Lost In Translation: AOL’s Big Assault On Latin America Hits Snags in Brazil”
...the "biggest" and the "best". AOL was cut down to size when the national advertising council ruled that the company must cease using the slogan ''the biggest because it's the best.'' That title, at least in Brazil, rightly goes to a local, Universo Online, or UOL, which claims to have 760,000 subscribers, compared with AOL's 130,000. AOL must not repeat such a mistake in the future - the way of advertising must be aggressive but not false and offensive for the rivals and clients. The companies will usually offer a lower priced product in a foreign country. This depends on the average income of the country involved. Though AOL did not offer a lower priced product, neither it was a better quality. In general, AOL failed in meeting the controllable element of the market. b) The domestic environmental elements can have a direct effect on the success of a foreign venture and these include political forces, legal structure and the economic situation in the home country. A political decision that involves domestic foreign policy can have a direct effect on a firm's international marketing success. The foreign uncontrollable elements include: political and legal forces, economic forces, competitive forces, level of technology, social and cultural, and physical and geographical. AOL must have analyzed all these elements in order to assess the opportunities and threats that exist in Latin America world market. More importantly, AOL must have also analyzed its capabilities and weaknesses comparing with local companies. By doing this, company can determine if it can survive in a foreign market. Governments' influences in Latin America countries are an important consideration - there are various tariffs, taxes, regulations and codes that may hinder a company's survival if the company does not adhere to these codes properly. Though the information presented in the case does not include discussion about these potential considerations. The cultural factors in a country can also affect a company's marketing plan in a foreign country. And the AOL case in Brazil is an example of disobeying the importance of cultural factors. The AOL could conduct a survey to assess a Brazilians needs, expectation for product quality etc. The AOL “overestimated the draw of its blue-chip brand” and underestimated its competitors technological capabilities, toughness and appreciation by local consumers. Such blindness did not only occur in Latin America expansion. AOL lags behind the competition in Japan, Germany, France, and Canada as well. The competition is largely from home-grown Internet providers backed by well-financed phone companies or media groups. Unlike AOL, the competition often offers its services for free and may do a better job delivering strong local content AOL is very American in thinking that their brand name will carry them outside the U.S - although AOL remains the leading Internet service provider at home, it trails rivals in Latin America, including Terra Networks, the Internet arm of Spain's Telefonica. The local companies and their core advantages must be analyzed very carefully and it must be understood that local consumers might defense their local companies and that US brand without improving its advantages against local firms will not be meet as an outperforming brand. 3. Identify other problems the firm may encounter in the future and discuss potential solutions. The essence of strategy in Latin America, as well as everywhere on the globe, is to identify the windows of opportunity, timing of entry, resource commitments, and creative response necessary to succeed. AOL missed some of them in Brazil and in Europe and it is not for sure that this will not happen in the future. First of all, there is no arguing that AOL's Latin expansion has been progressing at a snail's pace. Being one of the world's leaders in interactive services, Web brands, Internet technologies, and e-commerce services, AOL should “come-see-conquer”...