...Slide 1: Title In January 1994 there was a new development; the North American Free Trade Agreement (NAFTA) was instituted between the United States, Mexico, and Canada creating the largest free trade area and richest market in the world. This one of the most important and wide-reaching treaties in the world. A treaty between Canada, Mexico, and the United States that was designed to foster greater trade between the three countries. It was one of interesting prospect and looked upon as the start of globalization. The attempt was to help with financial situations involving the all countries in the North American continent, especially those of United States, Mexico, and Canada. One major problem encountered were the economic stabilities of each country, especially in Mexico. There were issues of foreign debt, balance of payment problems, and exchange rate fluctuations. The agreement does well to commit to standards on environmental protection and labor laws but still strives to enforce those laws. The agreement did have some goals to help foster the partnerships between the countries. First and foremost to reduce trade barriers. These barriers cause imports to be of a higher priced than local goods. The object of the agreement was to participate in free" or "open" when goods and services can move into markets without restrictions, and prices are determined by supply and demand. Nations sometimes erect barriers to this free movement of goods and services, such...
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...of new pharmaceuticals. The company’s strategic growth objective was to grow its existing business by between 12% and 15% annually and its entire business by 20%. This plan left a strategic growth gap of 5% to 8% each year, resulting in CRL’s pursuit of growth opportunities in the form of joint ventures, technology licensing and strategic partnerships. Key Issues Primary: Should CRL invest up to $2 million to create a state of the art specific pathogen free (SPF) egg farm? In order for Dennis to win over the Board of Directors, he must convince Jim Foster (CEO) of CRL. Foster views this proposal as a potential distraction for Specific Antigen Free Avian Services (SPAFAS), which continues to grow in the United States. Given the number of companies involved, different geographic locations and capital requirements, CRL must carefully decide whether this investment will fill their strategic gap growth. Secondary: Would IDISA be reliable partners in a joint venture The complex organizational structure of Group IDISA, is made up of five legally independent companies all owned by the same family. When considering a joint venture with ALPES, CRL has concerns regarding the number of transactions between the companies and the overall transparency of the IDISA. This family owned company holds a board meeting once a year, and has no strategic plans, operating budgets, meeting minutes or formal corporate documents that are routine for U.S. companies. Tertiary: Mexico’s instability ...
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...Key Issues The ALPES S.A. case deals with Charles River Laboratories (CRL) and their consideration of a joint venture proposal with an animal vaccine company in Mexico. The senior V.P. is preparing to present the proposal of a $2 million investment for the firm. The CEO, Jim Foster, is concerned with the associated risks that CRL would be undertaking if they accept this venture. Key issues of concern are; the partnership with a relatively small, family run business; having operations in Mexico, which could pose difficulties; maintaining CRL’s focus on U.S. expansion; and the proposed partner’s lack of funds to invest, which will leave CRL to bear the entire cost of the venture. Internal Analysis: Business Strategy Diamond 1. Arenas Charles River Laboratories (CRL) is currently the market leader for the commercial supply and production of global laboratory animal models used in the development and testing of new pharmaceuticals, as well as discovery research. The most recent product development is that of SPF eggs, which are used in the development of human vaccines that have not yet been converted over to the newer production technology. 2. Vehicles Charles River Laboratories has two different options at this time for vehicles that will enable them to enter new arenas. These consist of entering into a joint venture, or other type of agreement, with ALPES, or making use of the SPAFAS franchises. Although the initial intention to purchase the existing franchises...
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...Introduction: Designer jean company, Narcissus Denim Co, is looking to either move or expand it's manufacturing to the Mexico. The jeans are “made in the USA”, but currently the raw material, and the majority of the jeans are currently fabricated in the United States. They employ 75 people. The company was started five years ago in Nashville, TN, and has seen steady growth in the United States. Narcissus Denim currently fabricates its denim jeans in the USA, with only some of the materials coming from China. The cost of raw materials and manufacturing domestically have become too expensive, so Narcissus needs look outside of the USA. Narcissus is aware of other creators of designer apparel that have gotten bad press for using the “Made in the USA” label because the brands only make a portion each piece of their apparel in the USA. The purpose of this memorandum is to examine the possibility of bringing to the USA neighbor by working with “Maquiladora”, the Spanish word for manufacturer, in Mexico. Aspects of US law, international legal implications, as well as the ethical implications of moving this portion of the company to Mexico are the primary focus areas of research. Domestic Legal and Ethical Implications: Narcissus Denim was founded and gained success because of the quality of the product, in great part because the apparel is “made in the USA”. In order to create a portion of the product in Mexico and keep the “made in the USA” label, Narcissus Denim must ensure...
