MANAGING & MARKETING IN THE GLOBAL
ARENA
FALL SEMESTER 2011
MAN 385.33 – UNIQUE #04730
Professor
Class Times
Class Room
Office
Office Hours
Phone
E-Mail
Course Web Page
Teaching Assistant
John N. Doggett
Mondays and Wednesdays from 3:30 to 4:45 pm
UTC 4.104
CBA 5.124k
Wednesdays from 5:15 to 6:15 pm or by appointment
(512) 232-7671
john.doggett@mccombs.utexas.edu
via Blackboard
Adam Glick
Adam.Glick@mba12.mccombs.utexas.edu
Course Objectives
I created this course when I came to UT in 1989. I have continuously updated the cases and
the only case that I still use from back then is Republic Flour. You will understand why I keep
using it soon enough. Today, as we approach a second global recession, helping people learn
how to take advantage of the global turmoil that we are experiencing will give you a
tremendous advantage doing 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 assigned you four books. These books will help you understand the challenges
and opportunities represented by the emergence of China, India and Brazil. 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.
Third, I am going to press myself and all of you harder than I ever have. I fear that this new
global recession will be deeper and more destructive than the one that hit us in 2007-2009.
And that recession was the worst since 1948. I want to make sure that each and every one of
you is prepared to take advantage of the economic chaos that is buffeting the world.
Doggett
Managing and Marketing in the Global Arena Course —Fall 2011
page 2
The growth of China, India, Brazil, and other emerging economies has fundamentally changed
how we think about global business. 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.
This course will focus on significant international marketing, managerial, and operational
challenges and opportunities from the perspective of managers with decision-making
responsibility in many parts of the world. We will pay significant attention to the impact the
growth of the Chinese and Indian economies are having on the rest of the world. We will also
look at how this economic revolution is impacting Africa, the most underdeveloped continent
(with lots of people) on the planet.
Leadership and this Course
Each of you must participate in a group case analysis competition during the semester. The
goal of this case competition is to give you experience working together under tremendous
pressure with a short time frame when the choice of strategies to pursue is not clear. Each of
you will be "energetically" questioned by me during the in class case competition.
This case competition 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 during the class room competition, you will develop a deeper understanding of what
leadership requires.
Materials
Case Packet: You must purchase your case packet from www.hbsp. harvard.edu
Books: Purchase on-line or at a bookstore. They are not in the Co-op.
Getting India and China Right: Strategies for Leveraging the World's Fastest Growing
Economies for Global Advantage by Anil K. Gupta and Haiyan Wang, Jossey-Bass, February 17,
2009.
When China Rules the World: The End of the Western World and the Birth of a New Global
Order by Martin Jacques, Penguin Press HC, November 12, 2009.
Doggett
Managing and Marketing in the Global Arena Course —Fall 2011
page 3
India: A Portrait by Patrick French, Knopf, June 7, 2011.
The New Brazil by Riorden Roet, Brookings Institution Press, May 2, 2011.
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.
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.
Group Presentations = 30%
During the semester, each of you will participate in a group presentation of cases that are
assigned. The group presentations will be held three weeks prior to the last week of class.
The group presentation process will require the active participation of each group member in
the analysis of the group case, in the development of an action plan, and in the development
of materials to assist the group in making an effective forty minute presentation to the entire
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
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.
We will have a full day of presentations. The class will self-divide into six groups. Three
groups will present one case and the other three will present the second case. The groups not
presenting will grade the groups presenting. One group for each case will receive an A, one
Managing and Marketing in the Global Arena Course —Fall 2011
Doggett
page 4
will receive a B and one will receive a C. Your individual grade for group presentations will be
the grade that your group receives.
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 the class TA by the beginning of the next class. If
you do not submit one paper per missed case to the TA 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.
Schedule
1.
2.
Wednesday, August 24, 2011
a. Lecture:
Global Management in the 21st Century
Monday, August 29, 2011
a.
Note:
Note on Low-tech Marketing Math
b.
Case:
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
Managing and Marketing in the Global Arena Course —Fall 2011
Doggett
3.
page 5
Wednesday, August 31, 2011
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.
9.
10.
4.
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?
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 7, 2011
a. Case:
Republic Flour, continued
5. Monday, September 12, 2011
a. Note:
In the Spotlight: The Market for Iron Ore
b. Case:
Vale: Global Expansion in the Challenging World of Mining
Study Questions for Vale
Managing and Marketing in the Global Arena Course —Fall 2011
Doggett
1.
2.
3.
4.
5.
page 6
How important is the growing Chinese market to Vale?
What challenges does moving from “negotiated prices” to spot market
prices create for Vale?
What are the challenges that Vale’s senior management faces given that
Brazil’s president is a former labor union leader?
What should Agnelli do to deal with political pressures at home?
Did it make sense for Vale to purchase large vessels to ship iron ore to
Asia at a time when the shipping industry had excess capacity?
