Department of Management

MGMT3001 Global Business Strategy

Session 2, 2020

Problem Solving Analysis (40%):

Cases & Questions

Due: 5 pm 5 November 2020

(submit to Turnitin, no email submissions will be accepted)

Note: before completing this assessment, students should read the “Problem
Solving Analysis - assessment structure and submission guideline” document
(uploaded to iLearn at the beginning of the session) carefully again.

There will be a deduction of 10% of the total available marks made for each 24-hour
period or part thereof that the submission is late (for example, 25 hours late in
submission incurs a 20% deduction). Unless a special consideration has been lodged
and approved, late submissions will be accepted up to 96 hours after the due date and
time.

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Note A: There are four mini case studies for this assessment. Students must use
relevant concepts and frameworks introduced in the lecture program to analyze
the mini cases and answer the questions.

Note B: Attach a cover sheet, including the unit code and name, the assessment title (i.e.
Problem-solving Analysis), your name, student ID, your tutorial class, and a word count
--- the cover sheet itself does not constitute part of the word count. Below is a sample
cover sheet, you can create your own.

Sample cover sheet:

MGMT3001 Global Business Strategy

Final Assessment: Problem-solving Analysis

Name: xxx xxx xxx

Student ID: xxxxxxxxxx

Tutorial class: 6 pm Tuesday

Word count: 2490 (the 10%+ norm applies)

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 Important Note C

C1: For any students especially year 3 university students, it should be obvious that you need
to show your understanding of and ability to use concepts, ideas, frameworks, etc. introduced
and discussed in a specific unit program (in this case MGMT3001) in order to demonstrate
your engagement and effort in your study.

C2: To the extent that we know from many years’ experience with some previous and
unfortunately also some current students (though a small proportion) that C1 is not obvious to
them, I emphasize here once again (as I did in my first lecture, then repeated many times in
the subsequent lectures, also on iLearn, and in the assignment documents etc.) that if a student
does not use and apply anything from this unit program (as if we haven’t taught anything or
they haven’t learned anything from this unit), then it only tells us the student has either not
studied at all or not able to apply anything…please then do NOT expect that one can
automatically get some marks just because one has put down 2500 words in English.

C3: Students can use frameworks and concepts from other units if you feel relevant and
helpful, but first thing first, you need to apply knowledge from this unit --- this should be very
very very very obvious. In the worst case, if we cannot see any evidence of your ability and
effort in applying material and knowledge from this unit, we won’t be able to tell whether you
have completed this assessment by yourself or someone else has done that for you --- such
incidents happened before in some universities.

C4: For all these obvious reasons, I ask students to take your study of MGMT3001 seriously
(I am giving you far more time than perhaps what other units would give you…), but I will
NOT give a free pass to those who don’t show any evidence of effort (leaving aside ability) in
studying the unit. We have prepared and introduced many important concepts, ideas, theories,
etc. for this unit, and we expect students to show their engagement and effort…this is also for
your own benefits? Why would anyone pay $1000 or $3000 to come to study a unit which has
not taught you anything? If I was a student, I certainly wouldn’t pay the money if my
lecturers haven’t taught me anything.

C5: Final words from your UC

Please also note that, as I said a few times, uni and teaching staff are perhaps among the most
friendly people you would ever have met --- I am sure many of you will realize that when you
start to work for the corporate sector. Many of you study business degrees because you want
to enter into a business world, I guess. The amount of work and the amount of pressures that
you are facing in the uni environment, frankly, is nothing compared to what you might have
to face in the tough and competitive corporate and business world. Based on my interactions
with some students (current and previous), I always ask students to ask yourself a simple
question --- am I disciplined and hardworking enough to handle the competitive business and
corporate world? Frankly, there is no substantial differences in terms of people’s IQ, but what
makes some people more or less successful than others in their careers and businesses are
often things related to their characters, disciplines, EQ, work ethics, etc., all of which are what
RBV has taught us about in terms of sources of sustainable competitive advantages --- and I
encourage you to work hard to develop these courses of competitive advantages for your
future, when you are still young…if you don’t build these important foundations while others
do, then you will be at a serious competitive disadvantage in an increasingly globalized IB
world --- ask yourself a question: why would a multinational company or a domestics
company hire you not thousands of others with a similar degree? On this note, I am happy to
write reference letters for those students who have worked hard for your study, just email me
when you need my help.

