Final sample test

1. Discuss “economic factors” với “affect” của mấy đó “post-covid” (Chap 2)

2. (Chap 15)
a. So sánh advantages and disadvantages của franchising and wholly owned subsidiary.
b. Nếu mình suggest entry strategy cho một cty brand gì đó vào Việt Nam thì mình rec
cái nào (chọn từ 6 cái luôn chứ không phải chỉ 2 cái trên) (có thể chọn 1 cty cụ thể để
nói)
3.
a. kêu kể mấy cái international strategies. (Chap 13)
b. hỏi “Changes in Strategy over Time” như thế nào
c. rồi cái cuối thì liên quan nội dung trên nhma của “your group work”

Question 3.
"Changes in international strategies over time" refer to the evolution and adaptation of strategies
that companies employ to expand and operate in global markets. These changes can occur in
response to shifts in the global business environment, technological advancements, changes in
consumer behavior, regulatory developments, competitive pressures, and other factors. Here are
some examples of changes in international strategies over time:

● Market Entry Strategies: Companies may modify their approaches to entering new
international markets based on changing market conditions and strategic objectives. For
example, they may shift from exporting to establishing local subsidiaries, forming joint
ventures, or entering strategic alliances to gain access to new markets and resources.
● Product Adaptation: Companies may adjust their product offerings and marketing
strategies to better suit the preferences and needs of international consumers. This may
involve customizing products, packaging, pricing, and promotional activities to align
with local tastes, cultural norms, and regulatory requirements.
● Global Branding and Positioning: Companies may refine their global branding and
positioning strategies to build brand awareness, differentiation, and relevance in diverse
markets. This may involve adapting brand messaging, imagery, and communication
channels to resonate with local audiences while maintaining a consistent brand identity
across regions.
● Digital Transformation: Companies may embrace digital technologies to transform their
international operations, enhance customer experiences, and drive innovation. This could
include adopting e-commerce platforms, digital marketing strategies, data analytics, and
cloud-based collaboration tools to connect with global customers, suppliers, and partners.
● Sustainability and Corporate Social Responsibility (CSR): Companies may integrate
sustainability and CSR considerations into their international strategies to address
environmental, social, and governance (ESG) concerns. This could involve adopting
 sustainable sourcing practices, reducing carbon emissions, supporting local communities,
and promoting ethical labor practices throughout the supply chain.
● Risk Management: Companies may prioritize risk management and resilience in their
international strategies to navigate geopolitical uncertainties, economic volatility, natural
disasters, and other external threats. This could include scenario planning, diversification
of markets and investments, hedging strategies, and contingency plans to mitigate risks
and safeguard business continuity.

Overall, changes in international strategies over time reflect the dynamic nature of global
business and the need for companies to adapt and innovate in response to evolving market
dynamics and competitive pressures. By continuously reassessing and refining their international
strategies, companies can enhance their competitiveness, capture growth opportunities, and
create sustainable value in global markets.

Q1: (Chap 19)

Q2: (Chap 15)

Q3: (Chap 13)

Question 1: Assume an American firm wants to enter the Vietnamese market through a joint
venture agreement. Identify and explain 3 HRM issues that could arise between American
employees and Vietnamese employees. Choose a specific industry to discuss.
In your opinion, which staffing policy this joint venture should apply in order to prevent such
issues and why?

Answer:
Let's consider an American firm in the technology industry seeking to enter the Vietnamese
market through a joint venture agreement. Here are three HRM issues that could arise between
American employees and Vietnamese employees:
 ● Cultural Differences: American and Vietnamese employees may have different cultural
backgrounds, communication styles, and work habits. Misunderstandings and conflicts
may arise due to cultural differences in hierarchical structures, decision-making
processes, and perceptions of authority. For example, American employees may prefer
direct communication and individual initiative, while Vietnamese employees may value
harmony, consensus-building, and deference to authority.
● Language Barrier: Language differences between American employees
(English-speaking) and Vietnamese employees (Vietnamese-speaking) may hinder
effective communication and collaboration. Language barriers can lead to
misunderstandings, reduced productivity, and difficulty in conveying complex ideas or
instructions. Without clear communication channels, teamwork and coordination may
suffer, affecting project timelines and outcomes.
● Work Ethics and Expectations: Differences in work ethics, expectations, and attitudes
towards work may cause friction between American and Vietnamese employees. For
example, Americans may prioritize individual initiative, innovation, and work-life
balance, while Vietnamese employees may emphasize teamwork, loyalty, and long
working hours. Misalignment in work ethic and expectations could lead to resentment,
dissatisfaction, and turnover among employees.

