... Vizio and the Market for Flat-Panel TVs International Business: Strategy and Structure [Author] Table of Contents Introduction 3 Vizio’s Background 3 Effects of Globalization 3 Recommendations 5 Conclusion 6 Work Cited 7 Introduction The objective of this case study is to analyze the success of Vizio and discuss how globalization has affected the manufacturing of flat-panel TVs. What effects do companies that globalize their production have on their competitors and other participants in the marketplace, and what role can the government take to make the situation the best for all the stakeholders? These questions will be answered with focus on strategies that enterprises can implement to be successful and grown in the future marketplace. I have chosen this case study because I believe globalization is one of the most important factors to evaluate when you are leading a business in today’s economy. Vizio’s Background Vizio is a California based Flat-Panel TV producer. It was founded in 2002, and is most known for their affordable Flat-Panel TVs. company became the largest provider in its field in the United States with a 21.7 % market share in 2009. Anna Phillips, (2012), International Business: Strategy & Structure Effects of Globalization Globalization is defined in the textbook as “The shift toward a more integrated and interdependent world economy. Globalization has several facets, including the globalization of markets and the...
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...Vizio and the Market for Flat Panel TVs Operating sophisticated tooling in environments that must be kept absolutely clean, fabrication centers in South Korea, Taiwan, and Japan produce to exacting specifications sheets of glass twice as large as kingsize beds. From there, the glass panels travel to Mexican plants located alongside the U.S. border. There they are cut to size, combined with electronic components shipped in from Asia and the United States, assembled into finished flat panel TVs, and loaded onto trucks bound for retail stores in the United States, where consumers spend over $35 billion a year on flat panel TVs. The underlying technology for flat panel displays was invented in the United States in the late 1960s by RCA. But after RCA and rivals Westinghouse and Xerox opted not to pursue the technology, the Japanese company Sharp made aggressive investments in flat panel displays. By the early 1990s Sharp was selling the first flat panel screens, but as the Japanese economy plunged into a decade-long recession, investment leadership shifted to South Korean companies such as Samsung. Then the 1997 Asian crisis hit Korea hard, and Taiwanese companies seized leadership. Today, Chinese companies are starting to elbow their way into the flat panel display manufacturing business. As production for flat panel displays migrates its way around the globe to low-cost locations, there are clear winners and losers. U.S. consumers have benefited from the falling prices of flat...
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...Introduction The focus of this case study is on the Vizio company and market for flat-panel TVs. However, most importantly Vizio’s unique use of globalization of production which gave them a competitive advantage in the market just as it was peaking. I found it important to do some research on the Vizio company to get a solid understanding of their background and history. The unique blend of origin, ethnicity and country of residence through much of his youth may have played a strong role in CEO, William Wang’s success with globalization. What started as a consultant business in 2002, later helped Gateway launch the first flat-panel TV under $3K and then Vizio found a niche in the flat-panel TV market which set them apart from their competitors. Globalization makes them successful today which is highlighted in the case. Their products are manufactured in Mexico with parts from across the world. Even their core mission and business model states, “VIZIO® lowers cost and increases efficiency by creating and orchestrating mutually desirable global partnerships.” This is definitely a company with a goal of producing affordable producing and passing on efficient manufacturing costs is exactly how they do it. Question #1: Why is the manufacturing of flat-panel TVs migrating to different locations around the world? Flat-panel TV technology is much like other products being manufactured around the globe in that the companies that are manufacturing the products are trying to...
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...Vizio and the Market for Flat panel TVs They begin as glass panels that are manufactured in high tech fabrication centers in South Korea, Taiwan, and Japan. Operating sophisticated tooling in environments that must be kept absolutely clean, these factories produce sheets of glass twice as large as king size beds to exacting specifications. From there, the glass panels travel to the Mexican plant located alongside the U.S border. There they are cut to size, combined with electronic components shipped in from Asia and the United States, assembled into finished TVs, and located onto trucks bound for retail stores in United States. It’s a huge business. U.S consumers spend over $35 billion a year on flat panel TVs. The underlying technology for flat panel displays was invented in the United States in the late 1960s by RCA. But after RCA and rivals Westinghouse and Xerox opted not to pursue the technology, the Japanese company Sharp made aggressive investments in flat panel displays. By the early 1990s Sharp was selling the first flat panel screens, but as the Japanese economy plunged into a decade-long recession, investment leadership shifted to South Korean companies such as Samsung. Then the 1997 Asian crisis hit Korea hard, and Taiwanese companies seized leadership. Today, Chinese companies are starting to elbow their way into the flat panel display manufacturing business. As production for flat panel displays migrate its way around the globe to low cost locations, there are...
