MANAGING AND MARKETING IN THE GLOBAL ARENA
FALL SEMESTER, 2013
MAN 385.33 UNIQUE #04785
Professor
Class Times
Class Room
Office
Office Hours
Phone
E-Mail
Course Web Page
Teaching Assistant
John N. Doggett
Monday and Wednesdays from 3:30 to 5:00 p.m.
UTC 4.104
CBA 5.124k
Wednesdays, 5:30 to 6:30 p.m. or by appointment
512-232-7671
john.doggett@mccombs.utexas.edu
via Canvas
Aaron Burch (aaron.burch@mba14.mccombs.utexas.edu)
Course Objectives
I created this course when I came to UT in 1989. I update the cases for this course every
year to make sure that we address the most cutting edge issues that are facing global
managers. The only case that I still use from 1989 is Republic Flour. You will understand why
I’ve kept Republic Flour soon enough.
Today, as we near a second global recession, helping people learn how to take advantage of
global turmoil will give you a tremendous advantage during the coming difficult times. For
that reason, I have made several significant changes to this course.
First, I have done away with the individual midterm. The “next” recovery will be a group
effort. So will your midterm.
Second, I have broadened the focus of the course. In the past, we have spent significant time
looking at the emergence of China and India. During the past decade, the growth of China,
India, Brazil, and other emerging economies fundamentally changed how we did global
business. Today, every major economy is trying to manage slowing growth or recession. The
stagnation in Europe and the continued violence in the “Middle East” or “Middle World” is
simply too significant to be ignored. As a result, we will spend more time than in the past
working to understand the forces that are transforming Europe and the Muslim world.
Third, I have assigned you four books. These books will help you think about how to manage
the challenges and opportunities of global competition. They will also help you evaluate the
challenges faced by countries and companies trying to figure out how to navigate the slowing
global economy.
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Managing and Marketing in the Global Arena—Fall, 2013
page 2
They will help you develop your own strategies on how to compete in a world where every
rule of thumb is being discarded. These books will become “let me read that again” books
that you will use long after you graduate from UT. To compensate for assigning so many
books, I have significantly reduced the number of notes that I have assigned for the course.
Fourth, I have done away with the group case competition and replaced it with a group
country/company analysis and presentation. As important as it is for you to enhance your
presentation skills, being able to accurately access the specific challenges facing one country’s
economy and then developing a strategy for how a specific company should respond is of far
greater value.
This course will help you understand the sea change in global competition that we are
experiencing. It will help you understand how managers anticipate and respond to
competitive pressures in a rapidly changing global marketplace. It will help you enhance your
analytical, decision-making, and implementation skills in an intense, highly competitive
classroom environment. It will also help you understand and apply analytical tools used by
managers and management consultants to exploit competitive opportunities and effectively
respond to competitive threats.
Leadership and this Course
Each of you must participate in a group country/company analysis during the semester. The
goal of this country/company analysis is to give you experience working together to try to
predict the economic future of a country and then tell the senior management of a company
what they must do to successfully weather the coming storm.
This group country/company analysis will help you develop your leadership skills in a number
of ways. First, you will learn how to manage groups of peers where each student cannot be
the group leader. Second, you will learn to manage a decision making process with
inadequate information and time. Finally, by observing and reflecting on the dynamics of your
team and your interaction with me and your peers during the class room presentation, you will
develop a deeper understanding of what leadership requires.
Materials
Case Packet: You must purchase your case packet from www.hbsp. harvard.edu. Aaron will
send you a link that you can use to purchase the materials once you are registered.
Books: Purchase on-line or at a bookstore. They are not in the Co-op.
Redefining Global Strategy: Crossing Borders in a World Where Differences Still Matter by
Pankaj Ghemawat, HBS Press, 2007.
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Managing and Marketing in the Global Arena—Fall, 2013
page 3
Why Nations Fail: The Origins of Power, Prosperity and Poverty by Daron Acemoglu and
James Robinson, Crown Business, 2012.
Destiny Disrupted: A History of the World Through Islamic Eyes by Tamin Ansary,
PublicAffairs, 2010.
Breakout Nations: In Pursuit of the Next Economic Miracles by Ruchir Sharma, W.W. Norton
and Company, 2013.