To prevent such issues, the joint venture should consider implementing a staffing policy that
promotes cultural integration, diversity, and mutual understanding. One possible staffing policy
to address these challenges is the "Transnational Staffing" approach.

In the transnational staffing approach:

● Key management positions are filled by a mix of American and Vietnamese employees
who understand the local market, culture, and business practices.
● Both American and Vietnamese employees are given equal opportunities for leadership
roles, fostering collaboration, and shared decision-making.
● Cross-cultural training and development programs are provided to both American and
Vietnamese employees to enhance cultural awareness, communication skills, and
teamwork.
● Employee resource groups and diversity initiatives are established to foster inclusivity,
celebrate cultural differences, and promote collaboration among employees from
different backgrounds.

The transnational staffing approach allows the joint venture to leverage local expertise while
respecting cultural differences and promoting a collaborative work environment. By empowering
both American and Vietnamese employees to take leadership roles and fostering a culture of
inclusivity and diversity, the joint venture can minimize HRM issues and enhance its chances of
success in the Vietnamese market.
Chapter’s key

Chap 1: GLOBALIZATION

Hisense CEO Zhou Houjian led his company to become one of China’s top-selling electronics
manufacturers by using a strategy of rapid innovation and low-cost manufacturing.

If you were given the chance to run a leading electronics company, would you use a similar
approach to grow your brand? Or would you devote more time to research and development
and produce fewer products at a higher price point?

The decision between adopting a strategy of rapid innovation and low-cost manufacturing versus
prioritizing research and development (R&D) to produce fewer products at a higher price point
depends on various factors, including market dynamics, competitive landscape, customer
preferences, and the company's capabilities and resources. Here are some considerations for each
approach:

​ Rapid Innovation and Low-Cost Manufacturing:

● This approach focuses on quickly bringing new products to market at competitive
prices, leveraging economies of scale and efficient manufacturing processes to
keep costs low.
● Advantages:
● Rapid innovation allows the company to stay ahead of competitors and
capture market share by offering a wide range of products at affordable
prices.
● Low-cost manufacturing enables the company to appeal to price-sensitive
consumers and penetrate mass-market segments.
● Scale and efficiency in manufacturing can lead to cost advantages and
higher profitability.
● Challenges:
● Emphasizing rapid innovation and low-cost manufacturing may
compromise product quality or long-term sustainability if not executed
properly.
● Intense competition in price-driven markets may erode profit margins and
require continuous investment in innovation and cost optimization to
maintain competitiveness.
​ Focus on R&D and Premium Products:
 ● This approach prioritizes investing in R&D to develop high-quality, differentiated
products targeted at premium market segments, where consumers are willing to
pay higher prices for superior features and performance.
● Advantages:
● Producing fewer products at a higher price point allows the company to
focus on quality, innovation, and customer experience, fostering brand
loyalty and premium positioning.
● Premium pricing can lead to higher profit margins and greater
profitability, even with lower sales volume.
● Differentiated products cater to discerning consumers seeking superior
performance, design, and reliability, reducing price competition and
market saturation risks.
● Challenges:
● Investing in R&D and producing premium products requires substantial
resources, time, and expertise, with longer development cycles and higher
upfront costs.
● Targeting niche or premium market segments may limit the company's
addressable market and growth potential compared to mass-market
strategies.

Ultimately, the choice between these approaches depends on the company's strategic objectives,
market positioning, competitive advantages, and ability to execute effectively. A balanced
approach that combines elements of both rapid innovation and premium product development
may offer the best of both worlds, allowing the company to capture opportunities in mass-market
segments while also cultivating a loyal customer base willing to pay a premium for superior
products and experiences. As CEO, I would carefully assess market dynamics, customer needs,
and competitive pressures to determine the most suitable strategy for driving sustainable growth
and profitability in the long term.

Chap 2: NATIONAL DIFFERENCES IN POLITICAL ECONOMY

● Political economy
+ Economic factors:
+ Legal factors
+ Political factors
● Collectivism
● Individualism
● Socialism:
+ Communism
+ Social democracy
● Democracy -> Types of democracy
 ● Totalitarianism
● Market economy - Mixed economy - Command economy
● Legal system -> Types?

Chap 4: DIFFERENCES IN CULTURE

● Culture
+ Norms
+ Folkways
+ Mores
+ Values
● Determinants of culture
● Social strata
● Social mobility
+ Caste system
+ Class system
● Ethical system

Question:

Understanding the culture of a country or region can provide multinational enterprises with a
valuable competitive advantage and help them to avoid missteps that could negatively affect
their chances at success.

