MIVA Global Band Goes Local MIV Networks tas bcomea Symbol of fobalzation,Estabished in 199 | the US-based mac TV network has been expanding outside ts Noth American base snc 1987, when it pened MTV Europe. Now owned by media conglomerate Viacom, MTV Networks, which includes sblings Nickelodeon and VHI, the music station forthe ag baby boomer Serer more han $2blon in revenues ouside the United Stes, Since 1987, MV has becone the most ubiquitous cable programmer inthe Word, By 2006, the network reached Combine total of 443 milion households; sme 289 millon of which were in 140 other counties, ditt go over too Well.” fn 1995, My hanged its srategy and broke Europe into regional feeds, of which there are around twenty. five, indudin feds forthe United Kingdom and Ireland; another for Germany, Austria, and Switzerland: cone for tay one or France one fo pi; one for Holand and on for Rusa, The network adopted the same localiza. tion Strategy elsewhere inthe werld. For example in Asia, it has ten feeds—an Englsh-Hind channel for India, Separate Mandarin feeds for China and Teva, a Korean feed for South Korea, a Bahasalanguage feed for Indes, anes fad for Japan, and so on Digital and stale technology have made the locaiaton of Programming cheaper and easier MIV Networks can now beam half adozen feeds off one satelite transponder, Wile MTV Networks eres creative contol oer these diferent fees, and wile al the chanel have the *aMe familar frenetic look and feel of MTV in the United States, a sigtcant share of the Programming andcontents now local, When MTV opens loca station nd; itbegins with expatriates from elsewhere i the werk to doa "gene transfer” of company cure and operating principles: Once these are established, boweve the network switches to local employees and the expatriates move on, The ides to eiscover the tastes ofthe local population and produce programming that matches those tates, ‘Athough many ofthe programming ides stil originate in the United States, with staples such, World having equivalents in eferent counts, at increasing ¥ far of programing locln cchicepton MTV Kitchen combines cooking wth a music countdown, Erotica isin Brazil and features a pane of Youngsters ig Sex. Thelin cael produces tveny-oneomagrovn s hosted by lca veiys wt spa red bred of Hind afd Engh, Hit shows include MTV Cricket in intl appropriate fora lind useful, which Hones ini Hind il stars (chs th bigest fi Ths localization push reaped big benefits for MTV; ‘along the network to capture viewers back from local initators-In-Incia for example, ratings increased by more'than 700% between 1996; whem the localization push Began, and 2000.in tum localization helis MTV: to-capture:mote of those altimportant adverting revenues, yen from-other multinationals suchas. Coca-Cola, whose om advertising budgets arecoten locally determined; !Localization at IKEA IKEA may be the work's mast successful global retailer: Established by Ingar Kamp in Sweden in 1943 hen he was just seventeen years ld, the home-furishing superstore has grown into a global cult brand, with 230 stores in thirty-three countries that host 410 milion shoppers a year and generated sales of€14.8 bilion ~~ GIT bition) in 2005. Kamprad himself, who stil owns the private company, i rumored to be the worlds richest man. % IKEA target market isthe slobl middle dass who are look fr low-priced but atractvly designed furniture. and household ters. The compary applies the same basic formula worldwide: open, large ‘warehouse stores, festooned in the blue and yellow colors of the Swedish flag, that offer 8,000 to 10,000: items, from Kitchen cabinets to candlesticks. Use wacky promotions to dive traffic into the stores. Configure the interior ofthe stores so that customers have t| passthrough each department to get to the checkout. Add testaurans and child-care facts so that shoppers stay 2s long as posble Price the ites as low a possible. _ Make sre that produc dsin refit the simple clan Swedish nes tat have become IKEAS trademark. ‘And then watch the results: customers who enter the store planning to buy 2 Le cofee able and end up ae $500 on everthing from storage ts to kitchenware ims to feduce the price ofits offerings by 2t0 3% per year, wich requires jie toThe Evolution of Strategy at Procter & Gamble Founded in. 1837, Cincinnat-based Procter & Gamble has