20501034 - Entry 5

Original Article

Glaxo's Price Strategy

Based on Value

Zantac is the most famous product of Glaxo. Before Zantac came, the market was dominated by SmithKline's Tagamet. As Glaxo launched the market, SmithKline lower the price as much as 20%. However, Paul Girolami, the president of Glaxo decided to put Zantac in high price point because it is much better than Tagamet in many ways. When Zantac came to the market, the price of Zantac was 56% more expensive than Tagamet.

In addition to this, they set the marketing strategy with Roche, marketing partner firm in USA, to notify its excellence. As a result of these effort, the benefit of Zantac was broadly notified. Especially the doctor who prescribed the Zantac had seen that the patients who take the Zantac didn't feel pain anymore. Moreover, the patients doesn't need to take any more stomach operation. Therefore, doctors could recommend the Zantac with confidence.
This strategy was not the option unless they have strong confidence about their product's excellence and marketing capability. However, Glaxo proceeded what they believed and the consequences was proved as a great success.

Zantac's case could be the wonderful model of value based price strategy.

5. Warning to the U.S economy

Original Articles

Warning to The World Economy

As people know the truth about American economy related to many other countries. If U.S economy going down, it could cause inflation and economic chaos. Many countries depend on dollar cost. Most of U.S. economy problem caused by amid housing. People lent money from the bank to buy a house. However, they do not have ability to pay back. Federal Reserve Bank takes their house instead of money. It affects U.S. dollar value. As U.S. economy going down, dollar is cheaper and cheaper. It is going to cause inflation. Federal Reserve Bank should have strategy to defense U.S. dollar value.

Economic Growth

U.S. 0.5% growth

China 11.4% growth

Japan 1.4% growth

Canada 1.3% growth

India 7.9% growth

Russia 8.1% growth

As people can see the result. U.S. economic growth is too slow. "Many private economists and members of the U.S. public believe the country has already fallen into its first recession since 2001. For the first time, Federal Reserve Chairman Ben Bernanke acknowledged last week that a recession was possible." When FRD trying to limit the damage, they lower the interest rate to find their money. Their most problem started at subprime mortgage. They now have to consider their economy to rise up. U.S. economy already experience Great Depression. U.S. economy affects most of countries economy. It is now not just U.S. economy but all around the world economic problems to limit the inflation.

ST #: 20601011

Referencese

http://money.cnn.com/2008/04/09/news/international/world_economy.ap/index.htm?postversion=2008040910

5. Threat to Netflix&Blockbuster(Series2)

original article

1) Strength and weakness of VOD, Movielink & iTune

- There has emerged VOD(Video-on-demand) after Blocbuster&Netflix video-rental business industry. VOD is kind of mixture of video-rental service and telephone service. Through this system customers don’t need to move to a video-rental shop anymore. Only thing customers need to do is click a button and choose the movie that they want to see from the list.

Secondly, Web site Movielink is another factor which is intimidating preexistent market. So far, Movielink had offered movie-downloads as rentals, which, like the VOD model, the customer could watch for only 24hours. However, they improved this problem by offering download service. Therefore, customers can have movies exactly same as they buy them in the DVD store. But they have some problems like piracy issues, uncertainty of success(risk taking), technologic problems(hard to transport the download movies from computer to the TV screen). The more people download movies from Movielink the more the piracy will be prevalent. It will bring about patent problems. Since this is new trial of the business industry, there are lots of uncertainties to success. Movielink’s higher download fee than iTunes is another weekness and things to overcome to grow larger.

Lastly, it is not yet free from technologic aspect. To watch movies on a television screen, users would need to have Windows Media Center, which is designed to connect to a TV, or special jacks and cables. This technology has not come into wide use yet. Also, it requires customers to study and think to get used to it.

Another force that Blockbuster and Netflix have faced is the entrance of Apple into the movie download market. As we know, Apple’s iTunes is already a huge unchallenged company, so just its coming to the business could be a heavy burden to them. On the other hand, there are some problems they are having. First, it’s time consuming to download movies via that service. Because, even using a broadband Internet connection, high-quality movie files, which generally surpassed 1 gigabyte in file size, required in the neighborhood of 90minutes to download completely.

