HL Paper 2 Case Studies:

KFC went to China

Govt KFC created jobs and paid taxes more tax rev
for govt
Followed Chinese investment laws
Consumers Translators more jobs set up stores
Lots of market research find out what local pop
wanted
go global act local

Apple
500 stores in 13 countries
Online store global
Outsourcing China Foxconn
Employees Employees in China and Taiwan more work
BUT working conditions in China not good
Employees in USA lost jobs cheaper in China
only R&D in California
Govt Some tax
Apple accounts registered in Republic of China
pay less corporation tax
Saves tax reinvest in R&D/marketing remain
as market leader
Customers Do they benefit from lower prices lower labour
costs and less tax paid are prices as low as
they should be?
Consumers get more choice and high quality
components, security icloud

Toyota
Japanese
13th largest firm by revenue
+380,000 employees globally
Employees Mechanisation fewer jobs (robots)
More jobs in more countries UK
Govt Access global markets spread risk
Factory in Bridgend (Wales, UK), part of EU sell
Toyotas in EU without any tariffs (produced in
 UK/EU)
Developing hybrid cars reducing emissions of
CO2 helps Japanese govt reach emissions
target
Customers Wide range of products
Think global, act local try to understand local
markets Toyota Scion customised car for USA
market TOMORROW
More jobs BUT pioneered JIT Just In Time
stock arrives just as it is required less stock and
storage required fewer employees BUT cheaper
prices for cars save consumers money

Starbucks
1983 6 stores in Seattle espresso only
Howard Schulz renamed it Starbucks
Created a coffee supplier in Switzerland green coffee
Teavana bought this supplier
2013: 50,000 stores in 50 countries
Outsources coffee beans in China different types of coffee in
different seasons
Employees Chinese employees paid less reduce costs
keep costs lower and/or keep high profit margins
Govt Chinese govt receives more tax
Swiss govt company registered there
Use intellectual property laws copyright and
trademark what they do legal environment is
very important maintain brand image and
customer loyalty
Customers Cultural adaptation Germany breakfast
sandwiches UK desserts adapt to local
needs
Low pay working conditions are ok
Tim Hortons Canada main competitor
change menu for food to compete with
competition customers get more choice
India: joint venture with Tata coffee right taste
and understand Indian customer mentality to
avoid costly failure this is what happened in
 Italy failed there
Owners Outsource IT reduce costs Unisys
Reduced length of lunch break and amount of sick
leave 2012 minimise costs negative PR
Use psychographic techniques try to analyse
market research to understand why people of
same age, nationality, income and live in same
place: some love Starbucks, some hate it
understand why people buy what they buy.
 Apple
500 stores in 13 countries
Online store global
Outsourcing China Foxconn
Employees Employees in China and Taiwan more work
BUT working conditions in China not good
Employees in USA lost jobs cheaper in China
only R&D in California
Govt Some tax
BUT
Apple accounts registered in Republic of Ireland
pay less corporation tax
Saves tax reinvest in R&D/marketing remain
as market leader
Customers Do they benefit from lower prices lower labour
costs and less tax paid are prices as low as
they should be?
Consumers get more choice and high quality
components, security icloud

BUT

Social trends people cant be without the

phones
Becoming a monopoly prices will increase?
Retailers Companies who sell iPhones (Carphone
Warehouse in the UK) more business
BUT
Dont help local companies/competitors
Owners CSR
o Supplier code of conduct to protect
employees in outsourcing companies
o Supplier EHS Academy improve employee
health and safety 270,000 employees
have participated
o BUT cost
 Zara
Owns H&M
Employees Globalisation reduce unemployment creates
jobs
Opening 1 new store per week in 2013
Choice for consumer
Good training programes
Govt Jobs less unempl more tax rev for govt
invest in infrastructure, health, education
Zara requires cotton from Middle East
stimulates economy in LEDCs
BUT greater competition for local markets and
companies all profit back to Spain
Customers Choice for consumer
Low prices improves disp income
owners 1 wk to develop product and get to store 6
month industry average
Monitor sales give consumers what they want
maximise profits

1. Answer must relate to a stakeholder

2. The strategy the company used which must relate to globalisation
3. Advantage for stakeholder of strategy
4. Disadvantage for stakeholder of strategy
5. Evaluation: has the strategy/globalisation been beneficial for the
stakeholder