Why domestic outsourcing is leading America's reemergence in global manufacturing

With cost advantages from manufacturing in Asia and Mexico steadily deteriorating, U.S. firms are reassessing the option of domestic outsourcing to remain globally competitive. The challenge in evaluating international versus domestic outsourcing strategic options lies in that first-movers are extremely and intentionally vague about how they reach their decisions. The purpose of this article is to reveal these reasons by providing statistical and firm-based evidence on five major factors that are influencing the decision regarding where U.S. companies should manufacture to optimize their gross profits. The factors include (1) increasingly competitive U.S. labor costs; (2) increasing productivity of the U.S. workforce; (3) increasingly competitive domestic production costs; (4) incentives from federal, state, and local governments; and (5) improved synchronization of production with other business functions.     

Is innovation in pricing your next source of competitive advantage?

Few companies treat innovation in pricing as seriously as product innovation or business model innovation. However, after interviews with 50 executives and the analysis of pricing practices of 70 companies worldwide, our research suggests that innovation in pricing may be a company's most powerful—and, in many cases, least explored—source of competitive advantage. Innovation in pricing brings new-to-the-industry approaches to pricing strategies, to pricing tactics, and to the organization of pricing with the objective of increasing customer satisfaction and company profits; too many companies today see pricing as a win/lose proposition between themselves and their customers. Innovation in pricing breaks this deadlock and shows how to increase profits and customer satisfaction conjointly. As a result of our research, we present a canvas laying out more than 20 possible avenues for innovation in pricing, offering to any organization—regardless of size, industry, or nationality—a few key ideas on how to increase both profits and customer satisfaction.     

B2B branding: A financial burden for shareholders?

Is branding an effective tool for generating shareholder wealth for companies that are active in a business-to-business environment? Or, do other factors such as innovation and manufacturing efficiency—or the lack thereof—create or destroy shareholder wealth? Based on an examination of almost 1,700 companies listed either on the United States or European stock exchanges, this study reveals this crucial relationship could be described as a W-shaped curve with five distinctive phases, depending on the strategic branding position of the company. Used strategically, business-to-business (B2B) companies with a balanced corporate brand strategy generally yield a return to their shareholders that is 5%-7% higher. It is therefore vital that key executives, including the board of directors, systematically assess and monitor the strategic branding position of their company and how their branding investments are performing against key competitors. This study reveals that shareholders should insist on systematic performance feedback from the corporation regarding all key items in the balance sheet—including branding. As disclosed herein, very few of the companies analyzed possessed an optimal balance between branding and financial performance.     

Evaluating and Managing Brand Repurchase Across Multiple Geographic Retail Markets

Many companies manage their business on a geographic basis and evaluate marketing metrics and managers correspondingly. Here, using a multi-level dataset from the U.S. retail gasoline industry, we demonstrate inherent differences in the levels of brand repurchase across territories. Furthermore, we show that the effects of factors that may improve repurchase—customer satisfaction and customers’ relational investments—are moderated by market share at the territorial level. Relational investments have relatively more effect on repurchase in territories where a brand's market share is higher, while customer satisfaction has relatively more effect in territories where a brand's market share is lower. These findings imply that one size does not fit all for either evaluating or managing brand performance at a territorial level.     

A Global Analysis of Orientation,Coordination, and Flexibility in Supply Chains

Global supply chains are growing rapidly, and the ability to manage cross border logistics operations has become a necessity to maintain a competitive advantage in a dynamic environment. This research addresses current gaps in the literature by investigating the buyer–supplier integration dynamics in a global context with a focus on the antecedents and outcomes involved in the process. Empirical data from 320 U.S. based manufacturing companies that source from overseas was collected and used to test the framework. In addition to providing empirical evidence for the importance of orientation on collaboration, operational coordination, and integration this research explains how manufacturing companies can enhance the flexibility of their global suppliers and how that impact their logistics as well as overall firm performance. Managerial and research implications are provided as well as areas for future research.     

