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 1-2 indicated below. Read the Management Focus “Foreign Direct Investment by Cemex” on page 257* and “Diebold” on pages 519-520 of the textbook (9th edition) and answer
questions 3 and 4. For Question 5, 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. *8th edition, case on pages 240-41but case facts are slightly different..
Due Date: Hard copy to be handed in no later than Thursday, May 29, 2014.
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 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) Read the Management Focus “Foreign Direct Investment by Cemex” on page 257 and answer the following questions, using facts from the cases to support your answer (2 points):
a) Which of the four basic strategies do think Cemex is pursuing, based on the products it sells and the competitive advantages it has?
b) What advantages did Cemex gain in venturing out into the global marketplace?
c) Cemex has a strong preference for acquisition over greenfield ventures as an entry mode. Why?
4) Read the Case on “Diebold” and answer the following questions, using facts from the cases to support your answer and considering the four main strategies you identified in question 2 (3 points):
a) Prior to 1997, Diebold manufactured its ATM machines in the United States
and sold them internationally via distribution agreements, first with Philips NV and then with IBM. Why do you think Diebold chose this mode of expanding internationally? Which of the four strategies did
Diebold pursue in this beginning phase? What were the advantages and disadvantages of this arrangement?
b) What prompted Diebold to change its international expansion strategy in 1997 and start setting up wholly owned subsidiaries in most markets? Why do you think the company chose acquisition as
an entry mode?
c) Diebold entered China via a joint venture, as opposed to a wholly owned subsidiary. Why do you think it chose joint venture as an entry mode?
d) Describe the types of pressures for local responsiveness which Diebold encountered in expanding international. How did these pressures influence
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Diebold’s decisions about their strategy in the global marketplace?
e) Based on the changes Diebold had to make as it expanded internationally, is Diebold pursuing a localization strategy or a global standardization strategy?
5) Visit www.mcdonald’s.com and look at the left side of the home page; click on Mwebsites and open it up and click on international websites. 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, 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 would
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 wedding service in selected international markets. (2 points)