Homework # 4 Assignment
BUS 177-501
Sebastian Ortiz
Exercise # 2 reads:
Plot the position of the following firms on Figure 12.8 (p. 349):
Procter & Gamble
IBM
Apple
Coca-Cola
Dow Chemical.
U.S. Steel
McDonald’s
In each case, justify your answer.
Dow Chemical
U.S. Steel
IBM
 As stated by our chapter
High
reading conventional
commodity products such as
steel, bulk chemicals and
computer services. Price is
their main competitive
weapon. Many of these
companies send their raw
materials to places outside
the U.S. or any country,
were labor is cheaper for
them to sell the finished
product for a higher cost.
Also, the consumers
worldwide have similar
preferences. These
companies have low
pressure for local
responsiveness since what
they make are universal,
and do not necessarily need
to adjust their products to
certain standards. They do
this in order experience the
maximum benefits instead
of raising production costs
Firm A
Apple
 Apple is mostly a smartphone
company as well as a
computer company. In which
their main competitive weapon
is price. This creates high
pressure for cost reduction
since their products are
“expensive,” this shifts the
costumers idea of thinking
whether it is worth spending
1000 dollars for a brand name
or spending less on a similar
phone different brand, which
leads to costumers demanding
low costs. Also, Apple faces
high pressure for local
responsiveness, since as
stated by our reading
“manufacture smartphones
switches need to customize
their product offering
according to the technical
standard prevailing in a given
country or region.” Which
means that Apple must mold
their products to the needs
and standards for each
country. And as to domestic
some costumers have different
tastes in the display of a
phone as well as color
schemes etc.
 Firm C

Procter & Gamble

Coca-Cola
McDonald’s
 These three companies have
Low pressure from both Firm B
local responsiveness and
cost reduction, since
moreover these companies
Low

sell the same product

worldwide and it works for
them. They do not feel
pressure to change their
products to adapt to
different societies since
99% of the time domestic
products are like those
abroad. Also, price is not
their main competitive
weapon since most products
Pressures for cost reduction

are equally the same price

as their competitors, but
under a different name.
Local customization is
declining and not applicable
to these companies since
their products are accepted
worldwide.

Low
High

Pressures for local Responsiveness