Case Analysis #4
- Reread the Management Focus “Two Men and a Truck” in Chapter 14 and address these two questions:
- What are some of the factors that Two Men and a Truck focus on prior to entering a market? Are there other market attributes you could suggest?
- Why is it that localized names such as “Two Blokes and a Lorry” did not appeal to the decision-makers at Two Men and a Truck?
- Reread the Opening Case “Procter & Gamble Remakes Its Global Supply Chains” in Chapter 15 and address these two questions:
- Reflect on Procter & Gamble’s strengths in global supply chain management as well as its personal care and home care products businesses. Which strength do you feel is more important to the future of the company?
- What are Procter & Gamble’s strategic suppliers? Why are they so important to the company? How do the suppliers benefit from the relationship?
- Reread the Opening Case “Fake News and Alternative Facts” in chapter 16 and address these two questions.
- Discuss the collection of big data and the associated use of targeted advertising. How is it beneficial to businesses? How do you feel about it as a consumer?
- Do companies like Facebook have an ethical responsibility to limit the dissemination of fake news and alternative facts? Explain your position.
Case Analyses must follow the following guidelines:
- You must give a quality analysis of the cases based on the key terms showing mastery, using clear logic, and supporting facts. Also, the analysis must directly address the case using chapter readings and research.
- Case Analyses test the understanding of key elements of International Business, therefore, they must be thoroughly addressed.
- You must use citations with references to document information obtained from sources. The key elements and concepts of International Business are found in the sources listed in the syllabus (it is your duty to search for them, read, analyze, evaluate, summarize, paraphrase in your answers, and cite the authors who wrote the articles, books, term papers, memoirs, studies, etc. What it means is that you will have not less than 5 references from the listed sources.
- Grammatically correct paper, no typos, and must have obviously been proofread for logic.
- Avoid direct quotes, you must paraphrase and cite. If you direct quote (two words or three words, mission statements, phrases, etc.) you must include in your citation parenthesis page number or paragraph number. When you direct quote Brand taglines or Mission Statements, you must include the Brand name or Company name in the citation parenthesis.
- Key terms or Questions must be typed out as headings, with follow up analysis or answers in paragraph format, and a summary or conclusion to contextualize your analyses at the end of the paper.
The Cases Analyses must be in APA format
Chapter 14
ma n a g eme n t F O C U S
Two Men and a Truck
By some accounts, moving is ranked as the third-most-stressful event a person can experience, afterdeath of a relative and divorce. Two Men and a Truck (https://twomenandatruck.com) started as anafter-school business for two high school boys in Lansing, Michigan. As a small business focusedon local moving services, the company began in 1985 with $350, a hand-drawn logo, and anadvertisement in a local community newspaper.
In 1989, Melanie Bergeron, the daughter of founder Mary Ellen Sheets, opened the firstfranchised office of Two Men and a Truck in her hometown of Atlanta, Georgia. Melanie is nowboard chair, with Brig Sorber as the chief executive officer and Jon Sorber as executive vicepresident. Randy Shacka, who joined the company as an intern in 2001, was promoted in 2012 topresident. This is the first president of the company who did not come from the family.Two Men and a Truck is no longer “two men and a truck.” The company has grown bothdomestically and internationally to most of the United States and some 380 locations worldwide.
Two Men and a Truck is the fastest-growing franchised moving company in the United States (withmore than 95 consecutive months of growth as of May 2018), with more than $300 million in sales,2,800 moving trucks, and some 6,000 workers. The average franchise grosses about $1.5 millionannually. Bergeron said that “we never imagined being in the moving business—that is, until mymom and my brothers Brig and Jon scraped together some money to buy a truck to help raise extracash for college.”
Two Men and a Truck has remained branded as “Two Men and a Truck” in all parts of the worldin which it operates franchises (e.g., Canada, Ireland, the United Kingdom). Names such as “TwoBlokes and a Lorry” do not appeal to them! The company has decided to stick to the core Americanbrand name because “that’s what master franchisers and their investors want,” said Bergeron. “Thecustomers are less interested in whether it’s a U.S. brand . . . the appeal is the opposite . . . it’s alocal [franchise] company that will be available when I need them. . . . They want the U.S. brandpower and mystique.”
In going international to new markets, Two Men and a Truck’s primary factors to evaluate arethe size of the middle class in a country and the population’s mobility. They use software tools tohelp pinpoint income levels by neighborhood and whether the housing market is primarily based onsingle- or multifamily units. The market for Two Men and a Truck is best where there is a good mixof both. In addition, Bergeron said that two other key areas in determining locations in which tooperate include obtaining accurate market research and identifying potential master franchisees.
