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Instructor’s Notes on Text Cases
Q1. What would you describe as the societal by-products of U.S. home building, especially in
urban areas?
Q2. How can SSCo use the BLCO method to gain competitive advantage in the United States?
Q3. What are the market and nonmarket advantages and risks faced by SSCo in the U.S. market?
Are these risks relevant in other countries as well?
Q4. What are some advantages and disadvantages of utilizing these types of sustainability
methodologies and metrics for measuring success, especially across international markets?
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Appendix – Traditional SWOT Analysis
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CASE 2
THE CULTURAL ENVIRONMENT OF GLOBAL MARKETING
2-1 The Not-So-Wonderful World of EuroDisney
2-2 Cultural Norms, Fair and Lovely, and Advertising
2-3 Starnes-Brenner Machine Tool Company – To Bribe or Not to Bribe
2-4 Ethics and Airbus
2-5 Coping with Corruption
2-6 When International Buyers and Sellers Disagree
2-7 McDonald’s and Obesity
2-8 Ultrasound Machines, India, China, and a Skewed Sex Ration
2-9 Counterfeit Mobile Phones in Southeast Asia
Case 2-1 The Not-So-Wonderful World of EuroDisney
Summary
This case tells the story of the planning, construction and early days of management of a Disney theme
abroad;
• market forecasting and assumptions about consumer response to foreign products and services;
Instructor’s Notes on Text Cases
Answers To Questions
Q1. a. What factors contributed to Euro Disney’s poor performance during its first year of operation?
What factors contributed to Hong Kong Disney’s poor performance?
b. Three types of factors can be identified from the case: (i) managerial errors of judgment; (ii)
elements of consumer response; and (iii) environmental factors.
A1a.
(i) Students will easily be able to identify from the case a list of managerial errors relating to
over-ambitious forecasts and real-estate investments, expensive or inappropriate park
A1b. One thing that Disney learned from their French experience is that the park must be more reflective
of the local culture, tastes, and expectations. They tried to apply this experience in Hong Kong but,
Q2. To what degree do you consider that these factors were (i) foreseeable and (ii) controllable by either
EuroDisney or the parent company, Disney?
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A2. The narrative in the case makes it clear that managers and planners involved in the EuroDisney
Q3. What role does ethnocentrism play in the story of EuroDisney’s launch?
A3. This question is a little more subtle than it might appear at first glance. For example, students may
Q4. How do you assess the cross-cultural marketing skills of Disney?
A4. Based on a SWOT analysis (Strengths and Weaknesses, Opportunities and Threats) of the new
Q5. Do you think success in Tokyo predisposed Disney management to be too optimistic in their
expectations of success in France? In China?
A5. Yes. The outstanding success of Tokyo Disneyland must certainly have given Disney’s
management the impression that managing theme parks overseas did not present any major
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Q6. Why do you think the experience in France was not transferable to Hong Kong?
A6. The French experience probably gave them a false sense of “having finally gotten it right.” In fact,
their attempts to adapt to the Chinese culture were right on in that instead of simply replicating the
Q7. Now that Hong Kong Disney is up and running, will the Shanghai development benefit from the
Hong Kong experience?
A7. Yes, they will benefit from their Hong Kong experience. Moving from Hong Kong to Shanghai is
Q8. Now that Disney has opened Hong Kong and begun work on Shanghai location, where and when
should it go next? Assume you are a consultant hired to give Disney advice on the issue of where
and when to go next. Pick three locations and select the one you think will be the best new location
for “Disneyland X.”
A8. This question should lead to a lively discussion. Key factors of course will be population, per capita
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Q9. Given your choice of locale X for the newest Disneyland, what are the operational implications of
the history of Euro Disney and Disney Hong Kong for the new park?
A9. The experiences of American, Tokyo, Paris, Hong Kong and soon Shanghai will help of course. But
Q10. Think forward to 2020 (or 2024) and presume the rough politics and violence of the MENA region
settle down substantially. Where would be the best location for a Disney park in that region?
Defend your choice.
A10. See Exhibit 10.7 of the 18th edition for countries with the highest income and population—those
Case 2-2 Cultural Norms, Fair and Lovely, and Advertising
In addition to the questions at the end of the case, some other ways to approach this case:
1. In-class analysis and discussion using as a basis all or any one of the following. “The
Questions:
Q1. Is it ethical to sell a product that is, at best, only mildly effective? Discuss.
Instructor’s Notes on Text Cases
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Q2. Is it ethical to exploit cultural norms and values to promote a product? Discuss
Q3. Is the advertising of Fair & Lovely demeaning to women or or is it promoting the fairness cream in
a way not too dissimilar from how most cosmetics are promoted?
Q4. Will HLL’s Fair & Lovely Foundation counter charges made by AIDAW? Discuss
Q5. In light of AIDWA’s charges, how would you suggest Fair & Lovely promote their product?
Discuss. Would your response be different if Fairever continues to use “fairness” as a theme of their
promotion? Discuss.
