Ivey Publishing

International Business: Competing in the Global Marketplace

Hill, C.W.L.,10/e (United States, McGraw-Hill Irwin, 2015)
Prepared By Arthur Liang, PhD Student
Chapter and Title Chapter Matches: Case Information
Chapter 1:
Globalization

WHERE HAVE YOU BEEN?: AN EXERCISE TO ASSESS YOUR EXPOSURE TO THE REST OF THE WORLD’S PEOPLES (2017)
Paul W. Beamish

Product Number: 9B17M131
Publication Date: 8/17/2017
Revision Date: 8/17/2017
Length: 11 pages

This annually updated simple exercise assesses one’s exposure to the rest of the world’s peoples. A series of worksheets require the respondents to check off the number and names of countries they have visited and the corresponding percentage of world population which each country represents. By summing a group’s collective exposure to the world’s people whether for business, family, or tourism reasons. The summary result will inevitably be the recognition that together they have seen much, even if individually some have seen little. The teaching note provides assignments and discussion questions which look at: why there is such a high variability in individual profiles; the implications of each profile for one’s business career; and, what it would take for the respondent to change his/her profile.

For marketers, it underscores the need to gather greater base knowledge about opportunities abroad.


Teaching Note: 8B17M131 (6 pages)
Issues: career development, intercultural relations, team building, internationalization, diversity, human resources managment
Difficulty: 4 - Undergraduate/MBA



GOWLINGS LLP: CANADIAN LEGAL SERVICES FIRM GOING INTERNATIONAL
Brian C. Pinkham, Ramasastry Chandrasekhar

Product Number: 9B16M190
Publication Date: 11/10/2016
Revision Date: 11/10/2016
Length: 10 pages

In February 2014, the chairman and chief executive officer of the third-largest law firm in Canada, Gowlings LLP, was examining his options for taking the firm global. On the verge of retirement, he hoped to establish an enduring platform for international expansion based on three aspects: a new global location, a new global partner, and a new organizational structure. Each point was interlinked, and each presented its own managerial dilemmas. Gowlings had already established offices in three locations outside Canada: Moscow, London, and Beijing. The company had been ranked as the top legal advisor based on deal volume for Canadian mergers and acquisitions in both 2012 and 2013. Gowlings was primed to build on these attributes and move to the next level in positioning itself as an international law firm.

Teaching Note: 8B16M190 (5 pages)
Industry: Professional, Scientific, and Technical Services
Issues: professional services firms (PSFs), globalization
Difficulty: 4 - Undergraduate/MBA


Chapter 2:
National Differences in Political Economy

THE INDIAN ECONOMY: A MACROECONOMIC TURNAROUND
Tulsi Jayakumar

Product Number: 9B17M110
Publication Date: 7/28/2017
Revision Date: 7/28/2017
Length: 18 pages

In July 2016, India celebrated the 25th anniversary of its economic reforms, which were initiated in 1991 as a result of a severe fiscal deficit-driven balance of payments crisis. The reforms saw India gradually break free of a low annual growth rate of 3.0–3.5 per cent. In 2016, with a growth rate of 7.6 per cent, India emerged as the fastest-growing economy in the world. The increases in the country’s macroeconomic indicators in the past 25 years indicated a major turnaround. Were these positive macroeconomic indicators sufficiently sustainable? Should investors be confident about India’s growth story in 2016?

Teaching Note: 8B17M110 (9 pages)
Issues: macrofundamentals, macroeconomics, government policy, business environment
Difficulty: 5 - MBA/Postgraduate



ENOVE: BUSINESS STRATEGY IN A TRANSITIONING ECONOMY
Maciek Nowak, Alexander Stoll

Product Number: 9B16M013
Publication Date: 2/3/2016
Revision Date: 2/2/2016
Length: 9 pages

In August 2014, La Société Energies Nouvelles & Environnement (ENOVE), a subdivision of Groupe Bismuth, was developing an expansion strategy in the unstable political and economic environment of Tunisia, the company’s home country. Tunisia was the birthplace of the Arab Spring, a series of political revolutions that started in 2010 and swept the Mediterranean region for five years. Tunisia was also quickly moving toward a democratically elected government, but the transition was not an easy one; the country experienced a setback of about 10 to 15 years, in regards to economic development. Years of functional corruption under the long-time president, Ben Ali, were followed by sustained economic growth in manufacturing, tourism, and education. This led the economy into a governmental vacuum. For the first time, workers began exercising their rights to demand better conditions. There was little governmental oversight on customs, labour, or taxation. The threat of terrorism, whether real or perceived, was always present. Under these conditions, ENOVE's president had to make a decision: Should ENOVE expand within Tunisia, or move their manufacturing operations to a more stable country, perhaps nearby Morocco?

Teaching Note: 8B16M013 (10 pages)
Industry: Manufacturing
Issues: Strategy formulation, emerging economies, third world, political environment, labour force, extremism, decision-making, Arab Spring, Jasmine Revolution, Scramble for Africa, Africa, Tunisia
Difficulty: 5 - MBA/Postgraduate


Chapter 3:
Political Economy Economic Development

ROARING DRAGON HOTEL: PROBLEMS ADAPTING TO THE CHINESE MARKET ECONOMY
Stephen Grainger

Product Number: 9B17C049
Publication Date: 12/22/2017
Revision Date: 12/19/2017
Length: 6 pages

Between 1999 and 2017, the Roaring Dragon Hotel (RDH) evolved from a state-owned enterprise (SOE) into a modern, market-driven 5-star accommodation provider, experiencing a combination of market economy and privatization forces. Its initial operations under the new status progressed from the poor performance and management practices of China’s planned economy to a portfolio of operational and strategic reforms that saw it become semi-privatized in 2005, and a fully privatized 5-star accommodation provider by 2017. On the surface, this model of evolution would make any Chinese national proud. However, what was perceived from the outside did not necessarily reflect what was occurring within. Market evolution had produced complex challenges related to employee loyalty, competition, internal resistance to change, promotion prospects, management, and the continuation of questionable practices. What changes should management make in the second half of 2017 to continue the hotel’s transition to a modern global hotel, turn around its declining revenue, and improve its competitive outcomes?

Teaching Note: 8B17C049 (8 pages)
Industry: Accommodation & Food Services
Issues: culture, privatization, competition
Difficulty: 4 - Undergraduate/MBA



NOTE ON THE CUBAN CIGAR INDUSTRY (REVISED)
Paul W. Beamish, Akash Kapoor, Mila Bojic

Product Number: 9B17M162
Publication Date: 11/23/2017
Revision Date: 11/23/2017
Length: 14 pages

In June 2017, the U.S. president had made a statement regarding his stance on Cuba-U.S. relations. Business leaders were very attentive, as his actions could impact the softening U.S.-Cuban relations started by his predecessor in 2016. A recent MBA graduate in Canada and an avid cigar smoker, viewed this scenario and wondered what effect it would have on the current environment, and if there was potential in the Cuban cigar industry. With an inheritance of $1 million coming available in the next month, he thought back to his strategy sessions and looked to evaluate this industry.

Teaching Note: 8B17M162 (18 pages)
Industry: Manufacturing
Issues: government and business, internationalization, FDI, industry analysis, tourism
Difficulty: 4 - Undergraduate/MBA



MISMANAGEMENT OF FISCAL POLICY: GREECE'S ACHILLES' HEEL
Tulsi Jayakumar

Product Number: 9B17M142
Publication Date: 9/14/2017
Revision Date: 9/14/2017
Length: 17 pages

In December 2016, the debt-stricken Greek government announced the distribution of a sizeable “Christmas gift” to its low-income pensioners, a one-time bonus that would cost the government €617 million. This cost was in addition to suspending increases in the value-added tax on some Greek islands. These plans were in clear violation of the terms of a bailout provided to Greece by Eurozone nations in 2015, which required Greece to implement austerity measures and achieve specific fiscal targets. What was the reason for Greece’s economic troubles and why did Greece’s debt-to-GDP (gross domestic product) ratio climb to its current three-digit figure? Faced with an imminent exit from the Eurozone, how could the country’s government solve Greece’s longstanding fiscal problems?