Imagine your school is a country of its own. How would you describe its culture to a business
considering investing there? What are some values or norms that would be important for an
outsider to understand? Which of the six determinants of culture play the most significant role
in shaping your school culture?

Answer:
If my school were a country, its culture could be described as inclusive, collaborative, and
achievement-oriented. Here's how I would describe its culture to a business considering investing
there:

● Inclusive Culture: My school prides itself on fostering an inclusive environment where

diversity is celebrated, and individuals from different backgrounds feel welcome and
valued. Collaboration and teamwork are encouraged, and there is a strong sense of
community among students, faculty, and staff.
● Collaborative Environment: Collaboration is a key aspect of the school's culture, with
emphasis placed on teamwork, cooperation, and shared learning experiences. Students
are encouraged to work together on projects, participate in group discussions, and
exchange ideas and perspectives.
 ● Achievement-Oriented: The school culture places a high value on academic excellence,
innovation, and personal growth. Students are encouraged to strive for excellence in their
academic pursuits, pursue their passions, and develop critical thinking and
problem-solving skills.

Values and norms important for an outsider to understand:

● Inclusivity: Embracing diversity and creating an inclusive environment where all

individuals feel respected and valued.
● Collaboration: Promoting teamwork, cooperation, and collective achievement through
collaborative learning and project-based activities.
● Excellence: Encouraging a culture of excellence and continuous improvement, where
individuals are empowered to pursue their goals and aspirations.

Determinants of culture that play a significant role:

● Social Structure: The social structure of my school, including its emphasis on

collaboration, teamwork, and shared learning experiences, shapes its culture and values.
● Religion and Philosophy: While my school may not have a religious affiliation, its
culture may be influenced by philosophical values such as inclusivity, equality, and
personal growth.
● Education and Knowledge: As an educational institution, my school's culture is deeply
influenced by its commitment to academic excellence, innovation, and lifelong learning.

In summary, my school's culture can be characterized by its inclusive, collaborative, and

achievement-oriented environment, where diversity is celebrated, and individuals are encouraged
to work together towards common goals. Understanding these values and norms is crucial for
any business considering investing in my school, as they reflect the foundation of its culture and
contribute to its success as a learning community.

Chap 5: ETHICS, CORPORATE SOCIAL RESPONSIBILITY, AND

SUSTAINABILITY
● Business ethics
● Ethical strategy
● Most common ethical issues in business
● Commons -> Tragedy of commons
● Social responsibilities
● Ethical dilemmas
 ● Determinants of ethical behavior
● Straw men approaches
+ Friedman Doctrine
+ Cultural Relativism
+ Righteous Moralist
+ Naive Immoralist
● Utilitarian ethics
● Kantian ethics
● Right theories
● Justice theories

Question:

The job market of the 21st century is often referred to as the “gig economy.” Employers such
as Uber, Amazon, Airbnb, and others are increasingly relying on short-term freelance
employees who work on a piecemeal basis.

Proponents of the gig economy suggest it offers workers the freedom to work where and when
they want, while employers can reduce labor costs by avoiding health insurance and payroll
taxes. Others suggest that businesses are simply taking advantage of a tough economy to cut
benefits and offer lower wages to people desperate for work.

If you were the head of a large corporation, would you consider it ethical to profit from the gig
economy?

Answer:
As the head of a large corporation, considering the ethical implications of profiting from the gig
economy would be crucial. While there are arguments both for and against the gig economy, it's
essential to weigh the potential benefits and drawbacks for both workers and society as a whole.
Here are some ethical considerations to take into account:

● Worker Well-being:
+ gig work offers flexibility and autonomy, it can also lead to insecurity, instability,
and lack of benefits such as health insurance, retirement plans, and job security.
=> As a corporation, it's important to prioritize the welfare of workers and ensure fair
compensation, benefits, and working conditions.

● Fairness and Equity: Another ethical consideration is the fairness and equity of gig
work arrangements.
+ In many cases, gig workers may lack bargaining power -> face exploitation (bóc
lột) or unfair treatment by employers
=> It's important to ensure that gig workers are treated fairly, compensated adequately, and have
access to opportunities for advancement and professional development.
 ● Social Responsibility: Corporations have a broader ethical responsibility to contribute
positively to society.
+ Profiting from the gig economy should not come at the expense of undermining
social welfare or exacerbating (làm trầm trọng) income inequality.
=> It's important to consider the broader societal impacts of gig work and strive to create
economic opportunities that benefit workers, communities, and the economy as a whole.

● Regulatory Compliance: Ethical considerations also extend to compliance with labor

laws, regulations, and standards.
=> Corporations should ensure that gig work arrangements adhere to legal requirements and
ethical principles, including fair labor practices, non-discrimination, and respect for workers'
rights.

