Exam 7: Global Management

Which of the following factors should be considered when choosing an office/manufacturing location in the Brazilian market for a U.S. company that operates cinemas and wants to open a chain of movie theatres there?

WWYD Groupon Growing from 30 cities in December 2008 to 550 today, Groupon got to $1 billion in sales faster than any other company. Groupon sends a daily email to its 35 million subscribers offering a discount to a restaurant, museum, store, or service provider in their city. This "coupon" becomes a "groupon" because the company offering the discount specifies how many people (i.e., a group)must buy before the deal "tips." For example, a local restaurant may require 100 people to buy. If only 90 do, then no one gets the discount. Daily deals go viral as those who buy send the discount to others who might be interested. When the deal tips, the company and Groupon split the revenue. Why would companies sign up, especially since half of the money goes to Groupon? Nearly all of Groupon's clients are local companies, which have few cost effective ways of advertising. Radio, newspapers, and online advertising all require upfront payment (whether they work or not). By contrast, local companies pay Groupon only after the daily deal attracts enough customers to be successful. Because there are few barriers to entry and the basic Web platform is easy to copy, Groupon's business has been copied in 50 countries. China alone has 1,000 Groupon-type businesses. So, while Groupon has grown to $1 billion in sales faster than any other company, competitors threaten to take much of that business, especially in international markets. While the Web side of Groupon business works in most places, it doesn't work everywhere. Throughout much of the world, online credit cards facilitate quick, easy, and trustworthy payment. In India, however, Groupon must use cash-on delivery. In other ways, however, Groupon is balancing consistency with local adaptation. Groupon's business model suggests that the company could find itself locked out of key international markets if it doesn't move quickly to establish itself as a multinational company. Groupon began buying market leaders that it identified in 50 different countries-i.e, entrepreneurs to work with that were excellent operators and also understood the local culture. Groupon first bought a company in Germany and then repeated this acquisition strategy in Chile, Russia, Japan, China, and other locations. One year after deciding to go global, Groupon is in 42 different countries. While Groupon has local managers to run its businesses in 42 different countries, it brings all of them to Chicago to learn how to run their offices the way that it's done in the U.S. Then, it makes sure that those managers stay current with its client companies by using management software to ensure that its sales force follows up to address potential issues after every daily deal is completed. Refer to WWYD Groupon. Groupon became a multinational company after it bought a company in:

The Maastricht Treaty of Europe was designed to create the European Union and make the euro, the one common currency, for all members.

The term ____ is used by Hofstede to describe the degree to which people in a country are uncomfortable with unstructured, ambiguous, unpredictable situations.

The Japanese government continues to use the high tariffs to make sure local farmers can earn a living. The tariff on rice is an example of ____.

Global business is defined as____.

____ are long-term, low-interest loans, cash grants, and tax deductions used to develop and protect companies or special industries.

The criteria for choosing an office/manufacturing location are different from the criteria for entering a foreign market.

A married manager with two children has been offered the opportunity to go abroad on an expatriate assignment for the company in a foreign country for a period of three years. If the manager chooses to accept the assignment, he or she wants to perform very well in order to continue moving up the corporate ladder. What sorts of preparations should the manager expect the company to provide in order to ensure his or her success on the assignment? Comment on these training and preparatory expectations in an ideal world as well as the real world that the manager probably will face.

WWYD Groupon Growing from 30 cities in December 2008 to 550 today, Groupon got to $1 billion in sales faster than any other company. Groupon sends a daily email to its 35 million subscribers offering a discount to a restaurant, museum, store, or service provider in their city. This "coupon" becomes a "groupon" because the company offering the discount specifies how many people (i.e., a group)must buy before the deal "tips." For example, a local restaurant may require 100 people to buy. If only 90 do, then no one gets the discount. Daily deals go viral as those who buy send the discount to others who might be interested. When the deal tips, the company and Groupon split the revenue. Why would companies sign up, especially since half of the money goes to Groupon? Nearly all of Groupon's clients are local companies, which have few cost effective ways of advertising. Radio, newspapers, and online advertising all require upfront payment (whether they work or not). By contrast, local companies pay Groupon only after the daily deal attracts enough customers to be successful. Because there are few barriers to entry and the basic Web platform is easy to copy, Groupon's business has been copied in 50 countries. China alone has 1,000 Groupon-type businesses. So, while Groupon has grown to $1 billion in sales faster than any other company, competitors threaten to take much of that business, especially in international markets. While the Web side of Groupon business works in most places, it doesn't work everywhere. Throughout much of the world, online credit cards facilitate quick, easy, and trustworthy payment. In India, however, Groupon must use cash-on delivery. In other ways, however, Groupon is balancing consistency with local adaptation. Groupon's business model suggests that the company could find itself locked out of key international markets if it doesn't move quickly to establish itself as a multinational company. Groupon began buying market leaders that it identified in 50 different countries-i.e, entrepreneurs to work with that were excellent operators and also understood the local culture. Groupon first bought a company in Germany and then repeated this acquisition strategy in Chile, Russia, Japan, China, and other locations. One year after deciding to go global, Groupon is in 42 different countries. While Groupon has local managers to run its businesses in 42 different countries, it brings all of them to Chicago to learn how to run their offices the way that it's done in the U.S. Then, it makes sure that those managers stay current with its client companies by using management software to ensure that its sales force follows up to address potential issues after every daily deal is completed. Refer to WWYD Groupon. When a company uses the same policies to run its U.S., U.K., and Indian operations, it is trying to achieve:

