International Management

1
International Management

• Session 1

2
Why consider the international environment?

• To develop global perspective
• Identify how a business is affected when it
  operates outside its home country
• Identify how domestic businesses are affected by
  environment outside its home country

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LanChile The little Latin airline that could

• What is the basis for LanChiles success in the
  Latin airline industry?

Source Business Week, Lanchile web site
4
World economy slows

• Globalization and diversification of earnings
  volatility
• U.S., Europe, Japan and other countries in rare
  simultaneous slump
• Greater integration in trade

Source NY Times
5
Operating effectively in the international
environment?
Source NY Times
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Differences in international management

• How is international management different?

7
Key Problem of International Management Typical
Managers Perception of International Business
Environment

Source Steve Guisinger
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Actual View of International Business Environment
Source Steve Guisinger
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Economic context currency rates

• Strong dollar policy
• Domestic manufacturers face competition from
  exports GM, Ford
• US firms convert overseas sales into dollars to
  report results

Source NY Times
10
Implications of strong dollar

• European yacht builders take on strong American
  rivals
• Strong dollar enables Europeans to carve out a
  larger market niche

Source NY Times
11
Economic context tax policies

• Europes tax haven Belgium
• Differential tax rates
• Arrival of the foreign rich
• Needed regionwide tax reform

Source Business Week
12
Political context Colombia

• Frequent sabotage of pipeline
• Occidental Petroleum losses estimated at 400
  million
• Bombings by rebel forces protesting against
  multinationals exploiting resources

The Cano Limon pipeline
Source NY Times
13
Political context after effects

• Far reaching effects of political disputes
• Recent studies indicate that
• Australians and New Zealanders shunned French
  goods
• Residents of Belgrade avoid buying U.S. made
  goods

Source HBR 2000
14
Sociocultural context

• Made in Japan versus Made in Bulgaria
• The Gemplus experience
• Differences in management styles European and
  American

Source HBR. Business Week
15
Corporate context

• Adapting to the international environment
  while..
• Avon in Taiwan, China, Philippines and Japan
• Maximizing efficiency and learning
• Global sourcing and branding

Source Business Week, Avon web site
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Corporate context Li Fung

• Trading, a sunset industry?
• Co-ordinated global network
• Extending geographic reach
• Knowledge about different quotas, products,
  assortment packing, dispersed manufacturing

Source HBR, Li Fung website
17
Competing overseas

• Unilever and Nestles attempts to dominate the
  global ice cream market
• Heavy investments and acquisitions around the
  globe
• Focus on leader in ice cream consumption

Source NY Times, Unilever, BenJerry , Good
Humor web sites
18
French retailer tripping up global heavyweights

• Bring them on FNAC takes on Virgin, Bertelsmann
  and Amazon
• Brand recognition
• Savvy marketing
• Customer friendly store design

Source Business Week, FNAC web site