In the case of Two Men and a Truck going international, the industry itself also represented achallenge. There are plenty of moving businesses worldwide; why should franchisees representTwo Men and a Truck? The company’s answer to this market differentiation problem is itsexceptional focus on customer service and a sophisticated web-based tracking system. Qualitycontrol, labor costs, and cycle time to complete a move are core performance metrics in the system.In fact, the company has become known in its industry for faster and better analytics to run thebusiness. It has installed a private cloud system to make its business operations more efficient,using business analytics to capture and identify growth opportunities worldwide.
Sources: D. Barry, “Melanie Bergeron, Chair of the Board of Two Men and a Truck,” Exporters:The Wit and Wisdom of Small Businesspeople Who Sell Globally (Washington, DC: U.S.Commerce Department, 2013); C. Boulton, “Moving Company Gets a Lift from Faster analytics,”The Wall Street Journal, August 20, 2013; and A. Wittrock, “Two Men and a Truck Wins StateGrant, Plans $4 Million Expansion of Lansing-Area Headquarters,” MLive.com, February 27, 2013.
Chapter 15
Procter & Gamble Remakes Its Global SupplyChains
opening case
Procter & Gamble (P&G) is the world’s leading manufacturer of consumer products. P&G, foundedin 1837 by British American William Procter and Irish American James Gamble, is headquartered in Cincinnati in the United States, and the company has now been built into a $65 billionconglomerate. Within its portfolio, P&G has 21 billion-dollar brands (e.g., Bounty, Crest, Tide),operates 130 plants staffed by 95,000 people, has some 70,000 suppliers around the world, and sellsits products in more than 180 countries. By all accounts, P&G has been a giant multinationalcorporation for more than a century and will continue to be highly influential in consumer productsfor years to come.
At the same time, very few industries are as competitive as consumer packaged goods. Just thinkabout the options that you now have compared with five years ago. In most cases, we as customershave numerous more options in every consumer packaged-goods category than we did then. Theglobal marketplace has a lot to do with this competitive environment. Fragmentation andspecialization in consumer products from more companies have resulted in more products and moreplaces from which to buy. The infrastructure for developing products, entering markets, andmaintaining customer relationships is more robust than ever, resulting in small- and medium-sizedenterprises (SMEs) being competitive with companies like P&G (which they could not havecompeted with just a few years ago).
This market competitiveness has led companies like P&G to constantly assess the efficienciesand effectiveness of their production, operations, and global supply chains. For a long-standingindustry titan like P&G, this increasingly competitive global environment—see the figures inChapter 1 that show the drastically increased international trade in the last 20 years—has led to anewfound sense of urgency for P&G to get closer to both its customers and suppliers to maximizediminishing margins while selling products at a competitive price. This is not an easy task sincemargins in the consumer packaged goods market are already very tight. That led P&G to evaluateand ultimately remake their global supply chains.
P&G’s goal is to replenish at least 80 percent of the retail orders the company receives in lessthan a day. To be able to do this, P&G redesigned its distribution network. The company hasimproved transparency throughout the end-to-end supply chain, developed even strongerpartnerships with its suppliers, and focused on maximizing synergy throughout the productioncycle. Given this focus on synergy and supplier partnerships, P&G now develops global strategicsupply chain plans jointly with (at least) its core suppliers. This is not to say that all 70,000suppliers working with P&G are involved but the so-called “strategic suppliers” are very muchentrenched in working together with P&G.
P&G’s 70,000 suppliers include chemical companies (e.g., Dow Chemicals, DuPont) that supplyraw materials for cleaning supplies; packaging companies (e.g., Diamond Packaging, Vanenechten Packaging) that supply packaging materials for the company’s products; andindirect spend providers (e.g., Jones Lang Lasalle) that deliver services such aswarehouse maintenance and janitorial services. With the number and breadth of suppliers, P&Gcontinuously focuses on maintaining a strong supplier relations program. Guiding its supplierrelations program, P&G has a set of core principles: (1) Best Total Value, (2) Honest, Ethical,and Fair Dealings, (3) Externally Linked Supply Solutions, (4) Competition and Collaboration, and(5) Supplier Incumbency.
P&G appears to be in the forefront of continually evaluating and, when needed, remaking itsglobal supply chains to maintain the titan position in the consumer packaged goods industry.Despite this success at being able to remake itself so far, one can wonder if P&G, at some point,will run into difficulties competing with companies like Alibaba and Amazon. Or, will Alibaba andAmazon simply continue to sell P&G’s products (instead of starting to market their own).Alternatively, will companies like P&G be able to use their sophisticated global supply chains toexpand into new territories similar to what Alibaba and Amazon did not too long ago? •
Sources: “Technology Has Upended the World’s Advertising Giants,” The Economist, March 28,2018; DemitriosKalogeropoulo, “Will 2018 Be Procter & Gamble’s Best Year Yet?” The MotleyFool, November 12, 2017; and Matt Gunn, “How Supply Chain Transformation Saved P&G $1.2Billion,” GT Nexus Commerce Network, April 29, 2015.