Teaching Note: 8B17M142 (12 pages)
Industry: Public Administration
Issues: fiscal policy, sovereign debt, bond yield, greek debt crisis, bond spreads
Difficulty: 5 - MBA/Postgraduate


Chapter 4:
Differences in Culture

SABMILLER SOUTH AFRICA: CONTEXTUAL LEADERSHIP IN TRANSFORMING CULTURE
Caren Scheepers, Amy Moore

Product Number: 9B17C046
Publication Date: 12/21/2017
Revision Date: 12/20/2017
Length: 13 pages

In March 2017, Ajay Maharaj Bachulal was starting his new position as plant manager at SABMiller plc’s (SABMiller's) plant in Polokwane, South Africa. Bachulal had successfully led change at the company's brewery in another province, and he hoped to be as successful at the new plant. His dilemma was how to approach the workforce in Polokwane, and how to adapt to and make changes within the culture specific to that plant. While both plants adhered to SABMiller’s system, policies, and procedures, Bachulal sensed that the approach of each plant to work and life was different. How would Bachulal's own leadership development process, and his efforts to change culture by empowering lower level employees in Polokwane, help him in a different province with distinct ethnic compositions, languages, and cultures?

Teaching Note: 8B17C046 (15 pages)
Industry: Manufacturing
Issues: South Africa
Difficulty: 5 - MBA/Postgraduate



GEOSOFT INC.: LEADING ACROSS CULTURES
Mary Weil, Darren Meister, Chitra P. Reddin

Product Number: 9B17M064
Publication Date: 5/3/2017
Revision Date: 5/4/2017
Length: 7 pages

On January 18, 2016, the chief executive officer and chief technology officer of Geosoft Inc. (Geosoft) met in Toronto, Canada, with the company’s executive team and regional directors for a critical three-day strategic planning session. Geosoft was a privately held, employee-owned, mid-sized global company that worked to help earth scientists and explorers make discoveries through innovative data solutions and services. The focus of the meeting—a new technology strategy to protect Geosoft from the impact of a global economic downturn affecting its primary markets—was pivotal to Geosoft’s current and future growth. This new strategy, known within Geosoft as the digital intimacy strategy, would radically change the way the company communicated with its customers. Geosoft’s customers were located in five major geographic regions: Latin America, Africa, Australia (including Asia), Europe, and North America. Rolling out the strategy demanded seamless communication of change to multiple stakeholders in vastly differing cultures across five continents. The new digital intimacy strategy was planned for rollout in September 2016 with implementation in 2017. For the new strategy to work, communication was crucial.

Teaching Note: 8B17M064 (4 pages)
Industry: Professional, Scientific, and Technical Services
Issues: cross-cultural communications, internal communications, change management, leading technical organizations
Difficulty: 4 - Undergraduate/MBA



WORKING CROSS CULTURALLY: FORGET BUSINESS AS USUAL
Lynn Imai, Kanina Blanchard

Product Number: 9B17C013
Publication Date: 3/31/2017
Revision Date: 3/31/2017
Length: 8 pages

In 2006, Sophia Tannis, a 36-year-old professional with the U.S.-based multinational company CPA Solutions (CPA), who had worked internationally for many years, was asked by an influential leader at corporate headquarters in the United States to inject herself into a business-critical situation in Moscow. An established local competitor had been using various methods to damage CPA’s reputation in Moscow, and Tannis had to decide between employing the usual approaches expected by her leaders—involving the courts, media, and outreach to customers—or taking a more informal, relationship-based approach, as her Moscow-based counterpart encouraged. Tannis had to make a choice that could impact the company’s credibility, and she had to choose between strategies that were successful in North America and Europe and those proposed by her local advisors.

Teaching Note: 8B17C013 (10 pages)
Industry: Other Services
Issues: cross-cultural; networks, leadership; preparation
Difficulty: 4 - Undergraduate/MBA



LENOVO: IS THE CULTURAL INTEGRATION TEMPLATE REUSABLE?
Aijing Ran, Xiaobing Liu, Jiawei Dong, Yuekun Liu, Miao Cui

Product Number: 9B16M166
Publication Date: 10/5/2016
Revision Date: 12/22/2016
Length: 11 pages

The number and value of Chinese enterprises’ cross-border mergers and acquisitions (M&As) are increasing, but their success rate remains very low. The failure of cultural integration is one of the most important reasons. In 2005, Lenovo Group Ltd., acquired IBM’s PC division in what was called a “snake swallows elephant” acquisition that caused a sensation worldwide. During the ten years after the M&A, Lenovo integrated IBM’s PC division’s culture through several stages of acculturation, which ended with great success. In 2014, Lenovo acquired IBM’s x86 Server. Lenovo faced a challenge: Should the first acquisition’s cultural integration be replayed and copied for the x86 Server acquisition? Or should Lenovo look for a new approach?

Teaching Note: 8B16M166 (17 pages)
Industry: Information, Media & Telecommunications
Issues: cross-border mergers and acquisitions, acculturation, computers, servers, IT, culture
Difficulty: 5 - MBA/Postgraduate



LOUIS VUITTON IN JAPAN
Justin Paul, Charlotte Feroul

Product Number: 9B10M067
Publication Date: 10/19/2010
Revision Date: 2/22/2017
Length: 20 pages

This case deals with the opportunities and challenges of Louis Vuitton, the leading European luxury-sector multinational firm, in Japan, taking into account the unique features of brand management and integrating culture and consumer behaviour in Japan. In the last decade, Japan has been Louis Vuitton’s most profitable market, but the global economic crisis has presented challenges.

Facing a weak economy and a shift in consumer preferences, Louis Vuitton has been adapting its unique strategy in the Japanese market. The days of relying on a logo and a high price seem to be gone, as there is more interest in craftsmanship and value for money. To promote sales, the company has had to launch less expensive collections made with cheaper materials. The brand has also been opening stores in smaller cities, where the lure of the logo still works.

Over the years, Japanese consumers have demonstrated fascination with and passion for the iconic brand. What have been the keys to Louis Vuitton’s successful business model in the Japanese market?


Teaching Note: 8B10M67 (8 pages)
Industry: Manufacturing
Issues: International Marketing; Strategic Management; Brand Management; Luxury Goods; Financial Crisis; Japan; France
Difficulty: 4 - Undergraduate/MBA


Chapter 5:
Ethics in International Business

TOMMY CHEN: USING SUN TZU'S ART OF WAR IN BUSINESS
Stephen Grainger

Product Number: 9B17M058
Publication Date: 4/28/2017
Revision Date: 4/28/2017
Length: 9 pages

In 2014, the general manager and a director of an Australian building company were seeking an outside investor to provide the company with the needed resources to recover from a disastrous takeover. The two found such an investor in a Chinese entrepreneur and Sun Tzu master based in Hong Kong. To the shock of those involved with the Australian company, the Chinese investor used Sun Tzu war strategies to take over and destroy the smaller Australian company, while flouting ethical business practices and Australia's standards of corporate governance.

The Australians' naïveté and their desperate need for capital made the investor's tactics possible. With the benefit of hindsight and omniscient narration revealing the thoughts and actions of both parties, students can evaluate how the events in the case led to the shocking conclusion in 2015, leaving a shell of a company worth penny stock.


Teaching Note: 8B17M058 (8 pages)
Industry: Construction
Issues: secrets, strategy, corruption, corporate governance, Sun Tzu
Difficulty: 4 - Undergraduate/MBA



LENHAGE AG: ETHICAL DILEMMA
Daniel Galindau, Won-Yong Oh

Product Number: 9B14M037
Publication Date: 5/2/2014
Revision Date: 4/23/2014
Length: 8 pages

In 2012, the general manager at the Seoul location of a European manufacturing company faces an ethical dilemma involving bribery and “facilitation” payments. A key decision maker in a local construction company’s purchasing department has asked for a “facilitation” payment as a necessary condition for securing an order. If the expatriate manager decides to pay the money, he will secure an order that will lift his company to a new level of success for years to come. If he decides not to pay, the order and all the company has worked for over the last year will be lost. The expatriate manager must decide whether or not the payment would violate laws internationally, locally and in his home country. What are the real risks? Who can help him answer the many questions he has regarding this local practice?

