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Contents of Today’s Session (01/11/2021)

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News related to International Business

Cases - EPRG Framework
Tutorial No. 1
International Business Environment
Introduction to PESTEL Analysis
Videos: (1) Why Walmart Failed in Brazil? (2) Airtel in Africa
 News related to International Business (01/11/2021)
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G20 leaders endorse global minimum corporate tax deal for 2023 start

G20 leaders approve global tax reform deal

US Federal Reserve set to begin stimulus taper amid sticky inflation

Volkswagen's Skoda to resume production after two-week outage

Source: Economic Time / Business Standard

 Orientation of the Firm (EPRG Approach)
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Basis Ethnocentric Polycentric Regiocentric Geocentric

Culture Home Country Host Country Regional Global

Product determined Standardize
Local product
primarily by the needs within the region, Global product with
Marketing development based on
of home country but not across the local variation
local needs
customers regions
Repatriation of profits Retention of profits in Redistribution Redistribution
Finance
to home country host country within region globally
Technology Mass production Batch production Flexible Mfg. Flexible Mfg.
Best people
Regional people
People of home country People of local everywhere in the
developed for key
developed for key nationality developed world developed for
Practices positions
positions everywhere in for key positions in their key positions
anywhere in the
the world own country everywhere in the
region
world.
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1. Case on Ethnocentric Approach

Nissan’s Ethnocentric orientation was quite apparent during its

first years of exporting cars and trucks in United States. Nissan’s
earliest exports from Japan were automobiles designed for mild
Japanese winters. When exported to USA, a company with
extreme winters, these vehicles were difficult to start.
There were locations in Northern Japan where there were
comparatively chilled winters but the car owners here would put
blankets over car hoods. Nissan management assumed that even
US customers would do that.
Nissan tried for a long time to design cars in Japan and shove it in
the US market. But all was for vain.
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2. Case on Ethnocentric Approach

Robert Bosch, or BOSCH, is a German

multinational engineering and electronics
company headquartered in Germany.
It is the world’s largest supplier of automotive
components measured by 2011 revenues.
It proudly believes in German Engineering and
promotes its products with same approach.
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3. Case on Ethnocentric Approach

Walt Disney decided to venture into France with similar

marketing strategies as in US. The minister of culture in
Paris announced that the park be boycotted because it
was an unwelcome symbol of American Clichés and
consumer society.
At the same time there were political clashes between the
US government and French Farmer associations. There
were operational errors that existed.
For instance, keeping their strategies similar to US, they
had declared this amusement parks to be alcohol-free.
But this did not play very well in country where a glass
of wine for lunch is a given.
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4. Case on Polycentric Approach

McDonald’s is a prominent example of a firm

following polycentric approach. Having originated in
USA, its menu in USA is centered around their local
preference which is beef and meat. When coming to
India, it realized that Indians are culturally averse to
eating beef.
McDonald’s strategy to serve veg burgers in India
instead of nonveg burgers (pork and beef) to its Indian
customers can be termed as Polycentric.
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5. Case on Polycentric Approach

When Gerber, a Nestle owned purveyor of

baby foods first started selling their baby food
in Africa, they used the same packaging as in
the USA – with the cute baby on the label.
Later they found out that in Africa companies
routinely put pictures on the label of what is
inside the package, since most people cannot
read.
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International Business Approach – EPRG Framework
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6. Case on Polycentric Approach

When Another firm with its polycentric

approach is google. Do you care to notice the
changing doodles each day! Rather than
attempting a single doodle worldwide, it adapts
itself according to different countries. There
may be a different person being honored in
India and at the same time some other festival
being celebrated in USA.
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7. Case on Regiocentric Approach

In the 1950s, Pepsi reportedly lost its dominant

share of the beverage market in at least one
southeast Asian country after changing its
vending machines and coolers from a deep
regal blue to light ice blue.
Light blue is associated with death in that
region, and Pepsi’s subsequent loss was
competitor Coca-Cola’s gain.
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8. Case on Regiocentric Approach

Coca Cola has been using a regiocentric

approach in formulating its messages for a
basket of countries which includes India,
Pakistan and Bangladesh.
Similarly, in European countries, different
group of countries with similar regional
backgrounds have regiocentric orientation.
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9. Case on Regiocentric Approach

Goodyear International, the tire major also has

clubbed various countries with similar policies
and economic landscape. Asia-Pacific is one
region, Europe is another and the rest of the
world is divided into Latin America, North
America, Middle East and Africa.
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10. Case on Regiocentric Approach

Domino’s has a regional approach to serving pizzas which has

made it a much bigger brand than its rivals.
The company introduced its American Legends line of specialty
pizzas in 2009, featuring 40 % more cheese than the company’s
regular pizzas, along with a greater variety of toppings.
In 2010, shortly after the company’s 50th anniversary, Domino’s
changed its pizza recipe “from the crust up”, making significant
changes in the dough, sauce and cheese used in their pizzas.
In Dec 2013, Domino’s Pizza, in Israel, unveiled its first began
pizza, which uses a soy-based cheese substitute.
In 2014, Domino’s Pizza in Nigeria introduced the new Jollof
Rice Pizza and the Beef Stew Pizza.
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11. Case on Regiocentric Approach

‘Coca-Cola Zero providers real Coca-Cola

taste for variety seeking consumers. Coca-cola
zero is sweetened with a blend of low-calorie
sweeteners, while Diet Coke is sweetened with
aspartame. As for Coke / Coca-cola light, in
certain countries, the term ‘diet’ is not used to
describe low-calorie foods and beverages. In
these countries, we offer Coke/Coca-cola light.
The sweetener blend used for Coke/Coca-cola
light is formulated for each country based on
consumer preference.
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12. Case on Geocentric Approach

McDonald’s offers beer in Germany, wine in

France, mutton pieces in Australia, Veggie
McNuggets in India, Teriyaki Burger in Japan,
McLaks in Norway.
Some if its local favorites around the world
include the McItaly burger in Italy, Maharaja
Mac in India, the McLobster in Canada, the
Ebi Filit-O in Japan.
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13. Case on Geocentric Approach

Hindustan Uniliver identified the importance

of rural customers and invented the shampoo
sachets priced at almost a rupee which were an
instant hit.
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14. Case on Geocentric Approach

Viacom’s MTV channels are branded

according to the country they are operated in
namely MTV India, MTC China, MTV Korea
and many more. It hires more people from
these nationalities and plays according to
respective cultures.
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