Ultimately, whether profiting from the gig economy is ethical depends on how it is implemented
and the extent to which it prioritizes the well-being and rights of workers. As the head of a large
corporation, it's essential to approach gig work with a commitment to fairness, transparency, and
social responsibility, ensuring that it benefits both workers and society while maintaining ethical
standards and integrity in business practices.

Chap 6: INTERNATIONAL TRADE THEORY

New Trade Theory suggests that a country may become the dominant exporter of a good
because it was the first to develop large-scale production capabilities for a given product or
industry and thus possessed “first-mover advantages.”

As the head of a major manufacturing company, what types of new products, real or imagined,
would you start developing now in order to enjoy first-mover advantages in the future?

First-mover advantages:
1. Market leader: establish itself as a market leader and capture a significant share of the
marketer before competitors enter => shape the industry standard, customer preferences,
and build brand loyalty
2. Brand recognition: being an innovator/trendsetter => build a strong brand reputation and
recognition
3. Technological edge: By investing research and development early on, the first-mover can
develop proprietary technologies, patents, create barriers to entry and differentiation in
the market industry.

Chap 8: FOREIGN DIRECT INVESTMENT (FDI)

Foreign direct investment (FDI) in a developing economy, such as Russia or the countries of
 sub-Saharan Africa, can be extremely profitable for multinational enterprises. It can also result
in substantial losses if economic conditions in the host country deteriorate.

If you were the head of a major manufacturer of household goods seeking entry into the
market of a country experiencing strong economic growth due to its oil and gas exports, which
entry strategy would you pursue: exporting, licensing, or foreign direct investment? If FDI,
would you seek to acquire an existing firm, or build entirely new facilities (a greenfield
investment)?

As the head of a major manufacturer of household goods seeking entry into a market
experiencing strong economic growth due to its oil and gas exports, the choice of entry strategy
would depend on various factors, including market conditions, risk tolerance, resource
availability, and strategic objectives. Here are the considerations for each entry strategy:

​ Exporting:
● (definition) Exporting involves…
● Exporting may be suitable for entering a new market quickly with minimal
investment and risk.
● However, exporting may limit control over distribution, brand presence, and
customer relationships.
​ Licensing:
● (definition)
● Licensing can be a low-cost and low-risk entry strategy, as it leverages the local
partner's resources and market knowledge.
● However, licensing may result in reduced control over product quality, brand
image, and market expansion.
​ Foreign Direct Investment (FDI):
● FDI involves establishing operations or acquiring assets in the target market,
allowing for greater control and integration with local operations.
● Given the strong economic growth and potential profitability of the target market,
FDI may be an attractive option for maximizing long-term returns and market
presence.
● The choice between acquiring an existing firm (acquisition) or building entirely
new facilities (greenfield investment) depends on factors such as availability of
suitable acquisition targets, regulatory restrictions, cost considerations, and
strategic fit.

Considering the strong economic growth driven by oil and gas exports in the target market, and
the potential for substantial profits, FDI may be the most suitable entry strategy for the major
manufacturer of household goods. However, the decision between acquisition and greenfield
investment would require careful evaluation of various factors:

● Acquisition: Acquiring an existing firm in the target market may offer advantages such
as established market presence, customer relationships, distribution channels, and
operational infrastructure. This can expedite market entry and reduce risks associated
 with building from scratch. However, finding a suitable acquisition target and negotiating
a deal may pose challenges, and there may be integration risks and cultural differences to
address post-acquisition.
● Greenfield Investment: Building entirely new facilities allows for greater control over
operations, processes, and brand positioning. It offers the opportunity to design facilities
tailored to specific needs and standards. However, greenfield investment requires
significant upfront investment, time, and effort to establish operations, navigate
regulatory requirements, and build market presence from scratch.

Ultimately, the choice between acquisition and greenfield investment would depend on factors
such as market conditions, available resources, strategic objectives, risk appetite, and the
company's long-term vision for growth and profitability in the target market.

Chap 10: FOREIGN EXCHANGE MARKET (Currency, Exchange,

Purchasing Power)

Imagine that you are the CEO of a major consumer electronics manufacturer based in the
United States. Over the past decade, your company has seen a sharp rise in demand from
consumers in oil-exporting nations in South America, Africa, and Eastern Europe. As such, a
significant portion of your revenues are in foreign currencies.