Teaching Note: 8B14M037 (8 pages)
Industry: Manufacturing
Issues: Ethics; decision making; bribery; facilitation payment; South Korea
Difficulty: 4 - Undergraduate/MBA



ETHICS OF OFFSHORING: NOVO NORDISK AND CLINICAL TRIALS IN EMERGING ECONOMIES
Klaus Meyer

Product Number: 9B09M001
Publication Date: 1/9/2009
Revision Date: 5/3/2017
Length: 13 pages

The case outlines the conflicting ethical demands on a Danish pharmaceuticals company, Novo Nordisk, that is operating globally and is aspiring to high standards of corporate social responsibility. A recent report alleges that multinational pharmaceutical companies routinely conduct trials in developing countries under alleged unethical conditions. The company's director reflects on how to respond to a request from a journalist for an interview. This triggers a discussion on the appropriate ethical principles and how to communicate them. As a company emphasizing corporate responsibility, the interaction with the media presents both opportunities and risks to Novo Nordisk. The case focuses on clinical trials that are required to attain regulatory approval in, for example, Europe and North America, and that are conducted at multiple sites around the world, including many emerging economies. Novo Nordisk has implemented numerous procedures to protect its various stakeholders, yet will this satisfy journalists and non-governmental organizations, and how should the company communicate with these stakeholders?

Teaching Note: 8B09M01 (11 pages)
Industry: Manufacturing
Issues: Location Strategy; Ethical Issues; Emerging Markets; Research and Development
Difficulty: 4 - Undergraduate/MBA



PHIL CHAN (A)
Paul W. Beamish, Jean-Louis Schaan

Product Number: 9B08M038
Publication Date: 4/18/2008
Length: 8 pages

The case deals with a scam that has been run out of Nigeria since 1990. In it, foreign companies are approached for their assistance in facilitating an international transfer of funds in order to receive a very large but unearned commission. In the case, a Hong Kong-based manager who is travelling to Nigeria is unaware that he is walking into a situation where his company is about to be cheated. The objective of the case is to raise the issue of ethics in the conduct of international business. A follow-up case (9B08M039) is available.

Teaching Note: 8B08M38 (10 pages)
Industry: Administrative, Support, Waste Management and Remediation Services
Issues: Negotiation; Human Behaviour; Ethical Issues; Personal Values
Difficulty: 4 - Undergraduate/MBA


Chapter 6:
International Trade Theory

BAYER-MONSANTO: THE CHALLENGES OF A MEGA MERGER
Wiboon Kittilaksanawong, Gabrielle Gaté

Product Number: 9B17M182
Publication Date: 12/15/2017
Revision Date: 12/15/2017
Length: 16 pages

In September 2016, German-based Bayer AG (Bayer) and U.S.-based Monsanto Company (Monsanto) agreed to merge entities to create a global leader in agriculture. The combined entity would benefit from Monsanto’s expertise in seeds and traits, and from Bayer’s wide range of crop protection products. Bayer would acquire Monsanto for $128 per share, a high 44 per cent premium in an all-cash transaction. There were issues with the deal, which included antitrust concerns, which could require subsequent divestments, and Monsanto’s brand image, owing to its involvement in controversial business operations. Given these issues, would Bayer’s diversification into agrochemicals by merging with Monsanto be able to create sufficient synergies and deliver economic benefits to shareholders, while meeting expectations from other stakeholders at different levels?

Teaching Note: 8B17M182 (11 pages)
Industry: Agriculture, Forestry, Fishing and Hunting
Issues: mergers and acquisitions, industry consolidation, business ethics, stakeholder management, valuation
Difficulty: 4 - Undergraduate/MBA



CHINA'S TRADE DISPUTES
David W. Conklin, Danielle Cadieux

Product Number: 9B09M018
Publication Date: 3/9/2009
Revision Date: 8/5/2009
Length: 17 pages

By 2009, China's exports had increased dramatically from $250 billion in 2000 to a projected $1,500 billion in 2009. This enormous growth of exports severely damaged competing businesses in the advanced nations, particularly the United States and Europe. China's entry into the World Trade Organization (WTO) in 2001 guaranteed China's right to export to these nations, but at the same time the WTO required China to adhere to certain rules that sought to support fair trade and create a level playing field. Several broad subjects each gave rise to a series of trade disputes: the protection of intellectual property, health and safety concerns about China's products, labour and environmental standards, China's manipulation of their currency, and costs and prices determined by the government rather than free markets. This case examines each set of trade disputes and China's attempts to resolve them. Many disputes were embedded in cultural practices and ideological positions and so they might not disappear quickly. Shortcomings in China's legal and judicial system hampered enforcement. In addition, many rested on the government's desire to protect the interests of Chinese businesses and their employees, and so China might alter its practices only if confronted with credible retalitory threats. China's central government experienced the principal-agent problem where its wishes and decisions could be ignored by local governments and firms. Meanwhile, changes in industry structure within the advanced nations were altering the negotiation positions of Western governments. The case examines the WTO dispute resolution procedures and enforcement mechanisms that have been directed at China's trade disputes.

Teaching Note: 8B09M18 (8 pages)
Issues: China; International Business; Government and Business; Globalization
Difficulty: 4 - Undergraduate/MBA



ACQUISITION AND RESTRUCTURING OF KIA MOTORS BY HYUNDAI MOTORS
Seungwha (Andy) Chung, Sunju Park

Product Number: 9B09M015
Publication Date: 2/9/2009
Length: 16 pages

In recent years, greater competition and diminished profits, due to domestic and global oversupplies as well as higher development costs, have led the automobile industry to engage in domestic and international mergers and strategic collaboration. This case examines one of the largest mergers and acquisitions (M&As) in the Korean automobile market in recent years: the acquisition of Kia Motors (Kia) by Hyundai Motors (Hyundai). The case describes the background conditions of the acquisition, the integration processes after the acquisition, and the requisites for Kia Motors to normalize management within a short time. Hyundai, in acquiring Kia, enhanced its competitive power in both domestic and global markets, achieving economies of scale and scope and strengthening its global market basis. That said, Hyundai/Kia faced several pressing challenges, among them the cooperation of Renault and Samsung Motors, the unclear domestic treatment of Daewoo Motors, and M&As taking place among top motor companies worldwide. This case study asks students to analyze the process of post-acquisition restructuring and the resulting synergy effects, inviting them to think through the strategies by which Hyundai/Kia may thrive in the global automobile market. Further, it illustrates both the current state of the domestic Korean automobile industry and recent trends in the global automobile market.

Teaching Note: 8B09M15 (12 pages)
Industry: Manufacturing
Issues: Restructuring; Mergers & Acquisitions; Organizational Change; Integration; Ivey/Yonsei
Difficulty: 4 - Undergraduate/MBA


Chapter 7:
The Political Economy of International Trade

KHAO YAI WINERY: AN ECONOMIC PERSPECTIVE
Jordan French

Product Number: 9B17M035
Publication Date: 2/24/2017
Revision Date: 2/24/2017
Length: 10 pages

In 2015, the marketing and business developer at Khao Yai Winery in Thailand wondered whether a new excise tax, which the government implemented in 2012, had led to a decrease in sales despite an overall increase in wine consumption in Thailand. Before deciding whether he should lobby the government to lower the excise tax, he tasked three interns to examine how the government’s taxes on imported and domestic wines affected the winery. The interns also needed to determine how the government policies would be affected by various elasticities—income elasticities, own-price elasticities, and cross-price elasticities.

Teaching Note: 8B17M035 (13 pages)
Industry: Agriculture, Forestry, Fishing and Hunting
Issues: externalities, elasticity, tariffs, effective rate of protection, oligopoly
Difficulty: 4 - Undergraduate/MBA



SUBSIDIES: RATIONALES AND TRADE AND INVESTMENT DISTORTIONS
David W. Conklin, Danielle Cadieux

Product Number: 9B11M061
Publication Date: 6/30/2011
Length: 17 pages

Governments throughout the world have offered subsidies for a wide variety of reasons, including increasing investments and jobs (particularly those that are high-tech), stimulating economically depressed regions, supporting domestic agriculture, and preventing bankruptcies through “bail-outs.” Subsidies now play a key role in business location decisions, and impact international competitiveness. Recipients of subsidies can offer their goods and services for sale at lower prices than would exist in the absence of subsidies. Foreign-based corporations may regard these lower prices as unfair competition in international trade. Consequently, international trade negotiations have come to focus on many of these subsidy programs as trade distortions that should be limited by formal international agreements. Some countries, especially the United States, impose special countervail duties if their corporations are being hurt by foreign subsidies. With current and projected reductions in trade barriers, subsidies will become relatively more important as a trade-determining process. Nevertheless, subsidies are implemented to pursue certain social objectives, and so an intergovernmental pact that limits subsidies may diminish, rather than improve, the well being of signatories.