Course Requirements and Grading
Class Participation = 50%
This course will require a minimum of 4 hours of work per class. You must spend at least 3
hours analyzing each case and at least 1 hour preparing an action plan that is supported by
rigorous analysis for each case prior to class.
To help you prepare for my style of case teaching, I’ve assigned a new HBS tool called the
Case Analysis Coach. It’s the best tool out there to help you prepare for my class.
Each student must also join a study group of fellow students and spend a minimum of one
hour discussing each case prior to class. During our class sessions, each student must be
prepared to actively participate in the discussion of every case.
Your class participation grade will be based primarily on the quality of your comments, not on
the quantity. Comments that demonstrate a thorough analysis of the issues presented by
each case, an awareness and appreciation of the comments made by fellow students,
implementation of the frameworks from the readings that add to the learning process of the
class will receive high grades. Comments that ignore the content and flow of the discussion or
that reflect inadequate preparation will receive low grades.
Country/Company Group Presentations = 30%
By the third week of the class, you and your colleagues must select a country and company to
analyze. You will assess the ongoing political and economic challenges that the country you
choose faces. You will then advise senior management of the company you choose as to how
they should best proceed. The group presentations will be held during the last week of class.
The group presentation process will require the active participation of each member in the
analysis of the environment, the development of an action plan, and in the development of
materials to assist the group in making an effective twenty minute presentation to the class.
Group presentation grades will be based upon the quality of analysis, the "do ability" of the
action plan, the quality of the presentation, and the ability of the group to respond effectively
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Managing and Marketing in the Global Arena—Fall, 2013
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on their feet to the questions posed by members of the class and the instructor. Each group
member must actively participate in the presentations. Your classmates will grade each
presentation.
Group Mid-term Exam = 20%
Each of you must join a study group to help you prepare for class. That study group will also
be tasked with spending a weekend reading, analyzing and developing an action plan for a
case for a mid-term exam. Examination grades will reflect your group’s success in identifying
key challenges faced by the manager, developing a realistic plan of action to respond to the
managerial challenges presented by the exam Case and performing in-depth quantitative and
qualitative analysis to support your group’s action plan.
Missing Class Policy
I know that one of your priorities may be to get a job as we enter the second global recession
since 2007. My policy on missing classes is as follows.
You must submit a 10-page write up for every case that we covered when you missed a class.
This 10-page write up must be submitted to Aaron by the beginning of the next class. If you
do not submit one paper per missed case to Aaron by the beginning of the next class, your
maximum potential grade for the semester will be reduced by ½ of a letter grade.
If you miss more than one class, your maximum potential grade for the semester will be
reduced by ½ of a letter grade for each additional class that you miss, if you submit the 10page paper by the beginning of the next class. If you miss more than one class and do not
submit the 10-page paper by the beginning of the next class, your maximum potential grade
for the semester will be reduced by 1 full letter grade. I will waive the ½ or 1 grade penalty
for exceptional circumstances that are related to the health or safety of yourself, your spouse,
your children, your family or your significant other.
Religious Holy Days: By UT Austin policy, you must notify me of your pending absence at
least fourteen days prior to the date of observance of a religious holy day. If you must miss a
class, an examination, a work assignment, or a project in order to observe a religious holy day,
you will be given an opportunity to complete the missed work within a reasonable time after
the absence.
McCombs Classroom Professionalism Policy
The highest professional standards are expected of all members of the McCombs community.
The collective class reputation and the value of the Texas MBA experience hinges on this.
You should treat the Texas MBA classroom as you would a corporate boardroom.
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Managing and Marketing in the Global Arena—Fall, 2013
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Faculty are expected to be professional and prepared to deliver value for each and every class
session. Students are expected to be professional in all respects.
The Texas MBA classroom experience is enhanced when:
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Students arrive on time. On time arrival ensures that classes are able to start and finish
at the scheduled time. On time arrival shows respect for both fellow students and faculty
and it enhances learning by reducing avoidable distractions.
Students display their name cards. This permits fellow students and faculty to learn
names, enhancing opportunities for community building and evaluation of in-class
contributions.
