Standardisation and Differentiation

Professional English Online ©Cambridge University Press 2012 …..PHOTOCOPIABLE…..Standardisation and differentiation Marjorie Rosenberg Aims  to be able to define these concepts  to express the pros and cons of each of the concepts  to understand a text about a multinational company  to learn the vocabulary used in describing a company’s strategy  to be able to discuss the strategy of a multinational company  to consider the elements of differentiation  to create a strategy of differentiation for a product  to present your ideas to the class Tasks  to agree on definitions  to fill in a chart with pros and cons of each of the strategies  to read and understand a text  to match terms to their definitions  to talk about the strategy of a multinational and offer your own opinions about it  to discuss the elements of differentiation and offer your own ideas about the strategy  to work out a differentiation strategy for a particular product  to present your ideas to the class This activity can be used on its own or used together with Business Advantage Advanced, Martin Lisboa and Michael Handford, Unit 2. Level Advanced (C1–C2) Timing 40–45 minutes without the follow-up activity This should include checking the answers, the discussions and the presentation of ideas at the end. Lead-in (10 minutes) Students work in groups to define the two concepts. When they have finished, they should share their ideas with the class and the definitions given below are compared with those the class came up with. They then fill in two tables with the pros and cons of the different strategies and these are discussed. Possible answers are given below. Standardisation: to give things of the same type the same basic features Differentiation: to adapt products to different markets and target groups Possible answers Standardisation Pros Cons  makes use of economies of scale  more control of quality and brand by HO  easily recognisable  not suitable for every market  cannot compete with localised products  may indicate that company is out of touch with specialised needs of market Differentiation Pros Cons  designed to appeal to particular group  more globally competitive  promotes cultural-awareness image of company  more expensive to produce  may dilute brand name  may not be recognised as belonging to company Professional English Online ©Cambridge University Press 2012 …..PHOTOCOPIABLE….. Reading and vocabulary (10 minutes) Students read the text and then work in pairs to match words from the texts with their definitions. Key 1 matrix structure 2 generate 3 distribution channels 4 transnational 5 supply chain 6 economies of scale 7 foothold 8 evolve 9 emerging 10 cohesion 11 autonomy Discussion (5 minutes) Students work in groups to discuss several questions about the article. Elements of standardisation and differentiation (5 minutes) Students discuss elements of differentiation and try to give examples. They are encouraged to add others to the list. Working out a strategy (10–15 minutes) Students work in small groups to come up with a differentiated strategy for a particular product in a foreign market. They should consider the elements above and keep in mind the cost factor as well. When they finish, they present their ideas to the class. Follow-up Students look on the internet for products sold world-wide and try to find differences in features, packaging, advertising etc. from country to country. They can bring the information to class to present to the others. Sources http://www.pg.com/en_US http://wearedevelopment.net/2012/04/29/the-strategic-development-of-proctor-and- gamble-into-a-global-giant Professional English Online ©Cambridge University Press 2012 …..PHOTOCOPIABLE….. Standardisation and differentiation Marjorie Rosenberg Aims  to be able to define these concepts  to express the pros and cons of each of the concepts  to understand a text about a multinational company  to learn the vocabulary used in describing a company’s strategy  to be able to discuss the strategy of a multinational company  to consider the elements of differentiation  to create a strategy of differentiation for a product  to present your ideas to the class Tasks  to agree on definitions  to fill in a chart with pros and cons of each of the strategies  to read and understand a text  to match terms to their definitions  to talk about the strategy of a multinational and offer your own opinions about it  to discuss the elements of differentiation and offer your own ideas about the strategy  to work out a differentiation strategy for a particular product  to present your ideas to the class Lead-in Work in a small group and define these two words in reference to products produced for both domestic and international markets. Standardisation Differentiation Discuss the advantages and disadvantages of these two strategies. Fill in the tables below and then present your ideas to the rest of the class. Standardisation Pros Cons Differentiation Pros Cons Professional English Online ©Cambridge University Press 2012 …..PHOTOCOPIABLE….. Reading and vocabulary Read the text and then work in pairs to find the underlined words in the text which match definitions 1–11. One global company which has evolved over the years is Procter and Gamble. The Cincinnati, Ohio-based company has over 300 brands in 180 countries. As long ago as the 1990s, P&G changed their strategy from a ‘Global Product Structure’ to a ‘Transnational’ global strategy. This led them to consider the geographical differences in the market places they were in and specialisation of particular brands while maintaining economies of scale regarding areas such as production and distribution. This strategy allowed them to keep costs low while giving them the opportunity to better meet the needs of customers. In addition, this type of structure has the advantage of making use of both centralised and decentralised functions within the organisation. They can work efficiently and quickly to respond to customers’ wishes on a local level while maintaining the brand image and quality the company is known for. Key areas which require local customisation have been given autonomy, but the R&D department stays centralised, meaning that the executives running the company have control over it. Today P&G is organised using a global matrix structure requiring control at various levels and a great deal of cooperation and cohesion within the workforce. In order to maintain the efficiency and brand recognition achieved by P&G it was necessary to co-ordinate major parts of the business across nations. These included the distribution channels, logistics, the supply chain, the manufacturing process and finally putting an international IT system in place to oversee it all. Today P&G is recognised world-wide as a global innovation leader with some of the best-known household brands. Twenty-five of these brands each generate more than $1 billion dollars in annual sales. Some 15,000 market research studies are carried out annually around the globe and P&G prides themselves on interacting with more than five million customers in nearly 100 countries. In order to stay on top of the latest trends P&G works together with external companies who they seek out to help them with innovation and new ideas to ensure their foothold in both established and emerging markets. Definitions 1. an arrangement within a company where employees are responsible to two or more managers, often in different departments 2. to product or create something such as profits 3. methods that are used for selling a company’s products or services, for example, selling them through a distributor or a retailer 4. used to describe companies or business activities that exist or take place in more than one country 5. the system of people and organizations that are involved in getting a product from the place where it is made to customers 6. the reduction of production costs that is a result of making and selling goods in large quantities, for example, the ability to buy large amounts of materials at reduced prices 7. a strong first position in a market, industry, etc. from which further progress can be made 8. to develop gradually, or to make someone or something change and develop gradually 9. beginning to have economic power or success 10. the situation when the members of a group or company are united 11. the situation when a group of people can organise their own activities Professional English Online ©Cambridge University Press 2012 …..PHOTOCOPIABLE….. Discussion  Do you think that P&G has a good strategy for both standardisation and differentiation? Why or why not?  Which of their products do you know?  In which ways do you think they may change their products according to the market? Elements of standardisation and differentiation Discuss these elements of differentiation. Try to find examples if you can. Can you think of any others?  packaging  advertisements and advertising campaigns  USPs  colours  features Working out a strategy Work in small groups. Choose one of the products below and decide which of the elements mentioned above should standardised to maintain the brand image and which should differentiated depending on the market you are selling it in. car shampoo fast-food restaurant mobile phone computer software hotel chain Put your ideas together and present them to the class. Discuss ideas the other groups have and talk about the best strategy to make use of economies of scale while meeting individual needs in markets. Follow-up Check the internet for products sold worldwide and try to find differences in features, packaging, advertising etc. from country to country. Bring the information to present to the rest of the class.