Global Expansion: Godiva and Amazon

Guest post by Dina Vaccari and Kevin Croy, Class of 2012

TMMBA students Kevin & Dina with Godiva presenter

Kevin & Dina with Meagan Dietz of Godiva

It was amazing how relevant our TMMBA courses were during our visits to Singapore and Beijing, both during cultural tours and company visits.  The Global Strategy course taught by Kevin Steensma was particularly relevant, especially during our visit to China.  Many of the companies we met with spoke to the entry strategy options along with key points to consider when entering a new global marketplace; class discussions had previously exposed us to many of these factors.   A trip to an Amazon fulfillment center located in China gave us unique insight into the company’s  operations in addition to their global  expansion strategy.

The representative from Godiva Chocolates discussed their decision making process and considerations regarding joint venture, direct investment, or partnership entrance strategy.  Godiva benchmarked their entry against other luxury brand entries, such as Coach and Haagen Dazs, companies that had already entered the China market successfully.  They studied these brands’ entry experience and weighed the pros and cons of each to determine which strategy would be the best for them.  In the end, they determined that the challenges they anticipated with their supply chain, particularly associated with the proper refrigeration of their products during transport, would merit a direct investment and owning their supply chain throughout the whole process to ensure quality and reduce shrinkage.

In addition to Godiva, we also visited Amazon, which brought our Macroeconomics and Operations Management classes to mind.  The population of China is urbanizing and becoming a more consumer-oriented culture, so companies are adapting to leverage this growing segment of potential customers.  Our visit to an Amazon fulfillment center (FC) in China helped illustrate this point because the massive FC we visited primarily handled orders destined for Chinese consumers.  Clearly, Amazon understands the potential of the Chinese market and has positioned themselves to capitalize on this trend.  Operations at the FC were very efficient.  Our tour began at the loading dock on one side of the warehouse where inventory entered the system.  Items were catalogued and routed to holding locations.  As orders were placed, pickers pulled inventory to assemble the appropriate products and prepare them for packaging.  Once packaged, the orders proceeded to an area with workers who labeled them for shipping.  Finally, orders were routed to holding areas until outbound shippers could collect them.  The streamlined process was well choreographed and reminded us of the risk-pooling and queuing concepts we learned about in Operations Class.

Every company we visited or street vendor we encountered  gave us  a new opportunity to  look at things through our new TMMBA lenses.  It was an amazing trip!

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