Read Article and use Article review temple to answer the following questions.
Your review should:
identify the key concepts and theories related to your chosen article;
demonstrate a grasp of the author’s main arguments in the article;
· discuss the practical implications of the reading; you should consider why the topic of the article
is interesting and important for managers of multinational enterprises in the contemporary global business world and how the understanding of the article would benefit the managers; and
· present these by using an effective academic writing style.
Article Review Template Part A: Student and article information (This part is excluded from the word count) Your name Student ID Your tutor Tutorial class Day: Time: Number of words Title of the selected article Part B: Use your own words and sentences to complete each section (the questions are excluded from the word count) Objectives: What does the article set out to do? Subject and theories/concepts: What is the article about? What is its subject? What are the central concepts and/or theories discussed in the article? Findings/main arguments: What are the key findings or main arguments of the author? Practical implication: Why is the subject of the article interesting and important for managers of multinational enterprises in the contemporary global business world and how would the understanding of the article benefit the managers? Part C: List of references (The references should be in alphabetical order according to the last name of the first author. This part is excluded from the word count) International Business: Journal Article Review Template (Assessment 1) A Korean, a Chinese, and an Indian walk into an American bar: Tapping the Asian-American goldmine A Korean, a Chinese, and an Indian walk into an American bar: Tapping the Asian-American goldmine Steven Chen, Yuna Kim, Chiranjeev Kohli * Mihaylo College of Business & Economics, California State University, Fullerton, 800 N. State College Blvd., Fullerton, CA 92831, U.S.A. 1. The growth of small global brands in the U.S. market KakaoTalk is a mobile instant messaging application for smartphones with free text and call features. It was launched in 2010 and is available on iOS, Android, Bada OS, BlackBerry, Windows Phone, Nokia Asha, and personal computers. KakaoTalk currently has 170 million users and is available in 15 languages. In 2013, Kakao Corp., the South Korean company behind the popular application, generated revenue of approximately $200 million through gaming, digital content, and mobile com- merce. Following immense success in South Korea, Kakao Corp. is expanding into international mar- kets. In the U.S., KakaoTalk is used predominantly by Korean-Americans, but these users are also facilitating the adoption of the application among their friends, including those not of Asian origin. 99 Ranch Market, the largest Asian supermarket chain in the U.S., opened its first store in 1984 in Business Horizons (2017) 60, 91—100 Available online at www.sciencedirect.com ScienceDirect www.elsevier.com/locate/bushor KEYWORDS Asian-Americans; Cultural branding; Branding strategies; Long tail marketing; Social media branding; Cross cultural marketing; Market penetration strategy Abstract Historically, globalization has been synonymous with mega brands’ ex- pansion into international markets. However, changes in the marketing landscape–— namely, growth of immigrant consumers, new and emerging branding strategies, and advancements in technology–—have created a shift in the globalization paradigm, opening opportunities for small brands. Focusing on the growing number of Asian- American consumers, the authors develop a two-stage global market entry strategy for small brands entering the U.S. market. Specifically, the authors show how Asian brands can penetrate the U.S. market by serving Asian-American consumers or using them as a launchpad to reach mainstream American consumers. The growth of small global brands signifies an important and exciting change in the branded marketplace currently dominated by Western brands. # 2016 Kelley School of Business, Indiana University. Published by Elsevier Inc. All rights reserved. * Corresponding author E-mail addresses:
[email protected] (S. Chen),
[email protected] (Y. Kim),
[email protected] (C. Kohli) 0007-6813/$ — see front matter # 2016 Kelley School of Business, Indiana University. Published by Elsevier Inc. All rights reserved. http://dx.doi.org/10.1016/j.bushor.2016.09.003 http://crossmark.crossref.org/dialog/?doi=10.1016/j.bushor.2016.09.003&domain=pdf http://crossmark.crossref.org/dialog/?doi=10.1016/j.bushor.2016.09.003&domain=pdf http://dx.doi.org/10.1016/j.bushor.2016.09.003 http://www.sciencedirect.com/science/journal/00076813 mailto:
[email protected] mailto:
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[email protected] http://dx.doi.org/10.1016/j.bushor.2016.09.003 California. Since then, it has expanded to over 39 locations in California, Nevada, Texas, and Washington. It started by opening stores in neigh- borhoods with dense Chinese populations, but soon word spread among the consumers and a significant number of non-Chinese Asians, American-born Asians, and non-Asians who live in these communi- ties also started to shop at 99 Ranch Market for their grocery needs. To serve these non-Chinese consum- ers, 99 Ranch Market diversified its products to include brands from other countries including Vietnam, Korea, Japan, Mexico, and the U.S. The supermarket chain now uses dual languages (English and Chinese) in its marketing communications to appeal to its more diverse audience. These two examples illustrate the new globaliza- tion paradigm where consumers, rather than com- panies, dictate the usage and adoption of global products in international markets. Traditionally, globalization studies have examined how Western brands, particularly U.S.