Looking at Your World Through Your Customer'S Eyes

Abstract

There has been a great deal of discussion about firms moving away from transactions towards building long-term relationships with key customers. This is especially true in business-to-business markets and with larger companies with major customer accounts. But what is the reality of the situation? What do we find when we move beyond the rhetoric of relationship marketing to examining the extent of customer focus in large firms? This paper describes a major empirical study of some of the world'S largest B2B buyer-seller alliances in five countries representing each element of the Triad-England, France, Germany, Japan, and the U.S. We find that there are significant gaps between how customer focused manufacturers think they are and how customer focused their key customers perceive them to be. Further, these gaps vary by country and region. We explore the reasons for these differences in the context of cross-cultural organizational theory with implications for the strategic management of cross-national buyer-seller alliances.     

The importance of understanding the exchange context when developing a decision support tool to target prospective customers of business insurance

Companies use decision support tools that enable them to efficiently manage their customers. When targeting new prospective customers, companies need to be able to select those customers who are not only more likely to respond to their marketing activities but are also going to buy their products. There is a lot of research about customer relationship Management and the analytical models that can be used to effectively select and manage customers. There is however less attention that is given to the actual process of developing and building a marketing decision support tool. In this paper, we pay particular attention to the construction process of a marketing decision support tool. A key contribution of the paper is that we propose that companies should pay more attention to studying their exchange context and its unique features when they are developing analytical models to support marketing decisions. We illustrate the research contribution through the story of a company that is involved in the direct marketing of business insurance and faces the need to implement a better targeting model.     

How call center location impacts expectations of service from reputable versus lesser known firms

Businesses are increasingly turning to call service centers located abroad to provide customer support. Although the country-of-origin literature as well as other reports may lead one to believe that consumers will expect offshore call centers to deliver poorer service, call center location is simply one cue which consumers can utilize to form expectations. This research investigates how two factors (location and reputation) impact a consumer's expectations regarding an upcoming service encounter. We employ information integration theory to examine how these two cues are combined. Results from two experiments demonstrate that call center location does not impact pre-encounter expectations if the firm is reputable. If, however, the firm is less known, consumers anticipate being less satisfied if they believe the call center is located in a nation dissimilar to the U.S. (e.g., India or the Philippines) versus in the U.S. or similar to the U.S. (e.g., England). Belief about training provided by the firm is shown to be the key mediator.     

Purchasing policy in Switzerland: An empirical study of sourcing decisions

The economic ties between the United States and Switzerland are strong, both in terms of investment and trade. Swiss direct investments in the U.S. amount to US$35 billion providing some 300,000 jobs in the U.S. The U.S. is the second most important export market for Swiss goods (after Germany). These very striking facts demonstrate how closely intertwined the economies of the U.S. and Switzerland have become in the twenty‐first century. The recent attention to purchasing decisions in a variety of commercial and government contexts has grown much faster than detailed understanding of how sourcing decisions are made and their implications for organizations. This article provides an overview of empirical research into sourcing decisions made in Swiss organizations and will be of international interest to practitioners and academics in both purchasing (customer and purchaser) and marketing. The research demonstrates that sourcing decisions are highly contingent situations and the variable is policy. © 2002 Wiley Periodicals, Inc.     

The interactive effects of product and brand portfolio strategies on brand performance: Longitudinal evidence from the U.S. automotive industry

Product and brand portfolio extensions are effective marketing strategies to meet customer needs and to create a competitive advantage in the marketplace. Nevertheless, product and brand portfolios can get out of control easily leading to a loss of market focus and market share. This study examines how product portfolio and branding decisions affect brand performance (unit sales and market share). Prior research in marketing has investigated the effects of product portfolio and branding strategies on firm performance in isolation. However, these decisions are rarely isolated events. Usually, for multi-product and multi-brand companies, product portfolio decisions are determined in conjunction with branding decisions. Using a dynamic panel generalized method of moments estimation on a comprehensive dataset from the U.S. automotive industry between 2007 and 2013, this study examines the extent to which product and brand portfolio characteristics interact to affect brand performance. Findings reveal that while brand portfolio scope augments the positive effects of portfolio depth and innovativeness on brand performance, it attenuates the positive effects of product portfolio breadth on brand performance. Also, brand positioning in auto industry enhances brand performance only when considered jointly with product portfolio breadth, depth, and innovativeness. Finally, the present study discovers critical managerial trade-offs between product and brand portfolio decisions, as product and brand portfolio decisions are intertwined and a careful examination of the existing product and brand portfolio characteristics seem to be warranted to maximize brand performance.     

