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International Management
BSc PO 2008: General Business Administration Modul P 13 (BWL VII)
BSc PO 2015: Leadership & International Management Modul P 16
Summer Term 2017
Prof. Dr. Manfred Schwaiger
Institute for Market-based Management (IMM)
Kaulbachstraße 45/I
D-80539 München
phone +49 89 2180-5640
fax +49 89 2180-5651
email [email protected]
www www.imm.bwl.uni-muenchen.de
Prof. Dr. Anton Meyer
Institut für Marketing
Ludwigstraße 28 RG
D-80539 München
phone +49 89 2180-3321
fax +49 89 2180-3322
email [email protected]
www www.marketingworld.de
Prof. Dr. Anja Tuschke
Institute for Strategic Management
Ludwigstraße 28 RG
D-80539 München
phone +49 89 2180-2770
fax +49 89 2180-2886
email [email protected]
www www.ism.bwl.uni-muenchen.de
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Lecturer Delphine Colin, M.Sc.
(For consultation please refer to office hours)
Chair: Institute for Market-Based Management
Kaulbachstraße 45/I, 80539 München(089) 2180-5640, Fax - 5651
Time: Thursdays 14.00 - 16.00h
Lecture room: HGB – M 218
Written Exam: August 7th, 201708.30 - 09.30h (60 minutes)
08.30 – 10.45h (with Module People & Org.)
Credits: 3 ECTS (bachelor) / 2 LP (diploma)
Downloads: LMU Download Portal: www.lsf.lmu.de
or www.imm.bwl.uni-muenchen.de
Course Assistant: Sandra Männel, M.Sc. mult.
Course Organization
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International Management
2. Why Companies Go
International
1. Introduction
2. Why Companies Go International
3. The Political, Economic and Legal Environment
4. International Division of Value Creation
5. Standardization versus Differentiation
6. Cross Cultural Management
7. Corporate Aspects of International Management
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In this Chapter You Will Learn…
…what globalization is and how it has evolved over time.
…current international business and economic development.
…which forces drive globalization.
…pros and cons of globalization.
…theories on trade.
…why companies go global.
…how to approach a case study.
2. Why Companies Go
International
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2.1 Eras of Globalization
2.2 Doing Business And Regulation Worldwide
2.3 It´s No Longer If, But When and How
2.4 Motives & Reasons
2.5 Internationalization Theories
2.6 Summary
Outline
2. Why Companies Go
International
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Eras Of Globalization
Globalization 1.0
Where does my country
fit into global competition
and opportunities? How
can I go global and
collaborate with others
through my country?
Globalization 2.0
Where does my company
fit into global competition
and opportunities? How
can I go global and
collaborate with others
through my company?
Globalization 3.0
Where do I as individual
fit into global competition
and opportunities? How
can I, on my own
collaborate with others
globally?
1492 - 1800 1800 - 2000 2000 -
2. Why Companies Go
International
Source: Friedman, T.L. (2006), p.9-12
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Trade: Example
China/
India
The Long History of Trade: Silk Road
The silk road is an extensive interconnected
network of trade routes across the Asian
continent connecting East, South, and
Western Asia with the Mediterranean world,
including North Africa and Europe
2. Why Companies Go
International
silk, spices,
porcelain
Agricultural
products,
glass, noble
metals
Europe
Source: Kutschker/Schmid, (2011), p.8; www.wikipedia.org
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China and the World: Percentage of China‘s Stake of Worldwide GDP
25
0
5
10
15
20
30
Year 1 AD)Years
1600 1820 1962 2010
25 %
33 %
4 %
18 %
In %
British started importing heavily Opium
into greater China from Hong Kong to
improve their trade balance (which has
been negative due to Chinese
products like tea and silk)
First Opium War
(1839-42)
Result: China as a
dependent country
Source: Professor Agnus Maddison, University Groningen, in: Welt Kompakt, Thursday, 19.08.2010, Nr. 160, p. 2, www.economist.com (2015); www.statista.de (2017)
17.9%
as of 2016
2. Why Companies Go
International
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Globalization – Good or Bad?