Teaching Note: 8B11M061 (7 pages)
Issues: Globalization; International Business; Subsidies; Bailouts; Tax Concessions
Difficulty: 4 - Undergraduate/MBA



CANADIAN SOLAR
Paul W. Beamish, Jordan Mitchell

Product Number: 9B10M019
Publication Date: 4/5/2010
Revision Date: 11/19/2014
Length: 18 pages

In late September 2009, the CEO of the Nasdaq-traded solar cell and module manufacturer, Canadian Solar, was at an inflection point in the formation of its international strategy. The company had experienced dynamic growth during the past five years buoyed largely by aggressive incentive schemes to install solar photovoltaic (PV) technology in Germany and Spain. The credit crunch, coupled with changes in government incentive programs, caused a major decline in the demand for solar PV technology and analysts were predicting that full year 2009 sales would decline. Furthermore, competition in the industry was fierce with diverse players ranging from Japanese electronic giants to low-cost Chinese producers. Canadian Solar had decided to focus on 10 major markets in the next two to three years where strong renewable policies existed. Students are challenged with deciding if any changes to the company's global strategy are necessary.

Teaching Note: 8B10M19 (11 pages)
Industry: Manufacturing
Issues: China; International Business; Growth Strategy; Global Product; Internationalization
Difficulty: 4 - Undergraduate/MBA


Chapter 8:
Foreign Direct Investment

QUALTRICS: RAPID INTERNATIONAL EXPANSION
Esther Tippmann, Sinéad Monaghan

Product Number: 9B18M022
Publication Date: 2/2/2018
Revision Date: 1/31/2018
Length: 11 pages

In May 2015, Qualtrics was a rapidly growing U.S.-based software-as-a-service firm, founded in 2002. After 10 years of operating with little capital, Qualtrics raised some venture capital funding, which enabled it to initiate a rapid international expansion. The management team intended to aggressively pursue global opportunities, but first needed to make some key decisions regarding how to develop the company’s Europe, Middle East, and Africa (EMEA) regional headquarters, and its European operations. Key concerns included the company’s market selection and prioritization, and its best approach for developing a subsidiary and EMEA regional operations that could achieve significant scale in a short time frame.

Teaching Note: 8B18M022 (10 pages)
Industry: Information, Media & Telecommunications
Issues: internationalization, entrepreneurship; market selection
Difficulty: 4 - Undergraduate/MBA



TOYOTA TSUSHO CORPORATION: ACQUIRING THE FRENCH CFAO TO PENETRATE AFRICAN MARKETS
Wiboon Kittilaksanawong, Mayeni Gueye

Product Number: 9B18M002
Publication Date: 1/11/2018
Revision Date: 1/8/2018
Length: 15 pages

In 2016, the Japanese company Toyota Tsusho Corporation (TTC) acquired the remaining shares of the French trading company Compagnie Française de l’Afrique Occidentale (CFAO), which was operating in Africa. That same year, TTC registered its first financial loss in 16 years. Several years earlier, in 2012, TTC had participated in CFAO’s equity as its majority shareholder. These strategic moves were all part of TTC’s corporate campaign Vision 2015, "Lead the Next", which aimed specifically to reduce its dependence on its parent group by diversifying to increase earnings from non-automotive businesses, rather than targeting African markets as a long-term sustainability plan. What were the motivations of TTC and CFAO in pursuing these transactions? Was the positive performance that followed the acquisition a result of synergies or just a simple sum of the consolidation and an industry trend? Why did TTC move from preserving CFAO’s operational autonomy in 2012 to delisting and fully internalizing it in 2016? Was there a link between poor performance in 2016 and the acquisition of CFAO? How should CFAO solve the conflict between its existing automotive customers and the Toyota Group as its main rival? How could CFAO defend its leader position from the entry of major competitors from South Korea, India, and China? Although the Vision 2015 campaign was validated, should TTC revise its global vision strategy and 10-year plan in the future, given its bad year in 2016?

Teaching Note: 8B18M002 (16 pages)
Issues: acquisition, Japanese general trading company, post-acquisition integration, stakeholder conflicts, first mover, emerging market
Difficulty: 4 - Undergraduate/MBA



BOOTS PLC: JAPAN MARKET ENTRY
Derek Lehmberg

Product Number: 9B12M048
Publication Date: 5/3/2012
Revision Date: 5/2/2012
Length: 12 pages

In 1998, Boots PLC was in the midst of planning to enter the Japanese retail drugstore market. Boots, a household name in the United Kingdom and a fixture in traditional English shopping areas known as High Street, had an impressive lineup of Boots-branded health and beauty products. Boots developed, manufactured, marketed, and sold these products through its chain of Boots The Chemists stores. Management was convinced that the markets for health and beauty products were becoming increasingly global. Although Boots made few international sales at this time, it was in the midst of expanding overseas and had identified Japan as a particularly attractive market to enter.



International retailing efforts can prove difficult, as many failed international ventures show. Japan presented a number of unique challenges and required careful planning and attention. Boots had dispatched a manager to Japan to work on market entry and had been discussing a joint venture to develop several pilot stores together with Mitsubishi Corporation, one of Japan’s large trading companies. Mitsubishi had a great deal of clout in Japan, something Boots lacked, and was interested in the retailing venture. The case centres around the question of whether Boots should go ahead with the joint venture with Mitsubishi, and also facilitates a broader consideration of the market attractiveness and market entry in general.


Teaching Note: 8B12M048 (14 pages)
Industry: Retail Trade
Issues: Consumer Goods; Private Brands; International Joint Venture; Market Entry; Drug Stores; Cosmetics; United Kingdom; Japan
Difficulty: 4 - Undergraduate/MBA



RESUMING INTERNATIONALIZATION AT STARBUCKS
Mario Koster, Rob Alkema, Christopher Williams

Product Number: 9B10M073
Publication Date: 9/23/2010
Revision Date: 5/4/2017
Length: 17 pages

Starbucks enjoyed tremendous growth over the previous two decades. In 2007, it had a global reach of over 17,000 stores in 56 countries. Between 2007 and 2009, however, Starbucks' relentless march was slowed by three forces: increasingly intense competition, rising coffee bean prices and a global economic recession. In order to remain profitable, the company started to scale back its overseas operations. In 2010, Starbucks was faced with a critical strategic decision: Should the company resume its international expansion and once again intensify its commitments in overseas markets? If so, what approach should the company take? Had the pace of Starbucks' internationalization (i.e. the rate of opening new stores abroad), the rhythm of its internationalization (i.e. the regularity by which stores were opened abroad) and geographical scope of its internationalization (i.e. number of new countries entered) had an impact on the company's performance in previous years? Could Starbucks learn from its prior internationalization within the coffee industry in order to guide its future international strategy?

Teaching Note: 8B10M73 (10 pages)
Issues: Decision Making; International Strategy; Market Entry; Internationalization
Difficulty: 4 - Undergraduate/MBA


Chapter 9:
Regional Economic Integration

MOLTO DELIZIOSO: PRICING AND PROFITS FOLLOWING BREXIT DEVALUATION
Farok Contractor

Product Number: 9B17M049
Publication Date: 3/30/2017
Revision Date: 3/30/2017
Length: 4 pages

When the June 2016 referendum on the United Kingdom’s withdrawal from the European Union, or Brexit, resulted in a vote to leave, the managing director of the U.K. subsidiary of Italian coffee-machine maker Molto Delizioso, SRL, faced a scenario that affected many international firms and their subsidiaries. The U.K. subsidiary imported and paid for coffee machines in euros, but when it sold these items in the United Kingdom, the revenue earned was in pounds. The devaluation of the pound after the Brexit vote affected both the company’s revenues and costs and, therefore, its profits.

