global business strategies eldridge

8/6/2019 Global Business Strategies Eldridge

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COURSE SYLLABUS

COURSE TITLE:MGT/448 Global Business StrategiesLSB04BSM09

REQUIRED TEXT/MATERIAL:Books1. The World Is Flat A Brief History of the Twenty-first Century (Friedman)2. International Business: Competing in the Global Marketplace, 5/e (Hill)3. The Lexus and the Olive Tree: Understanding Globalization (Friedman)4. Managing Cultural Differences (Harris, Moran)5. Global E-Commerce Strategies for Small Business, (Da Costa, Laffont, Tirole)

Scholarly Articles1. International Business: Environments and Operations, (Daniels, Radebaugh, Sullivan) Journalof Political Economy2. International Real Business Cycles, (Backus, Kehoe and Kyland) Journal of PoliticalEconomy

3. Going global: Using information technology to advance the competitiveness of the virtual,(Boudreau, Loch, Robey, Straub) Academy of Management Executive4. Working with Americans, (Thompson) The FLAME of Claremont Graduate University

Websites:1. Economist.com (The Economist Magazine)2. FT.com (Financial Times Newspaper)3. cia.gov/cia/publications/factbook (CIA world Fact Book)4. loc.gov/rr/international/portals.html (Library of Congress Country Info)5. windowontheworldinc.com/countryprofile/index.html (Tips for Global Business Etiquette6. transparency.org (Transparency International)7. scholar.google.com (Google for academic search)

INSTRUCTOR:Taj Ahmad Eldridge, MBA, Ph.D Intl Political Economics & World Politics candidate

WELCOME:Buenas noches, Banji mashite, Boa noite, Masaa al-khair, Good Evening! Welcome

to MGT 448 Global Business Strategies. Business has been changed drastically by theadvent of technology and globalization. This course should prepare you to become aware ofmany of the externalities that businesses face as they enter the global market. It doesnt matter ifyou are not currently conducting business on a global scale, the global scale of business itself willimpact you more than you will ever know.

CONTACT METHOD:(866) 856-1325 (office phone & voice mail)[email protected]@globalpolicyconsultancy.com(alt. email)

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COURSE DESCRIPTION:

The objectives of this course include imparting an understanding of the global businessenvironment, thereby offering students the opportunity to effectively contribute to theorganizations international strategic, tactical, and operational planning processes. Upon thesuccessful completion of this course, students should have a practical working knowledge of theactivities, procedures, and techniques unique to international business operations.

TOPICS AND OBJECTIVES:Contemporary Global Business Environment

Define globalization.

List the major drivers of globalization.

Explain some effects of globalization.

Analyze the role of regional integration in promoting global business.

Relate the economic development stage of a country to potential businessopportunities.

Global Business Strategy Formulation

Conduct a business risk analysis

Compare and contrast the advantages and disadvantages of various modes ofentry into global markets.

Describe the global strategic planning process.

Strategic Implementation: Global Business Operations

Examine the impact of national and cultural differences on the functional areas ofglobal business including human resource, marketing, and finance.

Describe the legal, cultural, and ethical challenges that confront globalbusinesses.

Examine the various roles that host governments play in global businessoperations.

Describe the impact of global expansion on an organization's supply chain and

technology systems.

Strategy Implementation: Finance and Marketing in Global Business

Analyze global financing and exchange rate mechanisms.

Identify multilateral and regional financial institutions that help foster globalbusiness..

Identify various methods of financing global operations.

Examine key foreign exchange risks and hedging techniques to mitigate risk.

Conduct a global marketing analysis for a product or service.

Changing Environment of Global Business

Examine contemporary trends in the global environment Examine the role of governance in a global environment.

Evaluate exit strategies for global organizations.

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ASSIGNMENTS

INDIVIDUAL

Using a minimum of 350-words, prepare comprehensive responses to the followingquestions:

What is globalization, and what are some of the traditional internationaltrade theories that support the concept of globalization?

List the major drivers of globalization and give three examples of each.

Explain at least four effects of globalization that impact your communityand your organization.

What are some major regional trading blocs and specify at least two inyour region of interest.