Cultural and Ethical Effects on Managerial Decisions: Examined in a Throughput Model

Financial and cost accounting information is processed by decision-makers guided by their particular need to support decisions. Recent technological advances impacting on information as well as organizations such as the European Community mandating financial reporting requirements for many countries is rapidly changing the landscape for decision making using accounting information. Hence, the importance of individuals' decision making is more important than it was previously. These decisions are also influenced by individuals' ethical beliefs. The Throughput Modeling approach to cultural and ethical concerns provides a way of dealing with accounting information processed through various pathways by decision-makers. This modeling approach captures different philosophical perspectives from which to understand what is involved in "thinking scientifically." In the Throughput Modeling approach, pathways highlight the importance of how different philosophical perspectives may be used by individuals in arriving at a decision. This paper highlights key concepts involved in rethinking the basis of moral decision making in terms of an underlying process, rather than focusing on the application of principles or the development of a virtuous character. Examples are provided from both English and Spanish settings to help emphasize the importance of modeling ethical decision making globally.     

‘Do versus Buy’ Decisions in the Demand for Knowledge Intensive Business Services

The search for the maximum use of scale and agglomeration economies and the need to operate firms in the most flexible way have provided a strong impulse for companies to increase their use of external intermediate services. Because of their strategic role, the use of business services that are intensive both in labour qualification and in technological requirements is key for these policies. The purpose of this paper is to analyse the patterns followed by companies in the two relevant decisions on this issue: firstly, whether to use knowledge intensive business services or not and, secondly, whether (and to what extent) to buy these services from another firm or to provide them inside the organisation. In both cases, we intend to identify the factors that affect the ‘do versus buy’ decision with respect to total KIBS as well as particular categories. A specific feature in our study is that it focuses on the behaviour of firms working in a region without a well-developed supply of KIBS. Applying discrete response models to the data obtained in a survey elaborated by the authors, the most relevant variables for the use of KIBS are satisfaction with previous outsourcing experiences and location of the firm in a large urban centre, but they do not affect their external provision. The size of the firm, its export orientation and its technological complexity have opposite effects on use and outsourcing.     

The impact of economic downturns on marketing

The Great Recession of 2008–2010 affected the global and U.S. economies and its companies more universally than any economic downturn since the Great Depression. This study explores how the Great Recession influenced the marketing decisions of firms and the resulting long-term effects on marketing within business-to-business companies. Empirical evidence from previous recessions suggests that companies should focus on their customers and increase their marketing efforts during a recession. However, many companies typically slash their marketing budgets during economic downturns. Authors found that during the Great Recession, companies reacted differently than in previous recessions with their marketing responses. Authors conclude their analysis by proposing that the Great Recession will have three long-term effects on marketing in business-to-business companies.     

Entrepreneurs in the making: Six decisions for fostering entrepreneurship through maker spaces

Maker spaces—shared production facilities offering access to basic and advanced manufacturing technologies—have quickly become the latest must-have for universities, large corporations, and communities looking to foster entrepreneurship and innovation. While the entrepreneurial and educational prospects of maker spaces are certainly intriguing, questions remain concerning their design and effectiveness. Drawing primarily on case evidence and conversations with five maker spaces located across the U.S., we identify and present six key decisions for maker space leaders looking to foster entrepreneurship in their organizations. We conclude with a decision framework for maker space leaders and a series of questions for entrepreneurs as both groups work to pursue entrepreneurship through and in maker spaces.     

Making customer relationship decisions: Analytics v rules of thumb

This article explores how customer management decisions are made in the leading Nordic retail banks and whether these decisions are driven by mainstream analytical approaches to customer lifetime value available through the banks' CRM systems, or by rule of thumb heuristics. The results indicate that the use of managerial heuristics is surprisingly widespread and, counter-intuitively, that rule of thumb heuristic-based decision making frequently outweighs measures such as customer lifetime value with regard to customer management decisions. The implications are considerable because if successful banks are making widespread use of heuristics, managers and academics would benefit from understanding the conditions under which heuristic decision making can be more successful than an analytic approach. This understanding, in turn, may highlight a limitation of CRM systems and point to a more flexible approach to customer management decisions in which experience-based managerial heuristics modify data from formal CRM systems.     