The acronym GATT stands for the ____.

As Malta got ready for its admittance into the European Union (EU), the EU removed all taxes on the importation of goods manufactured in Malta. In other words, the EU abolished ____ for Malta-manufactured merchandise.

In terms of Hofstede's cultural differences, the people who are described as happy-go-lucky and are people who are comfortable with an unstructured life and deal well with sudden changes. In terms of Hofstede's cultural differences, these people have a ____.

The evidence clearly shows that how well an expatriate's spouse and family adjust to the foreign culture is the most important factor in determining the success or failure of an international assignment.

The European Union (EU)bans the importation of hormone-fed U.S. beef and bioengineered corn and soybeans on safety grounds. This ban is so consumers in the EU will buy domestic beef and products made from domestically produced corn and soybeans. This ban is an example of ____.

The trade agreement that represented the most significant change to the regulations governing global trade during the 1990s was the ____.

WWYD Groupon Growing from 30 cities in December 2008 to 550 today, Groupon got to $1 billion in sales faster than any other company. Groupon sends a daily email to its 35 million subscribers offering a discount to a restaurant, museum, store, or service provider in their city. This "coupon" becomes a "groupon" because the company offering the discount specifies how many people (i.e., a group)must buy before the deal "tips." For example, a local restaurant may require 100 people to buy. If only 90 do, then no one gets the discount. Daily deals go viral as those who buy send the discount to others who might be interested. When the deal tips, the company and Groupon split the revenue. Why would companies sign up, especially since half of the money goes to Groupon? Nearly all of Groupon's clients are local companies, which have few cost effective ways of advertising. Radio, newspapers, and online advertising all require upfront payment (whether they work or not). By contrast, local companies pay Groupon only after the daily deal attracts enough customers to be successful. Because there are few barriers to entry and the basic Web platform is easy to copy, Groupon's business has been copied in 50 countries. China alone has 1,000 Groupon-type businesses. So, while Groupon has grown to $1 billion in sales faster than any other company, competitors threaten to take much of that business, especially in international markets. While the Web side of Groupon business works in most places, it doesn't work everywhere. Throughout much of the world, online credit cards facilitate quick, easy, and trustworthy payment. In India, however, Groupon must use cash-on delivery. In other ways, however, Groupon is balancing consistency with local adaptation. Groupon's business model suggests that the company could find itself locked out of key international markets if it doesn't move quickly to establish itself as a multinational company. Groupon began buying market leaders that it identified in 50 different countries-i.e, entrepreneurs to work with that were excellent operators and also understood the local culture. Groupon first bought a company in Germany and then repeated this acquisition strategy in Chile, Russia, Japan, China, and other locations. One year after deciding to go global, Groupon is in 42 different countries. While Groupon has local managers to run its businesses in 42 different countries, it brings all of them to Chicago to learn how to run their offices the way that it's done in the U.S. Then, it makes sure that those managers stay current with its client companies by using management software to ensure that its sales force follows up to address potential issues after every daily deal is completed. Refer to WWYD Groupon. What challenge did Groupon face in going global?

Briefly explain how companies can assess the growth potential of new markets.

In 2000, the United States imposed a tax on all steel imports in an effort to protect about 5,000 jobs. This tax is an example of a(n)____.

Two factors that help companies determine the growth potential of foreign markets are the purchasing power of the consumers and types of foreign competitors already in the market.