Evaluate your exposure to foreign exchange risk. What factors might influence the profits you
receive from foreign sales? How might you hedge against these risks?
When exchanging with foreign countries, although it can present a significant portion of the
revenue but when converting those revenue from foreign currencies to the US dollar may pose
some risks:
+ Assume that the spot exchange is applied: If the US dollar depreciates in the future, it
will cause my company a loss in profit
=> To hedge against this risk: I will use the forward contract to mitigate the potential of the US
dollar will depreciate in the future. A forward contract will serve as a commitment that my
company will not experience a loss in profit because my company and the buyers will agree to
sell as a profitable price.
+

Answer:

Exposure:

● Revenue Concentration: A large portion of our revenue comes in foreign currencies,

primarily from oil-exporting regions like South America, Africa, and Eastern Europe.
● Currency Fluctuations: Fluctuations in these currencies against the US dollar can
significantly impact our profits.
Factors influencing profits from foreign sales:

● Currency Fluctuations: Exchange rate movements between the US dollar (USD) and
the currencies of the oil-exporting nations can impact the value of foreign sales revenues
when converted back into USD. Appreciation or depreciation of foreign currencies
relative to the USD can affect profitability.
● Inflation and Interest Rates: Variances in inflation rates and interest rates between the
US and the foreign countries can impact currency values and purchasing power,
potentially affecting profitability.
● Economic and Political Stability: Economic conditions, geopolitical tensions, and
political instability in the oil-exporting nations may influence exchange rates and
consumer purchasing power, thereby affecting demand for consumer electronics and sales
revenues.

Hedging strategies to mitigate foreign exchange risk:

● Forward Contracts: Enter into forward contracts with financial institutions to lock in
exchange rates for future currency conversions. By hedging against adverse currency
movements, the company can mitigate the risk of fluctuations in the value of foreign
sales revenues.
● Currency Options: Purchasing currency options allows us to buy USD at a
predetermined rate within a specific timeframe. This provides flexibility and protects us
against unfavorable exchange rate movements.
● Natural Hedging: Utilize natural hedging techniques by matching foreign currency
revenues with expenses denominated in the same currency. For example, sourcing
materials or components from suppliers in the foreign countries or establishing
production facilities locally can reduce our dependence on the local currency for
production costs and help offset currency risk.
● Diversification: Diversify sales and operations across multiple geographic regions and
currencies to reduce reliance on any single market or currency. A diversified revenue
stream can help mitigate the impact of adverse exchange rate movements on overall
profitability.

By implementing a combination of these hedging strategies and closely monitoring foreign

exchange exposures, the company can mitigate the impact of currency fluctuations on
profitability and ensure a more stable financial performance in markets with significant foreign
sales revenues.

CHAP 13: STRATEGY IN INTERNATIONAL BUSINESS

● Why do firms need to pursue strategies?
Value creation
 ● When will a firm has high profits (in terms of cost and value)
● 2 ways (strategies) to increase profits
Strategic positioning
● 3 things to maximize profits
● Support activities -> Primary activities
How can firms increase profits in international markets?
● 4 ways
International business strategy
● Global standardization
● Localization
● Transnational
● International

Question:
Imagine that you are the manager of a foreign subsidiary of a major U.S. apparel company.
Consumer tastes in your location require a high degree of local responsiveness, while declining
sales in the United States require significant cost reductions.

Which of the four main strategic postures (global standardization, localization, transnational,
or international) would you adopt to address these pressures? What advantages or
disadvantages would that strategy provide?
Answer:

The transnational strategy combines elements of both global standardization and localization to
achieve a balance between global efficiency and local responsiveness. Here's how this strategy
would address the pressures faced by the foreign subsidiary:

● Local Responsiveness:
+ customization of products and marketing strategies to cater to the unique
preferences and cultural nuances of the local market.
+ adapt its product offerings, designs, sizes, and marketing campaigns to better meet
the needs and preferences of consumers in the foreign location.
● Cost Reductions: (leveraging, standardizing, optimizing)
+ emphasizes efficiency and cost reductions by leveraging economies of scale,
standardizing processes, and optimizing the supply chain.
+ consolidate (củng cố) manufacturing facilities, and negotiate favorable terms with
suppliers to reduce costs without compromising quality or customer satisfaction.

Advantages of the transnational strategy:

● Flexibility:
+ allows the company to adapt to local market conditions
 + maintaining global competitiveness
=> provides the flexibility to customize products and services to meet the diverse needs of
consumers worldwide.

● Efficiency:
+ By optimizing global operations and leveraging economies of scale => achieve
cost reductions and improve operational efficiency.
+ Streamlining processes and standardizing certain aspects of the business =>
achieve economies of scale without sacrificing local responsiveness.
● Competitive Advantage:
+ enables the company to differentiate itself from competitors by offering products
and services that are tailored to local preferences while benefiting from the
efficiencies of a global operation
+ This dual focus on customization and efficiency can create a sustainable
competitive advantage in both local and global markets.