LEARNING TEAM PROJECTS FOR THE COURSE OVERVIEW

Select a country and product/service (with my approval) on which to focus your cumulativeGlobal Business Plan Learning Team project. The deliverables for the project will include

the following Learning Team assignments:Assignment due week 2, Week Two: Comprehensive EnvironmentalAnalysis Outline and Presentation (5 points)

Assignment due week 3, Week Three: Country Risk and StrategicPlanning Analysis Paper (5 points)

Assignment due week 4, Week Four: Global Considerations Paper (5points)

Assignment due Week 5, Week Five: Final Global Business Plan andPresentation (15 points)

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ASSIGNMENTS

INDIVIDUAL

.1 At the beginning of class, turn in the Regional Paper (5 points)assignment. The parameters of that assignment are as followed:

Select a region other than Canada and Mexico. Prepare a 1,050-1,750-word paper in whichyou analyze the role of regional integration in promoting global business. Discuss theadvantages and disadvantages of regional integration (NAFTA, EU, APEC, ASEAN, CAFTA,etc.). Compare and contrast the economic development stages of countries within yourchosen region and the ramifications of your regions economic development for globalbusiness.

This individual assignment is due in second week of class, week two,

LEARNING TEAM

.1 Turn in your Learning Team Comprehensive Environmental AnalysisOutline and Presentation (5 points). The parameters for this assignment are asfollowed:

I) Comprehensive Environmental Analysis Outline paper:

YOUR LEARNING TEAM needs to select a product/service and a country for a globalbusiness venture. Conduct global, regional, country, and product/service analyses foryour new global venture. Prepare the 1,050-1,400-word outline illustrating the following:

.a Global Current Events Analysis

)1 Politics

)2 Economics

)3 Finance

)4 Social, health, and environmental

)5 Terrorism

)6 External governance

.b Region Analysis

)1 Regional alliances)2 Physical environment

)3 Politics

)4 Economics

)5 Finance


)7 Terrorism

.c Country Analysis

)1 Political

)2 Economic

)3 Finance

)4 Physical environment

I) Comprehensive Environmental Analysis Outline paper (continued)


)6 Cultural

.d Organization and product/service analysis

Description of your organization

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Product/Services Needs Assessment of the new host country

Description of product/service to meet the need

Create a mission statement for organization

II) For the Oral Presentation portion, prepare 5-7-minute oral presentation accompaniedby 10-15 Microsoft PowerPoint slides illustrating your paper

This Learning Team assignment is due week two,

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ASSIGNMENTS

INDIVIDUAL

None

LEARNING TEAM

3. Turn in your Learning Team Country Risk and Strategic Planning Analysis (5 points). Theparameters for this assignment are as followed:

Country Risk and Strategic Planning Analysis Paper

.a Prepare a 1,400-2,100-word paper in which you conduct acountry risk analysis for your selected global business venture. Analyzethe following risks in your paper:

)1 Political/legal/regulatory risks

)2 Exchange and repatriation of funds risks

)3 Competitive risk assessment

)4 Taxation and double taxation risks

)5 Market (4 Ps) risks

)6 Distribution/supply chain risks

)7 Social/cultural risks

)8 Cyber/technology

)9 Physical environment

.b Describe how you would manage these risks

.c Summarize your strategic planning process:

)1 Define/clarify mission and objectives

)2 Assess internal/external environment (SWOTT)

)3 Consider alternative strategies using competitiveanalysis

)4 Make strategy selection

)5 Select and justify an appropriate mode of entry for yourglobal product or service

)6 Implement strategy

)7 Control and evaluation

)8 Devise contingency plan

This Learning Team assignment is due week three,

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ASSIGNMENTS

INDIVIDUAL

.2 At the beginning of class, turn in the Case Study paper (5 points). Theparameters for this assignment are as followed:

.a Select one of the following cases:

)1 Case: Nike: The Sweatshop Debate at the end of Part2 (After Chapter 3 pg 128)

)2 Case: The Politics of Trade in Steel at the end of Part 3(After Chapter8 pg 302)

)3 Case: Money Change at the end of Part 4 (AfterChapter 11 pg 402)

)4 Case: Restructuring Exide at the end of Part 5 (AfterChapter 14 pg 514)

5) Case: Motorolas Global Cash Management System (After Chapter 20 pg 689)

.b Answer the Case Discussion Questions following your selectedcase. Summarize the strategic and operational challenges facing global

managers illustrated in your selected case. Comment on recent globaldevelopments affecting the company in your selected case.