-based brands, flow into the rest of the world. This perspective is known as the Americanization thesis of globalization (Ritzer, 2009). The poster children of the Americanization thesis include brands such as McDonald’s (which has over 36,000 restaurants in over 100 countries), Ap- ple, Starbucks, and Google. However, scholars are noting increasingly that globalization is now dislo- cated from Western centers (Iwabuchi, 2002). Thomas Friedman argues that the ‘world is flat,’ meaning the contemporary marketplace has more parity than it ever has had before. Businesses of all sizes and national origins have an equal opportunity to compete in the global market. Particularly, busi- ness entities with origins in international markets can approach or exceed major American brands in terms of global relevance and fiscal performance. For example, Samsung, a South Korean technology brand, commands 28.2% and 20.7% global market shares in the competitive smart television and smartphones markets, respectively. Historically, multinational corporations have benefitted disproportionally from globalization. The McDonalds, Starbucks, Samsungs, and Toyotas of the world have become household names around the world by leveraging their immense resources to tap into international markets. Before entering an international market, McDonald’s spends millions of dollars to understand properly the local market needs and creates localized products and services to satisfy those needs. For example, McDonald’s entered the Indian market by forming joint ventures with prominent Indian industry veterans and lever- aged their resources and expertise to penetrate the Indian market successfully. Asian automotive com- panies, such as Toyota or Hyundai, have entered the U.S. market successfully through direct investment by building manufacturing plants and establishing relationships with local state governments. However, we make a case that the time has come for comparatively smaller brands to make their move. As illustrated through the earlier examples, in the new global landscape, consumers–—and not just company resources and support–—play an im- portant role in market penetration. Specifically, we draw attention to the significant role that immigrant consumers play in facilitating the growth of smaller global brands. According to the U.S. Census Bureau’s 2014 American Community Survey (ACS), the U.S. immigrant population stood at more than 42.4 million (13.3%) of the total U.S. population of 318.9 million in 2014. Between 2013 and 2014, the foreign-born population increased by 1 million (2.5%). Immigrants and their U.S.-born children now number approximately 81 million people (26%) of the overall U.S. population. These consumers are driving demand for products from their home coun- tries and American retailers increasingly are devot- ing a significant proportion of their shelf space to smaller, ethnic brands such as Lee Kum Kee (Chinese food sauce and condiment brand), Kingfisher (Indian beer brand), and Huy Fung Foods (Thai food sauce and condiment brand). As such, smaller brands from emergent countries now have a wider window of opportunity to go global. The purpose of this article is to examine the growth of smaller global brands in the U.S. market by focusing on the role played by immigrant con- sumers. We propose a two-stage market entry strat- egy, where in the short run, brands can market to immigrant consumers living in their new host culture (e.g., U.S.) who demand products from their native culture. In the long run, brands can use these immi- grant consumers as a launchpad to reach main- stream consumers in the host culture (e.g., American consumers). Specifically, we focus on the global entry of East Asian brands and their strategy to reach Asian-American consumers. Asian-Americans are the fastest growing ethnic consumer segment in the U.S., making them a par- ticularly attractive market. Many first generation Asian-American consumers were able to immigrate to the U.S. because of their wealth. But Asian- Americans are not only affluent respective to their native countrymen; they are also more affluent and educated than the average American consumer. The combination of high disposable income, education, and rapid growth rate makes Asian-Americans in the U.S. one of the most appealing markets worldwide for many businesses. While the increase in immigrant population stim- ulated demand for the smaller global brands in the 92 S. Chen et al. U.S. market, significant changes in the marketing landscape–—namely, the emergence of new branding strategies and technologies–—have created an eco- system for these brands to flourish. We discuss these changes in the marketing landscape before outlining our proposed market entry strategy. 2. Emerging branding strategies Brands are the most valuable intangible assets that companies possess, helping consumers identify and differentiate a company’s product offerings from competitors’ (Keller & Lehmann, 2006). More for- mally, brands allow companies to enjoy the differ- ential effect of brand knowledge on consumer response to marketing efforts (Aaker, 2012). Brands enable companies to appeal to consumers, charge price premiums, and command loyalty for their products. As such, once a brand is established, a barrier is built against competing brands. In the traditional market paradigm, marketplace sovereignty generally is determined by a company’s ability to make a substantial financial investment to push brands onto the consumers who would buy into the lifestyle articulated by the company. For exam- ple, to create brand awareness, a company heavily invests in advertising and promotion budgets during the early stages of the product life cycle. As the brand enters the growth and maturity stage, the company can outpace new competitors entering the market by leveraging existing competitive ad- vantages such as economies of scale, learning curves, and relationships established with channel members. Based on the traditional market struc- ture, multinational corporations thrived. However, the model of branding has been transformed in the recent past. While many aspects of the branding landscape have changed, we discuss two notable changes that have impacted smaller brands: a shift toward cultural branding and long-tail marketing. 2.1. Cultural branding We now live in the age of the informed,