Border Trade Barriers Decreased Answer Questions

Respond to Critical Thinking and Discussion Question

To successfully complete this discussion board, the student is to make two postings. The postings are to be made early enough to allow for comments from other students.

First posing: Your initial response to the discussion board questions Answer the following 3 questions

a) What strategy was Procter & Gamble pursuing when it first entered foreign markets in the period up until the 1980s?

b) Why do you think this strategy became less viable in the 1990s?

c) What strategy does Proctor & Gamble appear to be moving toward? What are the benefits of this strategy? What are the potential risks associated with it?

Second posting: Response to another student’s initial response to the discussion board questions. I show a student’s three answers, please a me a response.

a) What strategy was Procter & Gamble pursuing when it first entered foreign markets in the period up until the 1980s?

Proctor and Gamble first began selling it’s products overseas in the 1930’s. According to the textbook, up until the 1980s, Procter & Gamble developed new products in their home base of Cincinnati and then relied on “foreign subsidiaries to manufacture, market, and distribute those products in different countries. Foreign subsidiaries had their own production facilities and tailored the packaging, brand name, and marketing message to suit local taste and preferences.” This strategy is known as an international strategy.

b) Why do you think this strategy became less viable in the 1990s?

In the 1980’s P&G had extensive duplication of manufacturing, marketing, and administrative facilities resulting in high production costs. Additionally, retailers distributing P&G products were operating globally and demanding price cuts from Procter & Gamble. As globalization increased and cross-border trade barriers decreased in the 1990’s, Proctor and Gamble had to proactively reduce its costs to remain competitive. A marketing strategy segmented by country was simply too expensive and becoming ineffective to compete against.

c) What strategy does Proctor & Gamble appear to be moving toward? What are the benefits of this strategy? What are the potential risks associated with it?

Today, Procter & Gamble has shifted to a transnational strategy. The company has reorganized into seven self-contained global business unit by product category, instead of by country. Benefits of this approach include the speed of innovation, economies of scale, which results in cost reduction and the ability to adapt products to the need of local markets. The potential risks of a transnational strategy includes risks of siloed thinking and minimized communication between business units because of their global brand segmentation and individual business unit goals. This can reduce the sharing of knowledge and lessons learned between business units.

PLEASE DO NOT COPY! ALL OF ANSWERS MUST BE FROM YOUR OWN IDEAS!

 
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