Chupa Chups International Business Strategy
good distribution system. SERVICESDistribution system conferring responsiveness and rapid expansion, privilege relationships with the customers.
Primary
The value chain brings to the fore where the value is added to the product and where is built the competitive advantage.
1.3. Core competencies and competitive advantage
Core competencies are what delivers superior value to the customer, what a firm does that is strategically valuable.
Through the value chain, we can say that value is added in:
- Production: raw materials are transformed into a lollipop thanks to machineries developed by Confipack.
- Distribution: the way the products are sold and delivered added value.
- Marketing: the advertising adds value to the product as it creates the reputation of the brand in people’s minds.
Of course, support activities add value to the product but on an indirect way.
Which of these activities represent the core competencies?
Barney states that core competencies need to be:
- Valuable: They help the company to exploit opportunities to create value to the customer,
- Rare: they are possessed by few or any competitor,
- Costly and difficult to imitate: other companies cannot develop them easily,
- Non-substitutable: they do not have strategic equivalence.
Through these criteria, we can identify four core competencies:
Innovation and technology process Distribution system Human resources
Valuable The development of a new product and its production process created value for the customer. It adds value to the product and the customer, creating a special relationship. The competent and motivated personnel represent an obvious advantage for any company.
Rare They were the first to introduce the lollipop and they are still innovating. Their own company develops the machinery and benefit from a proprietary process. The partnerships the company has developed are unique. The company pays above-average salaries and has a familial and friendly atmosphere, what is pretty rare in any company.
Costly and difficult to imitate The technologic process was developed within the company, as the innovation, and another firm could not imitate it exactly, moreover with the proprietary process. Chupa Chups Diversificacion is a company with its own proprieties so cannot that be imitated. It comes from within the company, from its own specific values and cannot be imitated or substituted.
Non-substitutable Innovation cannot be substituted; it comes from the firm’s specific knowledge. It comes from the firm’s specific knowledge.
2. Chupa Chups international strategy
2.1. The international expansion
In 1960, the company decided to expand abroad in order to grow faster.
It first began exporting to France, [next page]