Designing Mobile Brand Communities: Concept and Empirical Illustration

Brand communities are a commonly used marketing instrument to enhance customer attraction and retention. Well-known success stories of brand communities include brands such as Jeep®, Apple Macintosh®, or Harley Davidson®. Despite the great importance for companies to effectively manage the social facet of their products, research in this field has been rare. In literature, indications for success factors and constituting elements of communities have been found. However, seldom have viable business cases for the community operator been provided.

We propose the mobile channel to be a particularly promising media for establishing brand communities. Due to the significant and still increasing worldwide penetration of mobile devices and current always-on location sensitive mobile services, innovative community concepts bear the potential for substantial value creation, which tends to result in positive effects on customer loyalty and brand equity for the community operator.

In this article, we review selected literature to develop propositions on how concepts for mobile brand communities can be developed. Building on the 4 constituting elements of a community, which are member entities, shared interest, common space of interaction, and relation, combined with the specific characteristics of the mobile channel, which are location awareness, ubiquity, identification, and immediacy, we developed a procedure on how to design mobile brand communities according to perceived consumer value. We use the case of a mobile content provider to illustrate the suggested process. Starting from the theoretical mobile community model, we apply means–end chains to do justice to the specific brand values. In concluding, we propose a 4-step model of key mobile brand community design tasks.     

For your eyes only: U.S. technology companies,sovereign states,and the battle over data protection

Who owns an individual's electronic communications data, who should have access to it, and what can be done with it? The battle of privacy versus security is currently raging between U.S. technology companies and national security forces. U.S. technology companies are adopting corporate foreign policies to respond to sovereign states’ efforts to access customer data, which could change and possibly even destroy their business models. This article discusses the struggles faced by these companies and the policies influencing the possible outcome, as will be determined in the European Union within the next few years.     

Mode of entry mode into a foreign market: the case of U.S. mutual funds in Canada

U.S. mutual fund companies offer funds in Canada through two channels: foreign direct investment or trade in advisement services. The total value of U.S.-controlled funds amounts to 18% of the Canadian equity fund market. This paper investigates how the fund-level and firm-level characteristics affect the channel used to enter the Canadian market. Empirical results indicate that the funds offered through FDI are not especially successful in the U.S. market but are associated with dominant companies, whereas the funds offered through trade in advisement services are highly successful in the U.S. market and are from companies with relatively few successful funds.     

Customer Service as a Strategic Weapon in International Operations

Customer service is an important competitive weapon in international markets becuase of its ability to acquire and retain overseas customers (especially intermediate firms) and, thus, enhance companies' revenues. Customer service is especially critical when foreign vendors are perceived as offering similar products at comparable prices, and purchasers have doubts about suppliers' willingness to carry out various post-purchase responsibilities. This paper reports the results of a study of the customer service programs of 151 U.S. non-service companies with international operations in five or more foreign countries. Sixty-nine firms responded to their customer service efforts in international markets and 81 addressed domestic customer service programs, allowing for comparisons to be made between international and domestic customer service operations. The study's results indicate that copmanies realize the importance of customer service in marketing to international customers, yet customer service for international markets is not considered to be appreciable more important than it is for domestic ones. Much similarity in perceptions about international and domestic customer service programs being in place. Whether this similarity occur from a careful analysis of domestic and international markets or simple expediency is uncertain.     

Advertising Spending Efficiency of Beauty-Care Product Companies: Comparison Between Local Companies and Multinational Companies in the U.S. Market

ABSTRACT

In this study, the authors apply data envelopment analysis (DEA) to evaluate the financial efficiency of U.S. beauty-care companies and foreign companies based on their media advertising expenditures in eight key media outlets (i.e., magazines, newspapers, outdoor, network TV, spot TV, syndication TV, cable TV, and radio) and their revenues in the U.S. market. The analyses revealed that 47.4% of the companies examined advertised efficiently. Companies that advertised inefficiently could save, on average, 75% of their advertising spending. The results also indicated that although U.S. companies are more efficient overall than are non-U.S. companies in terms of advertising spending, the competitiveness of non-U.S. companies should not be underestimated because some of them advertised efficiently (e.g., Kao Corporation from Japan) or almost efficiently.