To paraphrase Gehmawat, the world is not flat it’s semi-globalized, In order to understand the global environement where Grupo Bimbo intervene, a CAGE analysis based on the framework developed by Ghemawat will be performed at a country level (Mexico – USA & Mexico – China) and also at a food industry level. Armed with this analyisis we will check the relevance of each of the AAA strategy (Ghemawat, redefining global value), the recommended strategy will be then submitted to the 4I’s framework developed by Burton to understand the non-market environement. To complete the market strategy, we will then elaborate a non-market strategy to create an integrated strategy (Burton).
CAGE distance analysis – Mexico /US
Mexico and the United States share a common border on the northern side. Despite their close physical proximity and mexican adaptations to western styles, lots of dissimilarities are observed in the culture, beliefs, traditions and norms of social conduct of the people in these two countries. A vast majority of Mexican people use Spanish language. In fact, Mexico is the country which has the largest Spanish speaking population in the whole world. On the other hand, English is the most popular language among the Americans. However, the Spanish language is the second most common language in the United States after English. Mexican foods are famous all over the world. They are very appetizing because of their flavors as well as the use of colors and decorations. Americans have a large variety of styles of cooking. Most of their traditional cuisines have undergone a sea change over a period of time, due to the influence of various immigrant communities.
The politics of Mexico are somewhat similar to those of the United States. The United Mexican States are a federation whose government is representative, democratic and republican based on a presidential system according to the 1917 Constitution
The geographical distance between the Panera Bread in the US and Mexico is not significant. Both of these countries are part of the North American continent and are surrounded by the Pacific Ocean and the Atlantic Ocean.
The economy distance between the US and Mexico is not large. However, US economy has a large impact on the Mexican economy. The economy of Mexico is the 11th largest in the world. Mexico came to an agreement with the government of the US and Canada and it joined the North American Free Trade Agreement (NAFTA) in 1994. As a result of this agreement, the massive US market is easily accessible in Mexico.
CAGE Distance for food industry
Bakery is a FMCG ( Fast moving Consumer Goods ) Highly perishable
Non Market strategy to support the switch from artisanal bread and industry baked bread : •
Nutrition and health program
Education (to target young and future customer)
Alliance with other big company to change the consumption habits
Bimbo’s globalization challenges :
Industry competition: highly fragmented and competitive industry structure, with different players in different countries Demand patterns: Consumption habits heavily influenced by cultural legacy, demographics, tastes, fashion (e.g. low-carb diets in the US) and price sensitivity Distribution Networks: retailers bargaining power and location, country geography, transportation infrastructure, as well as labor relations affect distribution chain and costs. Administration: regulatory frameworks wary widely among countries for labor relations, new business registration, bankruptcy filing Brazil failure :
CAGE ANALYSIS BIMBO in US
Consumption patterns are strongly related to Diet
Low carb movement
Well being ? healthy lifestyle are general trends influencing may other industries as well as competitors (Nestle’s new goal: health & foods) •
Bimbo focuses on Hispanic immigrants segment (emotional ties)...
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