Q6. Propose a promotion/marketing program that will counter all the arguments and charges against
Fair & Lovely and be an effective program.
Q7. Now that a male market for fairness cream exists, is the strength of AIDWA’s argument weakened?
Q.8 Comment on using “Shakti Ammas” to introduce “fairness cream for the masses” in light of
AIDWA’s charges.
Case 2-3 Starnes-Brenner Machine Tool Company–To Bribe or Not to Bribe
Several questions should be emphasized in the case; the question of ethics, the question of self-reference
criterion and a more important question of what role should the marketer play; how much they should try
to change the system and how much should they try to become a part of the system. A strong point should
Instructor’s Notes on Text Cases
be made that in a country where bribery is part of the way of doing business, there is an identifiable
system of how much bribes are made, how much for different activities, when paid and to whom paid.
One retired British executive once graded bribes as: 5% of $200,000 will be interesting to a senior official
below the top rank, while 5% of $200 million justifies the serious attention of the head of state.3 Anyone
being sent to a country where bribery is an important aspect of doing business should be well versed on
the system of bribery in the country and be prepared to deal with it effectively.
Pertinent Facts
The Latin American sales effort of Starnes-Brenner Machine Tool Company of Iowa City, Iowa centers
around a one-man operation in Latino. The company is changing its international marketing emphasis and
is going to act more aggressively as an international firm. A new salesman is going to replace the Latino
representative who is retiring. During the training period the new man who is a company man from the
U.S., is introduced to the role bribery plays in doing business in Latin America. He questions the ethics of
the practice and the rationality of it as a means of doing business profitably. The retiring representative
points out that the firm in Latino, in addition to making a profit, is stimulating the economy of the country
and that since bribery is a recognized means of doing business it is stimulating to the economy of Latino.
He proposes that ethics will rise with an increase in the standard of living.
Bribery persists as a problem the world over. In China, many of the Republics of the former USSR, and
elsewhere, the business person is confronted with the decision to bribe or not to bribe. The instructor may
want to have the students review the section on Business Ethics in Chapter 5 before attempting this case.
It may be useful to have them examine the case without using the decision tree for ethical and socially
responsible decisions (Exhibit 5-4) and then to review the case using the decision tree. The advantage of
using the decision tree is to help them focus their thinking on the consequences of their decisions.
One of the purposes of this case is to explore all the ramifications of bribery. A point raised in the case
concerned bribery in the U.S. The attitude presented is that all others engage in wholesale bribery but that
Americans are somehow above it all, except for isolated cases.
Discussion Topic
An interesting comment from a retired agent in the U.S. Foreign Service raises questions about how
strictly the Foreign Corrupt Practices Act is enforced. Although the U.S. Foreign Service agent was
referring to his experience in China, it might be interesting to discuss his comments with the Latino case.
An economics officer of the U.S. Foreign Service said he intentionally subverted the intent of the
Foreign Corrupt Practices Act so U.S. investors and exporters would not lose out unfairly to companies
and agencies from other foreign countries.
“I figured out how business was actually done in corrupt countries who was on the take, whether
the going rate for host country cooperation in particular types of transactions was 10 percent or 25 percent
and who was good or bad as a go between.”
I would tell Americans trying to do business in the host country: “Don’t tell me about any corrupt
practices you are engaged in, because I am obliged to write that up and report you to Washington but do
tell me in detail about corrupt activities by competing foreign companies. In return, if your information is
interesting, I’ll give you my best guess on how corruption works here,” By doing this I hope that I have
helped level the playing field.--(Walter H. Drew, “Corrupt Thinking,” Foreign Policy May/June 2005.)
3 Robert Keatley, “U. S. Campaign Against Bribery Faces Resistance from Foreign Governments,” The Wall Street Journal, February 4, 1994, p.
A-10.
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Case 2-4 Ethics and Airbus
The case provides wonderful detail about how bribery works (including Swiss bank account numbers),
how difficult are convictions, how different countries pursue cases (India vs. Canada), and the importance
of personal connections even in billion-dollar deals. The Foreign Corrupt Practices Act (1977) and its
OECD incarnation (2000) have been shown to affect corporate behavior in the US – this is so even though
convictions are unusual. Hopefully, the OECD statutes will have a similar effect on other countries’
behavior.
1. Who benefits? The involved executives (if they don’t get caught), the firms making the bribes
(that includes employees, shareholders, and home governments – the last in the form of tax
2. Airbus’ PR response? It is hard to guess what the best public relations response might be
appropriate in different countries around the world. Our recommendation would be to tout the
firm’s extensive training program regarding prevention of bribery in accordance with the new
OECD rules (2000); and blame previous executive for previous transgressions that were allowed
all pertinent laws.
4. One might expect that a French company would be more savvy about interpersonal relations in
global business given their higher values for Power Distance and lower Individualism score in
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Q5. In your view, which of the expenses detailed in the lawsuit could be in violation of the FCPA and
which could be legitimate business expenses as the American company contends. Discuss.