Students do not confuse the classroom for the cafeteria. The classroom
(boardroom) is not the place to eat your breakfast tacos, wraps, sweet potato fries, or
otherwise set up for a picnic. Please plan accordingly. Recognizing that back-to-back
classes sometimes take place over the lunch hour, energy bars and similar snacks are
permitted. Please be respectful of your fellow students and faculty in your choices.
Students minimize unscheduled personal breaks. The learning environment
improves when disruptions are limited.
Students are fully prepared for each class. Much of the learning in the Texas MBA
program takes place during classroom discussions. When students are not prepared they
cannot contribute to the overall learning process. This affects not only the individual, but
their peers who count on them, as well.
Students respect the views and opinions of their colleagues. Disagreement and
debate are encouraged. Intolerance for the views of others is unacceptable.
Phones and wireless devices are turned off. We’ve all heard the annoying ringing in
the middle of a meeting. Not only is it not professional, it cuts off the flow of discussion
when the search for the offender begins. When a true need to communicate with someone
outside of class exists (e.g., for some medical need) please inform the professor prior to
class.
Remember, you are competing for the best faculty McCombs has to offer. Your
professionalism and activity in class contributes to your success in attracting the best faculty to
this program.
Academic Dishonesty
I have no tolerance for acts of academic dishonesty. Such acts damage the reputation of the
school and the degree and demean the honest efforts of the majority of students. The
minimum penalty for an act of academic dishonesty will be a zero for that assignment or
exam.
The responsibilities for both students and faculty with regard to the Honor System are
described on the final pages of this syllabus. As the instructor for this course, I agree to
observe all the faculty responsibilities described therein. As a Texas MBA student, you agree to
observe all of the student responsibilities of the Honor Code. If the application of the Honor
System to this class and its assignments is unclear in any way, it is your responsibility to ask
me for clarification.
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Managing and Marketing in the Global Arena—Fall, 2013
page 6
Students with Disabilities
Upon request, the University of Texas at Austin provides appropriate academic
accommodations for qualified students with disabilities. Services for Students with Disabilities
(SSD) is housed in the Office of the Dean of Students, located on the fourth floor of the
Student Services Building. Information on how to register, downloadable forms, including
guidelines for documentation, accommodation request letters, and releases of information are
available online at http://deanofstudents.utexas.edu/ssd/index.php. Please do not hesitate to
contact SSD at (512) 471-6259, VP: (512) 232-2937 or via e-mail if you have any questions.
Schedule
1.
Wednesday, August 28, 2013
a.
2.
3.
Lecture:
Global Management in the 21st Century
Wednesday, September 4, 2013
a.
b.
Note:
Case:
The Case Analysis Coach
c.
Lecture:
Where Have You Been? An Exercise to Assess Your
Exposure to the Rest of the World’s Peoples.
Global Management in the 21st Century, continued
Monday, September 9, 2013
a.
Case:
Republic Flour
Study Questions for Republic Flour Mills Case
1.
2.
3.
4.
5.
6.
What business does Republic think it is in?
Who are Republic's customers? What are they buying?
What business do you believe Republic Flour is really in?
What are the Key Factors for Success in the business that they should be
in?
What are their most pressing problems and how much are these problems
costing them?
What does your break-even analysis (# of bags they need to sell per
month to cover their costs) tell you about Republic Flour's condition?
Your Breakeven Analysis must be turned in at the beginning of class.
Make sure that you keep a copy for yourself!
7.
8.
Should they open their second plant? If not, what should they do with it
and how much will your recommendation cost?
What are the most realistic options to solve Republic's problems, how
much do each of them cost and how much money will each of them make
Republic?
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Managing and Marketing in the Global Arena—Fall, 2013
9.
10.
4.
page 7
Do you think this company will be successful? Would you invest your
money in it?
Prepare an Action Plan that tells me:
a.
How long can they last before they go bankrupt?
b.
What should they do and why should they do it?
c.
What options you considered and abandoned?
d.
When should they take action?
e.
How much will it cost and where will the money come from?
f.
Who will do what to whom when?
g.
When will results start to show?
h.
How much money will your strategy make Republic Flour and when
will their cash flow turn positive?
i.
What happens if you are wrong?
Wednesday, September 11, 2013
a.