2. Why Companies Go
International
Suicides at Foxconn
Light and Death
Source: The Economist, May 29th 2010, p. 68
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2.1 Eras of Globalization
2.2 Doing Business And Regulation Worldwide
2.3 It´s No Longer If, But When and How
2.4 Motives & Reasons
2.5 Internationalization Theories
2.6 Summary
Outline
2. Why Companies Go
International
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World Population
2. Why Companies Go
International
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Comparing Countries’ Performance
▪ Gross Domestic Product (GDP) is a monetary measure of the market value of all final
goods and services that are produced in a defined period (quarterly or yearly).
▪ Gross National Product (GNP) is the market value of all products and services produced
in one year by workers and property supplied by the residents of a country
• Unlike Gross Domestic Product (GDP), which defines production based on the
geographical location of production, GNP allocates production based on ownership
▪ What does GDP not measure?
• Economic and social wealth (Quality of Life)
• Measurement by the OECD: Better Life Index
▪ Since January 2011: Enquete-Commission by the German Bundestag developed a new
measurement approach for wealth in order to receive a more reliable, sustainable measure
that also incorporates (external) costs such as land consumption or species extinction
• Economic performance,
• Quality of life, and
• Sustainability
2. Why Companies Go
International
Sources: www.bundestag.de, 2017
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Measurements of Economic and Social Wealth
Measurement of quality of life: Better Life Index
Sources: OECD (2011). How’s Life: Measuring Well-Being, p. 23 and p. 50.
Relative well-being strengths and weaknesses,
by country
Framework for measuring well-being.
2. Why Companies Go
International
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Relationship of Life Satisfaction and GDP
Source: The Economist, December 2010
2. Why Companies Go
International
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2. Why Companies Go
International
The World’s Gross Domestic Product from 1980-2016
World: 11,8 Tr USD
Share of developing/
emerging countries:
30,9%
1980
World: 22,9 Tr USD
Share of developing/
emerging countries:
22,9%
1990
World: 31,9 Tr USD
Share of developing/
emerging countries:
20,3%
2000
2013
Slump due to
Global
Financial Crisis
World:
74,9 Tr USD
Share of
developing/
emerging
countries: 50,4 %
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Gross Domestic Product (2016): Nominal
2. Why Companies Go
International
2. PRC3. Japan. USA
2. China
4. Germany
1. United States.
Source: International Monetary Fund (2017), www.imf.org
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GDP (PPP) Top 10 Countries in 2016
2. Why Companies Go
International
Source: Central Intelligence Agency (2017), www.cia.gov
Rank Country GDP PPP
1 China $21,270,000,000,000 ($ 15,400 per capita)
(2) European Union $19,180,000,000,000 ($ 37,800 per capita)
3 United States $18,560,000,000,000 ($ 57,300 per capita)
4 India $8,721,000,000,000 ($ 6,700 per capita)
5 Japan $4,932,000,000,000 ($ 38,900 per capita)
6 Germany $3,979,000,000,000 ($ 48,200per capita)
7 Russia $3,745,000,000,000 ($ 26,100 per capita)
8 Brazil $3,135,000,000,000 ($ 15,200 per capita)
9 Indonesia $3,028,000,000,000 ($ 11,700 per capita)
10 United Kingdom $2,788,000,000,000 ($ 42,500 per capita)
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Countries by GDP (PPP) per capita in 2015
Source: World Economic Outlook Database, April 2016, International Monetary Fund. Database updated on 12 April 2016. Accessed on 28 April 2017.
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Gross Domestic Product (2017): Growth
2. Why Companies Go
International
Source: International Monetary Fund (2017), www.imf.org
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International Trade and Imports & Exports
International Trade is the exchange of goods and services across international borders.
Exports are goods and services produced by a firm in one country and then sent to another country.
