1. Helmut Maucher, former chairman of Nestle was quoted as saying: “I don’t share the euphoria for all international alliances. First they are an excuse and an easy way out when people should do their own homework. Secondly, they create additional difficulties-you share power and cultures, and decisions take longer.” A) Is Maucher overstating here?; B) Offer a defense for Maucher; C)Now counter Maucher & explain conditions when “international alliances” may offer better choices for Multinational companies than going on their own. Use examples-Research is needed.
2. Companies tend to begin their internationalization process in countries that are very close. For instance, U.S based companies would enter Canada first, before moving on to other countries. The so called “psychic distance” between the U.S and Canada is small given that these countries are supposedly very similar. A survey found that only 25 percent of Canadian retailers were operating successfully in the U.S. Explain in detail why at times culturally close countries are not necessarily easy to manage for a multinational firm.
3. Beijing Jeep is a 50-50 joint venture between Chrysler Corporation and the Chinese Government. Research this joint venture. Report on drawbacks in 50-50 international joint ventures.
4. What mechanisms multinational companies can use to protect themselves against ill-fated “partnerships” with foreign-owned firms?
5. A small Canadian firm that has developed some valuable new medical products using its unique biotechnology know-how is trying to decide how best to serve the European Community market. Its 3 choices are given below. The cost of investment in manufacturing facilities will be a major one for the Canadian firm, but it is not outside its reach. If these are the firm’s only options, which one would you advise it to choose? Why? Explain in detail.
Option A- Manufacture the product at home and let foreign sales agents handle marketing.
Option B- Manufacture the product at home and set up a wholly owned subsidiary in Europe to handle marketing.
Option C- Enter into an alliance with a large European pharmaceutical firm. The product would be manufactured in Europe by the 50-50 joint venture and marketed by the European firm.
6. Licensing proprietary technology to foreign competitors is the best way to give up a firm’s competitive advantage. Do you agree or disagree with the statement? Explain in detail with examples.
7. Examine PPT slide #17 carefully. Explain in detail as to why Exporting gets a higher score on “flexibility” than Wholly-owned subsidiary. Use Boeing as an example – Boeing is an example of a multinational using the Exporting strategy.
8. Examine PPT slide #17 carefully. Explain in detail as to why Exporting gets a lower score on “risk” than Wholly-owned subsidiary. Use Boeing as an example – Boeing is an example of a multinational using the Exporting strategy.
9. Using PPT slide #17 – explain in detail why Ford uses a Wholly-owned subsidiary to make cars in India whereas Boeing uses the Exporting strategy.