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Global strategic Planning

Case Study Instructions:

Global Strategic Planning Introduction Background Information Case assignment Session Long Project Objectives I Zipcar is a highly successful new company specializing in a brand new model for automobile rental services, allows their customers long-term and flexible access to shared vehicles on a daily or hourly basis. Zipcar's innovative model allows those who sign up for their membership services to share cars with other members on a flexible basis, creating a cost effective alternative to car ownership. Since its founding in 2000, it has grown to become a major player in the U.S. automobile rental market and has expanded internationally to Canada, the U.K., Spain, and Austria and offers rental services to almost one million customers. Case Assignment Read the following two articles and do some of your own additional research on Zipcar Tice., C. (2012) Zipcar: Two Moms, a Business Idea and $68 in the Bank, Entrepreneur.com, http://www(dot)entrepreneur(dot)com/article/223692 Zipcar Expands in Sacramento Becoming 26th Major Metro Market: Based on strong demand, Zipcar increases number of vehicles, will open office (Nov. 6, 2013) PR Newswire (available on Proquest) Zipcar (July 11, 2012) World's Leading Car Sharing Network Continues European Expansion in Top Growth Market, http://zipcar(dot)mediaroom(dot)com/2012-07-11-Zipcar-Acquires-Leading-Car-Sharing-Service-in-Austria-CarSharing.at Now suppose you have been hired by Zipcar to come up with a international strategic plan. Write a four to five page strategic plan for Zipcar that addresses the following issues: 1. Should Zipcar expand into other countries beyond the current five countries that they operate in? If so, which countries should they enter first? 2. What kind of strategy should they use? For example: multidomestic, international, global, transnational, or other? Helpful Tips: Please first read in-depth the background materials for module 2. Identify key concepts in the background materials write a list, and study them Read the case in-depth and conduct additional research, if necessary Case 2 Assignment Expectations Answer the assignment questions directly Stay focused on the precise assignment questions, don't go off on tangents or devote a lot of space to general background materials List supporting references and cite sources in proper format Use appropriate writing style in essay form (organization, grammar, & spelling- see Writing Guidelines). A Global Strategy Defining and understanding generic competitive strategies and formulating a strategy. How do managers deal with business on a global level contrasted with a domestic level in a rational and strategic manner? Deciding upon a strategy in an international context presents many challenges. To do this, we begin by classifying the various approaches to overseas strategy. One way to do that is to divide strategies into the dispersed multidomestic, centralized international, integrated global, and transnational approaches. Each approach has its own characteristics, imperatives, advantages, and disadvantages as follows: The multidomestic approach locates the firm autonomously in separate countries; responds to national operational, product, and market requirements; and affords flexibility. It customizes products and marketing strategies to the local needs. It is advantageous when local pressures are high and cost pressures low. Philips NV uses the multidomestic approach. The international approach transfers distinctive competencies to foreign markets; responds to national operational requirements and worldwide product and market requirements, and offers control, standardization, and choice locations for various functions that afford economies of scale. This strategy is appropriate when there is a high demand for that competency in a foreign country, while the need to customize it locally is relatively low. McDonald's Company is an example of an organization that uses an international approach. The global approach responds to a low-cost strategy, with a standardized product and marketing worldwide. The costs of customization are thus avoided. This strategy does not apply to consumer goods markets. Intel Corporation is an example of an organization that uses the global approach. The transnational approach is ideal; it customizes products and marketing strategies to local needs and demands; it transfers competencies; it takes advantage of cost savings. Caterpillar Inc. pursues the transnational approach. Professor Michael Porter from Harvard University is a guru of strategic management. He is a major player in the field of strategy and established it as an essential business management discipline. Michael Porter developed fundamental frameworks for use in strategic management, such as "Porter's Five Forces Model", "Generic Strategies", and ''The Porter Diamond" . Required Readings Peng, M. (2014) Chapter 1: Strategizing Around the Globe, Global Strategy, 3rd Edition, South-Western Cengage Learning, http://www(dot)utdallas(dot)edu/~mikepeng/documents/GS3E_CH1_intro_1207.pdf Steers, R., Nardon, L. (2006) Chapter 10: Developing Global Business Stratigies, Managing in the Global Economy, M.E. Sharpe, Inc, Armonk, NY [Available in Ebrary] Deresky, H. (2008) Formulating Strategy, International Management, Perason Education International, http://www(dot)staunstrup(dot)net/BA_Int_Sales/SOL_2_sem/Int_Man_kap_6.PDF Humphrey, S. (2010) Introduction to Global Strategy, London School of Business and Finance http://www(dot)youtube(dot)com/watch?v=vII1HJcCxTk Lynch, R., (2013) How Do You Build a Global Strategy? Global Stragegy, http://www(dot)global-strategy(dot)net/how-do-you-build-a-global-strategy/

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Global strategic Planning: Zipcar
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A global strategy refers to the theory followed by an organization at the global stage; it also means a strategy that encompasses a worldwide perspective (Peng, 2014). Highlighting the need to focus on a global strategy is globalization and increased interconnectivity of world markets. Thus, any business venturing outside the home country should choose a strategy that best facilitates sustainability on the global scene. Even though, Zipcar only operates in five countries operations in new counties provides an opportunity to expand the car sharing business. Nonetheless, the need to do risk assessment is necessary for the business to succeed in diverse countries. This is a transnational strategy of Zipcar for Mexico City, Singapore and Tokyo markets.
Beside the five countries which the company operates, Zipcar should expand into other countries including the following cities Mexico City, Singapore and Tokyo Japan. The countries have different market expectations and characteristics. Mexico is America’s southern border and provides opportunities in the areas surrounding Mexico City. However, the business may have to accept lower profit margins because of consumer trends in the country. On the other hand, Japan is a mature market that would openly embrace the idea because of convenience similar to Singapore. In the three counties countries, cities have high population densities and hence the car sharing services are to be reliable at all times to create a strong brand (Peng, 2014).
Zipcar will rely on the transnational approach upon entry into the new markets as this takes into account the local needs of the people. This strategy combines aspects of the multidomestic and global strategy to respond to the local needs. Differ market segments have divergent needs and the local culture and shopping habits influence the way customers view the organization’s services. This will enable the company to be flexible in the divergent countries, but this will also require more coordinated efforts (Deresky, 2008). Zipcar will pursue both local and global goals, and the benefits of the strategy helps to increase competitiveness over rivals who rely on the multidomestic or global strategy solely.
Zipcar’s mission is to ease urban living by making it easier to access cars through car sharing. Even though, the concept is not new there is a need to adapt to the local conditions, but the company still retains core values no matter the business location. In all the cities, the company will continue to will continue being involved in environmental transformation. As such, to ensure fuel efficiency, the company will rely on hybrid cars in the Asian market where there is increased awareness about environmental safety following smog incidences in industrial towns of China. Even though, using hybrid cars is not a top priority for the Mexican market, the cars ...
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