Imports are goods and services produced in one country and bought in by another country.
export
import
Source: Rugman/Collinson (2006), p.6.
2. Why Companies Go
International
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Globalization is defined as “the process of social, political, economic, cultural, and
technological integration among countries around the world”1.
Regulation through Global and Regional Integration:
▪ World Trade Organization (WTO)
▪ North American Free Trade Agreement (NAFTA) renegotiation
▪ Free Trade Area of the Americas (FTAA) no agreement
▪ European Free Trade Association (EFTA)
▪ Association of Southeast Asian Nations (ASEAN)
▪ Mercado Común del Sur (Mercosur)
▪ Trans-Pacific-Partnership (TPP) -> not ratified due to US withdrawal
▪ Transatlantic Trade and Investment Partnership (TTIP) no agreement
▪ Comprehensive Economic and Trade Agreement (CETA)
2. Why Companies Go
International
Source: Hodgetts et al. (2006), p.7.; www.bbc.com (2017); www.eurpe.eu (2017)
Doing Business and Regulation Worldwide
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19601950 1980 1990 2000 20101970
0
30 (Index 1950 = 1)
25
20
15
10
5
World‘s Population
Factor 3
Production of
Goods
Factor 10
Flow of Goods
Factor 30
2. Why Companies Go
International
Source: World Trade Organization WTO
Ramifications of Globalization:
Strong Growth of International Flow in Goods since 1950
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The World Trade Organization (WTO)
The WTO is ‘rule-based’;
its rules are negotiated agreements
WTO agreements
• cover goods, services and
intellectual property.
• spell out the principles of
liberalization, and the permitted
exceptions.
• include individual countries’
commitments to lower customs
tariffs and other trade barriers,
and open services markets.
• set procedures for settling
disputes.
• prescribe special treatment for
developing countries.
• require governments to make
their trade policies transparentSource: World Trade Organization, www.wto.org.
2. Why Companies Go
International
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2. Why Companies Go
International
Doing Business and Regulation Worldwide - Example
Mercosur – 5th largest common market
Impact on member countries:
• Increasing international trade, competition, and foreign
investment
• Economic stabilization due to free movement of
manpower, capital, free transit of goods and services
• Reductions of trade barriers and tariffs
Impact on firms within the Mercosur:
• 1,500 German firms are located within the Mercosur
• Mercosur provides foreign firms access to countries in
South America
• 1995: Volkswagen Argentina builds production facility in
General Pachego (Argentina) to profit from free trade
within the Mercosur (export of 60% of production volume)
• 2013: BMW builds a plant in Araquari, Brazil.
Members
• Members:
Argentina, Brazil,
Paraguay, Uruguay,
Venezuela
• Associate members:
Chile, Bolivia, Peru,
Colombia, Ecuador
Members
Associate
members
Source: http://www.vwgroupsupply.com/b2b/vwb2b_folder/supply2public/de/weltweit_vertreten/vw_argentina.html; http://www.mercosur.int/
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Transatlantic Trade and Investment Partnership (TTIP)
Pursued Objectives
With TTIP, the objective is to help people and
businesses large and small, by:
• Opening up the US to EU firms
– Helping EU companies get access
to an overseas market outside EU
• Helping cut red tape that firms face when
exporting
– Get regulators in the EU and the US
to work together closely (cost
saving)
• Setting new rules to make it easier and
fairer to export, import and invest
overseas.
Examples of discussions
For example, the EU must ensure:
• Products imported into the EU meet EU’s
high standards that:
– Protect people's health and safety, and
the environment
– Benefit society in other ways
• EU governments can maintain full rights to:
– Adopt rules or laws to protect people
and the environment
– Run public services independently
• Not only companies, but also citizens
should benefit from TTIP
• Ensure worker‘s rights in the US
The EU was negotiating a trade and investment deal with the US - the Transatlantic
Trade and Investment Partnership - or TTIP. Negotiations are now on ice.