Molto Delizioso’s managing director had to decide what to do about pricing after the devaluation of the pound caused an increase in the cost of importing his gourmet coffee machines. If he kept prices the same, profits would go down significantly. Should he raise the prices he charged to the customer? And if so, by how much?


Teaching Note: 8B17M049 (8 pages)
Industry: Manufacturing
Issues: currency risk, Brexit, pricing of imports, income statement, economic exposure, price elasticity of demand, devaluation, global strategy, finance, accounting, marketing and supply chain, European referendum 2016
Difficulty: 4 - Undergraduate/MBA



ARE WE READY FOR AN AUTOMOTIVE PLANT?
Yi-Chia Wu, Joo Y. Jung

Product Number: 9B09D014
Publication Date: 2/5/2010
Length: 15 pages

The city of McAllen, Texas and its partners have worked on attracting an automotive assembly plant to the region for over fifteen years. Under the North American Free Trade Agreement (NAFTA) provision, this region enjoys the advantages offered by both sides of the Mexican-U.S. border. Even during the economic downturn of 2007 to 2008, McAllen experienced a lower unemployment rate compared to other cities in the United States. One of the primary reasons was its close proximity and economic ties to Mexico. Lower labour cost, a right-to-work state and proximity to Mexico were some of this region's strengths, while a high illiteracy rate, limited numbers of automotive suppliers and small workforce were among its weaknesses. Based on publicly available data and aggregate score evaluation methods, McAllen is compared to other potential sites. The case addresses a wide range of issue regarding site selection factors within the automotive industry.

Teaching Note: 8B09D14 (6 pages)
Industry: Manufacturing
Issues: Automotive; Site Selection; Global Strategy; Decision Making
Difficulty: 4 - Undergraduate/MBA


Chapter 10:
The Foreign Exchange Market

F. MAYER IMPORTS: HEDGING FOREIGN CURRENCY RISK
Wallace Fan

Product Number: 9B17N004
Publication Date: 2/27/2017
Revision Date: 2/27/2017
Length: 8 pages

In September 2014, F. Mayer Imports Pty. Ltd., an Australian gourmet food importer, had a narrow window of opportunity to potentially protect its budget exchange rate for the rest of that, and the following, financial year. With imports such as European butter, chocolate, and cheese, the company procured a significant portion of its product in euros. The Australian dollar to euro exchange (AUD/EUR) dropped from a high of 0.7027 in October 2013 to a low of 0.6369 in January 2014. With the AUD/EUR recently rebounding and edging back toward the company’s budget rate of 0.6900, the company’s chief financial officer needed to choose between four proposed hedging strategies.

Teaching Note: 8B17N004 (8 pages)
Industry: Wholesale Trade
Issues: options, risk management, forwards, exchange rates, foreign exchange
Difficulty: 4 - Undergraduate/MBA



ALLIANCE DESIGN CONCEPTS: FOREIGN EXCHANGE RISK
Ryan Orchard

Product Number: 9B14M116
Publication Date: 10/3/2014
Revision Date: 7/27/2017
Length: 9 pages

Alliance Design Concepts provided audio system solutions, which involved installing high-quality sound systems in customer facilities (such as large churches). A major cost component (60–80 per cent) for these systems was the equipment (speakers, amplifiers, etc.), which was sourced from the United States and paid for in U.S. dollars (USD). Alliance quoted prices to customers in Canadian dollars (CAD) by converting equipment costs from USD to CAD based on the exchange rate on the day of the quotation. Since it was often months later that Alliance actually converted cash and paid the supplier in USD, it found that a change in the exchange rate during that time could directly reduce the margin on the sale. The operations manager had to devise a risk mitigation strategy and/or business process change.

Teaching Note: 8B14M116 (6 pages)
Issues: Foreign exchange; business process; small business; cash; Canada
Difficulty: 3 - Undergraduate


Chapter 11:
The International Monetary System

THE RISKS OF GLOBAL ECONOMIC STAGNATION
David W. Conklin, Guy L.F. Holburn

Product Number: 9B16M121
Publication Date: 7/6/2016
Revision Date: 7/6/2016
Length: 7 pages

In early 2016, stock markets around the world plummeted, raising the threat of another major depression enveloping the world. In their struggle to recover from the post-2008 global recession, many nations had expanded their money supply and lowered interest rates, with the aim of stimulating both consumer spending and corporate investment. While some of this monetary expansion increased production and employment, much of it created bubbles in asset prices, especially in the prices of equities. Investors faced such low returns from bonds and other fixed-income assets that they poured their funds into equities, which increased price-earnings ratios to exceptional levels. This bubble in stock prices amplified the risks of a severe crash. What could—and should—governments do to avoid a significant stock market crash and a global depression?

Teaching Note: 8B16M121 (6 pages)
Issues: economic recession, stagnation, stock market crash, public policy
Difficulty: 4 - Undergraduate/MBA



CRISIS IN CYPRUS: WAS IT DIFFERENT THIS TIME?
Nandita Yadav, Pratap Chandra Biswal

Product Number: 9B13N016
Publication Date: 9/10/2013
Revision Date: 9/13/2013
Length: 11 pages

Cyprus is a small island member of the European Union, constituting 0.2 per cent of the eurozone gross domestic product. During its growth phase, the Cypriot banking system developed vulnerabilities after suffering heavy losses during the Greek sovereign debt crisis. The European Central Bank, the International Monetary Fund and the European Union offered a bailout of US$16.9 billion if the Cypriot government could raise US$7.54 billion from within. The government had a few options on the table — a “one-off” stability levy on all bank deposits (a solution loathed by both native and foreign depositors), a bank restructuring plan, seeking help from Russia (which expected access to the island’s oil and gas reserves) and a complete banking system bailout (which would come with oversight and control from those offering the bailout). The economy was fast approaching a standstill and Cyprus had only two days to strike a deal to avoid the collapse of its banking system.

Teaching Note: 8B13N016 (14 pages)
Industry: Finance and Insurance
Issues: Financial crisis; eurozone; bailout; Cyprus
Difficulty: 5 - MBA/Postgraduate


Chapter 12:
The Global Capital Market

BANRO CORPORATION: RECAPITALIZATION FOR SUSTAINABILITY IN THE CONGO’S GOLD MINING
Wiboon Kittilaksanawong, Kabi Olivier Katabaruka

Product Number: 9B18M031
Publication Date: 3/9/2018
Revision Date: 3/9/2018
Length: 17 pages

In January 2017, Banro Corporation, a Canadian gold mining company in the Democratic Republic of Congo, underwent recapitalization to cope with financial distress, and to optimize its operations of mining assets. Since the commencement of commercial mining in 2009, unexpected social conflicts and operational challenges had led to significantly lower production than expected, with a large cost overrun, while the price of gold declined sharply from 2012. Would the recapitalization enable Banro Corporation to carry out its medium-term strategic plan of incremental growth by operational improvements, through cost reduction and throughput expansion over a five-year horizon? How could the company achieve its long-term goal of being a model of excellence in sustainability?

Teaching Note: 8B18M031 (18 pages)
Industry: Mining, Quarrying, and Oil and Gas Extraction
Issues: recapitalization, capital structure, stakeholder management, state-owned enterprise
Difficulty: 4 - Undergraduate/MBA



EAST CAMERON PARTNERS: THE SUKUK BOND
Stephen Sapp, Brooke Harley

Product Number: 9B10N014
Publication Date: 8/19/2010
Length: 9 pages

The chief executive officer (CEO) of East Cameron Partners LP, is interested in raising capital to buy out his existing 50 per cent partner thereby regaining control of the firm and enabling him to finance new growth. Because of the risky nature of the oil and gas business and relatively small size of East Cameron, the CEO has limited alternatives available to him. The case discusses the standard alternatives available to small and medium sized enterprises to raise capital but it also provides particular focus on a new alternative, a Sukuk Bond.