Disadvantages of the transnational strategy:

● Complexity:
+ requires coordination and integration across multiple regions, functions, and
departments within the organization => managing the complexities of balancing
global efficiency with local responsiveness can be challenging and may require
significant organizational resources and capabilities.
● Costs:
+ Achieving both local responsiveness and global efficiency may entail higher costs
in terms of research and development (R&D), marketing, and supply chain
management => balancing these competing priorities while maintaining
profitability can be demanding and may require careful resource allocation and
strategic decision-making.

CHAP 15: ENTRY STRATEGY AND STRATEGIC ALLIANCES

Entry mode
1. Exporting: refers to the selling and sending of goods or service to another country
→ No investments in foreign production facilities are needed

Advantages Disadvantages
 + Low cost: just need the right product at a
competitive price
+ High efficiency: achieve experience curve
→ substantial scale economies
+ Favorable gov policies: have foreign
currency reserves → gov gives incentives (tax
+ It can be expensive: Not be appropriate if
lower-cost locations for manufacturing the
product can be found abroad
+ High transportation costs and long lead time
+ Tariff barriers can make exporting risky
+ Foreign exchange risks
+ Foreign agent’s loyalty concerns: Local
agents often carry products from multiple
different suppliers in the same industry

2. Turnkey projects: the contractor handles every detail of the project for a foreign client,
including the training of operating personnel.
At completion of the contract, the foreign client is handed the “key” to a plant that is
ready for full operation → “turnkey”. Commonly used in the chemical, pharmaceutical,
petroleum-refining, and metal-refining industries

Advantages Disadvantages

+ More revenue (short-term): particularly + Possible revenue loss (long-term): turnkey

useful in areas where FDI is limited by host deal have no long-term interest
gov regulations. + Unintended competition
+ Less risk + The potential loss of a competitive
advantage

3. Licensing: a licensor grants the rights to intangible property to the licensee for a
specified time period, and in return, receives a royalty fee from the licensee (allows for
the use of registered trademarks, nothing more)
EX:
+ Calvin Klein has licensed the brand to sell their products, the products such as underwear,
perfume, and jeans are all produced and branded under licensing agreements.
+ When you purchase items emblazoned (trang trí) with disney characters, that products
was likely not manufactured by Disney itself, instead Disney usually signs licensing
agreements with certain producers to use their characters and images.
 Advantages Disadvantages

+ Income w/o overhead
+ Potentially better marketing: local
businesses have a better sense of how to reach
their market.
+ The ability to enter foreign markets more
easily: intangible property has an easier time
crossing national borders than physical
products do (not worry abt tariffs).
+ Risk of IP theft: have less control over the
ways the licensee conducts their operations →
more exposed to theft
+ No guarantee of revenue
+ Risk of diminished reputation

4. Franchising: a specialized form of licensing in which the franchisor not only sells
intangible property but also insists that the franchisee agree to abide by strict rules as
to how it does business (allow for the use of trademarks, additional intellectual property,
products, services, operating manual and much more.)
→ Royalty payment from % of franchisee’s revenue

→ Licensing mainly pursued by manufacturing firms while Franchising

mainly employed by service firms
 Advantages Disadvantages

+ Low risk: have better control -> lower risk + Less capable of supporting competitive
of theft attacks in foreign country
+ Fast expansion + Quality control:

5. Joint ventures: two or more parties agree to pool their resources for the purpose of
accomplishing a specific task (new project / any other business activity).
→ Each of the participants is responsible for the profits, losses, and costs associated with
it.
→ The venture is its own entity, in other words, it is separate from the participants’ other
business interests

Advantages Disadvantages

+ Gaining support from a local partner:
know abt the host country’s competitive
conditions, culture, language, political &
business systems
+ Sharing risks and costs
+ Less gov interventions
+ The risk of losing technology: (=licensing) risks
giving control of its technology to its partner
→ Op A: hold majority ownership in the venture
→ Op B: “wall off” a partner’s technology that’s
central to the core competence of the firm
+ Not having total control: Does not give a firm the
tight control over subsidiaries
+ A possible clash between partners: As a foreigner
partner’s knowledge about local market conditions
rises, it depends less on the expertise of a local
partner → conflicts over control of the venture’s
strategy and goals.