LEARNING TEAM

3. Turn in your Learning Team Global Considerations Paper (5 points). The parameters for thisassignment are as followed:

Global Considerations Paper

Based on your country risk analysis paper from week two, prepare a 1,050-1,400-wordresponse in which you explain how you would address the following within the context of yourselected country:

Human resources management (HRM) and cultural factors

Supply chain management

Information Technology (IT)Research and Development (R&D)

Legal and ethics challenges pertaining to your new venture

This Learning Team assignment is due week four

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ASSIGNMENTS

INDIVIDUAL

4. At the beginning of class, turn in the Global Financing and Exchange Rate MechanismsPaper(10 points). The parameters for this assignment are as followed:

Global Financing and Exchange Rate Mechanisms Paper

Choose one of the following topics and gain my approval for your choice. Prepare a1,050-1,750-word paper in which you analyze one of the following global financing andexchange rate topics:

Purchasing Power Parity/Big Mac Index

Currency Hedging

Hard and soft currencies

Currency controls, tax shelters, and repatriation

Countertrade

Financing via letters of credit/EXIM Bank and commercial banks

Tariff and non-tariff barriers

Roles of international financial institutions (e.g. IMF, World Bank,ADB, etc.)

Euro Currency Markets .

LEARNING TEAM

3. Turn in your Learning Team FINAL GLOBAL BUSINESS PLAN & PRESENTATION Paper(15 points). The parameters for this assignment are as followed:

I) Final Global Business Plan Paper

Prepare a 7,000-8,750-word paper integrating your previous Learning Team assignments toinclude the following new material:

.a Summarize your findings from pervious Learning Teamassignments.

.b Be sure to include the rational for selecting your target country.Refer to your Learning Team Meeting Two Country Risk Analysis forhighlights.

.c Determine the marketing mix specific to your selected globalproduct/service. Explain your choice of marketing mix. Prepare amarketing plan that addresses product modification, pricing, promotionalprograms, distribution channels, and e-business in your chosen country.Include market indicators and trends for your product or service.

I) Final Global Business Plan Paper (continued)

.d Prepare a budget and financial overview for your global venture.Prepare a financial analysis in terms of currency risk management andfinancing of your global operation. Discuss what financial institutions andinstruments you would use to achieve your global expansion. Use theCapital Budgeting Microsoft Excel template

As a minimum, apply the following capital budgeting techniquesto assess the financial viability of your project:

*Net Present Value (NPV)

*Internal Rate of Return (IRR)

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*You may use the data provided in the Capital BudgetingMicrosoft Excel Template as the basis for your analysis,or you may enter your own specific data to make theanalysis more real-life.

Identify potential domestic and international sources of financingfor your global venture project.

Examine the role of external governance and its impact to the organization.

.a Describe the degree to which your organization will operate as aCentralized versus Decentralized Organization. Include a suggested

organizational chart.

.b Evaluate various exit strategies: e.g., divestiture of assets,handing over to joint venture partner, diversification, or shutting downoperation, and contingencies for your global venture.

.c Make final recommendations about the feasibility of this globalventure.

.d Examine how contemporary trends in the global environmentmight impact your final recommendations

II) Final Global Business Presentation - Prepare 10-15-minute oral presentationaccompanied by 10-15 Microsoft PowerPoint slides illustrating your paper.

Grading Points

WRITTEN ASSIGNMENTS

Item Description Percents

1 Content and Conceptualization 60%

2 Logical organization of thoughts, ideas and structure 20%

3 Spelling, Grammar, APA format, etc. 20%

Total 100%

INDIVIDUAL ORAL PRESENTATIONS


1 Relevancy to class objectives 30%2 Clarity and conciseness of principles stated 30%

3 Evidence of preparation, including the ability to field questions 20%

4 Presentation skills, including compliance with time limits 20%

Total 100%

LEARNING TEAM ORAL PRESENTATIONS


1 Relevancy to stated objectives 20%

2 Appropriateness of examples as an illustrative vehicle 10%

3 Evidence of contribution of each team member 10%

4 Creativity 10%

5 Presentation skills including compliance with time limits 10%6 Evidence of substantive research 10%

7 Identification of principles 10%

8 Practical applications 10%

9 Mechanics of presentation 10%

Total 100%

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How points and percentages equate to grades

Letter Grade Criteria Points Earned

A Far exceeds the standard for all required work 96-100

A- Far exceeds the standard for all required work 91-95

B+ Exceeds the standard for all required work 88-90

B Exceeds the standard for all required work 85-87

B- Exceeds the standard for all required work 81-84

C+ Met the standard for all required work 78-80

C Met the standard for all required work 75-77

C- Met the standard for all required work 71-74D+ Did not meet the standard for all required work 67-70

D Did not meet the standard for all required work 64-66

D- Did not meet the standard for all required work 61-63

F Did not meet the standard all required work. Mustretake the course

< 60

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Week One Talking PointsGlobalization

Definition of contemporary global business environment

Moving or doing business across national borders

Interdependence and interconnectedness of countries,businesses, and organizations