Teaching Note: 8B10N14 (10 pages)
Industry: Mining, Quarrying, and Oil and Gas Extraction
Issues: Islamic Finance; Financial Instruments; Capital Markets; International Finance; Financial Strategy
Difficulty: 4 - Undergraduate/MBA


Chapter 13:
The Strategy of International Business

UNIQLO: RE-EXAMINING AMERICAN EXPANSION
Derek Lehmberg

Product Number: 9B18M067
Publication Date: 4/11/2018
Revision Date: 4/11/2018
Length: 15 pages

Japan's number-one apparel brand and retailer, Uniqlo Co. Ltd. (Uniqlo), built its business by delivering high-quality basic casual clothing at low prices. Uniqlo's founder and chief executive officer of Uniqlo's parent company, Fast Retailing, stated that his goal was to become the world's number-one apparel retailer. He argued that success in the U.S. market was crucial to meeting this goal; yet, Uniqlo USA was not doing well. In mid-2017, after more than a decade of efforts, Uniqlo USA had relatively few stores and continued to lose money. As the gap between its goals and performance continued to diverge, the company needed to re-examine its U.S.-based business and potentially its globalization strategy altogether.

Teaching Note: 8B18M067 (11 pages)
Industry: Retail Trade
Issues: global strategy, supply chain management, apparel industry, market entry
Difficulty: 4 - Undergraduate/MBA



PAILLASSE INTERNATIONAL SA: GLOBAL MARKET SELECTION
Marc Fetscherin, Tim Pett

Product Number: 9B17A019
Publication Date: 3/29/2017
Revision Date: 3/29/2017
Length: 9 pages

Paillasse International SA was a Swiss-based bread company operating in 15 European markets as of 2016. The company had invented a proprietary, patented process for producing bread concentrate that was used to make high quality, healthy breads. The company was successfully using licensing agreements for the bread concentrate with bakeries throughout the European markets; the latest agreement was with a retailer in Spain. The chief executive officer had just shared the good news with the company owner. The conversation then turned to questions concerning the future growth of the company. Where should it expand next? What impact would the maturing industry have on the company’s growth plans? How could the company maintain its competitive position in the market?

Teaching Note: 8B17A019 (15 pages)
Industry: Accommodation & Food Services
Issues: bread, expansion, franchise, data analysis, data normalization, intervals, Likert scale, outliers, population analysis, scoring, correlation, disposable income
Difficulty: 4 - Undergraduate/MBA


Chapter 14:
The Organization of International Business

DELIVERMEAL IVORY COAST: ADDRESSING HEADQUARTERS' DEMANDS
Benoit Decreton, Phillip C. Nell, Alison E. Holm

Product Number: 9B17M048
Publication Date: 3/28/2017
Revision Date: 3/28/2017
Length: 9 pages

In 2015, DeliverMeal was a Norwegian online food delivery firm, mostly present in what could be considered emerging markets such as those in Africa. Founded in 2010, the company had experienced extremely rapid international expansion. DeliverMeal followed a global strategy, and standardized processes and turnkey solutions were provided from the headquarters to the subsidiaries.

The local business development manager at DeliverMeal’s Ivory Coast subsidiary needed to make some decisions on how to react to three demands that had recently been passed down from corporate headquarters, all of which were at odds with the West African environment. How could the Ivory Coast manager meet her headquarters’ corporate expectations and still conduct successful business operations within the local cultural context?


Teaching Note: 8B17M048 (7 pages)
Industry: Accommodation & Food Services
Issues: headquarters, subsidiary relations, e-commerce, multinational corporations, delivery service, food delivery, emerging markets
Difficulty: 4 - Undergraduate/MBA



BEIERSDORF AG: EXPANDING NIVEA'S GLOBAL REACH
Paul W. Beamish, Vanessa Hasse

Product Number: 9B13M016
Publication Date: 2/11/2013
Revision Date: 12/4/2017
Length: 15 pages

In 2012, two years after a major restructuring project had begun at German skin care producer Beiersdorf, the process was still ongoing. The new chief executive officer (CEO) inherited several challenges from his predecessor, including the difficult implementation of the new transnational strategy, opposition from employees and the work council, and ineffective market-entry strategies (especially in China). Strong competitors and a slow rate of economic recovery in Beiersdorf’s main markets provided additional complexity. Questions remained about how the new CEO should address the ongoing challenges facing the company.

Teaching Note: 8B13M016 (12 pages)
Industry: Manufacturing
Issues: Reorganization; Transnational; Restructuring; Multinational; Germany
Difficulty: 4 - Undergraduate/MBA



LUNDBECK KOREA: MANAGING AN INTERNATIONAL GROWTH ENGINE
Paul W. Beamish, Michael Roberts

Product Number: 9B10M012
Publication Date: 2/11/2010
Revision Date: 2/12/2010
Length: 16 pages

In 2005, the vice-president of Lundbeck, a Danish based pharmaceutical firm, needed to decide what to do with one of his most promising subsidiaries, Lundbeck Korea. Over its short lifetime, under the leadership of the country manager and the Asia regional manager, the subsidiary had grown well beyond the original goals set for it. The vice-president wanted to create a reporting structure and management mix that would balance the local demands that Lundbeck Korea required for growth with Lundbeck's overall strategy of specialization, speed, integration and results. The case also traces Lundbeck's internationalization efforts in Asia over the past 20 years. The company had grown from pure licensing arrangements to establishing its own country level subsidiaries. This case introduces the dynamic tensions between taking advantage of local management expertise and executing a corporate strategy developed for an entire global group. In addition, it illustrates the importance, but difficulties, of being sensitive to local management goals, while promoting a global corporate culture.

Teaching Note: 8B10M12 (19 pages)
Industry: Manufacturing
Issues: MNE Reporting Structures; International Strategy; Emerging Markets
Difficulty: 4 - Undergraduate/MBA


Chapter 15:
Entry Strategy and Strategic Alliances

NOTE ON THE DESIGN AND MANAGEMENT OF INTERNATIONAL JOINT VENTURES
Paul W. Beamish

Product Number: 9B17M060
Publication Date: 4/25/2017
Revision Date: 4/25/2017
Length: 16 pages

An international joint venture is a company that is owned by two or more firms of different nationalities. The purpose of most international joint ventures is to allow partners to pool resources and coordinate their efforts in order to achieve results that neither could obtain acting alone. Virtually all multinational enterprises now use international joint ventures. Joint ventures are the mode of choice about 30 per cent of the time by both U.S. and Japanese multinationals. This note reviews the reasons why companies create international joint ventures (for example, to strengthen the existing business, take existing products to foreign markets, bring foreign products to local markets, and diversify into a new business) and examines specific types of joint ventures (for example, research and development; raw material and component supply; and marketing and distribution). It then considers some guidelines for international joint venture success.

Issues: internationalization, market entry, ownership, strategic logic, diversification, risk-sharing, collaboration, alliances
Difficulty: 4 - Undergraduate/MBA



NOTE ON INTERNATIONAL LICENSING
Paul W. Beamish

Product Number: 9B17M012
Publication Date: 1/17/2017
Revision Date: 1/17/2017
Length: 18 pages

Licensing is a strategy for technology transfer; and an approach to internationalization that requires less time or depth of involvement in foreign markets, compared to exports, joint ventures, and foreign direct investment. This note examines when licensing is employed, risks associated with it, intellectual property rights, costs of licensing, unattractive markets for licensing, and the major elements of the license agreement.

Issues: technology transfer, licensing, corporate strategy, internationalization, franchising, patent
Difficulty: 4 - Undergraduate/MBA



NORA-SAKARI: A PROPOSED JV IN MALAYSIA (REVISED)
Paul W. Beamish, R. Azimah Ainuddin

Product Number: 9B15M085
Publication Date: 9/9/2015
Revision Date: 4/10/2019
Length: 13 pages

This case presents the perspective of a Malaysian company, Nora Bhd, which was in the process of trying to establish a telecommunications joint venture with a Finnish firm, Sakari Oy. Negotiations have broken down between the firms, and students are asked to try to restructure a win-win deal. The case examines some of the most common issues involved in partner selection and design in international joint ventures.