2. Why Companies Go
International
Source: European Commission http://ec.europa.eu/trade/policy/in-focus/ttip/about-ttip/index_en.htm;
Overview of arguments against TTIP: YouTube: https://www.youtube.com/watch?v=sIfO5HRRjQg
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The Comprehensive Economic and Trade Agreement (CETA)
The European Parliament voted in favor of CETA on 15
February 2017.
The EU national parliaments must approve CETA before
it can take full effect.
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What Does Globalization Really Mean?
Advantages
• Globalization is bringing wealth, jobs,
and technologies to many regions of the
world
• Benefits of globalization are evident in
lower prices and greater availability of
goods
• Through globalization companies are
forced to become more competitive
Problems
• The global trading system is not
responsive to the economic and social
needs of developing countries
• A high number of services and jobs
migrate to low-wage countries (off
shoring)
• Globalization can lead to a “race to the
bottom” in which companies and
countries place downward pressure on
wages and working conditions, and
might lower the level of consumer
protection
Source: Kutschker/Schmid, (2011), p.178-181.
2. Why Companies Go
International
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Protectionism and Deglobalisation
• Global slowdown in world trade and slow
growth of global economy
• G20 economes have introduced new
protectionist trade measures at the fastest
pace seen since the 2008 financial crisis,
rolling out the equivalent of 5 each week
• Most visible layer is tariffs, or taxes on
imports
• Developing countries may impose higher
tariffs to build up home industries
• China joined the WTO in 2001, counting
as a developing nation
• Today, China‘s designation as developing
country is more debatable
• Some of Pres. Trump advisors defend the
implementation of a border-adjusted tax
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What about the EU?
• Brexit referendum on June 23rd, 2016
• British residents decided that belonging to
EU no longer outweighs costs of free
movement of immigration.
• Arguments given for Brexit:
– Prohibition of free flow of people
– Decrease refugee intake
• Arguments against:
– Loss of tariff trade status
– Potential collapse of London as Europe‘s
financial center
– Potential decrease of living standard
Source:
http://www.economist.com/news/world-
week/21715073-kals-cartoon
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What‘s next after Brexit?
Source: http://cdn.static-economist.com/sites/default/files/imagecache/1872-width/images/print-
edition/20160227_LDD001_0.jpg
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What‘s next after Brexit?
• Increase of Populism across
Europe
• EU President Herman van
Rompuy has called populism
"the greatest danger for
Europe". (Frankfurter
Allgemeine Zeitung, 9 April
2010)
• Next Sunday‘s vote in France
might result in a victory of the
Front National, which could
lead to Frexit.
• A Frexit would jeopardize the
European Project and
weaken all the European
countries Source:
http://www.spiegel.de/international/europe/alternative-for-
germany-shows-its-true-right-wing-colors-a-1076259.html
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2.1 Eras of Globalization
2.2 Doing Business And Regulation Worldwide
2.3 It´s No Longer If, But When and How
2.4 Motives & Reasons
2.5 Internationalization Theories
2.6 Summary
Outline
2. Why Companies Go
International
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2. Why Companies Go
International
e.g. Exports as Percentage of GDP in %
12,617,6
2228,7
45,6 46,8
e.g. Imports as Percentage of GDP in %
15,4 18 18,5 20,6
40,8 39,2
Source: http://data.worldbank.org/, Imports/Exports of goods and services (2017), www.imf.org
Exports and Imports of Goods and Services in the World as
Percentage of GDP (2015)
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U.S. Exports and Imports
Exports and imports 1960-2011
(in % of US GDP)1
Year
2. Why Companies Go
International
recessions
Most important trading partner of the U.S.
Exports (2016 in billion USD)2
267231
116
63 55 49
Most important trading partner of the U.S.
