IAF605 week 9 chapter 12 country evaluation and selection


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Country Evaluation and Selection

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IAF605 week 9 chapter 12 country evaluation and selection

  1. 1. IAF 605 - International Business Management Country Evaluation and Selection Week 9
  2. 2. Agenda Review Chapter 11 Chapter 12 – Country Evaluation and Selection Burger King Beefs Up Global Operations
  3. 3. Review
  4. 4. Chapter Objectives To grasp company strategies for sequencing the penetration of countries To see how scanning techniques can help managers both limit geographic alternatives and consider otherwise overlooked areas To discern the major opportunity and risk variables a company should consider when deciding whether and where to expand abroad To know the methods and problems when collecting and comparing information internationally To understand some simplifying tools for helping to decide where to operate To consider how companies allocate emphasis among the countries where they operate To comprehend why location decisions do not necessarily compare different countries’ possibilities
  5. 5. Location, location, location Companies lack resources to take advantage of all international opportunities. Companies need to: Determine the order of country In choosing geographic sites, a entry. company must decide: Set the rates of resource Where to sell. Where to produce. allocation among countries.
  6. 6. Location Decisions Affecting International Operations Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
  7. 7. Figure 12.3: The Location-Decision Process
  8. 8. Scanning aids managers in considering alternatives that might otherwise be overlooked helps limit the final detailed feasibility studies to a manageable number of those that appear most promising Source: kltprc.net
  9. 9. Escalation of Commitment Source: jnrphotography.com
  10. 10. Scanning for Opportunities Sales expansion - Economic and Demographic Variables Source: zastavki.com
  11. 11. Scanning for Opportunities Resource acquisition - Cost Considerations Source: newsdesk.si.edu
  12. 12. Factors to Consider in Analyzing Risk political competitive natural monetary disaster* perceptions of risk | opportunity | how to reduce | trade-offs * See the Disaster Risk Index: http://www.nat-hazards-earth-syst-sci.net/9/1149/2009/nhess-9-1149-2009.html
  13. 13. Collecting and Analyzing Data value (revenue gains or cost Problems savings) with research results and data? costs of information
  14. 14. Some Problems with Research Results and Data Inaccurate Info Noncomparable Info • The amount, accuracy, and • Managers should be timeliness of published data particularly aware of vary substantially among different definitions of countries terms, different collection methods, and different base years for reports, as well as misleading responses Image sources: http://aznmusic.files.wordpress.com/2008/01/chinglish.jpg; http://www.flickr.com/photos/thebusybrain/249294562 5/
  15. 15. External Sources of Information Individualized Reports Specialized Studies Service Companies Government Agencies International Organizations and Agencies Trade Associations
  16. 16. Reminder July 27th group assignment due
  17. 17. Country Comparison Tools – Grids and Matrices
  18. 18. Allocating Among Locations Reduce the risk of liability of foreignness by moving first to countries more similar to their home countries. Contract with experienced companies to handle operations for them, limit the resources they commit to foreign operations, and delay entry to many countries until they are operating successfully in one or a few.
  19. 19. The Usual Pattern of Internationalization – Gradual Commitments
  20. 20. Geographic Diversification versus Concentration Strategies for ultimately reaching a high level of commitment in many countries are: • Diversification—go to many fast and then build up slowly in each. • Concentration—go to one or a few and build up fast before going to others. • A hybrid of the two.
  21. 21. To Diversify or to Concentrate: The Role of Product and Market Factors (p461)
  22. 22. Reinvestment Versus Harvesting (Divesting) A company may have to make new commitments to maintain competitiveness abroad. Companies must decide how to get out of operations if: They no longer fit the overall strategy. There are better alternative opportunities.
  23. 23. Noncomparative Decision Making - one proposal at a time Companies may need to: Proposal • react quickly to Proposal A proposals B • respond to competitive threats Proposal C • because multiple feasibility studies seldom are finished simultaneously Unanticipated Prospects
  24. 24. Burger King Beefs Up Global Operations (p465-470) 1. By mid-2009, Burger King was not in any of the following five countries: France, India, Nigeria, Pakistan, and South Africa. Compare these countries as possible future locations for Burger King. 2. When entering another country, discuss the advantages and disadvantages that an international restaurant company, specifically Burger King, would have in comparison with a local company in that market. 3. About two-thirds of Burger King’s restaurants and revenues are in its Americas region (United States and Canada) and one-third elsewhere. Should this relationship change? If so, why and how? 4. The case mentions that Burger King prefers to enter countries with large numbers of youth and shopping centers. Why do you think these conditions would be advantageous? 5. How has Burger King’s headquarters location influenced its international expansion? Has this location strengthened or weakened its global competitive position? 6. Evaluate Burger King’s strategy of using the Brazilian experience to guide its entries into Russia.
  25. 25. Homework review Chapter 12 do quiz (Blackboard) read Chapter 13 – Export/Import strategies read/be prepared to discuss p499- 500 A Dirty Dilemma: Exporting Hazardous Waste