Teaching Note: 8B15M085 (12 pages)
Industry: Information, Media & Telecommunications
Issues: Intercultural Relations; Third World; Negotiation; Joint Ventures; Finland; Malaysia
Difficulty: 4 - Undergraduate/MBA


Chapter 16:
Exporting, Importing, and Countertrade

CAMERON AUTO PARTS: JOINT VENTURES, LICENSING OR EXPORTING
Paul W. Beamish, Harold Crookell

Product Number: 9B16M044
Publication Date: 3/24/2016
Revision Date: 1/9/2017
Length: 8 pages

In 2015, two years after signing a license agreement in the United Kingdom, Cameron Auto Parts (Cameron) now faces an opportunity to establish with another firm a joint venture in France for the European market. However, the prospect upsets the U.K. licensee who is clearly doing very well, and who even wants Cameron to consider joint venturing with him in Australia. The case ends with Cameron, run off its feet in North America, trying to decide whether to enter Europe via licensing, joint venture or direct investment. (This case is a sequel to Cameron Auto Parts: Early Internationalization, case (9B16M043).

Teaching Note: 8B16M044 (6 pages)
Industry: Manufacturing
Issues: Corporate strategy, exporting, licensing, joint venture
Difficulty: 4 - Undergraduate/MBA



CAMERON AUTO PARTS: EARLY INTERNATIONALIZATION
Paul W. Beamish, Harold Crookell

Product Number: 9B16M043
Publication Date: 3/24/2016
Revision Date: 1/5/2017
Length: 9 pages

This case is about a small American auto parts producer trying to diversify its way out of dependence on the major automakers in 2013. A promising new product is developed and the company gets a chance to license it to a Scottish manufacturer. The issue of whether to license or go it alone in international markets is central to the case. A full class sequel to this case is available, titled Cameron Auto Parts: Joint Ventures, Licensing or Exporting, 9B16M044.

Teaching Note: 8B16M043 (7 pages)
Industry: Manufacturing
Issues: Corporate strategy, exporting, licensing, joint venture
Difficulty: 4 - Undergraduate/MBA



SAI MARINE EXPORTS AT A CROSSROADS
Subhanjan Sengupta, Arunaditya Sahay

Product Number: 9B15M051
Publication Date: 5/15/2015
Revision Date: 5/13/2015
Length: 14 pages

Sai Marine Exports Pvt. Ltd. (SMEPL) had been in business for 20 years and had established itself as one of the major Indian shrimp exporters, with the United States and European Union as its primary markets. Following unprecedented market conditions due to early mortality syndrome affecting the exports of leading Southeast Asian shrimp-exporting countries in 2009, Indian companies were at a competitive advantage. SMEPL’s revenues had increased significantly from 2010 to 2014. Its current markets, the United States and Europe, were lucrative, but SMEPL’s chairman feared the risks of concentration in only two markets. Should SMEPL penetrate deeper into the U.S. and E.U. markets or enter new international markets like Japan and China?

Teaching Note: 8B15M051 (13 pages)
Industry: Other Services
Issues: Diversification; strategic choice; market selection; exporting
Difficulty: 5 - MBA/Postgraduate


Chapter 17:
Global Production, Outsourcing, and Logistics

GENERAL MOTORS: SUPPLIER SELECTION FOR INNOVATION
Tingting Yan, Hubert Pun, Timothy Butler, Melissa Srock, James Preslar, Kate Plegue, Jilianna Meldrum

Product Number: 9B17D006
Publication Date: 5/23/2017
Revision Date: 5/31/2017
Length: 6 pages

In February 2017, a purchasing manager for General Motors Company (GM) needed to come up with a sourcing proposal to source e-boost modules, which were required to support the enhanced 2020 Chevrolet Bolt Electric Vehicle and the new 2020 Chevrolet Bolt Autonomous Vehicle. GM had four possible international suppliers to choose from. Each supplier had its pros and cons in terms of price, product development capability, and the architectural nature of the braking system. GM wanted to be a disrupter to the autonomous vehicle industry. Its top priorities were public safety and defect-free quality. In order to continue to maintain the market leadership position, GM wanted to retain the intellectual property of the e-boost modules. Which supplier would best meet the needs of the company?

Teaching Note: 8B17D006 (10 pages)
Industry: Manufacturing
Issues: supply chain management, outsourcing
Difficulty: 4 - Undergraduate/MBA



GLOBAL SOURCING AT ANHEUSER-BUSCH INBEV: TAPPING (BEER) INTO THE CHINESE SUPPLIER MARKET
Martin Lockstrom, Thomas E. Callarman, Shengrong (Linda) Zhang

Product Number: 9B12D015
Publication Date: 7/25/2012
Revision Date: 7/25/2012
Length: 5 pages

This case concerns the difficulties of global sourcing for InBev, an international brewery with branches in six geographical zones. In 2006, Pascal Baltussen came to China to set up the company's international procurement office and had it up and running by the end of the year. Not only were risks such as delivery delays and rising costs constantly lurking, but in 2010 his company, Brazilian-Belgian brewer InBev, acquired the almost equally large U.S. brewer Anheuser-Busch to form the world's largest brewer, AB InBev. This posed further complications. How could Baltussen now successfully roll out his sourcing vision for China and manage internal and external challenges?

Teaching Note: 8B12D015 (6 pages)
Industry: Accommodation & Food Services
Issues: Global Sourcing; Supplier Selection; Procurement Organization; Sourcing Strategy; China
Difficulty: 5 - MBA/Postgraduate



MATTEL AND THE TOY RECALLS (A)
Hari Bapuji, Paul W. Beamish

Product Number: 9B08M010
Publication Date: 2/21/2008
Revision Date: 5/18/2017
Length: 14 pages

On July 30, 2007 the senior executive team of Mattel under the leadership of Bob Eckert, chief executive officer, received reports that the surface paint on the Sarge Cars, made in China, contained lead in excess of U.S. federal regulations. It was certainly not good news for Mattel, which was about to recall 967,000 other Chinese-made children's character toys because of excess lead in the paint. Not surprisingly, the decision ahead was not only about whether to recall the Sarge Cars and other toys that might be unsafe, but also how to deal with the recall situation. The (A) case details the events leading up to the recall and highlights the difficulties a multinational enterprise faces in managing global operations. Use with Ivey case 9B08M011, Mattel and the Toy Recalls (B).

Teaching Note: 8B08M10 (28 pages)
Industry: Manufacturing
Issues: Supply Chain Management; Offshoring; Outsourcing; Product Quality; Product Recall; Multinational Enterprise Stakeholders; the United States and China
Difficulty: 4 - Undergraduate/MBA


Chapter 18:
Global Marketing, and R&D

L’OREAL INDIA: WHERE BEAUTY MEETS TRADITION
Prem Shamdasani

Product Number: 9B17M146
Publication Date: 9/29/2017
Revision Date: 9/29/2017
Length: 15 pages

In 2013, L’Oréal SA had become the largest cosmetics manufacturer in the world by understanding different markets and offering products to those consumers that met needs they may not have realized they even had. In India, L’Oréal spent more than 20 years studying its target consumers and developing products to cater to their specific needs. However, developing localized products was not the only criterion for success in a new market. L’Oréal needed to also localize every aspect of its operations, from research and development to marketing and outreach. As well, the company needed to deal with intensifying competition as global and local players challenged L’Oréal’s efforts to penetrate and dominate the hair-care, skincare, makeup, and professional hair-care segments in the value-conscious and largely unorganized but fast-growing beauty market in India. What localization and market development strategies should L'Oréal implement?

Teaching Note: 8B17M146 (8 pages)
Industry: Manufacturing
Issues: cosmetics, hair care, skin care, beauty, localization, market entry, emerging markets
Difficulty: 4 - Undergraduate/MBA



FOTONATION: LEVERAGING INTERNATIONAL KNOWLEDGE CONNECTIVITY
Jung Kwan Kim, Ahreum Lee, Sinéad Monaghan, Ram Mudambi

Product Number: 9B16M021
Publication Date: 3/4/2016
Revision Date: 1/28/2016
Length: 12 pages

In 2014, FotoNation, an international venture previously located in Ireland, produced innovative solutions for digital photography from its headquarters in California. At the core of FotoNation’s technology were its proprietary algorithms, which were embedded in software and used in over 2 billion digital devices such as the cameras in smartphones. The company placed an emphasis on research, and it had its research and development units in Romania, Ireland, and the Western United States. However, after being acquired by Tessera Technologies in 2008, FotoNation had to relocate its top management team from Ireland to the headquarters of Tessera Technologies in the United States. FotoNation’s management had some difficult decisions to make in light of the acquisition. How would a research-based product fit into the grand scheme of Tessera Technologies? How would FotoNation compete with larger industrial players, while coping with the relocation of its top-tier staff?