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1. Mini case study (5%)

Into-tech is a Malaysia company producing standard components (e.g. jump wires) for
connections in semiconductor products such as LED and printed circuit boards. It was
a second-tier supplier for local device makers in Penang. Ever since the company was
established in 2004, the company had worked hard to become a certified supplier for
Sony Malaysia in 2016 and its name was listed on Sony’s primary supplier network.
Since then, the company was not only upgraded to become a first-tier primary
supplier for Sony, but also started receiving price inquiries and purchasing orders
from everywhere without a dollar spent on an advertisement – the company was
easily hooked up with other MNEs such as Simens and Sharp, because they respect
their peer’s (i.e. Sony’s) judgment. Do you think this Sony supplier certification can
provide a source of sustainable competitive advantage for this Malaysia company in
international market? And why?

2. Mini case study (5%)

A diversified multinational enterprise (MNE) has six major lines of businesses: A, B,

C, D, E, F. The current configuration of the company’s businesses is illustrated in the
BCG portfolio model below. The circle size represents the share of one business line’s
sales revenue in the company’s total sales revenue. Do you think a portfolio of
businesses like this is desirable? And why?

high E
D
F
market
growth

B
A
C
low

high low
relative market share

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3. Mini case study (10%)

A Melbourne-based insurance company is facing increasing costs of delivering

customer services based in Australia. The company has decided to move its call centre
service to the Philippines, where there are many established local companies with
experience in delivering call centre service for western multinational companies,
including many Australian competitors. The company needs to make a strategic
choice of either outsourcing its’ call centre service to an independent third-party local
service provider in the Philippines or building a Greenfield call centre operation (i.e.
owned by the Australian company) in the Philippines. Assuming outsourcing and
Greenfield will result in a similar amount of cost-saving in the long run, which
strategy would you recommend and why?

4. Mini case study (20%)

Note: this case study is worth 20 marks in total; 5 marks each for Questions (4.1)
and (4.2); 10 marks for Question (4.3).

You are on the executive team of a medium-sized Australia-based company, whose

competitive advantage is built almost entirely on its ability to achieve economies of
scale in producing electric motors that are used by firms around the world to make
home electrical appliances such as hair dryers, air purifiers, and vacuum cleaners. The
company has a good reputation of continuously investing in technological expertise in
designing and producing high quality new generations of electric motors that are
smaller, lighter, and more power-efficient than electric motors produced by many
competitors. Until now, the company conducts almost the entire value chain from
R&D to manufacturing in Australia and then export the products to more than 20
countries in Asia, Europe, and North America. Its’ major customers include global
brand names such as Black & Decker, Dyson, LG, Mitsubishi Electric, as well as
some lesser known local home appliances manufacturers in Asia and Europe.

The company’s current businesses are organized around three divisions to serve
global customers for hair dryers, air purifiers, and vacuum cleaners respectively. The
company has been doing quite well using the current strategy and structure to develop
and exploit the existing markets. In a recent executive meeting, a business proposal
has been made to develop new markets in Central and South America, including
Brazil, Argentina, Chile, Mexico, and Uruguay. While most executives thought this
was a good idea, a question was raised whether the company should consider re-
designing its organizational structure to meet the challenge of doing business in more
markets. Another issue under discussion was whether the company should consider
moving the manufacturing to a developing country such as Vietnam, where costs for
labor are lower. The company however has no prior experience in running overseas
business operations through foreign direct investment (FDI).

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(4.1) Do you think the company’s current strategy is best characterized as an
international strategy, a multinational (multi-domestic) strategy, a global strategy or a
transnational strategy?

(4.2) Would you suggest the company to continue the current structure for organizing
its export business when entering new markets in Central and South America, and
why? If not, how would you recommend the company to re-design its organizational
structure, and why?

(4.3) Assuming that a decision (good or bad) was made in the executive meeting that
the company should move manufacturing to a developing country (using Vietnam as
an example), and due to the lack of capital and experience in managing wholly owned
subsidiary (WOS) overseas, the company ruled out the strategy of FDI through WOS.
Further assuming that the company has found an electric motor manufacturer in
Vietnam as a potential business partner, there are three options left on the table:

[a] The Australian company can approach the Vietnamese company to negotiate a
pure market-based contract, which would require the Australian company to provide
the Vietnamese company with the necessary technologies and the Vietnamese
company need to produce small electric motors made out of such technologies. The
two companies will share the profits (or losses) based on the terms and conditions
stipulated in such a contract.

[b] The Australian company can try to negotiate an OEM (original equipment
manufacturing) agreement with the Vietnamese firm (i.e. allow the Vietnamese firm
to use the Australian company’s technologies to produce electric motors in Vietnam
and then buy back all finished products and re-sell around the world under the
Australian company’s own brand)

[c] The Australian company can try to enter into a joint venture with the Vietnamese
company.

Which of the above three strategies is most likely to be successfully implemented

through negotiation between the Australian and the Vietnam companies, and why?