MABE Case
Key Issue
From the case, we see that the primary source of concern is what Mabe should do with its Joint Venture in Russia in spite of the opportunities, benefits and threats of doing business there. In a nutshell, Mabe is trying to decide whether or not to continue with the Joint Venture (JV hereafter) or seek ways to improve the JVs performance and gain more market share.
Internal Analysis
VRINE Analysis
Resources/Capabilities
Value
Rarity
Inimitability
Non-substitute
Exploitability
Internationalization Strategy √ √ √ X √
Research and Development √ √ √ √ √
Organizational Cultures √ X √ √ √
Internationalization Strategy
MABE has a good internationalization strategy with widely spread manufacturing plants in Mexico and Latin America, such as Venezuela, Colombia, Peru and Ecuador. It relies highly on acquisitions and JVs with local brands to lower manufacturing cost and increase its market share by entering different markets. This strategy is valuable as it decreases net costs and increases net revenues. It is rare because one third of all gas, electric ranges and refrigerators sold in the U.S. are manufactured by MABE. It is also hard to imitate as MABE spent many years to develop its plants in Mexico and Latin America, thus, competitors would face a cost disadvantage in developing similar strategy. Its products can be easily substituted as GE is still one of the largest competitors. However, MABE has exploited the full potential of this strategy in the international market.
Research & Development
In the early stage of development, MABE formed alliance with GE and took advantage of the foreign technology and penetrated new market. Later on, it developed higher and more sophisticated technical skills and decreased reliance on GE and developed its proprietary technology. It has used its R&D capability to exploit opportunities in the electric stoves, refrigerators, dish washing machines and clothing dryers markets. Thus, its
From the case, we see that the primary source of concern is what Mabe should do with its Joint Venture in Russia in spite of the opportunities, benefits and threats of doing business there. In a nutshell, Mabe is trying to decide whether or not to continue with the Joint Venture (JV hereafter) or seek ways to improve the JVs performance and gain more market share.
Internal Analysis
VRINE Analysis
Resources/Capabilities
Value
Rarity
Inimitability
Non-substitute
Exploitability
Internationalization Strategy √ √ √ X √
Research and Development √ √ √ √ √
Organizational Cultures √ X √ √ √
Internationalization Strategy
MABE has a good internationalization strategy with widely spread manufacturing plants in Mexico and Latin America, such as Venezuela, Colombia, Peru and Ecuador. It relies highly on acquisitions and JVs with local brands to lower manufacturing cost and increase its market share by entering different markets. This strategy is valuable as it decreases net costs and increases net revenues. It is rare because one third of all gas, electric ranges and refrigerators sold in the U.S. are manufactured by MABE. It is also hard to imitate as MABE spent many years to develop its plants in Mexico and Latin America, thus, competitors would face a cost disadvantage in developing similar strategy. Its products can be easily substituted as GE is still one of the largest competitors. However, MABE has exploited the full potential of this strategy in the international market.
Research & Development
In the early stage of development, MABE formed alliance with GE and took advantage of the foreign technology and penetrated new market. Later on, it developed higher and more sophisticated technical skills and decreased reliance on GE and developed its proprietary technology. It has used its R&D capability to exploit opportunities in the electric stoves, refrigerators, dish washing machines and clothing dryers markets. Thus, its