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...Vizio is a California based company, created by a Tiawanese immigrant, that sales flat panel TVs. Vizio started production in 2004. While based in California, “Vizio outsources all of its manufacturing. For each model, they put together a team of suppliers around the world to do their manufacturing. This consists of getting the panel from South Korea, electronic components from China, processors are in the United States, and each model is assembled in Mexico. (Hill, 8) The reason that manufacturing is migrating to different locations are because of the competitive market of flat panel TVs, countries becoming democratic, labor wages are lower, and declining trade and investment. “As production for flat-panel TVs migrates its way around the globe there are clear winners and losers.” (Hill, 8) The beneficiaries include consumers, the company itself and company shareholders. The losers include competitors and the box TV manufacturers. Since Vizio relies on a global manufacturing process, if the government put a restriction on manufacturing outside the US Vizio would be in an unfavorable state due to price, quality, raw materials, and employment situations. By manufacturing outside of the United States, Vizio’s sales have ballooned by $3 billion in 2012 and owns 18-19 percent share of the US market while only employing 500 employees. (Hill, 8) 1. So you may ask why do you do all the manufacturing outside of the United States. Vizio manufacturing of flat panel TVs are migrating...
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...Vizio is a relatively nascent player in the flat panel television industry. It has witnessed tremendous growth within the industry and, in turn, has seen sales multiply by approximately more than ten-fold within a three year span. This analysis will examine the flat panel industry’s competitive landscape, the success of Vizio’s strategy, and whether Vizio’s strategy is sustainable for the long term prospects of the company. To get a better understanding of the flat panel television industry, let’s consider the competitive forces. When we consider buyers, there are two groups to keep in mind – the retailers (Walmart, Best Buy, etc.) and the consumers. As it stands today, there is not much price elasticity for consumers. They tend to purchase based on brand recognition. Televisions tend to be a fairly significant investment for the average household and quality, especially with the introduction of high definition, seems to be of paramount importance. Hence, companies that have developed a strong reputation for quality have historically done well. With that being said, flat panel televisions are becoming more popular and the industry continues to grow. In terms of channels, consumers are starting to buy more televisions from large discount retailers, which allows some smaller producers to be appeal to a more price conscious customer base. Suppliers comprise of companies that sell components and manufacturers that assemble these components. The article suggests that suppliers have...
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...barriers to cross-border trade and investment, and by national differences in government regulation, culture, and business systems; and moving toward a world where barriers to cross-border trade and investment are declining, material cultures are becoming similar, and national economies are merging into an integrated, interdependent global economic system. As companies from Japan and emerging markets like China play a more vital role in the world economy, the dominance of companies from the United States and Western Europe has diminished. Significant implications for British firms involve looking beyond Europe and America for investment and opportunities. Consumer spending power is growing quickly in developing countries. For North American companies, the same holds true, although the importance of the growing prosperity in Latin America suggests a potentially huge market in “their backyard.” Hong Kong is perceived as the gateway to the immense market of mainland China. Since Hong Kong firms are now less taken for granted, access to China is improving along with the move towards a market economy within China. International businesses based in all three locations are facing new opportunities and threats. 2. "The study of international business is fine if you are going to work in a large multinational enterprise, but it has no relevance for individuals who are going to work in small firms." Evaluate this statement. Globalization is changing the world economy. Firms, even...