6. Wholly owned subsidiaries: the firm owns 100 percent of the stock → The optimal
entry mode depends on the nature of a firm’s core competencies
+ Opt A: Set up a new operation in a foreign country => Greenfield venture
+ Opt B: Acquire an established firm in the host nation => Acquisition

Advantages Disadvantages

+ Less risk of losing core technology + Huge sunk costs and big risks
+ Tight control + Lack of local support
+ Attaining an economy of scale: realize +
location & experience curve economies + it
gives the firm a 100% share of profits
generated in a foreign market

When competitive advantage is based on proprietary technological know-how

avoid licensing and joint ventures
When competitive advantage is based on management know-how,
franchisees or joint-venture partners is not that great

Greenfield or Acquisition?
Greenfield strategy: build a subsidiary from the ground up or sometimes include the building of
new distribution hubs, offices, and living quarters. Better when the firm needs to transfer
organizationally embedded competencies, skills, routines, and culture

Advantages Disadvantages

+ It gives the firm a much greater ability to
build the kind of subsidiary company that
it wants
+ It is simpler to establish a set of
operating routines in a new subsidiary than
it is to convert the operating routines of an
acquired unit
+ It comes at a high cost and requires a long-term
commitment: requires a huge amt of capital
expenditure -> high financial burden
+ It is more vulnerable to political risk: if
discouraging gov policies in the country -> foreign
corp decide not to put money into that company

Acquisition strategy: acquire an existing company. Better when there are well-established
competitors or global competitors interested in expanding

Advantages Disadvantages

+ Firms may overpay for the acquisition: arises when

+ Expedite (đẩy nhanh) market entry
+ Reduce risks associated with building
from scratch
many firms are interested in that company -> pay
larger amt
+ There may be a cultural clash: different in cultures
-> high management turnover bc the employees do
not like the acquiring companies way of doing things
+ Challenges are often underestimated: attempts to
realize synergies by integrating the operations of the
acquired and acquiring entities often run into
roadblocks (differences in management
philosophy/cultures) -> take much longer than
 expected

=> Acquisition when the firm is seeking to enter a market where there are already
well-established incumbent enterprises, and where global competitors are also interested in
establishing a presence.
=> Greenfield venture when the firm is considering entering a country where there are no
incumbent competitors to be acquired. And when the competitive advantage of the firm is
based on the transfer of organizationally embedded competencies, skills, routines, and culture.

Question:
The Jollibee Foods Corporation was able to withstand competition from McDonald’s in the
Philippines and later found success in an already-saturated U.S. fast food market by localizing
its menu to Filipino tastes and entering foreign markets with a large number of Filipino
expatriates.

What are the risks and potential rewards of such a strategy? If you were the head of a
successful apparel company based in a developing nation, would you choose a similar strategy
to enter into the U.S. market, or would you pursue a different option, such as licensing or
forming a joint venture with an established U.S. brand?

Answer:
The strategy of localizing the menu to cater to Filipino tastes and leveraging the Filipino
expatriate community to enter foreign markets, as exemplified by Jollibee Foods Corporation,
comes with both risks and potential rewards.

Risks:

● Cultural Adaptation: Adapting the menu to suit local tastes may require significant
research and investment to ensure that the offerings resonate with the target market.
Failure to accurately understand and cater to local preferences could result in rejection by
consumers.
● Market Saturation: In entering foreign markets with a large number of expatriates, there
is a risk that the market may already be saturated with competitors offering similar
products. It may be challenging to differentiate the brand and attract customers away
from established competitors.
● Dependency on Expatriate Market: Relying heavily on the expatriate community may
limit the brand's growth potential, as it may struggle to appeal to a broader segment of the
population beyond the expatriate demographic.

Potential Rewards:

● Differentiation: By offering menu items tailored to Filipino tastes, Jollibee Foods

Corporation was able to differentiate itself from competitors and carve out a unique
 position in the market. This strategy can help attract customers seeking authentic and
familiar flavors.
● Loyalty from Expatriate Community: Leveraging the loyalty and nostalgia of the
Filipino expatriate community can provide a strong initial customer base and
word-of-mouth marketing, helping to establish a foothold in foreign markets.
● Opportunities for Expansion: Successfully penetrating foreign markets with a
significant expatriate population can serve as a springboard for further expansion into the
broader market, as the brand gains recognition and acceptance.

If I were the head of a successful apparel company based in a developing nation considering
entering the U.S. market, I would carefully evaluate the risks and rewards of a similar
localization strategy. While leveraging the expatriate community and catering to niche tastes can
offer certain advantages, it may not be the most sustainable long-term strategy for penetrating the
U.S. market.

