Norning International (NI) states that both its past successes and future growth strategies are based on an evolving network of wholly owned businesses and joint ventures around its core competency in glass making. Through their alliances and owned divisions they compete in four global business sectors: Specialty Glass and Materials (including materials for HDTV and LCD displays), Consumer Housewares (including microwavable dishware), Laboratory Sciences Products and Services (test tubes, testing equipment, and drug trials testing), and Communications (fiber optics and related technologies). Per the company’s annual report, “binding all four sectors together is the glue of a commitment to leading edge glass making technologies, shared resources, and dedication to total quality.” Each sector is composed of divisions, subsidiaries and alliances. However, the central role played by alliances is demonstrated by the fact that the combined revenue of its 30-some alliances is more than double that of NI on its own. Most of the alliances provide NI with access to particular geographic markets, industries, or channels, although an increasing number of alliances involve both market access and technological development.
1. How would a company like NI implement a market-penetration strategy in order to grow?
2. What are the advantages of multi-dimensional scaling for implementing NI’s strategy?
3. What risks arise from a market segmentation strategy based on alliance networks?