SAP Business Symposium Osaka - s3. · PDF fileSAP Business Symposium Osaka © Kazuo Ichijo...

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April 19, 2011ICSIMD

SAP Business Symposium Osaka

1.Singapore2. Hong Kong3. USA4. Switzerland5. Austria6. Sweden7. Canada8. Taiwan9. Norway10. Malaysia11. Luxembourg12. Netherlands13. Denmark14. Austria15. Qatar16. Germany17. Israel18. China19. Finland20. New Zealand21. Ireland22. UK23. Korea24. France25. Belgium26. Thailand27. Japan

Source: IMD World Competitiveness Yearbook, 2010

28. Chile29. Czech R.30. Iceland31. India32. Poland33. Kazakhstan34. Estonia35. Indonesia36. Spain37. Portugal38. Brazil39. Philippines40. Italy41. Peru42. Hungary43. Lithuania44. South Africa45. Columbia46. Greece47. Mexico48. Turkey49. Slovak R.50. Jordan

51. Russia52. Slovenia53. Bulgaria54. Romania55. Argentina56. Croatia57. Ukraine58. Venezuela

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Japan’s overall rankingin the IMD’s World Competitiveness Yearbook

(2001-2010)

NUMBERNUMBER11

19901990

WORKINGBETTER

WORKINGCHEAPER

WORKINGANYWHERE

Source: D. Turpin (IMD)

Where are you now and where do you want to go??

Local, domestic No value chain overseasInternational: Only some activities in the whole value chain

Multi-national: the whole value chain in a country

Multi-regional: the whole value chain regionally integrated

Global: the whole value chain globally integrated

Two Opposing Forces in Global Environment

Global Integration

The ability to derive the benefits of operating as a single global entity

Local Responsiveness

The ability to respond to each locality (e.g., region, country,province/state) and compete effectively at that level

Source: P. Rosenzweig, IMD

Forces for Global Integration

Scale economies in R&D R&DScale economies in purchasingScale economies in manufacturing

Scale economies in advertisingAbility to leverage best practicesAbility to apply managerial talentConsistency for global customers

Multinational firmsGlobally mobile customers

Forces for Local Responsiveness

Product tastes and habitsCustomer ability to pay

Marketing channels, sales, and merchandising

Competitive pressureHost country regulations

Technical, environmental, more

Labor and management practicesClimate

ConsumerElectronics

Cement

BrandedPackagedProducts

Forces For Local Responsiveness

Source: Adapted from Managing Across Borders: The Transnational Solution,Christopher A. Bartlett and Sumantra Ghoshal, Harvard Business School Press, 1989.

Automotive

MercedesBMW

Toyota PSA

Global and National Forces: Industry Effects

Nestlé

Sustenance

PleasurePleasureand diversityand diversity

ConvenienceConvenience Nutrition

Health

Wellbeing

1867 1944 2000 2025

Source: Nestlé

Nestlé

Paul Burke, CEO, Nestlé

Source: www.youtube.com

Source: http://www.nestle.com

Nestlé 77

Nestlé

Nestle,Purina,Nestea,Nescafe,Maggi,Buitoni,,,

Kitkat,Nespresso,Perrier,Vittel,Milo,,,

Findus,Eskimo,,,

Corporate brand

Global strategic brand

Local strategic brand

Local brand about7500

global

Made by ichijo from the source”

2003/06/30 NO.49”

Nestlé

Local Adaptation

Global Integration

Nestlé

KPI1. Growth2. Gross margin3. Capital efficiency4. Market leadership

Nestlé BOP

BOP market - $5 trillion.Total by income segment.(Page 13, The Next 4 Billion: Market Size and Business Strategy at the Baseof the Pyramid)Four billion people form the base of the economic pyramid (BOP) – those withannual incomes below $3,000 (in local purchasing power).The BOP makes up 72 percent of the 5,575 million people recorded byavailable national household surveys worldwide and an overwhelming majorityof the population in the developing countries of Africa, Asia, Eastern Europe,and Latin America and the Caribbean – home to nearly all the BOP.This large segment of humanity faces significant unmet needs and lives inrelative poverty: in current U.S. dollars their incomes are less than $3.35 a dayin Brazil, $2.11 in China, $1.89 in Ghana, and $1.56 in India.Yet together they have substantial purchasing power: the BOP constitutes a $5trillion global consumer market.

Source: http://www.wri.org/publication/the-next-4-billion

Source: Nestlé

BOP Nestlé Vision

Source: Nestlé

Nestlé

Win Win

Source: Nestlé

Adaptation ?

Aggregation ?Arbitrage ?

Source: Ghemawat, 2007

COE (Center of Excellence)

Multi-regional organization (1998

Organization 2005 (1999 -)Global Business Unit (GBU): AggregationMarket Development Organization (MDO): AdaptationGlobal Business Services (GBS): Arbitrage

P&G: Multi-regional Global

Adaptation

AggregationArbitrage

1980s: Multi-regional

1998: Organization 20052000s: More Arbitrage

Source: Ghemawat, 2007 and James Henderson@IMD

Procter and Gamble(-1998)

28Source: HBS 9-707-519

Procter and Gamble Organization 2005

Source: HBS 9-707-519

Gillette, Wella, Clairol Procter and Gamble Organization(2006)

30Source: HBS 9-707-402

A.G. Lafley Organization 2005 P&G

A. G. Lafley, former CEOProcter and Gamble

Source: HBS P&G Japan: SK-LL Globalization Project

Source; Vlad Pucik

GE-Allow Globalization to Drive New Business Models-

Phase 1: Made in the USA and ExportPhase 2: Localization of ProductionPhase 3: Engage Local Customers to do more engineering forlocal adaptationPhase 4: Unique Local Products (Reverse innovation)Phase 5: Export Unique Local Products to the USA

Source: http://www.ge.com

Cheap WorkerJPN Knowledge Worker JPN

INDIA INDIA

Arbitrage:

Aggregation:

Arbitrage COE

Japan’s Burden

38Source: http://www.economist.com

The Fallout

The Rising Sun

http://www5a.biglobe.ne.jp/~french/

RD & CD

RD: Research and Develop CDConnect and Develop

P&G 35% CDCD

Source: http://www.pg.com

Connect and Develop P&G

Source: http://www.pg.com

iPhone :

Source: http://www.apple.com; http://www.uniqlo.com

Japan Technology

Source: http://www.uniqlo.com

Social Network

Facebook GoogleFacebook

The Economist, Jan 28., 2010

Facebook and Social Networking

The Economist, Jan 28., 2010

NPO NGO

SAP Business Symposium Osaka - s3. · PDF fileSAP Business Symposium Osaka © Kazuo Ichijo...

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