Case:
Republic Flour, continued
5. Monday, September 16, 2013
a.
b.
Note:
Case:
Note on Islamic Finance
The International Investor
Study Questions for the International Investor
1.
2.
3.
4.
5.
6.
7.
Is Equate an attractive investment opportunity for the sponsors? What
are the expected internal rates of return for equity investors? For
subordinated debt holders?
Are the returns commensurate with the risks? What are the major
operating and financial risks? What is the minimum debt service ratio
(DSCR) for the term loans only (for total debt including subordinated
debt)? When does it occur and why? What is the average DSCR and
what does it tell you?
DSCR = Cash Available for Debt Service (CADS) / Principle and Interest
Average DSCR = # years * DSCR/# years
Should the sponsors use a tranche of Islamic finance? If so, how big
should it be and what form should it take?
How would the inclusion of an Islamic tranche affect the deal? How
would you address these complications?
How much of the Islamic tranche should TII underwrite?
6. Wednesday, September 18, 2013
a.
Case:
Metro Cash and Carry
Study Questions for Metro Cash and Carry
1.
What have been MCC's key competitive advantages as it has moved into
Doggett
Managing and Marketing in the Global Arena—Fall, 2013
2.
3.
page 8
emerging markets?
What role did institutional context play in challenging MCC's efforts to
prove the value proposition of its unique wholesaling format and establish
itself as an accepted corporate citizen in Russia, India, and China?
How would you rethink MCC's approach to strategic expansion and public
relations in India going forward?
7. Monday, September 23, 2013
a. Case:
Jabwood International
Study Questions for Jabwood International: The Risky Business of Expanding East
1. Is this the right time to think about expansion?
2. Use macroeconomic indicators to evaluate the country attractiveness of the
two proposed options.
3. Which factors should the country watch?
4. Evaluate competition in each country using Porter’s 5 forces framework.
5. Construct a SWOT analysis for expansion in each of the two countries
considered and tell me what the implications of that analysis are.
6. Estimate Jabwood’s maximum potential market share in Saudi Arabia and
China. Provide estimates in cubic meters (CBM), then forecast sales for the
next three years in US$ and in the local currency.
7. Identify the potential modes of entry (exporting, joint ventures, licensing, and
foreign direct investment) Jabwood should consider when expanding
internationally. Out of all of the potential entry modes, which is the most
suitable? Why?
8. In light of the previous analysis, what should Fayez Jabado do? Discuss the
sequence of expansion and resource allocation.
8. Wednesday, September 25, 2013
a. Case:
Sany: Going Global
Study Questions for Sany
1. How did Sany succeed in China?
2. How did Putzmeister lose its dominant market position in China? What
could they have done differently?
3. What should be Sany’s strategy with the two brands in China and globally?
4. What challenges should be anticipated in integrating the two companies?
How would you overcome them?
5. Is this the future of German middle-sized engineering companies that have
formed the backbone of a robust German economy? Is this good or bad for
Germany?
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Managing and Marketing in the Global Arena—Fall, 2013
page 9
9. Monday, September 30, 2013
a. Case:
Brasil Foods
Study Questions for Brasil Foods
1. As CEO of Brasil Foods, how would you prioritize:
a. Rationalizing the domestic business?
b. Establishing new export markets?
i. Where?
ii. How?
c. Developing a single Brasil Foods culture?
2. What other company might Brasil Foods use as a role model of what I should
aim to be?
10.
Wednesday, October 2, 2013
a. Case:
Ferro Industries - Exporting Challenge in a Small Firm
Study Questions for Ferro Industries
1. As Yatendra Sharma, how would you manage the challenges of having
limited available resources and limited access to capital while completing a
large overseas order”
2. Assess Garima Sharma’s strategy for building and maintaining marketing
and customer relationships. Could there be a better strategy?
3. Suggest a brand strategy that could help Ferro gain a competitive
advantage over existing domestic and Chinese competitors.
4. In light of Ferro’s experience, which of the following payment strategies
would you choose as an exporter in order to assure payment and reduce
financial risk? Why?
1. Full advance payment
2. Payment on sight
3. Usance facility to the importer (period of time between the date a bill
of exchange is presented and the date it is paid)
5. Do you agree with Garima’s decision to release the machines to Yusuf?
Why or why not?
