Case I: Facebook’s Internet.Org Initiative
Facebook in the leadership of Mark Zuckerberg launched an internet initiative with the name Internet.org in which it aimed to provide internet connection to every single human being on the planet. It was a very ambitious project launched in 2013. This crusade of internet connectivity has been partially successful in making people of the countries like Zambia, Paraguay, Indonesia, Philippines, Rwanda and Kenya online (Aivazidou et al. 2017). The main aim of this initiative was to target a huge internet market in the country of India and many other developing nations. This initiative was termed to be a mixture of a business prospect along with the concept of philanthropy. But it was criticized by the press and many other players in the IT world as it seemed to them that Facebook plotting to get more number of users in the backdrop of this initiative. It was shown that from this initiative Facebook will gain monetarily and will gain exponentially from the bottom of the pyramid (Bates et al. 2017). There were many discussions and debates as this initiative was in contradiction with the net neutrality concept which allowed internet users to access any website without any restrictions created by monopoly, as the Facebook was orchestrating.
Q1. Outline of Facebook’s Internet.org Initiative.
Internet.org is an initiative which comprises of partnership between many social networking players on the internet such as Facebook, Qualcomm, MediaTek Samsung, Nokia, Ericsson and Opera Software. This plan aimed to provide very cheap internet access to some selected internet services in some underdeveloped countries where there is a paucity of internet connectivity and people are unaware of the facilities of internet (Beeler et al. 2017). This initiative plans to increase the efficiency and providing new models of business models which revolves around the internet access. A web application named Free Basics was developed to execute this initiative which gained much popularity in very less time.
This initiative was criticized on a global level as it violated the concept of net neutrality because it contained some handpicked internet services which the people will be able to use if they are using the Internet.org system. This created a sense of discrimination against the services which were not included in the scheme (Bowie 2017). The main aim of Internet .org initiative was to provide internet access to the two third of the world population which is deprived of the benefits of the internet services. The concerned partners in this initiative were looking forward to provide affordable and efficient system on internet access which was misinterpreted. The Internet.org initiative has plans of using compressed data transfer methods to increase the speed of internet connectivity so that more amounts of data can be sent in less time and with the help of minimum infrastructure cost (Broeders 2017).
Solution: The best solution to the problem of net neutrality which the Internet.org initiative faced is providing the entire internet services in the scheme so that there is no discrimination in the eyes of competitors.
Q2. Impact of Internet.org on emerging economies
Internet has changed the dynamics of business and economy of the entire world. It can be observed that all the developed nations have free and high speed internet connectivity which has become the most basic requirement to do all the things in daily life. The prospect and impact of internet is increasing day by day on the lives of people (Ferraro et al. 2017). Mark Zuckerberg championed the economic implications of free internet which is why he launched Internet.org initiative. He understood the fact that people who have the power of internet access have the power to gain a lot in especially in economic prospect. Internet.org initiative was launched keeping in mind that countries which are deprived of internet access are living in a primitive age and have no future opportunities to change their economic status. If the Internet.org initiative successful in its pilot program then the countries, who will take part in the scheme will radically change their economic condition (Hsueh 2017). There will exploration of huge untapped market opportunities which will have a major positive impact on the global economy. Economies where business is still done manually and have no idea about the services of internet which will make their business faster and easier and less costly could exploit this opportunity to become self-sustainable and can expand their business on the international level which will mutually benefit both, their indigenous economy as well as the global economy. People of the underdeveloped economies will explore new horizons of business opportunities by using the internet services provided by the Internet.org initiative (Huang et al. 2017).
Solution: The problem of Internet.org initiative to reach underdeveloped countries is the lack of modern infrastructure which can be solved by involving the local governments in support of the initiative.
Q3: Serving the bottom of the pyramid or Facebook trying to expand its reach.
The entire Internet.org initiative was under the crosshairs of debates and criticism that Facebook is trying to use this initiative as a cover to bottom feed by exploiting the base of the pyramid and is trying to gain from the economic benefits of this initiative to reach new levels of business goals (Karamet al. 2017). Many players on the global level were vocal about the ulterior motives of Facebook for launching the Internet.org initiative. Facebook had to face many allegations which came along the launch of this initiative as some stated that Facebook will use the user base to increase its income which it gets from the advertisements.
Another grave allegation which was made on Facebook that Internet.org initiative has nothing to do with the humanitarian values of providing users with free internet access rather it is concerned about expanding its user base which will bring more revenue and profit to the company (Kourula et al. 2017). It was also stated that Facebook and other partner companies in this initiative are trying to establish a strong monopoly by allowing only certain services under the scheme restricting the access to a large number of services which is not justified from the point of view of a user. Mark Zuckerberg tried to explain that this initiative is a pilot scheme and its success will determine the future prospect of the full-fledged scheme. But critics all around the world were not convinced with this explanation (Linehan et al. 2017).
It can be concluded from the above discussion which contains questions and their relative answers about the case study on Facebook Internet.org initiative that it was a very ambitious and farsighted scheme to make two third of the world population aware of the internet services and its benefits which can be exploited and explored by people who are unfortunate enough not to know about it. It was launched by one of the biggest Social Networking Company which has the maximum user base as of now and has unfathomable resources to accomplish this project. But there are certain limitations to the schemes and initiatives planned by the companies which have to convince some regulatory authorities about the viabilities of the project. In the following scenario the Internet.org initiative got caught up in regulations about the net neutrality and monopolizing the internet access due to which the initiative does not end up well. Despite the efforts made by Facebook in the underdeveloped countries of Africa and South East Asia it failed to incorporate big market like India which could have turned the tables of the Internet.org initiative. Therefore it can be concluded that the Internet.org was believed to serve the bottom of the pyramid.