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...Flat-panel TVs display effects of globalization Costs come down for consumers, but U.S. companies, workers pay To understand the trade-offs inherent in 21st-century borderless commerce, consider one of the hottest items in consumer electronics: the flat-panel television set. It begins in spotless, state-of-the-art fabrication centers in South Korea, Taiwan and Japan, where the glass panels that form the televisions' heart are produced. From there, the panels travel to Mexican plants clustered along the U.S. border to be assembled into cabinets and loaded onto trucks bound for retailers such as Circuit City or Wal-Mart. Each link in this global supply chain specializes in what it does best and at lowest cost. By collaborating across time zones and oceans, these industrial networks have driven costs down and performance up in ways no single company ever could. With scores of brands jostling for attention -- from global icons such as Sony to newcomers such as Olevia and even "virtual companies" such as little-known Vizio -- a fierce price war is giving consumers more TV for less money with each passing day. Dan Moll of Arlington, Va., just spent $4,000 on a 50-inch Pioneer Elite plasma TV after watching the price fall 25% in four months. "It's phenomenal. It's beautiful. ... It just looks great," he says. The one-two punch of globalization and technological advances that define this industry, however, entails costs as well as benefits. Earlier this year, as manufacturers...
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...Case study flat-panels TV`s 1)Companies in that industry, because of high levels of competition, have had to reduce their prices to remain competitive and profitable, so they are taking advantage of the economies of scale by acquiring the cheapest labor and materials from around the world. 2)Who benefits from the globalization of the flat-panel display industry?who are the losers? The clear winners from globalization are consumers and efficient manufactureres. As producction has been redistributed along cheaper countries around the world, these made posible so many profitable changes. Also as always, there are losers from others joy. The film fimrs that make cathode-ray tv are losers and also manufactureres from countries whom are not profitable to investors. 3)Then they would make the product more expensive, and thus less accessible to population. They would eventually kill the industry and probably favor substitute goods for flat televisions. In a balance, this would be really bad, both for Asian and Mexican economies as well for the consumption of them in the US. Restricting trade through barriers and useless tariffs is always a bad idea. 4) What does the example of vizio tell you about the future of production in an increasingly integrated global economy? What does it tell you about the strategies that enterprises must adopt to thrive in highly comptetitive global markets? Vizio gives the perfect about globalization, that they will never have to worry...
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...firms.” Evaluate this statement. 3. How have changes in technology contributed to the globalization of markets and production? Would the globalization of production and markets have been possible without these technological changes? 4. “Ultimately, the study of international business is no different from the study of domestic business. Thus, there is no point in having a separate course on international business.” Evaluate this statement. 5. How do the Internet and the associated World Wide Web affect international business activity and the globalization of the world economy? 6. If current trends continue, China may be the world's largest economy by 2020. Discuss the possible implications of such a development for (a) the world trading system, (b) the world monetary system, (c) the business strategy of today's European and U.S.-based global corporations, and (d) global commodity prices. 7. Reread the Management Focus on Vizio and answer the following questions: a. Why is the manufacturing of flat-panel TVs migrating to different locations around the world? b. Who benefits from the globalization of the flat-panel display industry? Who are the losers? c. What would happen if the U.S. government required that flat-panel displays sold in the United States also had to be made in the United States? On balance, would this be a good or a bad thing? d. What does the example of Vizio tell you about the future of production in an increasingly integrated global economy? What does it tell...
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...companies in the industry. With more technology advancements thanour market can handle at this point and time, Samsung has paved the way for the future inelectronics. One of the most popular new “toys” in the market today, is the unbelievable 3D TV.The first 3D TV was launched in March of 2010, and has already had a major impact on themarket. With the release earlier this year, Samsung dominated the market, controlling nearly90% of the total share. Samsung’s product, the 9000 series TV, is incomparable to competitionwith its ultra-thin screen, measuring only 0.3 inches in width. The 9000 series also comes with afull color spectrum that makes for an incredible viewing experience.Although Samsung is dominating the 3D market, we still have very detailed strategiesand tactics that we believe will give us an increased competitive advantage over our competition. The company’s main emphasis the past couple years has been on integration,union, and encouraging innovation. Samsung is always preparing for the next big item to hit themarket, which is why their technology is so far ahead of all leading competitors. In the future,we plan to enter the 3D video gaming market with a partnership with Microsoft. This will give usaccess to all of Microsoft’s gaming technology, in which we will combine with our quality of sound and viewing stations to create the ultimate gaming experience. Of course, throughoutour journey through this market, we will continue to provide the best ad campaigns for the publicso...
