Introduction to International Business Article Discussion

1
Introduction to International BusinessArticle
Discussion

• Sanny X. Liao
• June 19, 2007

2
The Crossover Queen

• Who? Whats her core competency?
• Shakira
• Latino pop music
• Why does Shakira want to expand into the English
  language pop market?
• Its a more lucrative market
• What is her controversial move that is addressed
  in this article?
• She released her second album in Spanish

3
The Crossover Queen

• In the framework of cost reduction vs. local
  responsiveness, how much pressure does an artist
  like Shakira face in the pop music market?
• Low pressure for cost reduction
• High pressure for local responsiveness, albeit
  debatable
• According to the same cost reduction vs. local
  responsiveness framework, what should she do?
• Release the album in the language of the market
  that she is in (localization strategy)
• What did she do?
• Release her second album in Spanish (global
  standardization strategy)

4
The Crossover Queen

• Why did Shakira release her second album in the
  U.S. in Spanish?
• Re-establish her roots in the Latin marketplace.
• integrate her two audience
• There is a large Spanish-speaking audience in the
  U.S.

5
Express Delivery Firms in China

• What firms are discussed in this article? What
  are their core competencies?
• FedEx, UPS and DHL
• Delivery packages and supply chain management
• Are these technological or management know-hows?
• Management

6
Express Delivery Firms in China

• What is supply chain management?
• Suppose you are Apple Computers, what do you
  need do to move an IPod from a design to a
  product in the hand of a consumer?
• Designing and planning
• Distribution
• Filling orders
• Post sales support
• Supplier management
• (from UPS company website)

7
Express Delivery Firms in China

• What entry mode did the delivery firms choose?
  Why?
• Greenfield using JV.
• What markets did the delivery firms enter first?
  
• Delivery
• Why did they choose to enter the supply chain
  management market at a later time?
• Supply chain management requires firms to be more
  knowledgeable about the market and business
• The market for supply chain market is growing

8
Express Delivery Firms in China

• Why do the delivery firms see China as a
  profitable market for supply chain management?
• Chinese exports are becoming more sophisticated
• There is increased competition among Chinese
  manufacturers
• Infrastructure, laws and corruption are difficult
  to manage
• FedEx, UPS and DHL have already developed
  competencies in supply chain management

9
Express Delivery Firms in China

• In the Varian case, how has FedEx enhanced the
  efficiency of Varians supply chain?
• Have a more accessible and organized storage
  space for parts
• Electronically process the order for parts
• Can use its own in-house delivery system
• Drawbacks?
• Varian loses control of its supply chain
  management
• Varian becomes more alienated from its customers
• FedEx does not have the technical expertise to
  deal with more complex problems.

10
Express Delivery Firms in China

• Did the expansion into the logistics market
  enhance the profitability and profit growth of
  FedEx, UPS and DHL?
• Profit growth through entering a new market and
  selling more in existing markets as a result
• Was there pressure for cost reduction?
• High pressure
• Pressure for local responsiveness?
• High pressure
• What strategy did these delivery firms use?
• Transnational

11
Haier Overseas

• Who is Haier? What is its core competency?
• A Chinese appliance maker
• Manufacturing appliances at lower cost than its
  American competitors
• What kind of cost pressure does Haier face? What
  about local responsiveness pressure?
• High cost pressure
• Low local responsiveness pressure

12
Haier Overseas

• Why does Haier want to build factories overseas?
• Haier needs a higher-design level and a bigger
  sales network
• Which market does Haier want to expand in?
• US, India, Middle East, South Asia
• Why does Haier want to expand now?
• Price war in the Chinese market makes Haier look
  elsewhere for profitability
• On what scale is Haier planning to expand its
  global operations?
• Small scale, one factory at a time
• What entry mode does Haier plan to use?
• Wholly owned subsidiary
• What forms of expansion strategy is Haier using?
  Why?
• Acquisition
• Greenfield

13
Haier Overseas

• What are the pros and cons of Haiers decision to
  expand globally in order to satisfy its need for
  a higher-design level and a bigger sales network?
• Pro
• More access to trained researchers
• Can build a more locally responsive sales network
• More in tune with market needs
• Can use experience gained from conducting RD and
  manufacturing abroad at home
• Con
• Very expensive to manufacture in the U.S. (less
  so in other developing countries)
• Haier does not need any more production capacity
• What global strategy did Haier use? What should
  it use?
• Currently uses an international strategy
• Should use a global standardization strategy

14
Manager, Offshore Thyself

• Why are managers moving overseas?
• Wisden Group to be closer to consumers
• Nokia to be closer to investors and innovation
• IBM to be closer to suppliers

15
Manager, Offshore Thyself

• What are the pros and cons of moving managers?
• Pro
• Closer to consumers, investors, suppliers or
  innovation
• Technology made coordination between managers
  feasible from anywhere in the world
• Much cheaper to operate in some countries
• Con
• Economies of scale
• Planning needs to be centralized
• Heritage
• Adjustment problems
• More stable business environment in most home
  countries

16
Manager, Offshore Thyself

• How can we think about moving headquarters in the
  global strategy framework?
• International Strategy
• Localization Strategy
• Global Standardization Strategy
• Transnational Strategy