978-1259317224 Chapter 9 Part 3

International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 9

When he did begin to experience the typical symptoms of culture shock, he was able to

recognize them and seek assistance from a professor, which many students will view as an

appropriate and constructive choice. He emphasizes the importance of being patient, and

about the value of experiential learning and relationship building, in order to understand and

perform more effectively within a different culture. He also emphasizes the value of having a

plan regarding what you want to accomplish from the international experience, to help keep

one’s focus and motivation. Some students might find Rangel’s approach to immersing in

another culture to be an exciting notion, and certainly one that will force them to quickly

advance in their knowledge of the language and culture of the host country. Other students

might express less self-confidence about being able to adjust successfully. Asking students

whether they have had a similar experience themselves and exploring the benefits they may

have perceived and lessons they learned, as well as anecdotes about difficulties they

encountered, can contribute to a robust discussion.

2. Rangel emphasizes the importance of relationship building and how experiential

learning in this regard can be invaluable to personal and professional success. Do you agree

with this assertion? Why or why not? What do you think of his recommendations for

addressing this challenge?

International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 9

END OF MODULE EXERCISES

CRITICAL THINKING QUESTIONS

1. What is international strategy? Do you think it is useful for companies to take the time

and effort to prepare international strategies if they are in rapidly changing competitive

situations with high levels of uncertainty? Why or why not?

2. Why don’t companies use the same strategic planning processes for their international

business activities as for their domestic operations? 

3. Suppose competitor analysis reveals that the U.S. subsidiary of your firm’s German

competitor is about to broaden its product mix in the U.S. market by introducing a new line

against which your company has not previously had to compete in the home market? Your

environmental analysis shows that the U.S. dollar is expected to weaken relative to the euro,

making U.S. exports relatively less expensive in Germany. Do you recommend a defensive

strategy, or do you attack your competitor in its home market? How will you implement your

strategy? 

4. You are the CEO of the Mesozoic Petrochemical Company and have just finished

studying next year’s plans of your foreign subsidiaries. You are pleased that the African

regional unit’s plan is so optimistic because that subsidiary contributes heavily to your

International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 9

company’s income. But OPEC is meeting next month to discuss whether its member countries

should reduce production in order to raise the international price of petroleum. Should you

ask your planning committee, which meets tomorrow, to construct some scenarios? If so,

what about?

5. What are the main strengths and weaknesses of each of the competitive strategies:

home replication, multidomestic, regional, global, and transnational? What challenges arise

under each approach in terms of building and leveraging knowledge that can yield

competitive advantage, and what can companies do to enhance the effectiveness of their

knowledge management efforts under each approach?

International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 9

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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

centralized production sites, and the risks of locating activities in a centralized location. The lack

of appeal to specific needs of people due to income difference, preferences, as well as cultural

value system, means that not all people can have the same taste or ability to afford

standardized products or services.

The strengths of a regional strategy include the potential value to be derived from thinking of

international strategy within the context of a region–by-region perspective, rather than merely

a nation-by-nation versus a global basis. To the extent that an international company’s market

position varies substantially across regions, strategies may also need to vary by region in order

to accommodate the differing competitive circumstances that confront the company. Yet, even

when management consider the appropriate strategy to use within each region, it may be

useful to consider the relative extent of pressure for local adaptation versus pressure to reduce

costs.

A transnational strategy has strengths when a company simultaneously confronts pressures for

cost effectiveness and local adaptation, and when there is a potential for competitive

advantage from simultaneously responding to these two divergent forces. The location of a

company’s assets and capabilities will be based on where it would be most beneficial for each

specific activity, giving a basis for competitive edge. Achieving and maintaining an optimal

balance in locating activities is a challenge, however. Management must ensure that the

comparative advantages of the locations of their various value chain activities are captured and

internalized, now and over time. The complexity of strategic decisions, and the supporting

structures and systems of the organization, will be much greater with a transnational strategy.

6. If predictions are difficult to make accurately when there are high levels of uncertainty

and change, why would scenario analysis have value? Aren’t scenarios likely to be inaccurate

under such circumstances?

7. What strategic issues arise as a firm considers whether and how to transfer

internationally the unique skills, and associated products, that result from the distinctive

competencies it has developed in its home country?

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International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 9

One of the major strategic issues that arises when a firm considers the transfer of a skill or

product resulting from a distinctive competency in its home country is, how quickly can the

product or skill be imitated? Can it be easily reversed-engineered and copied, and then brought

to the market at a lower price? Other issues include where to manufacture and how to

distribute.

8. Your firm has used bottom-up planning for years, but its subsidiaries’ plans take

different approaches to goals and assumptions—even their time frames are different. How

can you, the CEO, get them to agree on these points and still solicit their individual input?

9. How can you apply the concepts of strategic planning to your own life, such as for

getting a job or a better job? Which, if any, of the strategic planning approaches would not be

applicable for you, and why?

International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 9

This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This

document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

media sites). Students usually see that they utilize personal performance measures and have

plans with various time horizons as well. It can be interesting, however, to push a bit on which

of the modules strategic planning elements would be least applicable to students, and why.

This could prove to yield some interesting and potentially illuminating discussions and insights.

MINICASE: The Globalization of Walmart

This mini-case provides an opportunity for students to examine the globalization efforts of the

world’s largest retailer, Walmart. The mini-case examines Walmart’s internationalization

process, including some of the failures and challenges that the company experienced as it

expanded from the U.S. Because of their familiarity with the company, students typically are

interested in this mini-case and are excited to discuss it in class.

1. Why has Walmart viewed international expansion as a critical part of its strategy?

2. What did Walmart do to enable the company to achieve success in Latin America and

China?

3. What should Walmart do—or not do—to help ensure that the company achieves

success in India?

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International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 9

BONUS ACTIVITIES (additional resources not in the text)

This section provides you with support of your course above and beyond what’s found in the

text. We have developed these resources to support your course, to support your traditional,

hybrid, flipped, or online class.

VIDEO SUGGESTIONS

McGraw Hill’s collection of international business videos is available on pinterest at

https://pinterest.com/mheibvideos. The Strategy in the International Business board is one

source that an instructor may find useful tools in. The content is rich and varied, and it is

updated monthly.

first KFC to Myanmar in 2015” to discuss the strategic rationale for a Western fast food chain to

enter into a developing country market such as Myanmar.

The video on “Big Mac Index – explained” provides a cartoon-based explanation of the Big Mac

Index; this video can be found at: https://youtu.be/hzyhZWZue7E. The video “Hollenbeck on

Big Mac Index,” found at https://youtu.be/7QR2D4IGArs, has Frank Hollenbeck explaining the

The video, “Business Development 222: How to Craft a Winning Market Entry Strategy,” at

https://www.pinterest.com/pin/387591111651725948/, helps to explain the factors that a

strategist needs to consider when designing a strategy for entering into a foreign market.

GlobalEdge and the Academy of International Business provide links to a number of

organizations that offer videos about international business. You can find these links at

https://aib.msu.edu/resources/videodepositories.asp.