( TCO 6) In the 1980s, Caterpillar was negatively affected by a strong dollar and lost significant market share to Japanese competitor Komatsu. The situation prompted Caterpillar to revise its global strategy and by the 2000s, the company was in a much better position to deal with volatile currency values. More recently, a strong dollar has actually helped boost Caterpillar’ s bottom line.
In the 1980s, a stronger dollar hurt Caterpillar’ s competitive position, but in 2008 a stronger dollar did not seem to have the same effect. What had changed?( TCO 7) After joining the European Union in 2004, Latvia established a currency board system that pegged the value of its currency to the euro. This system came under significant pressure when the effects of the financial crisis that began in the United States in 2008 spilled over into the country. Latvia was eventually forced to ask the International Monetary Fund and the European Union for assistance in order to get its financial system and economy back on track. As part of the assistance package, Latvia was required to make significant changes in its economic policy.
Why did the initial effort by Latvia’ s government to stabilize the country’ s currency fail? Was the government attempting to stop a banking crisis or a foreign debt crisis?( TCO 8) Vellus Products is a small company that produces personal care products for dogs. Vellus Products initially began exporting when a Taiwanese business placed an order for its dog shampoo. Since then, Vellus Products has expanded its export business and today, international sales account for about half its total sales. Vellus Products now sells in 28 countries around the world.
Can other small companies learn from the experiences of Vellus Products? Reflect on the tips of Vellus Products’ founder Sharon Doherty for beginning the export process.
( TCO 8) By 2012, India is expected to export half a million vehicles a year. South Korea’ s Hyundai is leading the charge, exporting over one third of its Indian production. Suzuki and Nissan have both entered the Indian market more recently. Both companies see the Indian market as an important component in their future production and marketing strategies. Why did Hyundai and other global automakers choose India as a production location? What makes India attractive to auto producers?( TCO 8) Microsoft is meeting the challenges of expanding into the potentially lucrative Indian market, a market where currently most people cannot afford a computer nor the Microsoft programs to run it. Microsoft has changed its highly standardized approach to markets to develop products specifically designed to meet the needs of the Indian market. In addition, the company has established local R & D operations that it hopes will generate new products for the market. How does Microsoft vary the marketing mix of its existing product offerings to gain traction with Indian customers? What else has Microsoft done to make headway in India?