Chapter 16
Fake News and Alternative Facts
opening case
Advertising is an important part of marketing, but mass advertising, which is generally despised by a lot of people around the world, is more and more becoming an ancient way of doing business. Today, with big data, business analytics, and much more sophisticated international marketing research, customization of advertisements in line with a company’s marketing mix is becoming a must for most multinational corporations. That is not to say that you will not get the customary call to your phone about supporting some cause that you are not interested in, or that an advertisement during a prime time TV show will be for a product you want. Some level of mass marketing will most likely always exist as a form of spreading the word and getting the buzz into the marketplace, engaging people who have not been identified (yet) as within the company’s prime target market, or simply trying to sell more (commodity) products by the old adage that advertising leads to sales.
But we as customers expect more. The least the companies can do, we now expect, is to understand our wants and needs and target advertisements to us appropriately. In such cases, it is also not really an advertisement—it is a form of messaging that informs us of opportunities that we had perhaps not considered. This is one of the strategic elements of Facebook, for example. Today, more than two billion people use Facebook on a monthly basis. Companies around the world can target just the right segment of those two billion Facebook users with advertisements in people’s newsfeeds based on interests and characteristics that are likely to be important and/or similar to existing or potential customers (e.g., demographics, interests, and behaviors). This is targeted global messaging with a much higher probability of customer action than traditional advertising.
While targeted, customized ads seem like they should be preferred over mass advertisements that often annoy people, these customized ads by Facebook and Google, as heavyweights in this space, also annoy customers! Interestingly, Mark Zuckerberg’s former pollster at Facebook, Tavis McGinn, concluded based on a survey that Facebook is having a negative impact on the global society. In effect, customers want companies marketing to them to know who they are and what they may potentially want and need, but they don’t want companies to be too intrusive into their personal life. This is a gigantic challenge that has put Facebook in a negative light. As the founder of Facebook, Zuckerberg clearly set out to collect “big data” on everyone interacting in some way with Facebook and even those who are nonusers.
Amazingly, Facebook with all its sophisticated technology and user tracking got caught off guard in the rollout of the fake news and alternative facts debacle that became pronounced in 2016 through 2018. Organizations, in particular political action organizations, used Facebook for fake news distribution about political competitors (e.g., Donald Trump vs. Hillary Clinton) and political referendum votes (e.g., United Kingdom leaving the European Union). Facebook’s solution apparently is to reduce the visual prominence of feed stories that are fact-checked as false by thirdparty fact-checkers instead of editorializing those stories by removing them from the Facebook newsfeeds. Clearly, the editorializing/removal would constitute a form of censoring, but if the information is deemed to be inaccurate, what obligation should Facebook have to mark such postings as false and/or remove them altogether?
That people and organizations are using alternative facts when they don’t like or agree with real news based on real data and information is surely problematic. Proponents of “alternative facts” say that it is a way to provide additional facts and information while opponents, of course, say that alternative facts are simply lies and inaccurate information. Most people would argue that information and data should be presented in an accurate, trustworthy, and correct manner, and there is really no middle ground. Interestingly, that is not the crux of the debate. The focus is instead on interpreting the truth of the data and information, the key word being “interpretation.” Apparently everything is open to interpretation. If there is even a tiny sliver of a chance that a piece of data or information is not trustworthy and accurate, a portion of the populace will interpret the data or information as inaccurate if they dislike it (97 percent of the world’s climate scientists agree that global warming is real, but the larger population still cannot totally agree that it is!).
The prevalence of “fake news” and “alternative facts,” whatever your opinion of them, creates a conundrum for global marketing professionals and companies marketing globally. For now, what is real news or not is in the eye of the beholder. What is promotional or trustworthy for one customer can be viewed as an opinionated viewpoint or a downright false claim by another in the overheated atmosphere where a general mistrust prevails. Clearly fake news is not new and did not start in 2016, even though it got popularized at that time. Companies can leverage big data, business analytics, and international marketing research today in sophisticated ways that potentially should be good for society and useful to the consumer. But the temptation to make fake news is a troublesome development abetted by technology—at least as long as (some) people believe the storyline.•
Sources: Rani Molla and Kurt Wagner, “Many Believe Facebook Is Having a Negative Impact on Society around the World,” Recode, April 12, 2018; Thuy Ong, “Facebook Is Shrinking Fake News Posts in the News Feed,” The Verge, April 30, 2018; “Scientists Agree: Global Warming is Happening and Humans Are the Primary Cause,” Union of Concerned Scientists, January 9, 2018; “Demand for Lies and Misinformation Encourages Media Organizations to Provide Them,” The Economist, April 5, 2018; and “Fake News: You Ain’t Seen Nothing Yet,” The Economist, July 1, 2017.
