Using Internet-Based Resources in Teaching IB S. Tamer Cavusgil University Distinguished Faculty

1. Using Internet-Based Resources in Teaching IB S. Tamer Cavusgil University Distinguished Faculty John W. Byington Endowed Chair in Global Marketing Michigan State University July 2008

2. Examples of Web Resources • globalEDGE • Market potential Index for Emerging Markets http://globaledge.msu.edu/resourceDesk/mpi • Diagnostic Tools (CORE, Partner, Distributor, GLOBE) http://globaledge.msu.edu/diagTools • ATKearney • FDI Confidence Index http://www.atkearney.com/main.taf?p=5,3,1,140,2 • Global Services Location Index http://www.atkearney.com/main.taf?p=5,3,1,160&utm_source=pr&utm_medium=atk • Global Retail Development Index http://www.atkearney.com/main.taf?p=5,3,1,141

3. Other Portals • World Bank’s Ease of Doing Business Indexhttp://www.doingbusiness.org/ • Interbrand / Business WeekBest Global Brands Study • http://www.interbrand.com/best_brands_2007.asp • http://www.businessweek.com/magazine/toc/06_32/B399606globalbrands.htm • CKR Educators Consortium Portal; Repository of IB teaching tools and resources for the virtual community of Pearson’s Cavusgil, Knight, Riesenberger IB text (2008) users. • http://www.prenhall.com/cavusgil • http://www.pearsonhighered.com/educator/academic/product/0,3110,0131738607,00.html • http://dev.prenhall.com/divisions/bp/app/fred/Catalog/0131738607

4. Emerging Market Potential Indicators Index (EMPI)Diagnostic Tools: CORE, Distributor, Partner, freight Forwarder, Global Company

6. ATKearney Resources • FDI Confidence Indexhttp://www.atkearney.com/main.taf?p=5,3,1,140,2 • Global Services Location Attractiveness Index http://www.atkearney.com/main.taf?p=5,3,1,160&utm_source=pr&utm_medium=atk • Global Retail Development Indexhttp://www.atkearney.com/main.taf?p=5,3,1,141

7. World Bank’s Ease of Doing Business portal, Benchmarking Business Regulations • http://www.doingbusiness.org/

8. The World’s Bank’s Ease of Doing Business ... in China, Hong Kong and the U.S.A. Doing Business (overall) 93 5 3 Starting a Business 128 5 3 Dealing with Licenses 153 64 22 Employing Workers 78 16 1 Registering Property 21 60 10 Getting Credit 101 2 7 Protecting Investors 83 3 5 Paying Taxes 168 5 62 Trading Across Borders 38 1 11 Enforcing Contracts 63 10 6 Closing a Business 75 14 16

9. Assessing the Country Regulatory Environment • Learning Objectives: • Understand those factors that enhance business activity and those that constrain it • Formulate quantitative measurement of business regulations in a country • Relate the degree of business regulations to such factors as pace of economic development, GDP per capita, and others • Develop public policy implications for improving the commercial climate in a country • Prepared by the World Bank, the Doing Business database provides objective measures of business regulations and their enforcement. The Doing Business indicators are calculated and reported for 155 economies. They indicate the regulatory costs of business and can be used to analyze specific regulations that enhance or constrain investment, productivity and growth. • Please review the overall rankings by visiting: • http://www.doingbusiness.org/EconomyRankings/

10. Assignment: • What are your initial impressions of the country rankings in the Doing Business study? What is unique to the top 10 countries where ease of doing business (EDB) is ideal, and what is unique to those countries to where EDB is highly unfavorable? • Please review of the methodology used by the World Bank in capturing the EDB rankings. To what extent is this a sound approach? What are the limitations of this methodology? From your knowledge of country regulatory environments, do the ten overall indicators of EDB capture all of the key determinants? • Consider the 25 emerging countries identified by http://globaledge.msu.edu/ . Also consider an industry of your choice. How would you go about refining the EDB rankings to fit the particular needs of your chosen industry and the emerging country environment? Develop a weighting scheme for customizing the World Bank’s EDB rankings. Explain the rationale for your choice of weights that you have chosen for each of the ten indicators. Interpret and comment on your customized EDB rankings by country. • You have been asked to make a presentation before your senior management on your choice of three most attractive countries for your company to enter over the next year. Justify the choice of your recommended countries based on considerations other than EDB. Will your recommendation differ based on your entry mode (e.g., direct investment versus exporting)? • Based upon your analysis, formulate six public policy recommendations for improving the regulatory environment of in a country of your choice. • Extra Credit Question: Conduct a regression analysis where you employ EDB figures as the predictor to predict GDP per capita, growth rate of GDP per capita, and the country’s rate of participation in international trade. Carry out this analysis for three countries of your choice.

11. Top 100 Global Brands from Interbrand Consultancy and Business Week: http://www.interbrand.com/best_brands_2007.asp • http://www.businessweek.com/magazine/toc/06_32/B399606globalbrands.htm

15. What Makes Brands Globally Recognizable? • Learning objectives: • Understand the common elements of successful global brands. • Learn about Interbrand methodology for arriving at global brand rankings. • Understand unique features of the brands that rank especially high ranked brands. • Understand companies how can go about pursuing global brand leadership. • Understand the limitations of global branding.