Imports (2016 in billion USD)2
463
294 278
132 114 70
Source: 1 Bureau of Economic Analysis (2011), www.bea.gov; 2 United States Census Bureau (2017), www.census.gov
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Germany’s Exports and Imports
Exports and imports 1970-2011
(in % of GER GDP)
Year
2. Why Companies Go
International
Most important trading partner of
Germany: Exports (2014 in billion EUR)
Most important trading partner of
Germany: Imports (2014 in billion EUR)
Source: Statistisches Bundesamt (2011, 2014), www.destatis.de
102 96 84 75 7356
88 79 6849 48 42
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Main players for international trade in goods, 2015 (billion EUR)
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2.1 Eras of Globalization
2.2 Doing Business And Regulation Worldwide
2.3 It´s No Longer If, But When and How
2.4 Motives & Reasons
2.5 Internationalization Theories
2.6 Summary
2.7 Case Study (background)
2. Why Companies Go
International
Outline
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Benefits from global market expansion: research has shown that firms of all sizes and
in all industries that are engaged in international marketing and as a result they:
• Outperform their strictly domestic counterparts
• Grow more than twice as fast in sales
• Earn significantly higher returns on equity and assets
2. Why Companies Go
International
Source: Czinkota et al. 2004
Motives & Reasons – Going for Gold
Company
Performance
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Significance of International Trade
Importance for specific industries:
• Cars, chemicals and machines are the most frequently exported goods; 98% of exporting companies are small and medium-sized enterprises.
Importance for specific nations:
• Germany is an export-oriented nation. From 1985 until 1994, Germany was the country with the highest amount of exports (3rd biggest in 2015).
• Due to globalization and the reduction of trade barriers, emerging markets became important for each exporting country.
• Emerging markets are often characterized by a previously centrally planned, isolated economy and a relatively short history of open market relations.
• Exports are an important factor for the standard of living and the development of wealth of each nation.
Source: www.ifm-bonn.org
2. Why Companies Go
International
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Internationalising to be Competitive - the World’s Most Competitive
Nations, 2016 Ranking
Country Rank 2015 (2014)
China/HK
Switzerland
United States
Singapore
Sweden
Denmark
Ireland
Netherlands
Norway
Canada
1 (2)
2 (4)
3 (1)
4 (3)
5 (9)
6 (8)
7 (16)
8 (15)
9 (7)
10 (5)
2. Why Companies Go
International
Source: IMD World Competitiveness Center www.imd.org (2017)
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2. Why Companies Go
International
Fortune Global 500 by Country: Top Ten 2012 and 2014
Ranking Country Number of MNCs 2012 Number of MNCs 2014
1 (1)
2 (2)
3 (3)
4 (4)
5 (5)
6 (6)
7 (8)
8 (7)
8 (9)
10 (10)
United States
China
Japan
France
Germany
United Kingdom
South Korea
Switzerland
Netherlands
Canada
132
73
68
32
32
26
13
15
12
11
128
95
57
31
28
28
17
13
13
10
Source: The Fortune Global 500 (2012), Number of companies data taken from the "Pick a country" box.
,
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Internationalizing to Earn Money - the Fortune Global Top Ten 2016
2. Why Companies Go
International
Source: Fortune Global 500, July 2014
Rank Company Country Industry Revenue (Bn. $) Profit (Bn. $)
1 Walmart United States Retail 482.3 14.7
2 State Grid Corporation China Utilities 329.6 10.2
3 China National Petroleum China Petroleum 299.3 7.1
4 Sinopec China Petroleum 294.3 3.6
5 Royal Dutch Shell Netherlands Petroleum 272.2 1.9
6 Exxon Mobil United States Petroleum 246.2 16.2
7 Volkswagen Germany Automobile 236.6 -1.5
8 Toyota Japan Automobiles 236.6 19.3
9 Apple United States Technology 233.7 53.4
10 BP Britain Petroleum 226.0 -6.5
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Motives & Reasons – Going for Gold
• Independency
• Lower costs
• Higher profits
2. Why Companies Go
International
Source: Czinkota et al. 2004.