6. Wednesday, September 14, 2011 [We must reschedule this class]
a. Case:
The POSCO Way of Field Based Innovation
Study Questions for the POSCO Way
1. What external environmental factors have forced POSCO to focus on
innovation?
2. What specific steps and measures has POSCO taken to innovate its
operations? Is there any recognizable sequence in these steps and
measures? If there is, is it logical? Why or why not?
3. Evaluate the internal and external forces that might pose potential threats to
POSCO’s innovation efforts.
4. What advice would you give Chang?
7. Monday, September 19, 2011
a.
b.
Note:
Case:
An Introduction to 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?
8. Wednesday, September 21, 2011
Managing and Marketing in the Global Arena Course —Fall 2011
Doggett
a.
Case:
page 7
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?
9. Monday, September 26, 2011
a.
Case:
The Indian Tiger Prowls in Africa: Bharti Airtel’s Acquisition
The Indian Tiger Prowls in Africa: Bharti Airtel’s Acquisition of Zain Africa
1. What are the key management challenges and opportunities that firms face
when they wish to enter emerging markets?
2. How do Indian companies globalize and compete with incumbent
multinationals? What are the key challenges they facing in doing this?
3. Critically examine the factors that led to Bharti Airtel to acquire Zain’s
operations in Africa. What are the risks and challenges involved in this
venture and what strategy does the company need to adopt to secure
success?
10. Wednesday, September 28, 2011
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
emerging markets?
Managing and Marketing in the Global Arena Course —Fall 2011
Doggett
2.
3.
page 8
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?
11. Monday, October 3, 2011
a.
Case:
TCL: Seeking the Road to Product Innovation
Study Questions for TCL
1. What are the most significant trends in the international consumer
electronics industry and what are the implications of these trends for TCL?
2. Explain the different types of product innovation and compare and contrast
them to TCL’s production innovation approach.
3. What should TCL do to improve its approach to product innovation?
12. Wednesday, October 5, 2011
a.
b.
Note:
Case:
Is the Bottom of the Pyramid Really for You?
Danimal in South Africa: Management Innovation at the
Bottom of the Pyramid
Study Questions for Danimal in South Africa
1. How does the Danimal project shed light on and challenge the principals
suggested to manage the base of the pyramid?
2. How would you measure the success of the Danimal project?
3. How does the approach taken by Maria Pretorius in managing the Danimal
product line factor in management innovation opportunities and challenges?
13. Monday, October 10, 2011
a.
b.
Note:
Case:
Blue Ocean Strategy
The Dutch Flower Cluster
1. How did the Netherlands build the most competitive flower cluster in the
world in a country with a cold and cloudy climate?
2. How has the Dutch cluster sustained its leadership position for so long?
What changes took place?
3. Why has flower production internationalized over the last few decades?
How are the flower clusters in various countries connected? How do they
compete?
4. What are the challenges facing the Dutch cluster in 2011?
5. What recommendations would you make to FloraHolland? To the Dutch
government? To a major grower?
Managing and Marketing in the Global Arena Course —Fall 2011
Doggett
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14. Wednesday, October 12, 2011 [Midterm distributed at the end of class]
a. Note:
Farmland Investing: A Technical Note
b. Case:
Cresud, S.A., A Farmer or Real Estate Developer?
Study Questions for Cresud, S.A.
1. What is the opportunity for farmland investing? What are the risks and key
issues in owning and developing farmland?
2. Should Alejandro sell, develop or continue holding the remanding Los Pozos
land? What are the key qualitative and quantitive advantages/disadvantages
of each option? What are the key variables that drive the returns in the
development option?
3. Would you invest in Cresud?
15. Monday, October 17, 2011 [Midterm due at the beginning of class]
a. Case:
Grolsch: Growing Globally
Study Questions for Grolsch
1. Why did Grolsch globalize and how well has it performed internationally?
2. What are the key elements and limitations of its emphasis on adaptation?
3. What lessons does Grolsch’s history afford on where to compete? What,
specifically, do you think about the MABA process?
4. What lessons does Grolsch’s history suggest about how to compete in
markets targeted – especially about modes of entry?
5. What changes would you suggest to Grolsch’s historical strategy?
6. Will the merger with SABMiller add value or will it be a win-lose deal?
16. Wednesday, October 19, 2011
a. Case:
Zespri
Study Questions for Zespri
1.
2.
3.
4.
Why does Zespri exist?
What value does Zespri bring to growers? To consumers? To retailers?
What must Zespri do well in order to succeed?
How do Zespri’s research and development and branding initiatives create
value? Why are they important?
5. How should Zespri look to grow its business (i.e., global sourcing, additional
product lines)?
17. Monday, October 24, 2011 [This class will have to be rescheduled]
a. Case:
Los Grobo: Farming’s Future?