Moreover, it takes certain time to make customers to adapt to the new technology. Also, they should spend some time to learn how to use the system. In brief, it’s more complicated than just buy DVDs and watch it. Lastly, many piracies will be prevalent. Then, naturally it will cause downwardness of Movie industry.

2) Its effect in the future to Blockbuster&Netflix Market

- I don’t think nor Blockbuster and Netflix will keep there market share in the future unless they innovate present system and organization. Because, as time flows lots of new entrants will be coming into this industry with better contents. Since science and technology are developing fast these days, position of the bricks and mortal industry like Blockbuster is getting smaller and they are now facing crisis. To survive in this tough, competitive environment, Blockbuster and Netflix should innovate on their present structures and ideas to catch up changing trends.

3) Different point of view: Would the Netflix model work in Korea? Why or why not?

- It will be little bit tough for Netflix to succeed in Korea. Because, most of environments and circumstances are different between US and Korea.

Firstly, Korean technology has developed so well, so there are many ways to download movies and even dramas at low cost. For example, Korean internet site ‘we-disk’ offers 10MB/1Won download service. Also it helps us to download a movie within 5minutes. It’s really convenient and time-saving. Therefore there is no room for Netflix to come into Korea market.

Secondly, Korea online DVD&Video rental industry is already fixed firmly. It’s already full like Cashcow of BCG Matrix. Therefore we don’t need to use foreign company.

Thirdly, it’s really easy to access offline store. If we leave home, we can reach DVD&Vedio rental store just by few steps. We don’t want to spend our time and labor searching on the internet to rent DVDs via online.

Reference:

Management Information System -Pearson Education- P121-123

http://en.wikipedia.org/wiki/Video_on_demand

http://industry.tekrati.com/research/news.asp?id=7746

student NO. 20601016 entry-5

cool shoes?

GEOX respira. Means “GEOX breathe” in spanish. These are the first words you see when you go into www.geox.com. Geox is a shoes and clothing manufacturing company that manufactures shoes that actually “breathe”. With the original idea developing from an arduous hike and a visionary who believed in his creation, Polegato (founder and president of GEOX) came up with an innovative product in an industry that was slowly starting to depend on bizarre models and name brand to survive. As GEOX, which was previously only a shoes company, expands it is now trying to grab a piece of the athletic shoes market pie.
GEOX shoes are normal shoes but with a touch of comfort in them. These shoes actually let your feet breath and cool down. GEOX shoes are made similarly to any normal type of shoe except the sole. The sole is a perforated one that allows air to ventilate through its holes but at the same time leaving all the water and liquid substances out of the shoe. Making it a cooler shoe. (As in decreasing the temperature and stuffiness inside the shoe).
But making a cooler shoe is quite hard these days as shoes, not only dress shoes but even athletic shoes are all becoming “apparel”. Nike’s Air Jordans, which were specifically designed for maximum comfort and efficiency on the basketball courts, are now being worn by consumers with no experience or interest in basketball. The Adidas “Samba” were also designed and manufactured for soccer players and people who play the game of soccer. However this shoe has become more of a casual wear to match with a pair of pants and a casual shirt. My point is that many of the athletic footwear that were once designed for athletic purposes are being used for a different purpose. And these companies are making profits because of their “looks”, not because of their comfort and strength on the soccer field.
As GEOX tries to jump into the athletic footwear market, GEOX should consider its apparel more than it is doing right now. From what it looks like, GEOX is investing zero research on fashion and the way the athletic shoe looks. My first impression when I saw the GEOX atheltic shoes reminded me of a “Nice” instead of a Nike, an “Adidos” instead of an “Adidas” and a “Fuma” instead of a “Puma”. In other words cheap and not cool.
In Geox’s attempt in marketing its “cool” shoes, GEOX should probably focus more on the “coooool” that would come from the consumer’s peers mouth rather than the “cool” that the wind would bring.

http://www.businessweek.com/magazine/content/08_15/b4079058287126.htm?chan=top+news_top+news+index_global+business



Entry #4 (20100656)

4. Nolbu's business

Original Articles

NolBu's Business Strategy

1. Tarketing

2. R&D

3. Franchise

One of the famous restaurant in Korea is Nolbu Bossam. They started their business at 1987 with only 15 ft size of restaurant. However, they are now big restaurant company in korea which has many franchise all around in S.Korea.