Performance
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2.1 Eras of Globalization
2.2 Doing Business And Regulation Worldwide
2.3 It´s No Longer If, But When and How
2.4 Motives & Reasons
2.5 Internationalization Theories
2.6 Summary
2.7 Case Study (background)
Outline
2. Why Companies Go
International
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How to Access the Case Study
1 Go to: http://www.thecasecentre.org/students/
2 Register as student
2. Why Companies Go
International
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How to Access the Case Study
3
Search for: Case
Search by: Title
Keywords: Walmart
sweatshop
2. Why Companies Go
International
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4 Add to Basket
Case:
„From Sweatshops to Sustainability: Wal-Mart‘s Journey in Bangaldesh“
2. Why Companies Go
International
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4 Insert CoursePack Code: C-1380-259189-STU and proceed to Checkout
2. Why Companies Go
International
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Walmart Case Study - Overview
Walmart the largest company in the world by revenues as of 2014,
operated on the philosophy of providing its consumers products at the
lowest possible price. To achieve this, it procured goods from various
parts of the world. The clothes were mostly procured from Bangladesh.
Walmart and other global retailers were attracted to Bangladesh due to
cheap labor and low production costs. They usually outsourced their
production to some of the factories in the country. At that time they
ensured that the producer and the factory complied with laws and have
other facilities in place for workers, pertaining to timings, leave, overtime,
etc.
Objectives
▪ Learn about the garment industry that exists in Bangladesh from where global apparel brands import
the products; the poor working conditions in the sweatshops and the complex subcontracting system
that exists, which exposes millions of workers to life threatening accidents.
▪ Understand the business model of Walmart and how the company projected itself as a sustainable
company through various sustainability initiatives.
▪ Understand the challenges for Walmart in playing a major role in resolving the deep rooted problems of
the garment industry in Bangladesh.
How cheap should cheap clothing be? And on account of whom?
2. Why Companies Go
International
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Excursus - Case Studies
How to work on cases
2. Why Companies Go
International
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How to Edit a Case Study
What is a case study?
A case study is a written summary of real-life business situations based upon data and
research. It enables students to identify appropriate strategies for the resolution of the “case”.
How to analyse a case study
1. Read the case carefully more than once in order to get a general impression
• Which organizations and industries/sectors does it relate to?
• Is the organization doing well or badly and how has it performed in the past? Is it an
organization that has an unbroken record of success or has it fallen on hard times?
• Look at the development of the organization over time. What strategies has it pursued? Which
have succeeded and which have failed? How successful has the organization been – and on
what bases do you know?
• What are your initial impressions of the main issues and choices confronting the organization?
Is it in an expanding industry/sector, or a maturing one? Are customer needs changing? Does
the organization confront a variety of opportunities? Or is there a particular strategic issue
which the case is oriented towards?
• What information is there in the case as tables and annexes?
2. Why Companies Go
International
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How to Edit a Case Study
2. Start to analyse seriously
First, with regard to its environment:
• Which are the types of environment where it has been able to succeed, and in which types
has it had problems?
• What have been and are likely to be the key drivers in the macro environment that may give
rise to changes that could provide opportunities or give rise to threats?
• What is the nature of the competitive environment?
Second, get insights about the organization itself:
• What kind of strategic resources does the organization have – and which does it lack?
• Think about which of these have provided advantage over competitors; or could provide
competitive advantage.
• Draw these analyses together by considering in what ways the organization has strengths or
weaknesses greater than competition.
• So you will have built up a picture of the relative strengths, weaknesses, opportunities and
threats (SWOT) for the organization.
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How to Edit a Case Study
2. Start to analyse seriously
Third, look at issues about the organization’s stakeholders. What are their expectations? Are they
similar or in conflict? Who has more or less power and influence over the organization’s
strategy?
• Consider the organization’s culture. How has this influenced past strategies and is it likely to
influence future strategy or constrain attempts to change strategy?
• Beware of regarding different frameworks of analysis as distinct and separate; they relate to
each other. For instance, the results of a value chain analysis could be put in the context of
data from a PESTEL and 5-Forces analysis and are likely to provide more insight if they are
combined.
