V. Internationalization & Porsche Flashcards
1
Q
Standardization vs. Adaption
A
- Global strategy = Considering expectations of foreign consumers/ Importance of country of origin for the brand identity
- Not applicable for all industries = If needs are not the same E.G. cosmetics/ If taste is not the same E.G. Food/ If resources are not transportable E.G. Eiffel tower
2
Q
Brands Worldwide distribution general
A
- Core product in Home country = The original company
- Core product in Worldwide distribution = Distribution systems
- Licensed products in Home country = Licensing
- Licensed products in Worldwide distribution = Distribution systems for licensing
3
Q
Different systems for international distribution
A
- Exclusive sales
- Subsidiaries
- Local distribution
- Joint Ventures
- Franchises
4
Q
Exclusive Sales
A
- Exporting products on their own
- International fairs once or twice a year = E.G. Fashion shows
- Open buy on budget of the department stores
- Difficult for new brands
- E.G. Watches and wonders trade show
5
Q
Subsidiaries
A
- Expensive = Not recommendable if sales are less than €4m
- Slower growth
- Only for big brands
- Not the most common strategy in internationalization
- Not always possible
- E.G. Dior in Mexico/ Corbet in China
6
Q
Local distributions
A
- Exclusive right to distribute a brand in a given territory
- Allows to represent several brands at the same time
- Pro = Less financial risks/ Knowledge about local market
- Con = Expensive/ Hard to control
7
Q
Joint Venture system
A
- Subsidiaries that belong partly to a partner
- In order to facilitate relationship with local distributor
- Back office activities and local market knowledge
- Possible increase in market share price
- E.G. Chalhoub in Middle East = LV + Dior
8
Q
Franchise
A
- Franchise company manages the brand following international guidelines
- Franchise is clone of the brand
- Franchisee pays a franchise fee
9
Q
Flagship Store
A
- Specific market entry strategy for luxury brands
- Company owned stores that only carry a single brand
- Intention to build brand instead of solely focusing on generating profit
- Pros = Reinforces credibility of the brand/ Space to innovate/ Strengthens relationship with stakeholders
10
Q
Best way to grow internationally
A
- Average global Luxury brand deal includes:
- 10 fully owned subsidiaries
- 5-20 joint ventures with former distributors
- 40-60 independent distributors
11
Q
Tourism and business travel to reach international consumers
A
- Tourism to buy luxury products in targeted cities
- Luxury travel retail = Duty-free shops (Airports and downtown)
- E.G. Kering = Collections exclusively for travel retail/ Opened travel retail shops
12
Q
Duty-frees in airports
A
- Strategic source of sales and growth
- Consumers mostly from emerging countries
- Named the 6th continent
- 36% products sales, Average growth rate 8.6% since 2002
13
Q
Duty-frees and Covid
A
- Sales collapsed by two thirds due to C-19
- 60% of luxury consumer cant wait to travel again
- Prada and Hermes made +40% during pandemic in China
- Acceleration of pre-existing trends = Duty frees shift away from airports but are popping up across mainland China
- Dutyfrees drift eastward of China to Hainan in form of a free trade port
14
Q
Chinese consumers
A
- Source of growth with 30% of global sales
- Choice of travel destination by = Geographical distance/ Attractivity of exchange rate/ Exciting character of duty free zones
15
Q
Pricing
A
- Highest = Japan/ Lowest = Germany, UK, France
- Dior most consistently priced brand geographically
- Less consistent brands = Gucci, LV, Balenciaga with up to 35% variety