6. Suggest some ways that Ferro could ensure prompt payment for future
export deals? Should firms like Ferro insist on obtaining a letter of credit
from importers?
7. Would you argue that the communication between Garima and Yusuf was
an important factor in the case? Why or why not?
8. Identify the factors that influenced Garima’s decision to release the
machines to Yusuf.
11.
Monday, October 7, 2013
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Managing and Marketing in the Global Arena—Fall, 2013
page 10
Building a Women's Hospital in Coimbatore, India
a. Case:
Study Questions for Building a Women's Hospital in Coimbatore, India
1.
What are the key issues that Jay faces in mid-2011? Are there issues he
has not recognized?
What lessons about the process of entrepreneurship in a resource-poor
country can you draw from the case?
What is the state of health-care in India and how does it compare to the
sample of countries in Exhibits 10 to 13?
What is the state of the healthcare ecosystem in India and how is it
changing? What opportunities and challenges does it present to Jay?
Assess Jay’s decisions so far.
Develop the Women’s Center’s mission, vision and strategy.
What recommendations would you make to Jay?
2.
3.
4.
5.
6.
7.
12.
Wednesday, October 9, 2013
a. Case:
Australia: Commodities and Competitiveness
Study Questions for Australia
1. What have been the tradeoffs between growth, inflation, savings and
investment, the current account deficit and competitiveness over the past 20
years in Australia?
2. What are the economic and environmental issues facing Australia today?
3. What is your assessment of the country’s economic relationship with China?
4. Is Australia’s non-mining competitiveness doomed?
[Activate Working Capital Management Simulation: Managing Growth]
13.
Monday, October 14, 2013 [Midterm distributed at the end of class]
a. Note:
b. Debrief:
c.
Case:
How Fast Can Your Company Afford to Grow?
Working Capital Simulation: Managing Growth
Can the Eurozone Survive?
Study Questions for Eurozone
1. How serious are the problems facing the Eurozone?
2. Which countries are at greatest risk given these problems?
3. Should the Eurozone be saved? If yes, why? If no, why not?
14.
Wednesday, October 16, 2013
a. Case:
Turkey – A Work in Progress?
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Managing and Marketing in the Global Arena—Fall, 2013
page 11
Study Questions for Turkey- A Work in Progress?
1. What have been the strengths and weaknesses of Turkey’s growth model?
2. What is causing the current account deficit? What can Turkey do about it?
3. What do you make of the Islamicization of Turkey? Has it gone too far? Will
it?
4. What do you make of the government’s foreign policy – “zero problems with
its neighbors?”
5. Would you invest in Turkey?
15.
Monday, October 21, 2013 [Midterm due at the beginning of class]
a. Case:
16.
Discuss Midterm
Wednesday, October 23, 2013
a. Case:
Smartbites (A)
Study Questions for Smartbites
1. What value would an America franchise bring to the Turkish market?
2. Why wouldn’t it be easier just to start their own business without franchise
fees and other “impediments” to creativity?
3. Should they do the franchise deal? If yes, why? If no, why not?
17.
Monday, October 28, 2013
a. Case:
Tencent: Expanding From China to the World
Study Questions for Tencent
1. As a company nurtured by the walled-garden environment, how can it make
its way outside of its comfort zone?
2. What does it have to offer to the global market, with its pockets of lookalike internet services, that the rest of the world is not deprived of?
3. Will Tencent be able to globalize?
18.
Wednesday, October 30, 2013
a. Case:
New Earth Mining, Inc.
Study Questions for New Earth Mining
1. Is iron ore in South Africa considered an attractive investment opportunity for
New Earth given the materials presented in the case?
2. Which valuation approach in analyzing the net present value of the new
investment opportunity is most accurate? Why are the other methods not
accurate?
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Managing and Marketing in the Global Arena—Fall, 2013
page 12
3. What is the value added by the design of the financing package? How does it
alter both the return and the risk of the new project? Is it effective at reducing
the project’s operating risks?
