Deconstructing Zara Handout Version

Topics: Foreign exchange market, International trade, Economics Pages: 15 (4175 words) Published: January 14, 2012
1. The global economy may be viewed as a pyramid. The growing number of opportunities at the base of the pyramid highlights the role this bottom tier will play in the years to come. How would you take advantage of this often-ignored level if you were occupying a top management position at a prominent MNE?

The global economy can be viewed as a pyramid. The top of the pyramid consists of one billion people with per capita income of $20,000 or higher. The second tier consists of another billion people making $2,000 to $20,000 a year. A lot of the world's populations, about 4 billion people, live at the base of this pyramid, making less than $2,000 a year. (one billion的人在金字塔顶端每年收入是高于20千,another billion make 2千到20千一年, 大多数人在低端大约4B人, make 少于2千一年)

Marketers have focused on the top two levels and ignore the bottom tier. It is much easier to market to consumers with higher incomes. An increasing number of countries located in this bottom tier also have a big opportunity to make more money. In the emerging world, marketing is different. There is no guarantee media choices will be available or that your product will be a success(marketers 集中于顶端忽略低端,很容易赚高收入人的钱,在新型市场,销售很难,因为没有保证能成功).

The challenges in the bottom of the pyramid require innovation, such as identifying special price points, as well as long-term commitment. Many consumers at the base of the pyramid may be uneducated, but they are brand conscious. Companies need to think outside the box and identify win-win strategies for this emerging consumer market(在低端的挑战是创新,许多客户也许没有文化,但是有品牌意识,公司需要确立双赢的战略在新型市场上).

Although individuals living in developing economies have less purchasing power than their counterparts living in the developed countries, they still have needs and wants. Global firms capable of fulfilling these needs will make a profit and emerge as global marketers.(虽然发展中的经济购买力比较低,但是还是有需求)

2. Describe the differences among the three economic systems.

A pure market economy is described by an "invisible hand" of market forces noted by Adam Smith in the Wealth of Nations in 1776. The government takes a hands-off approach known as laissez faire. The government only performs functions the private sector cannot perform.(纯粹的市场经济是无形的手,政府采用不干涉的方式,只执行公司不能执行的功能)

A pure command economy is defined by a government taking, in the words of Lenin, the "commanding height" on the economy. All factors of production should be government controlled, and all supply, demand, and pricing are planned by the government.( Former Soviet Union)(计划经济,列宁提出的制高点,所有的生产要素归政府计划和控制) A mixed economy has elements of both a market and command economy. It boils down to the relative distribution of market forces versus command forces.(混合经济)各个举例(China)

3. Define how Hofstede's power distance and uncertainty avoidance dimensions influence the style of decision making in the U.S.

For example, in Brazil, the richest 10% have 50% of the national income, but everyone accepts it as the way it is. Sweden, on the other hand, has a lower power distance where the richest 10% only get 22% of the national income. Managers in high power distance countries have a stronger role to manage their business. Managers in low power distance countries should take advantage of the greater communication between power levels, gaining insight and perspective from all individuals.

Uncertainty avoidance. Individuals in high uncertainty avoidance cultures place a premium on job security and retirement benefits. Managers in high uncertainty avoidance cultures (Greece) often strictly follow guidelines, rulebooks, and corporate codes. Mangers in low uncertainty avoidance countries (US China) rely more on experience and training. This gives the members more room to adapt in the face of a problem.

4. List and explain six basic rules of thumb for venturing overseas.

The first is to be prepared. Traveling internationally is always difficult to predict, so attempting to plan and have enough...
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