Instead, I would explore other options such as licensing or forming a joint venture with an
established U.S. brand. These approaches offer opportunities to leverage the brand equity,
distribution networks, and market knowledge of established players, while also mitigating risks
associated with market entry and cultural adaptation. Additionally, forming strategic partnerships
can provide access to resources, expertise, and market insights that can accelerate market
penetration and growth in the U.S. market. Ultimately, the choice of strategy would depend on
the company's objectives, resources, and capabilities, as well as the competitive dynamics of the
U.S. apparel market.

Chap 19: HRM (culture, language, hinder effective communication)

If you were an HR manager for a London-based multinational enterprise that was launching a
subsidiary in Vietnam, what are some challenges that you would expect an expatriate manager to
face, and how might you seek to minimize those challenges and reduce the chance of failure?
How would your response change if your company was based in Japan, India, or South Africa

Challenges for an expatriate manager in Vietnam:

● Cultural Environment:
+ Cultural differences: Adapting to the local culture, customs, and business
practices in Vietnam may be challenging for an expatriate manager, leading to
misunderstandings and communication barriers.
+ Language Barrier: If the expatriate manager is not fluent in Vietnamese, language
barriers can hinder effective communication with employees, clients, and
stakeholders.
● Legal and Regulatory Environment: Navigating the complex legal and regulatory
environment in Vietnam, including labor laws, taxation, and business regulations, can be
daunting (làm nản chí) for an expatriate manager.
 ● Economic Environment:
+ Management of Local Workforce: Managing a diverse and culturally different
local workforce may require a nuanced approach to leadership, team-building, and
employee relations.
+ Adapting to Market Dynamics: Understanding the local market dynamics,
consumer preferences, and competition in Vietnam's business landscape may take
time for an expatriate manager.

Strategies to minimize challenges and reduce the chance of failure:

● Cross-Cultural Training: Providing cross-cultural training and orientation programs for

expatriate managers or arranging a familiarization trip to Vietnam before their assignment
can help them better understand the local culture, business etiquette, and communication
norms.
● Language Support: Offering language training or hiring interpreters/translators to assist
expatriate managers with language barriers can facilitate smoother communication and
relationship-building with local stakeholders.
● Local Support Network: Establishing a local support network of experienced employees
or mentors who can provide guidance and assistance to expatriate managers in navigating
the local environment can be invaluable.
● Legal and Compliance Assistance: Providing legal and compliance support from local
experts or legal advisors can help expatriate managers navigate the regulatory landscape
and ensure compliance with local laws and regulations.

If the company were based in Japan, India, or South Africa, the specific challenges and strategies
to minimize them might vary:

● In Japan, expatriate managers may face challenges related to hierarchical organizational

culture, language barriers, and the need for consensus decision-making. Strategies could
include providing extensive cultural training, fostering mentorship programs, and
promoting open communication channels.

● In India, expatriate managers may encounter challenges related to bureaucratic red tape,
diverse cultural norms across regions, and managing hierarchical structures within
organizations. Strategies could include building strong relationships with local partners,
leveraging local expertise, and adapting management styles to accommodate cultural
diversity.
● In South Africa, expatriate managers may face challenges related to addressing
socioeconomic inequalities, and managing diverse workforce demographics. Strategies
could include promoting diversity and inclusion initiatives, engaging with local
communities, and fostering cross-cultural dialogue within the organization.

Overall, understanding the specific challenges and context of the host country is crucial for
expatriate managers' success. By implementing targeted strategies and support mechanisms, HR
managers can help minimize challenges and enhance the likelihood of a successful subsidiary
launch.
 CGV case

1. International business strategy

● Differentiation through innovative technology: CJ CGV is a pioneer in employing
state-of-the-art technology like digital projection technology, IMAX, and 4DX
⇒ attracts moviegoers seeking cutting-edge entertainment experiences, enhancing its brand
image and driving ticket sales.

● Localization operations:
- CJ CGV schedules different films for different countries
+ CJ CGV Korea: Ode to My Father, The Attorney, and Miracle in Cell No. 7.
+ CJ CGV Vietnam: Dao, Pho and Piano, Nguoi vo cuoi cung
- Different menu offerings in different countries:
+ CJ CGV Vietnam: Banh mi
+ CJ CGV Korea: chestnuts
+ CJ CGV America: cream onion popcorn
● Cultureplex

2. Entry mode
● Mergers and Acquisitions (M&A)
→ gain immediate access to the new market, accelerate its growth strategy, and provide
access to a broader customer base without the time-consuming process of organic expansion.
● Joint ventures
→ be able to navigate the complexities of the partner’s market more effectively, gaining access
to prime locations, securing necessary permits, and establishing a brand presence.
● Greenfield investment (Wholly owned subsidiaries)
→ customized its offerings to suit the specific needs and preferences of local consumers, while
also demonstrating its long-term commitment to the market.