Critically evaluation of the international pricing issue for multinational corporations based on the factors that have impacts on pricing decision making in the context of the differentiated or similar characteristics of countries. A case study of Bridgestone Corporation’s subsidiaries of UK and Turkey

1. University of Wales
MBA International Management
Critically evaluation of the international pricing issue for multinational
corporations based on the factors that have impacts on pricing decision
making in the context of the differentiated or similar characteristics of
countries.
A case study of Bridgestone Corporation’s subsidiaries of UK and Turkey
by Tolga KOYMEN
UoW ID: 1092227299339
19/12/2011
Supervisor: Kevin O’HARA

2. ACKNOWLEDGEMENTS
This research would not be completed without acknowledging, support and guidance of
below persons.
I would like to thank to my supervisor Mr. Kevin O’HARA for all guidance, help and supports
provided by him during my study.
I would also like to thank to Mr. Brett EMERSON, Mr. Sevket SARAL, Mr. Tolga
OZBAYAZITOGLU, Mr. Mustafa ORAK and to all Bridgestone family.
I would specially like to thank to my wife, Mrs. Ilkay KURT KOYMEN for her supporting
during my whole MBA study and being part of my life.

3. ABSTRACT
This research critically evaluates the international pricing issue of multinational
corporations, which operates across countries, based on the factors that have impacts on
global pricing decision making in the context of differentiated or similar characteristics of
countries. In order to achieving ultimate objective, the case of Bridgestone Corporation’s
two subsidiaries, which are Bridgestone UK and Bridgestone Turkey, was used.
This research has been based on different theories behind international pricing which is
industrial economics theory, contingency theory, and corporation’s resources theory. In the
context of industrial economics theory, it is found that Bridgestone is using benchmark
pricing strategy. Meanwhile, Bridgestone has been taking into consideration of price
fairness because of its distribution channel structure, competition laws, and entry barriers.
On the other hand, costs, especially raw material costs, in which whole tyre manufacturers
have lack of control, hugely impact pricing. Additionally, the labour costs and transportation
costs have caused becoming a competitive disadvantage for Bridgestone over its
competitors, especially low cost Asian tyre manufacturers when pricing. In the context of
contingency theory, Bridgestone has a tendency of adapting its pricing policy through
leaving it to local managements in each country in the case of different factors of locals. The
company has provided the opportunities of higher availability of quick and deeper market
analysis and response, deeper penetration of local markets, better understanding of
significant differences of local markets, easier to get new ideas, opportunities and
innovations, and using the motivation of local management. Meanwhile, the strong
communication between headquarters and its local subsidiaries has provided the correct
implementation of the pricing policy. In the contexts of corporation’s resources theory,
Bridgestone has a tendency of making investments on branding, and brand awareness that
provide the most competitive advantages which cannot be imitated by its competitors. On
the other hand, original equipment impact which provides reinforcing on the choice of end
user’s tyre replacement decision with the same brand already fitted on the passenger car is
being taken into consideration. On the other hand, again in the light of competitive
advantages of corporation, it is clearly observed that Bridgestone has made investments on
environmental friendliness, being safer for consumers’ family life, social responsibility
campaigns, and after sales conveniences for customers in order to create positive
differentiations, to provide emotional connections with consumers, to win the emotional
branding race, and to sustain its leadership due to setting higher prices for its products over
its competitors.
Keywords: International pricing issue, factors that affect international pricing, international
pricing in multinational corporations.