Teaching Note: 8B16M021 (7 pages)
Industry: Professional, Scientific, and Technical Services
Issues: New venture, global knowledge networks, facial recognition, algorithms, cameras, R&D, Omron, Arcsoft, consumer electronics, digital, imaging, IP, intellectual property, smartphone, acquisition, photo correction
Difficulty: 5 - MBA/Postgraduate


Chapter 19:
Global Human Resource Management

SYIT: CHANGING THE CORPORATE CULTURE
Maria Khan, Khurram Rehman Alvi, Zunaira Saqib

Product Number: 9B18C004
Publication Date: 2/2/2018
Revision Date: 1/29/2018
Length: 9 pages

On February 1, 2013, the managing director of software development firm SYIT, sat in his office and gathered his thoughts on his new organization. Based in Islamabad, Pakistan, SYIT was a new entrant in the offshore software development industry. Its managing director had expended months of effort to move the entire project team from his previous employer to his newly formed company, but the real challenge lay ahead. SYIT needed to reduce the cultural gap between its team and its primary client, one of Denmark’s largest publishing houses. The managing director’s ultimate goal was to create an organization that was flexible and innovative—like the European clients that he wanted to continue to attract. How could he implement a strong company culture to ensure that all employees projected one consistent and effective working style across SYIT’s different projects and clients?

Teaching Note: 8B18C004 (9 pages)
Industry: Information, Media & Telecommunications
Issues: change management, organizational culture
Difficulty: 3 - Undergraduate



ASPOP'S RECRUITMENT PREDICAMENT
Xiaokang Zhao, Paul W. Beamish

Product Number: 9B17C043
Publication Date: 11/17/2017
Revision Date: 11/17/2017
Length: 11 pages

In early 2013, the founder of Shandong Aspop Clothing Apparel Group Co. Ltd. faced the annual “post-holiday recruitment dilemma.” His challenge was typical of the growth challenges that many labour-intensive original equipment manufacturer clothing enterprises in China encountered. Facing rising domestic labour costs, a change in attitudes among workers, the gradual shift of labour preferences from manufacturing industries to service industries, and a market environment in which international orders had shifted to Southeast Asian countries, the founder needed to make a decision. Should he strive to attract and retain more skilled front-line workers, replace personnel via automation, or set up a factory in a neighbouring country to transfer part of the enterprise’s production capacity?

Teaching Note: 8B17C043 (9 pages)
Industry: Retail Trade
Issues: worker recruitment, retention, employee incentives, employee turnover, apparel
Difficulty: 4 - Undergraduate/MBA



LEADERSHIP CRISIS AT STEELWORKS' XIAMEN PLANT
Hwee Hoon Tan, Flocy Joseph

Product Number: 9B16C005
Publication Date: 2/22/2016
Revision Date: 2/22/2016
Length: 9 pages

In April 2010, the chief executive officer (CEO) of Steelworks, a Singapore-based metals company recently acquired by an Indian conglomerate, embarked on a plan to realign the organization's structure and processes across its subsidiaries. However, he had difficulty getting the long-serving general manager of a plant in China to sign off on the current year’s audited financial statements. This led to a tense and bizarre confrontation between the CEO and the regional general manager. The restructuring project was taking autonomy from regional unit heads. Was that the problem? Was Steelworks mismanaging its subsidiaries? Had the general manager of the Chinese plant, a Singaporean expatriate, been seconded to China for too long? It was unclear how a member of the senior management team who had been with Steelworks for his entire career could behave this way and jeopardize his position. What could the CEO have done differently?

Teaching Note: 8B16C005 (10 pages)
Industry: Manufacturing
Issues: Trust building, multinational corporation, change management, China
Difficulty: 5 - MBA/Postgraduate



LARSON INC. IN NIGERIA
Paul W. Beamish, Isaiah A. Litvak

Product Number: 9B15M047
Publication Date: 4/9/2015
Revision Date: 4/9/2015
Length: 6 pages

In 2015, the vice-president of international operations must decide whether to continue to operate or abandon the company's Nigerian joint venture. Although the expatriate general manager of the Nigerian operation has delivered a very pessimistic report, Larson's own hunch was to stay in that country. Maintaining the operation was complicated by problems in staffing, a joint venture partner with divergent views, and increasing costs of doing business in Nigeria. If Larson decides to maintain the existing operation, the issues with its local partner and staffing problems (especially in terms of the joint venture general manager) have to be addressed.

Teaching Note: 8B15M047 (10 pages)
Industry: Manufacturing
Issues: Subsidiaries; Third World; Government Regulation; Staffing
Difficulty: 4 - Undergraduate/MBA


Chapter 20:
Accounting and Finance in International Business

REIKE TECHNOLOGY: REVENUE RECOGNITION AND PAY-WHEN-PAID CLAUSES
Lixin Pan, Ying Yu, Lei Li

Product Number: 9B17B016
Publication Date: 7/26/2017
Revision Date: 7/26/2017
Length: 12 pages

In December 2013, Reike Technology Co. Ltd. (Reike), a Chinese information technology and outsourcing company, faced an accounting revenue recognition problem. Reike had a well-deserved reputation in the software outsourcing industry, having built partnerships with Fortune 500 companies since the 1990s. However, in 2012, it collaborated on a project with a multinational software company that included a “pay-when-paid” clause in the contract. According to this clause, payments to Reike would be based on the percentage of the project completed upon review, as long as the software company received the corresponding proportion of payments from the owner. As the project progressed, Reike’s managers became troubled by the following issues: Should the “pay-when-paid” contract containing legal risks have been signed? When should Reike recognize the project revenue? How should the company deal with the project costs considering there was unrecognized revenue at the end of the year? Would there be any effect on performance assessments?

Teaching Note: 8B17B016 (6 pages)
Industry: Professional, Scientific, and Technical Services
Issues: IT services, outsourcing, revenue recognition
Difficulty: 4 - Undergraduate/MBA



TOSHIBA: ACCOUNTING FRAUD
Anupam Mehta

Product Number: 9B16B011
Publication Date: 6/27/2016
Revision Date: 6/27/2016
Length: 7 pages

In July 2015, the chief executive officer of Toshiba Corporation (Toshiba) resigned over the revelation of a JP¥151.8 billion accounting scandal that shocked the world. Toshiba, a Japanese multinational conglomerate with net sales of JP¥6.5 trillion and total assets of ¥6.2 trillion, had been widely criticized in the news for the multi-billion-dollar accounting fraud. The company’s stock prices declined by 38 per cent after the accounting probe was announced, and the company withdrew the dividend that had been declared earlier. These setbacks challenged company investors, who had always regarded Toshiba as a reputable company. The investors were wondering the same thing as everyone else watching the scandal unfold: How could a company with a 140-year history do this, and why? What were the consequences? What should Toshiba do in response to this crisis?

Teaching Note: 8B16B011 (11 pages)
Industry: Information, Media & Telecommunications
Issues: computers, electronics, accounting fraud, scandal, fraud triangle, ethics
Difficulty: 4 - Undergraduate/MBA



TRANSFER PRICING AT CAMECO CORPORATION
Walid Busaba, Nourhene Ben Youssef, Saqib A. Khan

Product Number: 9B14B011
Publication Date: 8/14/2014
Revision Date: 8/14/2014
Length: 8 pages

Transfer pricing used by multinational corporations to lower its tax burden, thereby increasing its consolidated income, can have far-reaching implications for the stakeholders, as a fund manager for Saskhedge fund found out the hard way. A stock investment the manager had made in Cameco Corporation has dropped its value by 20 per cent. In addition, Canada Revenue Agency has initiated a law suit against the firm for alleged tax avoidance in relation to the company's transfer pricing practices with its Swiss subsidiary. The suit could result in an additional tax liability of $800 million to $850 million. The manager needs to explain to the investment board the implications of the lawsuit on the stock price and advise the board on whether the projected $800 to $850 million is a fair estimate.

Teaching Note: 8B14B011 (4 pages)
Industry: Mining, Quarrying, and Oil and Gas Extraction
Issues: Transfer pricing; differential tax regimes; consolidated statements; financial reporting; Canada
Difficulty: 4 - Undergraduate/MBA