4. If you, the CEO of New Earth, were trying to negotiate a better deal with the
customers and lenders, in which of the following areas would you concentrate
your efforts and why?
a. Ore pricing
b. Interest rates
c. Prepayment schedule
d. Dividends allowed
e. Debt maturity or
f. Extension of guarantee program.
5. Should New Earth make the investment?
19.
a.
b.
Monday, November 4, 2013
Note:
Case:
Cracking the Next Growth Market: Africa
East of Africa (and West of China): Chinese Business in
Africa
Study Questions for East of Africa (and West of China)
1. Why do Chinese companies want to invest in Africa?
2. What are the arguments for and against land outsourcing?
3. Is there such a thing as a good practice when engaging in land
outsourcing? Would land outsourcing be welcomed by local partners?
4. What sorts of ethical issues does land outsourcing raise? What kinds of
consequences might this practice entail?
5. The Economist has reported that in early 2009, a US businessman secured
leasehold rights for 400,000 hectares in southern Sudan from the son of a
warlord. What are the implications of this type of investment?
6. Have any social tensions resulted from the growing relationship between
China and Africa?
7. What are the short- and long-term risks of encouraging raw material
production in exchange for manufactured goods?
8. What is the “Dutch disease” and what are its implications for Africa?
9. When private investors put money into cash crops, they tend to boost world
trade, international economic activity and local economic development.
How and why are governments resisting this?
10. Why do Chinese businesses hire mostly Chinese workers in Africa? Is this
likely to continue in the long term?
20.
Wednesday, November 6, 2013
a. Case:
Tianlong Company and the Toxic Capsule Scandal
Study Questions for Tianlong
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Managing and Marketing in the Global Arena—Fall, 2013
page 13
1. What can Tianlong do to alleviate the negative influence caused by this
scandal?
2. How should Tianlong respond to the government requirement to suspend
production? How should it deal with the Chinese government?
3. Who should be held responsible for this scandal? Has the Chinese
government done enough to prevent similar incidents? What would you
suggest to prevent another similar scandal?
4. The scandal not only affected capsule producers but also pharmaceutical
companies that purchased capsules from Ru’ao capsule companies. As the
CEO of a large Chinese pharmaceutical firm, what would you do going
forward to assure your customers that your products are not tainted?
21.
Monday, November 11, 2013
a. Case:
Olam: On A New Course
Study Questions for Olam
1. What business strategy should Olam pursue going forward?
2. What must Olam do to defeat the attack by Muddy Waters?
22.
Wednesday, November 13, 2013
a. Case:
Domaines Barons de Rothschild (Lafite): Plus ca change…
Study Questions for Domaines Barons de Rothschild
1. How does Baron de Rothschild protect the historic gold standard of Lafite
given its new activities?
2. What priority should Baron Rothschild give to each of the existing
businesses? What new opportunities should DBR pursue?
3. Given the multiplicity of changes in the wine industry, how does DBR fit into
that new system?
4. What will DBR look like in 20 years?
23.
a.
Monday, November 18, 2013
Case:
Collision Course: Selling European High Performance
Motorcycles in Japan
Study Questions for Collision Course
1. Considering the problems occurring in this case, what is going wrong inside
and outside Tommasi Motorcycles Japan? How are these issues related or
connected?
2. Describe the corporate level strategy that Tommasi Motorcycles European
headquarters appears to be following. Where are the major decisions made?
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Managing and Marketing in the Global Arena—Fall, 2013
page 14
3. What is the role that JNO is supposed to play, ideally? Is it performing its
role well? What should it change?
4. What are the pros and cons of using expatriate managers in this case? What
would be the characteristics for a suitable leader of JNO?
5. Is Katoh part of the problem or part of the solution?
6. How do you manage a firm where the people do not speak the same
language? Can you suggest things that will make this work better? Do you
think the consultants will approach their next assignment differently? If so,
how?
24.
Wednesday, November 20, 2013
Group Presentations
25.
Monday, November 25, 2013
Group Presentations
26.
Wednesday, November 27, 2013
Group Presentations
27.
Monday, December 2, 2013
Group Presentations
28.
Wednesday, December 4, 2013
a. Note:
How Will You Measure Your Life?
Assignment for Class
1. Write what you want you obituary to say about you at the end of your life.
2. Send your obituary to me by Sunday, December 1st.