Joint Ventures Grants Companies Opportunities They Could Not Achieve Alone

              Joint ventures are a type of “strategic alliance that entails significant structure and commitment.”  To help get across the types of results one can accomplish utilizing this structure, I have researched the joint venture between Walmart and Bharti and also why they are more likely to achieve prosperity working together as opposed to going solo.  

            Bharti Enterprises is a large business conglomerate located in New Delhi, India that has decided to go into a joint venture with Walmart to help set up hypermarkets, neighborhood stores and supermarkets across India.  Bharti chose Walmart to pair up with because they fit into Bharti’s aggressive strategies and growth plans.  In addition, Walmart has been trying to focus on emerging markets, but in India you must be an Indian company to own a department store, so by starting a joint venture with Bharti, an Indian company, Walmart is going to be able to break into the emerging Indian market.  Bharti also can achieve greater prosperity because they will be working with a company that already has the plans for success mapped out.  Additionally, India is currently dominated by small neighborhood stores right now, so by launching these new giant retail stores with extremely low prices, they will most definitely be one of the top competitors in the market.  

           

            Walmart and Bharti are hoping to have launched 10 -15 companies by 2014.  The companies predicted sales are expected to reach 55 billion in annual sales and are\ expected to grow at an annual rate of 22% for the next ten years.  I think that this is a great idea for the companies because for Bharti to try and start it up on their own they may run into problems with obtaining low priced merchandise and in addition Walmart could not even enter the market on their own.  Yet together, with Walmart’s reputation for selling brand name products at low prices and their “logistics, distribution and sourcing expertise” partnered with Bhardi supplying the money for the launching of this project and running the retail aspect they are setting themselves up for success.

http://www.forbes.com/2006/11/27/wal-mart-bharati-markets-emerge-cx_rd_1127markets03.html

Porter’s Five Forces and how they relate to Apple's computer market

Porter’s five forces model is a commonly used tool that businesses can use to analyze their external environment, and I am going to look at how they have been applied to a company that is already thriving, namely Apple.   The first of Porter’s forces is the degree of existing rivalry, which is based upon the number of competitors that are of comparable size.  For Apple, some of their existing rivalry would be other computer companies such as Dell, HP, ASUS, ACER, Sony, and other computer manufacturers.  The next force is the threat of potential entrants.  In Apple’s case some entry barriers for new companies could be brand loyalty, and large startup costs, yet because Apple’s computers are highly priced there could also be an opening for computer companies that market towards customers with a lower price range. 

Porter’s third force is the Bargaining Power of Suppliers.  This means that the ability of a firm to negotiate good terms is influenced by the number of firms a company relies on.  Apple has a high bargaining power over their suppliers because they are able to outsource much of their manufacturing and they also have been able to vertically integrate, which means produce some of their own supplies, which has allowed Apple a great advantage in the competitive market.  Bargaining power of buyers is the next force which a firm is reliant on customers.  There is a very high demand currently for Apples products and what gives them a great advantage is that customers see them as a unique product, where the substitutes (i.e. other computers) just do not compare.  The last force is the threat of substitutes.  These are products that are not competitors, but could “fulfill a strategically equivalent role for the customer.”  The great thing about Apple is that they have already considered these substitutes and have branched out their company to support substitutes such as the iPad and iPhone.

http://www.youtube.com/watch?v=3yn9J3EVs-A&feature=related

Better to be a follower?

                Normally one might assume that being the first to enter a market you would have a great advantage because that meant that you were further along with the new technology and also that you could own the market because you had no competition.  But in reality sometimes companies that enter as a follower come out on top and the original product fades into the past.  Being the first to develop a product means that you must spend more money on exploratory costs to see if there is a need for a product, yet even then you can never be sure exactly how the public will react to it once it is released.  On the other hand, if you are the first mover to a market you can “shape customer preferences by establishing the precedent for product design” which hopefully means that you will ultimately come out on top.

            Visicalc was the first spreadsheet software and after it was introduced in 1979 it became an instant success.  It was an incentive for many business workers and corporations to purchase computers and the market for this program was quickly expanding.  This was followed by the release of the new IBM PC that used an Intel computer chip, but Visicalc was not able to keep up with this new technology.  As they rushed to sort out problems with their software, companies such as Microsoft had already surged into the market with Microsoft Excel, which was easier to use and quickly became the new standard.  In just a short time Visicalc had dropped out of the market entirely making a profit of around one million dollars.  Meanwhile, Microsoft Excel’s profits exceeded 156 million in just two years. 

            It is difficult to predict whether a company will be able to stay on top because they must be prepared to follow the market’s needs with whichever direction it takes.  Early entrants to a market set the precedence for a new product but they must be careful of other companies who are always trying to advance faster and take advantage of the new opportunity.  I think it is easy for newcomers to enter the market because they do not have to deal with exploratory research and they can focus more on the consumers needs and target their product development towards that.  This gives them a bigger benefit and they can quickly attract consumers who are ready to move forward with new technology. 

http://dssresources.com/history/sshistory.html