The company applies regiocentric kind of management orientation where certain elements of other management orientations are incorporated. From the case to be analyzed, it is evident that most of the head office positions are managed by employees from the parent country, which in this case is the United States. However, Ben & Jerry’s top management grants host countries autonomy over subsidiary and regional decision making in marketing strategies.
Ben & Jerry’s allows contributions from the locals and the members of the headquarters concerning business strategies which basically suit destined environment (Keegan and Green, 2002). In this case, geocentric management orientation is also applicable based on similarities in the markets. This is since marketing opportunities in both cases are handled through extension of business principles and adaptation strategies applicable within global markets.
Environmental factors most important to the decision whether or not to expand into Japan
Ben & Jerry’s Company should consider issues on Political environment. This is since such developed nations as Japanese can at times be bogged down by immense levels of bureaucracy making it difficult to establish business as a foreign multinational company. At the same time, foreign governments are known for their involvement in the affairs of their host nations.
Social aspect is an important consideration since parent country has a totally different culture from that of a target country, which in this case is Japan. The country is considered to comprise high context culture since Ben & Jerry’s targets customers within new environment.
Consumers in Japan apparently have no existing relationship with management of the company, hence there is a need to establish better relationship based on informal communication. Knowledge concerning Ben & Jerry’s products within the new territory largely depends on relationships built. Therefore, entering into such a business venture would require to display of high context characteristics (Keegan and Green, 2002).
At the same time, Ben & Jerry’s needs to establish relationships with different customers and other stakeholders within Japanese market and, if possible, personalize their interactions. Additionally, US-based businessmen are recognized for their astute abilities in forging networks within international market which is an attribute of high context cultures.
However, in a low context culture, information concerning new business venture is easily disseminated to recipients without any major communication barriers, making it easier for multinational companies. Venturing into Japanese market would require Ben & Jerry’s Company to learn several policies and procedures, for instance, dietary laws and language expressions. Such level of subconscious information at times makes difficult environment to foreign ventures (Keegan and Green, 2002).
Japanese market and Ben & Jerry’s social mission
Ben & Jerry’s has ventured into international field for various reasons, such as searching for better markets for their goods and services. Other reasons include cost reduction and results on local adaptation. Due to such factors, Ben & Jerry’s has applied the use of basic strategies for the purposes of gaining competitive advantage within international markets.
Such strategies include multi-domestic, global and transnational strategies. Suitability of using a strategy on company’s value chain depends on nature of pressure faced in the process of adjusting costs and adapting to intended local markets. However, the venturing into Japanese market is not consistent with the company’s social mission.
Should Ben & Jerry’s enter Japanese market in time for the summer of 1998?
The company should examine summer of 1998 based on Global strategy which is applicable in cases where there are strong pressures in line of cost reduction and less pressure in the process of venturing into local markets. In such a case, all the strategies Ben & Jerry’s applies including making processes are centralized.
This strategy emphasizes on nature of monitoring, integration and coordination of activities within the local markets (Keegan and Green, 2002). The company can gain competitive advantage through such a strategy by automating the whole delivery processes, hence ensuring that products and services are efficiently supplied.
This is ensured through reliable storage services and provision of real-time monitoring processes at all the levels. Such strategy ensures improvement in stock and purchases coordination based on order cycles. The challenge arises due to differences in tariff costs which largely depend on country’s legislation rules as well as fluctuations in foreign currencies.
Based on Multi-domestic strategy, Ben & Jerry’s should enter into partnership with other domestic companies for purposes of offering integrated services within the region. Gaining competitive advantage in this case depends on effectiveness with which decentralization process is executed.
Decentralization on decision making allows for easier modification of products or services depending on local demand and nature of competition present. At the same time, the strategy enables the company to utilize local knowledge and capabilities, for the purposes of satisfying needs and taste of local consumers. However, utilizing multi-domestic strategy easily leads to the loss of product’s distinctiveness since local adaptation keeps changing over a period of time.
Conclusion
Ben & Jerry’s should also incorporate transnational strategy in cases where the company requires expertise for the purposes of overcoming pressures from cost effectiveness as well as local market adaptation. In this case, gaining competitive advantage would require supply team to be comprised of experienced knowledgeable individuals. Such applications would ensure significant reduction in costs and improved speed in processing transactions as well as quick response towards consumer needs.
Reference
Keegan, M & Green, K. (2002). Global marketing management. New York, NY: Prentice Hall