Study Questions for Los Grobo
Doggett
Managing and Marketing in the Global Arena Course —Fall 2011
page 10
1. What makes Los Grobo different from most farms?
2. What are the key advantages and challenges to Los Grobo’s business
model?
3. How does it feel to be a farmer working with Los Grobo?
4. Would you like to work for Los Grobo?
18. Wednesday, October 26, 2011
Discuss Midterm
19. Monday, October 31, 2011
GROUP PRESENATIONS
a. Case:
Super Shampoo Products and the Indian Mass Market
Study Questions for Super Shampoo
1. Why do so many Indians not use shampoo?
2. Are there any beliefs about shampoo in India that create unique challenges
to launching a brand targeting the bottom of the pyramid?
3. What should Suresh do?
20. Wednesday, November 2, 2011
GROUP PRESENTATIONS
a. Case:
Herborist: A Chinese Personal Care Brand Goes Abroad
Study Questions for Herborist
1. What type of growth strategy should Herborist adopt going forward?
2. As a Chinese brand, what are the advantages and challenges for Herborist
becoming a global brand?
3. How should Herborist develop its sales network?
4. What should Herborist do?
21. Monday, November 7, 2011
a. Case:
Snacko India Limited – Leveraging Trade Promotions
Study Questions for Snacko India
1. How is trade promotion related to the nature of the product?
2. What are the objectives of a trade promotion campaign?
3. What considerations should be taken into account before launching a trade
promotion campaign?
4. How does one evaluate the success of a trade promotion campaign?
22. Wednesday, November 9, 2011
a. Case:
Yum! China
Study Questions for Yum! China
Doggett
Managing and Marketing in the Global Arena Course —Fall 2011
page 11
1. Compare and contrast the differences and similarities between KFCs in China
and KFCs in the United States or your home country.
2. What special challenges did Yum face in exporting the KFC model and how
did Sam solve them?
3. How can Sam make sure that KFC in China doesn’t make the same mistakes
that fast food restaurants made in the West? You have to define what those
mistakes are.
4. Is Sam ready to proceed with the opening of 15,000 additional stores? What
would be the right time frame for that?
23. Monday, November 14, 2011
a. Case:
Logoplaste: Global Growing Challenges
Study Questions for Logoplaste
1. What is Logoplaste’s key competitive advantage/
2. What type of competition should Logoplaste fear the most?
3. Many of its customers want it to expand, should it?
24. Wednesday, November 16, 2011
a. Case:
Samarco: the role of businesses in empowering people
Study Questions for Samarco
1. What are the main characteristics of Samarco’s corporate social responsibility
policy?
2. How effective are Smarco’s programs in “empowering” people?
3. What, if anything, would you do differently if you ran Samarco?
25. Monday, November 21, 2011
a. Case:
Blood Bananas: Chiquita in Columbia
Study Questions for Blood Bananas
1. What do you think were the root causes for Chiquita’s actions in Columbia
that ultimately led to their conviction?
2. Do you think that Chiquita and its managers had a choice? Why or why not?
3. What other companies and industries do you think should be worried about
Chiquita’s experience? How does the story change your perspective on doing
business abroad?
4. What can current CEO Fernando Aguirre do now to restore Chiquita’s
reputation and ensure future competitiveness?
26. Wednesday, November 23, 2011
a. Case:
Vestas’ World of Wind
Study Question for Vestas
Managing and Marketing in the Global Arena Course —Fall 2011
Doggett
1.
2.
3.
4.
5.
6.
7.
page 12
How did Vestas become so successful in the past?
Why is Vestas having so much trouble adjusting to new competition?
Why did Vestas have virtually zero marketing strategy in the past?
What do you think about Vestas’ new marketing strategy?
What would you keep and what would you change?
Is this campaign bringing Vestas closer to its customer base?
Are they using the right tools?
27. Monday, November 28, 2011
a. Case:
China Construction America (A)
Study Questions for China Construction America
1. What does China Construction America (CCA) offer that makes it so
competitive?
2. How did a Chinese state-owned construction company strike one deal after
another in South Carolina despite political backlash and in New York where
well-established competitors dominate?
3. What must CCA do in the future to continue its success in America?
28. Wednesday, November 30, 2011
a. Case:
ITC-e Choupal
Study Questions for ITC e-Choupal
1.
2.
3.
4.
How does ITC manage the dilemma of balancing its profit objectives with
its social objectives and expectations in implementing CSR? Does the ITC
e-Choupal initiative really respond to the development needs, concerns
and priorities of rural India?
How can ITC take e-Choupal to the next level in leveraging information
technology (“IT”) to deliver business and social benefits?
Poor people at the BOP represent a very attractive market opportunity.
The BOP model argues “that selling to the poor can simultaneously be
profitable and help eradicate poverty”. Do you agree with this statement
in reference to India and ITC’s e-Choupal?
Discuss the accomplishments, prospects and challenges for the managers
of the modern supply chain of e-Choupal.