NOTE: Excerpts from the lawsuit presented in the case were taken from: David Barboza, “Charges of
Bribery in a Chinese Bank Deal,” New York Times, November 29, 2006. The Instructor may want to share
this article with their students.
Q6. Discuss the legal/ethical issues raised by the comments of the retired Foreign Service agent and the
consultant.
Q7. List alternatives to paying bribes in international markets and discuss the pluses and minuses of
each.
A study on the effects of corruption on administration performance by the World Bank and others made
the following estimates on what corruption costs.
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Case 2-6 When International Buyers and Sellers Disagree
Pertinent Facts
The disagreement is that a German importer bought pork livers from a U.S. supplier. The buyer was
expecting 100 percent male pig livers, but got 45 percent sow livers which the Germans consider inferior
to the male pig liver.
The German firm had to dispose of the sow livers at a reduced price and wants the U.S. supplier to reduce
his price accordingly on the sow livers.
The U.S. supplier refused to pay the $1,000 requested.
Comments
Insofar as contract law is concerned, the crux of the problem seemed to be whether the phrases
“customary merchantable quality” referred to standards in the United States, where the meat originated, or
in the country to which it was exported. Many other firms in the industry awaited the arbitrator’s decision
because, while arbitral awards do not constitute binding precedents as such, they do provide some
guidelines for the future.
The American Arbitration Association upheld the American exporter. The arbitrator found that, although
there was some tendency in the U.S. for packers to distinguish between male pork livers and pork livers
from sows, the practice was not so widespread as to constitute an implied term of the contract. If the
German buyer wanted no sow livers included in the shipment, he should have stated so when the contract
was made.
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Case 2-7 McDonald’s and Obesity
QUESTIONS:
1. How should McDonald’s respond when ads promoting healthy life styles featuring Ronald McDonald
are equated with Joe Camel and cigarette ads? Should McDonald’s eliminate Ronald McDonald in its
ads?
2. Discuss the merits of the law, proposed by France that would allow fast food companies either to add a
health message to commercials or to pay a 1.5 percent tax on their ad budgets. Propose a strategy for
McDonald’s to pay the tax or add health messages and defend your recommendation.
3. If there is no evidence that obesity rates fall in those countries that ban food advertising to children,
why bother?
4. The broad issue facing McDonald’s U.K. is the current attitude toward rising obesity. The company
seems to have tried many different approaches to deal with the problem but the problem persists. List all
the problems facing McDonald’s and critique their various approaches to solve the problems.
5. Based on your response to question # 4 above, recommend both a short range and long-range plan for
McDonald’s to implement.
Case Comments:
It is obvious from the market’s response that McDonald’s has been doing something that is working and
Instructor’s Notes on Text Cases
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• McDonald's executives say they chose calories and the four other nutritional points based on
what customers in test markets, as well as public-health experts, said are most relevant. In the
U.S., the data will be available in English and Spanish, and in Canada, in English and French.
• Calories, protein, fat, carbohydrates and salt will be listed, with a graphic device in a bar
chart format illustrating how the food compares with the recommended daily intake of
nutrients.
Instructor’s Notes on Text Cases
• One customer’s response was that she might switch her Cobb salad order to a regular salad,
These excerpts were taken from the following sources:
Mark Sweney, “McDonald’s Unveils 8million pound Ads to Win over Women,” Marketing UK, April 6,
2005, Samuel Solley, McDonald’s Unveils Nutrition-Level Packs,” Marketing UK, Amy Garber, “Plan to
Instructor’s Notes on Text Cases
Case 2-9 Counterfeit Mobile Phones in Southeast Asia
Q. Assume you are the CEO of a new firm that has perfected a package of software applications for
medium- and large-sized companies to help manage intellectual property applications (patents,
$1.2 billion of software to be included in the Chinese firm’s computers.
Philips. One of the originators of “open innovation” is Philips Research in the Netherlands. Thirty years
ago, it pioneered the concept of partnering 28 to develop and market new ideas. Open innovation for
Philips also means that it buys ideas from R&D partners and sells ideas to marketing partners, rather than
Instructor’s Notes on Text Cases
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CASE 3
ASSESSING GLOBAL MARKET OPPORTUNITIES
3-1 International Marketing Research at Mayo Clinic
3-2 Swifter, Higher, Stronger, Dearer
Case 3-1 International Marketing Research at Mayo Clinic
This case offers an in-depth description of the kinds of research (and some of the results) that one of the
most international health care providers routinely does; and it is a worthwhile read just for that reason.
Case 3-2 Swifter, Higher, Stronger, Dearer
There are several juicy topics addressed in this case—three are perhaps most useful. One is the growing
Q1. The following are the prices paid for the American television broadcasting rights of the summer
Olympics since 1980: Moscow—NBC agreed to pay $85 million; 1984 in Los Angeles—ABC paid
