Project presentation

1. COUNTRY OF ORIGIN AND MARKET PRESSURE
Simona-Diana Saptebani
MSc. International Marketing
Master Thesis
2012-

2. Agenda:
 Findings
 Market Pressure
 Value Chain
 The smile of value creation
 Location and control
 Reflections and conclusions

3. Findings:
The origin of the brand is more important
than the origin of the product!

4. Market Pressure:
Competitive pressure
to reduce costs
Market making
flexibility more
valuable
Cost
Flexibility
High Low
LowHigh

5. Research and
development
Production Marketing
Sales and
service
Value Chain:
Intangible
resources
High value
added
Intangible
resources
High value
added
Tangible
resources
Low value
added

6. The Smile of Value Creation:
R&D, Design,
Commercialization
Manufacturing
Marketing and Brand
management,
Specialized logistics,
After-sales services
Value
added
R&D
knowledge
Marketing
knowledge
Location 1 Location 2 Location 3 Location 4 Location 5
Input Market
Intangibles
Advanced
economies
Tangibles
Emerging market
economies

7. Value
added
R&D
knowledge
Marketing
knowledge
Loc
1
Loc
2
Loc
3
Loc
5
Loc
6
Input Market
APPLE (US)
R&D, Product Design,
Commercialization
Chip Design (UK)
ARM Holdings
Parts – touchscreen
Balda (Germany)
Parts chips
Samsung (Korea)
NXP Semiconductor
(The Netherlands) Assembly
Inventec (Taiwan)
Hon Hai Precision Industry
(Taiwan)
Advertising (US)
TBWA/Chiat/Day
APPLE (US)
Marketing,
Brand management
After--sales services
Loc
4
Loc
7
The Smile of Value Creation:

8. R&D, Design,
Commercialization
Manufacturing
Marketing and Brand
management,
Specialized logistics,
After-sales services
Value
added
R&D
knowledge
Marketing
knowledge
Location 1 Location 2 Location 3 Location 4 Location 5
Input Market
Creation
Creation
The Smile of Value Creation:

9. Strategic choice – Location and Control:
1. Onshore in-house 3. Captive Offshore
2. Onshore outsourced 4. Offshore outsourced
Concentrated Dispersed
Geographical location strategyControlstrategy
SpecializationVerticalIntegration

10. Reflections:
 is product specific
 is more concerned with companies from advanced countries
 offers just a guideline, do not offers details

11. Companies from advanced economy countries producing
hybrid products (electronics) when facing market pressure
should consider outsourcing or relocation of the parts of the
value chain that bring less value to the products.
However there should be considered the control and the
specialization implications in that decision.
Conclusions:

12. Thank you for listening!