long been one of the world’s most international ‘Companies. Today, P&G is a global colossus in the consumer products busines, with annul sales in excess of $68 bilion, some 56% of which are generated outside the United States, PG sel more than 300 brands— including. Ivory soap; Tide, Pampers, JAMS pet food, Crisco, Gilete, and Folgers—to consumers in 180 countries, It has Production eperations in eighty countries and erploys cose to 138,000 people global. PRG established ts fist foreign factory in 1915 when it opened a plant in Canada to produce ory soap and Cio. This was followed in 1930 by the establishment of the company’s first foreign subsidiary in Britain, The pace of intermatonal expansion quickened in the 1950s and {960s as P&G expanded rapidly in western Europe, and then agzn nthe 1970s when the company entered Japan and other Asian nations, Sometimes PAG entered 2 nation by acquing an established competitor and its brands, as occurred inthe case of Great Britain and jp, 3 but more typical the company set up operations fom the ground floor. Bythelate 1970s, thesrategy at PAG was wel established. The compan developed new products in inci nati and then relied on semiautonomous foregn subsidiaries to manufacture, market; and distribute‘those Products indifferent nations. In many cases, foreign subsiciaries had their own production facities and tailored the packaging, brand name, and marketing message to local tastes and preferences, For years ths sategy delved a steady stream of new produts and relsbe growth in sls and profs. By the 1990s, however, profit == growth at P&G was sowing. 4 The essenée ofthe problem was simple; PEGs costs were too high because of extensive duplication of manufacturing marketing, and administrative faites in diferent national subsidiaries, The dupcation of assets ‘made sense in the word of the 1960s, when rational markets Were segmented from each other by barriers to Cross-border trade, Produts produced in Great Brian, for example, could not be sold economical in Germany ~. 3 vet igh taf ties levied on import ito Geany. By the I9BD, however bari to cos-brder trade Were fling rapidly wordwide and fragmented rational markets were merging into lager regional. o. ob ‘markets, Als, the retailers through which P&G distributed its products, such as Wal-Mart, Tesco in the United Kingdom, and Carefour in Hance, were growing ager and more global. These emerging goblets were eranding price discounts from P&G: 4 fh 1993, PAG embarked ona major reorganization nan attempt to contol its cost structure and recognize the: Te realty of emerging global markets, The company shut down some thirty manufacturing plants around the Abe, lid off 13,00 employes, and concentrated production ‘in fewer plants tat could beter realae Sconomies of ce and serve regional markets These actions cut some $600 milion year oot of PGS ext Structure It wasrt enough! Prof growth remained suggsh.In 1998, PAG launched its second reorganization ofthe decade. Named Organization 2005, its ‘goal was to transform P&G into a truly global company. The company tore Up its old organization, which was based on ‘countries and regions, and replaced itwith one based on seven sel-contained slobal busines units, ranging from =~ baby care to food products, Each business unit was given complete responsbilty for generating profts from ts products, and for manufacturing, marketing and product evelopment. Each business ‘rit Was told to rationalize production, concentrating it in-fewer, larger facts; to build gobal brands wherever possible, thereby __ eliminating marketing diferences among counties and to aceerate the development and lunch of new products In 1999, P&G announced tht, asa result ofthis initiative, it would close another ten factories and ay of ——15,000 employees, mostly in Europe where there was stil extensive duplication of assets, The annual cos sang were estimated to be about $800 millon, P&G planned to use the savings to cut prices and increase marketing spetdng in an effort to gein market share and thus futher lower costs through the attainment of sale ‘economies, This tine, the strategy seemed to be working, Between 2003 and 2006, P&G, Teported strong growth inboth sles and profs, Sigitcanty, PEG’ gob compettors, such as Unilever, Kimberly-Clark, and Colgate. Palmolive, were struggling in 2003 to 2006.32