Tarketing

When Nolbu CEO started their business, their customer tarket was worker who go to big company. They also consider the customer age about 30~50 who usually has money in their poket. They also tarket the korean foods for customer. Nolbu CEO knew that most Korean workers like bean soup, Kimchi, and meat. They started as sole proprietorship which is entrepreneur.

R&D

When Nolbu company grow bigger and bigger. They invest their money for new product to be competitive and Interior design for the luxury atmosphere. As people know, when people go to Nolbu restaurant, they told that Nolbu's facilities are clean and shiny which has good looking. They made good first impression to the customer, and it affected as strength of their company. They also invest to the new product. When Nolbu started their business, they only has menu for the Bossam which is their star product. Now, Nolbu menu has more developed and products. Nolbu invest R&D for only korean tradition food. They now have Bossam, Dolsot bab, and Budae JJigae. All of this product made big hit in restaurant business. They also invest to get people's opinion by event.

• New Products
• Interior Design
• Internet Business

Franchise

One of the reasons to be growing big company that is franchising. Especially, Nolbu CEO earns their most profit from their franchise. Because of brand name, people recognize their foods and eat their food. Their brand name is so strong. It became one of the famous restrauant in korea. Even, many korean, who lived in outside of Korea, also know the Nolbu brand. They now tried to open their market outside of Korea.

Reference

http://month.foodbank.co.kr/etc/search_view.php?secIndex=1036&page=4&section=&serial=&keyfield=all&key=

St #: 20601011

20501034 - Entry 4

TGIF

Original Article

Just 10 years ago, having a meal in family restaurant like TGIF, Outback, Marche is regarded as one of snobby life style. Once, some woman who loved to go to family restaurant enjoying fancy life style was very much criticized and named “된장녀”. However, we don’t criticize anybody who has a meal in family restaurant since more and more people are experiencing and getting used to these kinds of life style. As the pie is getting bigger and bigger, family restaurants are competing each other to have more market share. In this situation, TGIF has been shown as leading company. Let’s see how they did.

External environment

Social factor
Increasing the number of career women
Two career couple
Showing more interest in recreation
Anti-America emotion

Cultural factor
Improvement of cultural sense
Westernized eating habit
Introduction of western food culture

Economic factor
Economic growth
Globalization
Progress in FTA

Technical factor
Improvement of packaging technique
Technical cooperation with famous brand

Competitors analysis

Bennigans
Bennigans has the second largest market share after TGIF and has as many menus as TGIF does. In comparison with TGIF, it is evaluated as more sweet and spicy. Overall theme color is green and atmosphere is like middle part of America.

Tony Romas
Tony Romas is specialized in rib.

Marche
The concept that Marche is promoting is “World Tour Pursuing the Taste.” People can feel that they are shopping all different kinds of food in outdoor market.

Jungle Jim
Korean company developed the brand by themselves without any technological cooperation. It locates mainly in theater, institution, etc and attract a number of people. However, it doesn’t have crowded impression.

Chillis
Chillis is specialized in American style Mexican food. They consider foreign customers posting certain percentage of foreign staffs. They offer child meny.

Internal anlaysis

Taste and atmosphere
TGIF has extraordinary “Cajun” source, and “Pizzadilla” menu which is popular among customers. The number of menu is also very diverse, so customer can pick some of the menus they would love to have. TGIF is also putting great effort on its bar and have various cocktail menus. Stripe that is made of red and white and American curio makes TGIF’s unique atmosphere.

Differentiated service
Since they opened the first shop in early 90’s, TGIF has been promoted by customers who experienced TGIF’s service. TGIF induces customers to visit again by service and good food that worth more than their high price. For example, TGIF executed “Puppy dog service” that server kneel down to have proper eye contact. TGIF has not only “Puppy dog service” but also physically challenged people policy, service guarantee and clean toilet.