16. Assignment • Visit the Interbrand site at http://www.interbrand.com/best_brands_2007.asp and Business Week portal at http://bwnt.businessweek.com/brand/2005/ . • Provide your initial impressions of the rankings. What patterns can you identify about the rankings? For example, do you find a dominance of a certain country’s brands in the list? • What are the common elements of highly recognized brands? • Analyze and critique the Interbrand methodology. What are its merits? What are its limitations? • A common element of successful global brands is that these tend be highly standardized offerings. Why does standardization works especially well for some brands? • From a country perspective, can you identify any limitations that may be associated with global brands? • How should managers go about establishing global brands? What were especially useful strategies of recent additions such as Zara, Google, LG, Bulgari, Novartis and UPS?

17. Illustrations of Collaborative Ventures We made a distinction between conventional, equity-based joint ventures and non-equity, strategic alliances. Another distinctive feature of a collaborative venture is its geographic focus—whether the venture’s geographic reach is primarily local (in single national market) or regional/global (encompassing multiple markets or worldwide). Using these two features it is possible to develop a classification scheme such as the following grid. Using this scheme, identify at least six examples of ventures for each of the four types. General business literature will be useful for this purpose. Familiarize yourself with these ventures and be prepared to comment on their long-term prospects. If they are still active, what are the prospects? If they disbanded or failed, why?

18. Readings: “Make Your Dealers Your Partners,” Harvard Business Review, March-April 1996. “Selecting Foreign Distributors: An Expert Systems Approach,” Industrial Marketing Management, 1995, (on VIBA).

19. (INSTRUCTOR SOLUTION) Geographic Scope of Collaboration Type of Collaboration Local (Single Market) Regional/Global Equity JVs (Ownership Based) Non-Equity Alliances (Project Based; Contractual)

20. Contrasting International Collaborative Ventures Global (Regional or Worldwide) Local (Single Market) Equity Joint Ventures (Ownership Based) Non-Equity Collaborative Ventures (Alliances) (Project Based)

21. CKR: International Business: Strategy, Management and the New Realities • http://www.pearsonhighered.com/educator/academic/product/0,3110,0131738607,00.html • http://dev.prenhall.com/divisions/bp/app/fred/Catalog/0131738607 • http://www.prenhall.com/cavusgil

22. Management Skill Buildersin Cavusgil, Knight and Riesenberger International Business: Strategy, Management and the New RealitiesISBN # 0-13-173860-7Pearson 2008

24. Illustrations of Product and Promotion Adaptation Using the chart that follows, attempt to develop five alternative strategies for internationalization. Varying decisions on product and promotion/positioning result in five distinct strategy options. First develop some examples of products or industries where each strategy would be appropriate. Next, elaborate on special advantages as well as drawbacks of each strategy. Finally, the following checklist is offered as a way of considering reasons for why management would engage in product adaptation. The list provides a comprehensive guide for thinking about product adaptation and, in the process, add value to company’s offering.

26. (INSTRUCTOR SOLUTION) ADAPTATION vs. STANDARDIZATION IN INTERNATIONAL MARKETS STRATEGIC OPTIONS

27. Critical Incident Analysis in Cross-Cultural Management Assignment Most of us have experienced a situation where, in a cross-cultural setting, we found the behavior of a foreign national hard to explain. We perceived this behavior to be odd, unusual, or perhaps improper. As a result, we may have felt anger, frustration, or at least felt uncomfortable and awkward. It is likely that this state of affairs interfered with our ability to interact effectively with the foreign national, and maybe even led to a breakdown in communication. That we tend to view other cultures through our own is a well-accepted human trait. We accept our own culture and its ways as the norm—everything else may seem strange to us. Our acceptance of our own culture also tends to condition how we react to different behavior, systems, or values. This sub-conscious reference to our own way of doing things is known as Self-Reference Criterion. Understanding this phenomenon is an effective first step in avoiding cultural bias — avoid ethnocentric reactions.

28. Critical Incident Analysis encourages a more objective reaction to cultural differences by helping us develop empathy for other points of view. It may be attempted in a number of steps as follows: • First, identify the situations where you need to be culturally aware to interact effectively with your business partners from another culture. These may include socializing, building trust, negotiations, arrival to meetings, legal agreements, formality, and so on. • When confronted with a “different” behavior, discipline yourself not to make value judgments. Instead define the situation or problem in terms of the foreign culture traits, habits, and norms. Simply make observations and gather objective information. This way, you will be isolating the self-reference criterion influence in the problem. • Learn to make a variety of interpretations of the foreign national’s behavior, to weight the probabilities of each, to select the most likely interpretation, and then formulate your own response. By doing so, you will have reacted to the situation without the self-reference criterion, and hopefully produced the optimum response. • Learn from this process, and improve continually. Remember also that cross-cultural empathy—and success in international business—can be greatly enhanced by acquiring factual knowledge about your partners. This includes political and economic background of the country, the human profile (social norms, values, behavior, traditions, etc.), history as well as current national affairs, and their perceptions of other cultures. • Assignment: Using the approach suggested by the Critical Incident Analysis, define a situation that you or someone else has experienced that led to a cross-cultural misunderstanding. Explain what actually happened, and how a more culturally-sensitive response may have been possible if Critical Incident Analysis were used.