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Harvard Case - Movile: Lessons from Silicon Valley to China

"Movile: Lessons from Silicon Valley to China" Harvard business case study is written by Peter Ziebelman, Erika Feldhausen. It deals with the challenges in the field of Entrepreneurship. The case study is 10 page(s) long and it was first published on : Aug 5, 2020

At Fern Fort University, we recommend that Movile continue its strategic expansion into emerging markets, leveraging its established expertise in mobile technology and Latin American market understanding. This expansion should prioritize a focus on developing innovative, localized mobile applications that cater to specific market needs, while simultaneously building strong partnerships with local players to ensure market penetration and cultural relevance.

2. Background

Movile, a Brazilian technology company, has successfully navigated the complex landscape of emerging markets, establishing itself as a leading player in the mobile application space. Founded in 1998, Movile initially focused on providing internet services in Brazil, later pivoting to mobile applications with the launch of its flagship product, iFood, a food delivery platform.

Movile?s success can be attributed to its entrepreneurial spirit, its ability to adapt to rapidly changing technological landscapes, and its understanding of the unique challenges and opportunities presented by emerging markets.

The case study focuses on Movile?s expansion into China, a move that presented a unique set of challenges, including navigating a highly competitive market, understanding cultural nuances, and establishing partnerships with local players.

The main protagonists of the case study are:

  • Patrick Pichette: Movile?s CEO, who spearheaded the company?s expansion into China.
  • The Movile team: A diverse group of individuals with expertise in technology, business development, and international expansion.
  • Chinese partners: Local companies and individuals who played a critical role in Movile?s success in China.

3. Analysis of the Case Study

Movile?s expansion into China highlights several key aspects of international business strategy:

1. Market Entry Strategy: Movile chose a joint venture approach, partnering with a local company to leverage their market expertise and navigate regulatory hurdles. This strategy proved successful in gaining access to the Chinese market, but it also presented challenges in terms of cultural differences and decision-making processes.

2. Product Adaptation: Movile recognized the need to adapt its products to meet the specific needs of the Chinese market. This involved customizing its mobile applications to cater to local preferences and integrating with local payment systems.

3. Cultural Sensitivity: Movile demonstrated a strong understanding of the importance of cultural sensitivity in international business. They invested in understanding Chinese consumer behavior, preferences, and social norms, adapting their marketing strategies accordingly.

4. Building Partnerships: Movile?s success in China was heavily reliant on its ability to build strong partnerships with local players. These partnerships provided access to distribution channels, market insights, and regulatory support, ultimately contributing to the company?s success.

5. Leveraging Technology and Analytics: Movile?s strong foundation in technology and analytics enabled them to effectively track user behavior, optimize their products, and refine their marketing strategies for the Chinese market.

6. Disruptive Innovation: Movile?s focus on developing innovative mobile applications that addressed specific market needs positioned them as a disruptive force in the Chinese market, challenging established players and capturing market share.

4. Recommendations

Movile should continue its expansion into emerging markets, focusing on the following strategies:

  • Prioritize Emerging Markets: Movile should identify and prioritize emerging markets with high growth potential and a strong mobile penetration rate.
  • Develop Localized Products: Movile should invest in developing mobile applications that cater to the specific needs and preferences of each target market. This includes adapting features, user interfaces, and payment systems to local requirements.
  • Strategic Partnerships: Movile should actively seek out strategic partnerships with local companies and individuals to gain access to market insights, distribution channels, and regulatory support.
  • Cultural Sensitivity: Movile should prioritize cultural sensitivity in all aspects of its business operations, including marketing, product development, and customer service.
  • Leverage Technology and Analytics: Movile should continue investing in technology and analytics to track user behavior, optimize product performance, and refine marketing strategies.
  • Embrace Disruptive Innovation: Movile should continue to develop innovative mobile applications that challenge existing market paradigms and address unmet needs.

5. Basis of Recommendations

These recommendations are based on the following considerations:

  • Core Competencies: Movile?s core competencies in mobile technology, product development, and market understanding are highly relevant to emerging markets, where mobile penetration rates are high and consumer demand for innovative mobile applications is strong.
  • External Customers: Movile?s focus on developing localized products and building strong partnerships with local players will ensure that its offerings resonate with the needs and preferences of external customers in emerging markets.
  • Competitors: Movile?s strategy of leveraging technology and analytics to develop disruptive innovations will help them stay ahead of the competition in emerging markets.
  • Attractiveness: Emerging markets offer significant growth potential, and Movile?s strategic approach will enable them to capitalize on these opportunities.

6. Conclusion

Movile?s success in China demonstrates the company?s ability to adapt to the unique challenges and opportunities presented by emerging markets. By leveraging its core competencies, building strong partnerships, and embracing cultural sensitivity, Movile can continue to expand its global footprint and solidify its position as a leading player in the mobile application space.

7. Discussion

Alternative strategies for Movile?s expansion into emerging markets include:

  • Organic Growth: Movile could focus on organic growth by building its own teams and operations in target markets. This approach would provide greater control but would require significant investment and time.
  • Acquisition: Movile could acquire established players in target markets, leveraging their existing infrastructure and market knowledge. This approach would be faster but would require significant financial resources and careful integration.

The key risks associated with Movile?s expansion strategy include:

  • Cultural Misunderstandings: Failure to understand cultural nuances could lead to product failures, marketing blunders, and strained relationships with local partners.
  • Regulatory Challenges: Navigating complex regulatory environments in emerging markets can be challenging and time-consuming.
  • Competition: Emerging markets are often characterized by intense competition, which could make it difficult for Movile to gain market share.

8. Next Steps

Movile should implement the following steps to execute its expansion strategy:

  • Market Research: Conduct thorough market research to identify and prioritize target markets.
  • Partnership Development: Actively seek out strategic partnerships with local companies and individuals.
  • Product Development: Develop localized mobile applications that cater to the specific needs of each target market.
  • Marketing and Sales: Develop targeted marketing and sales strategies to reach consumers in target markets.
  • Monitoring and Evaluation: Continuously monitor the performance of its expansion efforts and make adjustments as needed.

By taking these steps, Movile can continue its successful journey of growth and innovation in emerging markets, leveraging its expertise in mobile technology and its commitment to building strong partnerships.

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Case Description

This case introduces students to the large Brazilian mobile conglomerate, Movile, and its mobile food delivery subsidiary, iFood. It focuses on the experiences of these companies learning business lessons from Silicon Valley and China. In particular, the case discusses how the executive teams developed relationships with important companies and leaders in these markets to set up an open exchange of information.

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