No.1 market share
TGIF has been seen the best family restaurant in popularity and market share. TGIF has been attracting consumers offering coupon, 25% discounts for SK telecom customers.

SWOT Analysis

Strength
Various menus, differentiated service
No.1 market share

Weakness
High price point
Limitation of responsiveness due to increasing consumers

Opportunity
Increase of people who eat out
Possibility of expanding shop

Threat
Aggressive promotion among the competitors
Consumer's diminished purchasing power

4. Who will be the final winner?

original article

DVD-rental business competition:
Blockbuster VS Netflix

1. How successful Blockbuster & its business model
- Blockbuster entered the video rental business in 1985, at that time, only certain customers were using it, but after 20years, it rapidly has been prospered. John Antico is CEO of this company. The rental giant opened 9,100 stores in 25 countries, gaining a market share that has been enjoyed by few companies in any industry.

1) Blockbuster simplified the procedure - using bar code scanner system
Blockbuster equipped each of its video rental stores with custom software it had designed to simplify rental and sale transactions. An automated point-of-sale system uses a laser bar code scanner to read data from items being rented or sold and from a Blockbuster customer’s identification card.

2) Blockbuster’s CRM(Customer Relationship Management) – Knowing customer’s needs on the basis of the record
These data are transmitted to Blockbuster’s corporate computer center. Management uses these data to monitor sales and to analyze the demographics, and rental and sales patterns for each store to improve its marketing decisions. Blockbuster’s success was based on video tape rentals and sales and rentals of DVDs. By 2004, Block buster possessed a 40-percent share of the U.S. video rental market, estimated to range from $7billion of business per year to $9billion; Blockbuster also had video sales of around $16billion.

3) Benchmarking – Analyze competitor and apply their strength to ours
Blockbuster faced a crisis as a new business model emerges to the industry. Unlike Blockbuster Nflix sells products via online. It was sensational and competitive at that time. So, it generates lots of profit. Seeing and analyzing this business model, Blockbuster decided to adopt it to survive in the industry. More commendable thing is Blockbuster doesn’t only adopt other’s model but also restructure their old system by offering “a monthly subscription service for in-store customers”, “a subscription service for video games”, “a trading service for movies and games” , etc. to the customers.
Finally, Blockbuster yielded 100$ million increase in capital expenditures from 2003 to 2004.


2. How successful Netflix & its business model?
- Netflix is one of video rental industry like Blockbuster. Reed Hastings is a CEO of this company. When it first emerged into online DVD rental industry, it was focused on customer’s convenience by giving new way to rent&buy DVDs; via internet. All interactions between Netflix and its customers took place on the Internet and through the postal service. Only thing that customers need to do is make a wish list and click some buttons to order it. Another good thing is that customer could keep for DVDs as long as he or she wanted without incurring late charges. That way, customers feel more secure and comfortable when they use Netflix. It was truly successful. According to Kagan Research LLC, revenues from online movie rentals, which were nonexistent in 1998, rose to %522 million in 2004. Also, total revenue would approach $1billion in 2005 and $3 billion by 2009. As Netflix caught on and its subscription model became popular, Netflix’s gains in market share, from 2 to 7percent between 2003 and 2004, gave Blockbuster true cause for concern.


3. Future of Blockbuster&Netflix
- I don’t think nor Blockbuster and Netflix will succeed in the future unless they innovate present system and organization. Because, as time flows lots of new entrants will be coming into this industry with better contents. Since science and technology are developing fast these days, position of the bricks and mortal industry like Blockbuster is getting smaller and they are now facing crisis. To survive in this tough, competitive environment, Blockbuster and Netflix should innovate on their present structures and ideas to catch up changing trends.

Reference:
http://writer111.blogspot.com/2006/02/blockbuster-beats-netflix-in-service.html
http://www.thelogicofsuccess.com/blockbuster-netflix-innovation-competition.htm
Management Information System -Pearson Education- P121-123

Student# 20601016 entry:4