• Pull together your analyses and ask: “What are the major issues that future strategy needs to
address?”
• In all of this consider what information is there in all the tables, annexes and appendices?
What are they and how do they relate to and inform the questions above?
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3. Develop and Evaluate Strategic Options
• Use the results of these analyses as a starting point for developing strategic options. You will
have begun to think of what the organization might do during your analyses. Note these down.
• But don’t just rely on these. Generate other options more systematically by using some
frameworks – for example a TOWS matrix builds on a SWOT analysis that you have carried
out.
• Evaluate the options by asking the following questions:
– Which are most suitable in terms of the strategic position of the organization; i.e. the strengths and
weaknesses it has and the opportunities and threats it faces?
– Would a strategy, if followed, achieve competitive advantage for the organization and provide bases
for the sustainability of such advantage?
– Which are most likely to be acceptable in terms of the expectations of major stakeholders?
– Which are feasible in terms of the likelihood of implementation: for example in terms of resourcing the
strategy and managing change.
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4. Justify your conclusions with reference to the case
• Relate your analysis to the task or questions that have been set. Which elements of the
strategic analysis do you require to answer the question? Which are not relevant, or less
significant (don’t try to justify your arguments by using all the information you have – select
what is most powerful to support your argument)? Is further information or analysis needed?
• Ask yourself whether you really have supported your conclusions and recommendations using
hard evidence (events and results) given in the case study? Have you allowed yourself to be
swayed by the opinions of the organization’s own managers? Do the facts support their claims
of success, or their excuses for failure?
• Make sure you clearly state your recommendation. There is no point marshalling a list of
fifteen possible reasons why the organization should act this or that way without making clear
which one(s) is your preferred option. Unless you clearly state your recommendation, you
could lose marks.
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5. Present a balanced view
• Make sure you have considered the alternatives to your recommendations. There is hardly
ever just one single option available to an organization in a given industry/sector.
• Make sure your have made clear why the recommendation you have chosen is the best of the
available alternatives.
• Make sure you have examined the downside of your options.
Source: Student Resoures of: Johnson, G.;Scholes, K.; Whittington, R.: Exploring Corporate Strategy, Enhanced Media Edition, 7th Edition at http://wps.pearsoned.co.uk
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Declarative Versus Procedural Knowledge
Declarative knowledge Procedural knowledge
▪ Knowledge of theories and
facts
▪ Can be articulated verbally
Tested in written exams
▪ Knowledge of actions and
procedures
▪ Can usually not be
articulated verbally
▪ Examples: dancing,
swimming
Tested in assessment
centers
Case study application:
▪ Locate knowledge
▪ Transfer theoretical knowledge to
real-life situations
▪ In other words: Transform
declarative into procedural
knowledge
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Steps in Working with Case Studies
Executive summary Analysis Solution
▪ Why is it beneficial for
managers to read your case
study?
▪ What is the problem?
▪ Which solutions do you
suggest?
▪ Which effects will the
implementation of your
recommendations have for the
respective business?
▪ Identification of the company’s
problem
(target/actual comparison)
▪ Observation of the problem’s
complexity
(stakeholder approach;
strategic vs. functional)
▪ Identification of the problem
scope
(internal/external, time; clear
goals)
▪ Well-structured discussion of
advantages and disadvantages
of problem solutions
▪ Benefit-cost analysis for
implementation of problem
solutions
▪ Recommendations for
implementation
(time schedule, milestones)
▪ Interpretation
1 2 3
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The WalMart Case
1. What is the impact of global retailers on the economy of Bangladesh?
2. How far can retailers be held responsible for the accidents in Bangladesh?
3. What is Walmart doing to address the prevailing situation?
4. How seriuous is Walmart‘s commitment to CSR?
5. How did the Garment industry benefit from the subcontractors?
6. Is the subcontracting system a necessary evil?
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