WRITTEN RESPONSE #4 MGNT 4670: Strategy in International Business/Entry Modes
Instructions: Refer to the key concepts covered in Chapter 13 and Chapter 15 of the text and the power points about the challenges and opportunities of the International Business. Utilize this information to answer the questions 1-3 indicated below. Read and analyze Management Focus: “Evolution of Strategy at Procter & Gamble” on page 401, Management Focus: “Foreign Direct Investment by Cemex” on page 229 and Part 5 Case ”General Electric’s Joint Ventures” on pages 483-4 (10th edition) and answer questions 4 and 5. For Question 6, conduct research on the Internet and follow the instructions provided. Your answers must be typed, double-spaced, size 12 font, preferably in question-answer format with complete answers and approximately 3-4 pages in length. .
Due Date: Hard copy to be handed in no later than Wednesday, May 24, 2017.
1) What are the two types of pressures that firms competing in the global marketplace typically face? Under what types of conditions do these pressures arise? (1 point)
2) What are the four main strategies or approaches firms may follow to face these pressures? Describe the basic approach of each of these strategies, specifically in terms of its response to the two basic pressures. (2 points)
3) Once a company has identified the general strategy it will pursue in an international market, it must determine how it will enter the market (entry mode). Discuss how the need for control over foreign operations varies with a firm’s strategies and core competence. What are the implications for the choice of entry mode? (1 point)
4) Read the Management Focus“: Evolution of Strategy at Procter & Gamble” on page 401 to answer the following questions about the strategic challenges that Procter and Gamble faced in competing in the global marketplace (2 points):
What type of strategy did Procter and Gamble pursue when it first entered foreign markets up until the early 1990’s?
What type of pressures caused Procter and Gamble to change their strategy in the early 1990’s? In response to these types of pressures, what types of actions did Procter and Gamble take to change their strategy?
When Procter and Gamble determined that the changes they had taken were not sufficient to overcome the problems they faced, what additional actions did the company take to achieve their overall goals of profitability and profit growth?
Towards what strategy does Procter and Gamble appear to be evolving? What are the benefits of this strategy? What are the potential risks associated with it?
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5) Read the Management Focus: “Foreign Direct Investment by Cemex” on page 229 and Part 5 Case ”General Electric’s Joint Ventures” on pages 483-4 (answer the following questions, using facts from the cases to support your answer (2 points):
a) Why did Cemex decide that it should expand internationally? Why did Cemex choose to use wholly-owned subsidiaries instead of licensing or exporting to participate in the international market?
b) What are the benefits that Cemex brings to the host country, its people, and its economy?
c) Why did Cemex prefer to buy another company (acquisition) instead of going into a country and starting a completely new operation (greenfield ventures) as a way to enter these foreign markets?
d) GE used to prefer acquisitions or greenfield ventures as an entry mode rather than joint ventures. Why do you think this was the case?
e) Why do you think GE gas come to prefer joint ventures in recent years? Do you think that the global economic crises of 2008-2009 might have affected this preference in any way? Is so, how?
f) What are the risks that GE must assume when it enters into a joint venture? Is there any way for GE to reduce those risks?
6) Visit www.mcdonald’s.com and look at and look at the bottom right side of the home page; Under Community, click on McDonald’s International.
You will see a list of regions you can select as shown below.
Select three of the five regions and take a look at the website for one country from each of these three areas. (in other words, select a total of three (3) countries, each one from a different region). You may not be able to understand the language [though many of them have a translate feature], but there are many differences that you will find if you surf around this websites.
Study the websites you have looked at and write a short essay (minimum two paragraphs) about some of the changes that McDonald’s has made in response to pressures for localization. These changes can include offering different menu choices, different services, emphasizing certain aspects of the McDonald’s brand, communicating in a different manner on the website (e.g. more pictures, less graphics, etc.), etc. Keep in mind that McDonald’s makes adjustments in its international markets beyond menu adaptations, such as offering delivery service and even wedding service in selected international markets. (2 points) Page 2/2
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