Case II: IKEA in Russia: Emerging Market Strategies and Ethical Dilemmas
IKEA is a Swedish company having headquartered in Netherlands and sells and designs the most modernized and luxury furniture. It is the most top rated furniture company in the world with its branch in all the major cities of the world. In the following case study IKEA in Russia faced some legal issues concerning the bribery case which was penalized and investigated by the Russian authorities (Medeiros et al. 2017). The country of Russia is quite infamous for its corruption practices, mafias and organized crime syndicates but the reality is quite different from which many Russian experts are unaware of. Russian authorities captured some high posted authorities of IKEA’s Russian subsidiary who were involved in crimes like bribery and high-level extortion for leasing two premises for IKEA’s Mega Shopping Complex (Michalos 2017). The two suspects of crime fled Russia although the Russian authorities were seeking them for their extradition. IKEA has been known for its uncompromising approach towards corruption but in some cases it has been unsuccessful in keeping its employees under the radar who have been caught in some shady deals. In the same year IKEA has been accused of practicing unfair lumbering practices in the Russian woods which made them break the environmental norms of the country.
Q1. External factors for devising a market entry strategy in new country
The stakeholders of IKEA had been keen in expanding their business into Russia way back when it was USSR. They believed that there is an untapped and unexplored market in Russia which can be capitalized to increase the business opportunities of IKEA in Europe (Nord et al. 2017). It was known to the partners of IKEA that Russia is a country where cheap and affordable products will attract more customers than expensive and lavish furniture. Durability of the products mattered more than its looks for the Russian customers. The strategy for IKEA was to use cheap labor and cut cost in that domain. Another strategy was to offer simple design products in affordable prices. IKEA also indulged itself into several environmental and social projects to advertise its presence and concern for the citizens of Russia (Schaltegger and Marcus 2017).IKEA paid emphasis on the human resources also which made its management realize about the values and beliefs which superseded the skills and academics when they conducted job interviews for hiring in IKEA. The company has attempted to open their business in Russia when it was Soviet Union but the attempt failed as the Soviet Union collapsed and the business plan of IKEA was dropped. But in later years, IKEA entered into Russia for its business. They knew that Russia is teaming up to develop a market for the poor people which were not good for the business prospect of IKEA (Shahin 2017). There was another problem of corruption which IKEA had to deal with in doing business in Russia.
Solution: IKEA would have devised a plan and strategy by doing proper survey for the market of Russia which would have given a holistic idea of how the things will work for them.
Q2. Impact of Strong and Co-operative Political Machinery on the Business Prospects
IKEA has to face many small and big problems in its expansion strategy which was not considered to be a smooth road for them. The business environment in Russia determined the type and quality of business they did which was filled with problems which ranged from obstacles in opening up of stores to convincing the government employees in fire, safety, health customs, electricity, tax, and other departments which need compliance from IKEA (Singhet al. 2017). The employees of these Russian departments found problems in the stores of IKEA consistently, especially during the crucial times of business such as openings of stores. The management of IKEA considered that the Russian authorities will give them pointers to mitigate the problems and overcome them to do proper business with all the rules and regulations which were asked of them but this does not happened as the Russian authorities wanted IKEA to defaulter so that they can create more problems for them (Sunnyet al. 2017). Although there were some problems from the government side Russian authorities also provided IKEA some support. The Russians provided IKEA proper place of opening a mega store which became the center of attraction for the brand and it made a lot of business for IKEA. It created a record opening sale which is almost impossible to break for any retail chain company to break even now. Russia being a country where taiga and tundra climate exist which is quite congenial for lumbering and furniture business (Willoughby 2017).
Solution: IKEA should have planned the business prospects in Russia and problems which they can face so that they would have been prepared to face them.
Q3. Strategy for establishing large shopping complexes instead of standalone shopping centers.
The stores of IKEA are not common furniture stores but have huge spaces and an ambience which suits perfectly to the theme which is provided by them to familiarize the customers with the company and the products. IKEA stores provide shopping experience to their customer which gives them a feel of visiting a museum (Yim 2017). Russian people are very conservative and have less idea about the standards and way of living of people in different parts of the world. They are oblivious to the styles and designs of furniture used in the Western and Eastern parts of the world. IKEA stores which are constructed as mega complexes show the glimpse of the ways of living of the Westerns countries which draws Russians to its stores as they come to educate themselves with the Western culture which is way modern and advanced than them (Singh et al. 2017).
IKEA provides an interesting environment of shopping which becomes a topic of discussion for its customers even if they leave the store and go somewhere else. Unlike the mundane shopping centers of furniture IKEA gives a creative edge to the shopping experience which cannot be provided in the stand alone shops, Thus it becomes mandatory for the IKEA management team to build large and mega complexes so that they can display their grandeur and variety of products with proper presentation and that too at cheap rates (Aivazidou et al. 2017). IKEA attracts customers of all economic status which ranges from poor students to highly paid officials in Russia.
It can be concluded from the above discussion about the second case study about IKEA and its business prospects in Russia that in the beginning it faced many problems in context with the government authorities. The officials created many issues in different departments of government which needed compliance. These issues create an ethical dilemma in making emerging marketing decisions about the company like IKEA which has grown so much in its international market. The problems of bribery and extortion which were faced by IKEA are result of the corrupt practices executed by their own employees which may be a requirement for doing business in Russia at that moment. IKEA being a strict company for the charges and accusations like these has been booked for not complying with environmental rules of the country as they cut down trees which were against the norms. Some actions taken by IKEA may be circumstantial and guided by the ethical dilemma of doing business and making decisions for emerging market changes but the entire company should not be judged by these degraded deeds of its employees. IKEA has been one of the most successful business ventures of its time which has reshaped the entire furniture business.
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