Decision factors and reasons to go globalIncrease market share

Respond to competitive pressures

Expand the product life cycle

Increase profits

Balance business cycles

Acquire technology

Gain access to additional factors of production

Major drivers of globalization (STEEP)

Social-demographic

Religion

Cultural factors

Technological

Telecommunications

Internet

Transportation

Economic

Economic systems

Market share

Profit motives

Foreign direct investment (FDI)

Portfolio investmentsEcological and environmental factors

Pollution

Green laws

Political-legal

Falling trade barriers

Political stability

Intellectual property

Effects of globalization

Positive

Economic growth

Capital mobility

Labor mobility

Competitive advantage

Technology transfer

Political advantages

Cultural awareness

Negative

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Job shifts

Environmental impacts

Depletion of natural resources

Lack of regulation

Dilution of culture

Loss of sovereignty

Evolution of global economy

International trade theories

Absolute advantage

Comparative advantage

International product life cycle

Hecksher-Ohlin

National competitive advantage: Porters Diamond

International organizations

World Trade Organization (WTO)

United Nations (UN)

Organization for Economic Cooperation and Development(OECD)

International Monetary Fund (IMF)

G8

Regional economic integration

European Union (EU)

North American Free Trade Agreement (NAFTA)

MERCOSUR

Association of Southeast Asian Nations (ASEAN)

Central American Free Trade Association (CAFTA)

Asia-Pacific Economic Cooperation (APEC)

Andean Community

Economic Community of West African States (ECOWAS)

Other regional economic associationsStages of country economic development

Less developed countries

Emerging/developing markets

Industrialized/developed countries

Current trends and predictions of growth areas and economicpowers

Global business analysis process

International Analysis

Economics

Politics

Finance

Terrorism

Health

Environmental (Global Warming)

Regional analysis

Impact of political and economic history on region

Regional alliances

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Country selection

Market size and growth

Barriers to entry

Tariff

Non-tariff

Previous experiences in country

Timing

Country analysis

Political

Economic

Cultural

Legal

Physical Environment

Business risk analysis

Political/legal/regulatory risks

Exchange and repatriation risks

Taxation and double taxation risks

Market (4 Ps) risks

Distribution/supply chain risksSocial/cultural risks

Labor availability and issues

Potential conflicts and reconciliation with stakeholders regardingglobalization

Creation and/or modification of mission statement to reflect globalization

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Week Two Talking PointsBusiness risk analysis

Country and business risk analysis

Application of STEEP factors related to country

SWOTT analysis (strengths, weaknesses, opportunities, threats,and trends)

Initial screening: basic need potential and/or foreign trade andinvestment

Second screening: economic and financial forces

Economic indicators

Balance of payments

Budget deficits

Degree of inflation

Exchange controls

Currency convertibility

Gross Domestic Product (GDP) and growth rate of your country

Third screening: political and legal forces

Entry barriersProfit remittance barriers

Other possible barriers

Fourth screening: socio/cultural forces

Demographics

Cultural

Religious

Educational

Health

Labor

Fifth screening: competitive forces

Number, size, and financial strength

Market share

Marketing strategies

Distribution and supply chain

Modes of entry

Export/import

Management contracts

Licensing

Franchising

Joint ventures/strategic alliances

Turnkey operationsWholly owned subsidiaries (FDI)

Global Strategic Planning Process

Analyze external global environment

Define corporate vision/mission

Set corporate objectives

Quantify objectives

Formulate corporate strategies

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Implement/execute strategic plan

Devise contingency plan

Mission statements

What is our business and who are we?

Identification of stakeholders and their claims

Labor

Customers

Suppliers

Stockholders

Management

Community

Stages of Economic Development

Traditional

Pre-Conditions for growth

Take-Off

Drive to Maturity

Age of Mass Consumption

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Week Three Talking PointsStrategic-Operational challenges and Role of Government

Human resources development

Staffing

Ethnocentric

Polycentric

GeocentricRegional centric

Expatriates

Pre-assignment training

Reentry strategies

Families

Information dissemination and continual contact withheadquarters (HQ) via an Intranet

Cultural differences and productivity

Communications

Work ethics

Motivation

Gender

Religion

Business etiquette

Cultural sensitivity training for home country and host countryemployees

Compensation

Health insurance and availability

Housing and education issues

Taxes

Pay and benefits

Diversity issues

HQ diversity initiatives

Managing diversity in host country

Marketing

Marketing segmentation

Product attributes

Distribution strategy

Communications strategy

Finance

Investment decisions

Financing decisionsWorking capital management

Ethical and legal considerations

Host country and home country ethics differences

Employment practices

Different legal systems

Legal enforcement

Foreign Corrupt Practices Act (FCPA)

