Consulting in Globalizing Landscape

1. Impact of Emerging Markets

2. Value Chain

As mentioned in the Video, the Value Chain is an important approach to access the global strategy of a corporation. The idea of the value chain is based on the process view of organizations: a manufacturing (or service) organization is a system, made up of subsystems each with inputs, transformation processes and outputs.

According to Porter (1985), the primary activities are:

• Inbound Logistics - involve relationships with suppliers and include all the activities required to receive, store, and disseminate inputs.

• Operations - are all the activities required to transform inputs into outputs (products and services).

• Outbound Logistics - include all the activities required to collect, store, and distribute the output.

• Marketing and Sales - activities inform buyers about products and services, induce buyers to purchase them, and facilitate their purchase.

• Service - includes all the activities required to keep the product or service working effectively for the buyer after it is sold and delivered.

Secondary activities are:

• Procurement - is the acquisition of inputs, or resources, for the firm.

• Human Resource management - consists of all activities involved in recruiting, hiring, training, developing, compensating and (if necessary) dismissing or laying off personnel.

• Technological Development - pertains to the equipment, hardware, software, procedures and technical knowledge brought to bear in the firm's transformation of inputs into outputs.

• Infrastructure - serves the company's needs and ties its various parts together, it consists of functions or departments such as accounting, legal, finance, planning, public affairs, government relations, quality assurance and general management.

3.How Does It Impact the Consulting Industry?

1) Company’s Needs in 2017

• Strong focus on core business which resulted in higher specialization, sale of side business and outsourcing of non core activities;

• Attention to globalization: to satisfy growth needs and to face global competition;

• Innovation, flexibility and adaptation to changes (turnaround, products, processes)

2) How These Needs Affect Consulting

• Stronger internal competences and the whole management has grown professionally;

• Project like activities have become part of the usual tasks of many resources -- much more time and efforts;

• Setup of adequate info network, supported by media globalization -- in real time news and data;

• External support must be specialized to master all competitive issues deriving from globalization.

3) How Firms Struggle

• Expansion for the wrong purpose

• False assumptions about the nature of the international market → Consider Strategic Acquisition

• Underestimating the operating costs in an international market → Hiring Local Manager

• Deciding to become a global company too late

4.Examples - Crocs

Crocs is one of those companies contributing to an impressive American record of international trade. It has reaped the benefits of the skyrocketing popularity of its odd-looking yet comfortable shoes. Crocs has steadily expanded the availability of its shoes internationally, adding Europe, China, India and Brazil as target markets.

In 2004, Crocs expanded their product line, added warehouses and shipping programs for quick assembly in North America and distribution throughout the world. Today, Crocs are sold through over 6,000 US store locations and in 40 different countries. Sales channels are through retail stores, the internet and company-operated kiosks that promote their products and increase brand awareness

“Every day we learn more about our business, particularly overseas. Plus the geographic diversity of our company-operated and third party manufacturing facilities allows us to move efficiently and cost-effectively serve specific markets around the world” said Ron Snyder, President and CEO of Crocs, Inc.

Consultant's Advice: Play the long game and gradually erode rivals’ market share

• Adopt a slow-build approach and gradually eroding rivals’ market share before taking over the competition. Understand that things may take longer abroad.

• Be patient! Allocate the level of investment, strategy, adaptation and time needed to be successful.

• The urgency of expansion plans is driven by the perennial business driver to reap the first-mover advantage. This desire to be first in a market can blind otherwise cautious executives to the pitfalls and missteps that line the path of a global business strategy.