dacia Duster SUV: 9,000; 30% less than models offered by mainstream volume brands. Ford EcoSport SUV: Designed in Brazil, built in India, introduced in Europe

21 Why should Western managers care? A golden rule in strategic management is to understand your competitors. This is a crucial prerequisite for being able to develop effective counterstrategies. You can t make the same mistake twice. The second time, it s not a mistake, it s a choice. Leverage emerging market strategies for global advantage Plot counter- and cooperative strategies; alliances, mergers, acquisitions.

22 Why should UNC care? A golden rule in strategic management is to understand your competitors. This is a crucial prerequisite for being able to develop effective counterstrategies. You can t make the same mistake twice. The second time, it s not a mistake, it s a choice. Leverage emerging market strategies for global advantage Plot counter- and cooperative strategies; alliances, mergers, acquisitions. Implications for your alma mater!

23 Questions?