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Roles of Host Governments in Global Business

Political system

Economic system

Legal systems

Incentives

Free trade zone

Concessionary loans

Duty free privileges

Tax holidays

Bonded warehouses

Supply chain management

Product and/or services

Decision to make or buy

Vendors and sourcing

Facilities and equipment

Logistics

Inventory management

Quality managementInternational Organization for Standardization (ISO)standards

Industry standards

Country standards

Information technology

Internet/intranet

Language

E-business

Level of sophistication of users

Security

MaintenanceTraining

Country telecom and energy infrastructure, telecom regulationsand ownership

Costs

Virtual team

Platforms and software

Research and Development (R&D)

Role of R&D

In-house

Acquisition

Collaboration

Costs

Intellectual property

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Week Four Talking PointsGlobal Financing and Exchange Rate

Financing of global business

Financial overview process

Determine financial health of country selected

Determine potential domestic and international sources

of financing for projectDetermine investment levels within assumed timeframe

Estimate budget percentages

Process profits and repatriation of funds

Outline most favorable financial structure

Capital Budgeting Techniques

Elements of Capital Budgeting

Initial investment

Cash inflows

Cost of capital

Capital Budgeting Techniques

Payback (PB)

Accounting rate of return (AROR)

Net Present Value (NPV)

Profitability index (PI)

Internal Rate of Return (IRR)

Decision rules

PB: < original life of project, accept; PB >original life of project, reject

AROR > Required Rate of Return (RRoR),accept; AROR < RRoR reject

NPV: > 0, accept; NPV < 0, reject

PI: > 1, accept; PI < 1, reject

IRR: < Cost of Capital (CoC), reject; IRR, >CoC, accept

Foreign Exchange Market

Definition

Functions

Location

Market makers

Large commercial banks

Brokers/dealers

Non-financial entities

Speculators, arbitrageurs, hedgers

Types of exchange transactions

Spot

Forward

Swap

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Terms and quotations

Direct versus indirect quotations

Continental versus American

Price versus volume

Cross rates

Bid/ask

Exchange rate systems

Fixed

Freely fluctuating

Managed float

Pegged

Supply and demand for foreign exchange

International Financial Markets

Eurocurrency market

Eurobond market

Euro credit market

International stock markets

London Inter-bank Offer Rate (LIBOR)International and regional lending Institutions (multilateral and regional)

World Bank

International Monetary Fund

Asian Development Bank

African Development Bank

Financing Global Operations

Payment methods

Letters of Credit (LCs)

Drafts

Prepayment

Consignment

Open account

Finance methods

Bankers acceptances

Counter trade

Factoring

Working capital financing

Forfeiting

Euro notes

Euro-commercial paper

Euro bank loansPortfolio of currencies

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Foreign exchange risks

Transaction exposure

Managing transaction exposure

Do nothing

Invoice all transactions into dollars

Execute future hedge

Execute money market hedge

Execute currency option hedge

Managing economic exposure

Shift production activities

Increase productivity

Outsourcing

Increase product differentiation

Operate in markets with stable and strong currencies

Managing transaction exposure

Finance foreign assets with host country debt

Develop a portfolio of investments, diversify

Marketing mixPeople (customer)

Market research

Market segmentation

Product

Localization versus standardization

Cultural and economic differences

Packaging

Political and technical standards

Warranties

Price

Price discrimination

Regulatory influence on pricing

Strategic pricing

Distribution (place)

Differences in distribution systems

Retail concentration

Channel length

Access to channels and channel exclusivity

Product support

E-business

PromotionBarriers to international communication

Language

Cultural communication styles

Promotions methods and messages (advertising and publicrelations)

Localization versus standardization

Media selection

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Regulatory issues

Customer Relationship Management (CRM)

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Week Five Talking PointsChanging demographics in a global economy

US dominance in world trade

US dominance in FDI

Dominance of US multinational firms

Centrally planned economies (Communist World) off-limits

Anti-globalization debateJobs

Income

Environment

Spread of Democracy

Global Terrorism

Economic transformation

Deregulation

Privatization

Legal systems

Command/control mechanisms (Governance)

Organizational structures

Strategic business unit

International division

Geographical

Matrix

Functional

Hybrid

Market channel

Operational feedback and reports

Centralized versus decentralized reporting function

Exit strategies: harvest or withdrawalDivest assets

Sales

Abandonment

Handover to joint venture partner

Diversify

Shutdown operation

Global business failures

Lack of strategic planning

Lack of market research

Unethical behavior

Operational inefficiencies

Unfavorable change in political system or economy

global business strategies eldridge

Documents