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...Product Vizio uses unprecedented technologies to ensure that their products are of the highest quality available. This approach has helped the company prosper and grow to great levels in the entertainment industry. Vizio now offers everything from multiple types of televisions (LCD, LED, 3-D) to home theatre products, tablets, and wireless routers. While their main product remains to be their televisions, the variety of products that they now offer are rapidly becoming popular amongst consumers in North America. Although Vizio’s newer products are a huge success, we believe that for now Vizio’s televisions would be the best product to offer in the Australian market. When looking at the high demand for television in the Australia market, it is easy to see why Vizio will not experience many obstacles in the selling of their televisions there. Being the number one media outlet for Australians, televisions are commodities that manufacturers are always competing with one another to try to gain the advantage in. Vizio has gained that advantage in their televisions and have used it to gain the upper hand on the companies in North America. They have recognized the desires of their consumers, and have thus used uncompromised technology to produce a product that is of incredible quality while offering it at a lower price than of competitors. In 2010, Vizio got the award for offering the highest rated LCD high-definition (HD) television. Their current lineup can even offer...
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...Ghemawat’s “AAA” Global Strategy Framework Ghemawat so-called AAA framework offers three generic approaches to global value creation. Adaptation strategies strategies that seek to increase revenues and market share by tailoring one or more components of a firm’s business model to suit local requirements or preferences. Aggregation strategies focus on achieving economies of scale or scope by creating regional or global efficiencies; they typically involve standardizing a significant portion of the value proposition and grouping together development and production processes. Arbitrage is about exploiting economic or other differences between national or regional markets, usually by locating separate parts of the supply chain in different places. Adaptation Adaptation—creating global value by changing one or more elements of a company’s offer to meet local requirements or preferences—is probably the most widely used global strategy. The reason for this will be readily apparent: some degree of adaptation is essential or unavoidable for virtually all products in all parts of the world. The taste of Coca-Cola in Europe is different from that in the United States, reflecting differences in water quality and the kind and amount of sugar added. The packaging of construction adhesive in the United States informs customers how many square feet it will cover; the same package in Europe must do so in square meters. Even commodities such as cement are not immune: its pricing in different...
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...the industry. With more technology advancements than our market can handle at this point and time, Samsung has paved the way for the future in electronics. One of the most popular new “toys” in the market today, is the unbelievable 3D TV. The first 3D TV was launched in March of 2010, and has already had a major impact on the market. With the release earlier this year, Samsung dominated the market, controlling nearly 90% of the total share. Samsung’s product, the 9000 series TV, is incomparable to competition with its ultra-thin screen, measuring only 0.3 inches in width. The 9000 series also comes with a full color spectrum that makes for an incredible viewing experience. Although Samsung is dominating the 3D market, we still have very detailed strategies and tactics that we believe will give us an increased competitive advantage over our competition. The company’s main emphasis the past couple years has been on integration, union, and encouraging innovation. Samsung is always preparing for the next big item to hit the market, which is why their technology is so far ahead of all leading competitors. In the future, we plan to enter the 3D video gaming market with a partnership with Microsoft. This will give us access to all of Microsoft’s gaming technology, in which we will combine with our quality of sound and viewing stations to create the ultimate gaming experience. Of course, throughout our journey through this market, we will continue to provide the best ad campaigns for the...
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...material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Richard Ivey School of Business Foundation, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright © 2011, Richard Ivey School of Business Foundation Version: 2012-07-06 Mikio Katayama was the president of Sharp Corporation, a company that in the last 10 years had become recognized as a top-notch competitor in electronics products, leaving behind its image as a second-rate player. Sharp could brag about its leading positions in the Japanese cell phone handset and TV set markets as well as its worldwide reputation as a leader in liquid crystal display (LCD) technology. Despite these successes, however, the outlook for Sharp was far from optimistic. In the spring of 2009, Sharp reported its first loss since 1956, the year its shares began trading on the Tokyo Stock Exchange. At the subsequent annual shareholders’ meeting, Katayama apologized for “causing great anxiety and trouble to shareholders,” and also announced that the firm’s dividend would be cut.2 With slowing sales due to the deepest worldwide recession since the 1930s, Sharp’s competitors were also facing hard times. However,...
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