Popescu Eliza, Cance Virgil, Zecre Marie-Paule

Strategic management & corporate politics

8.04.2015

Answers Mock exam

Case study 1.
I.

Swot analysis
Strengths

the products are varied and

qualified
- are supported on a complete culture
built around local gastronomy and
Mediterranean diet.
- exporting products
- the size of the population
Weaknesses
- small size: little opportunities for
exporting and investing in R&D
-

Opportunities
- distribution brands
Threats
- specific critical events, such as
Pescanova crises or the Russian
block of importations
- the pressure of the big retailers
- low prices
- precarious jobs
- atomization of the industry
- little capacity to invest in R&D
- scarce development of the brands

II.
III.
Customers are struggling for the price declines, negotiating better quality services,
juggling between a competitor or another.
A group of customers is stronger if this group is concentrated on purchasing large
quantities in relation to turnover of the seller.
Products purchased in the sector are an important part of the costs or customer
purchases.
The purchased products are standardized or differentiated sector.
Customers seeking to minimize costs, seek products with minimum cost.
Transfer costs are low. Transfer costs bind customers and private sellers client has a
less power if these transfer costs are strong (high).
The customers have access to complete information. If the customers are informed,
they have a higher pressure. With a complete customer information they are able to
ensure that they are receiving the most favorable price.
I think that the Spanish food and beverages industry can only increase their bargaining
power against manufacturers if they succeed in influencing of purchasing decisions of
the customers.
IV. Pros of exporting:
a) The exporting is increasing the competitiveness
b) Exporting is one way of increasing the potential sales.
c) No company would export unless it intends to make a profit.
d) The costs per product is typically reduced. The food and beverage providers
need to carefully assess the production process when levels increase to ensure
the quality is not compromised.
e) In the domestic market, your product might be approaching the end of its life
cycle. In such an instance, finding an export market would be ideal in order to
extend the life cycle of the product.
V.
Cons of exporting:
a) Competitors can typically not be avoided in export markets.
b) It can also be costly to develop new promotional/marketing materials, develop new
packaging and assign new personnel to travel and undertake other administrative and
operational tasks
c) In order to meet safety, security and other requirements in the export market, your
product may have to be modified( hiring an expert).
d) Payment: letter of credit can be time consuming.
e) Financial risks, transportation risks, cultural differences and finding information on
some markets can be extremely difficult.
VI.
VII.
Case study 2.
I.
Creating a joint venture with a local producer - Joint ventures may involve companies
in one or more countries and the basic reason is to save money. In effect, they are
sharing the risks if a particular project fail. Joint ventures are extraordinarily helpful to
some companies in gaining access to foreign markets. Also many companies reduce
their labor costs by moving production operations to other countries. And with
targeting other markets they are mantaining their prices and trying to reach the
wealthy segment of the population.
II.
Risks of joint venture: potential financial losses if a project fails, expropriation or
nationalization, disagreements among partners, and less-than-anticipated results. Some
joint venture fail because of disappearing markets, lagging technology, partners'

inability to honor the contract, cultural differences interfering with progress, or

governmental and macroeconomic de-stabilizing factors.
VIII.
IX.
I.

XII.
II.

Case study 3.
Advantages of cooperation agreement: brand name, the marketing and the
maintenance, the modern management tools and technology that which enable them to
interact on-line at every level.
X.
XI.
Disadvantages: high costs and royalty payments, strict product rules, and other
start up challenges.
The main advantages:
Faster speed of access on a new market area
The market power is increasing
Reducing the competition
Economies on scale
Diversification of business risk

XIII.
XIV.

XVI.

The main disadvantages:

Other culture
Operational problems
The business complexity is increasing
Loss of organizational flexibility
XV.