Mid-Term Project Guide for International Business

Mid-Term Project Overview

• Choose a public-traded Multinational Corporation (MNC) for analysis
• Focus on their international business strategies
• Include assessment of successes and failures, along with lessons learned

Suggested Industries

• Manufacturing: Lockheed Martin
• Information and Communications Technology (ICT): Microsoft
• Food and Beverage: Heineken
• Retail: Amazon
• Pharmaceutical: Novo Nordisk
• Fashion: Prada

Suggested Structure for Project

1. Executive Summary
2. Company Overview
3. Industry Overview: Analyze macroeconomic factors affecting the industry
4. Competitive Positioning: Utilize Porter's Five Forces model
5. International Business Strategy:

• Overview of the strategy (What, how, why, lessons)
• Success: Focus on one country/group of countries
• Failure: Focus on one country/group of countries

1. Conclusion
2. Appendix

International Business Strategy Components

• Entry Strategy
• Decision Factors: Where to enter, when to enter, how to enter
• Business Strategy: Address pressures faced in the invested market, overall theme strategies, cost reduction and value creation
• Evaluation: Determine success or failure in the market and reasons behind it
• Lessons: Use a checklist for evaluation

CAGE Distance Framework

• Framework for analyzing invested countries based on:
• Culture distance
• Administrative distance
• Geographic distance
• Economic distance

Cultural Distance

• Factors influencing culture distance:
• Language differences
• Religious beliefs and traditions
• Social norms and values
• Consumer behavior and preferences
• Trust and business practices
• Key Questions for MNCs:
• Need for adjustments to product or strategy?
• Awareness of MNC products in target market?
• Possible marketing and branding strategies?

Administrative Distance

• Evaluating:
• Government policies and regulations
• Trade agreements and tariffs
• Political stability and legal differences
• Corruption and bureaucratic efficiency
• Key Questions for MNCs:
• Legal status of business operations?
• Political safety in the country?
• Benefits/challenges from trade agreements?

Geographic Distance

• Considerations:
• Physical distance and logistics
• Transportation infrastructure
• Time zones
• Climate and resources availability
• Key Questions for MNCs:
• Suitability of supply chain in target country?
• Competitiveness after transport costs?

Economic Distance

• Differences affecting decision:
• Income and purchasing power levels
• Labor and production costs
• Market size and growth rate
• Industry development and tech readiness
• Key Questions for MNCs:
• Consumer purchasing power sufficient for product?

Timing of Entry

• Assessing entry timing:
• Early Entry:
  • Was the MNC among the first in the market?
  • Is the market undeveloped?
• Late Entry:
  • Entering after competitors?
  • Learning from competitors' experiences?
• Consider pros and cons of both approaches

Modes of Entry

• Options for market entry:

1. Export
2. Turnkey Projects
3. Licensing
4. Franchising
5. Joint Ventures
6. Wholly Owned Subsidiaries

• Criteria for Selection:
• Investment costs and available capital
• Risk tolerance in unstable markets
• Desired level of control over operations
• Speed of entry considerations
• Knowledge of local market
• Legal constraints on foreign ownership
• Industry type requiring operational control
• Market conditions affecting demand testing

Business Strategy Types

• Strategies to manage pressures for cost reduction and local responsiveness:

1. Global Standardization Strategy: High pressure for cost reduction
2. Transnational Strategy: Balance between global efficiency and local responsiveness
3. International Strategy: Low pressure for local responsiveness, focus on exports
4. Localization Strategy: High pressure for local responsiveness

Support Activities in Business Strategy

• Key activities to support the business strategy:
• Company infrastructure
• Information systems
• Logistics
• Human resources
• Research and Development (R&D)
• Production
• Marketing and sales
• Customer service

Conclusion and Q&A

• Thank you for listening
• Open for questions