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...Partnership: Worse than NAFTA? Septemb er 2013 Lori Walla ch Public Citizen’s Global Trade Watch Outcomes of 20 Ye ars of NAFTA, WTO, FTAs… Crushing of Americ an Middle Class: more than 5 million US manufa cturing jobs (1 out of 4) & 60,000 US manufa cturing fa cilities gone. Millions of service sector jobs offshored: c all centers, computer, programming, engineering, a cc ounting. Wage “arbitrage” in a ra ce- to-the- bottom. U.S. re al median wages at ‘70s levels. Income inequality at Robb er-Baron-era levels. When manufa cturing, good jobs go tax bases shrink – and schools, public services, infrastructure cut, and construction sector unemployment soars. Floods of unsafe imported food, products. Financial deregulation, instability and repe ated financial crises. He alth, labor, land use, other public interest laws around world atta cked in foreign tribunals. Some dump ed. Initiatives chilled. Billions extra cted from taxpayers and paid to corporations for violations of new “rights.” Drug prices up. In poor nations, de adly cut in a cce ss to meds. Rich nation higher prices slam poor consumers, govt budg ets as Big PhRMA profits soar. U.S. loses 170,000 family farms. In ‘12, volume of U.S. food exports only 1% higher than ’95 (when NAFTA-WTO started). Imports of food now 97% above ‘95 level. Livelihoods of tens of millions of pe asant farmers destroyed, mass migrations, hunger incre ased. Growth rates decline in nations that follow NAFTA-WTO model. U...
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...beneficial to the growth of the company. Internal Analysis_______________________________________________________________ The internal analysis will partially determine how capable CRL is with their business resources moving forward within their industry. With a VRINE analysis, descriptions of what this company may endure internally will be discussed. Value There is a clear value for CRL in their industry. Under B&L, CRL is one of their most profitable divisions. They contribute around ten percent of B&L’s corporate net income. CRL was sold to B&L for 110 million dollars. This acquisition gave the CRL division a greater growth opportunity within an organization. CRL planned to have a growth of twelve to fifteen percent a year. CRL also acquired SPAFAS for six million dollars, which also added value to the B&L division. A large capital investment in SPAFAS increased production of SPF eggs in the United States. Rarity For CRL, resources were important and ALPES represented an opportunity for them. ALPES was the sole producer of SPF eggs in Mexico. A joint venture with ALPES would give CRL a market where basically no competition exists. To enhance this opportunity, CRL will need to contribute funds for the joint venture which would ultimately increase the SPF egg production capacity. Adding this production in Mexico would give competitive advantage. The high capital that B&L has in possession gives them a serious competitive advantage and adds a sense...
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...Globalization Learning objectives • Explain why it is important for managers today to have a global perspective. • Explain the three components of globalization • Describe its effects on markets and production • Explain how technology and innovation in transportation have speeded up globalization • Discuss pros and cons of globalization This chapter is dedicated to introducing the student to the emergence of a new and integrated world of business in which the traditional barriers to cross-border trade and investment including distance, time zones, language, differences in national government regulation, culture and business systems recede in significance due to globalization. The discussion of contemporary issues in international business illustrates the unique challenges of international business. A review of macro-economic and political changes that have taken place in the last 30 years highlights the issues that a typical manager must address in a global market. Information technology and technological changes have put global markets within the reach of small firms in remote locations. In spite of all its benefits, globalization is not a panacea. Critics of globalization point out that it has adverse effects on some firms and individuals. The opening case chronicles the meteoric rise of Wal-Mart from its humble Arkansas beginnings in 1962 to a global retailing giant with $218 billion in sales in 2002. The closing...
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...Globalization Learning objectives • Explain why it is important for managers today to have a global perspective. • Explain the three components of globalization • Describe its effects on markets and production • Explain how technology and innovation in transportation have speeded up globalization • Discuss pros and cons of globalization This chapter is dedicated to introducing the student to the emergence of a new and integrated world of business in which the traditional barriers to cross-border trade and investment including distance, time zones, language, differences in national government regulation, culture and business systems recede in significance due to globalization. The discussion of contemporary issues in international business illustrates the unique challenges of international business. A review of macro-economic and political changes that have taken place in the last 30 years highlights the issues that a typical manager must address in a global market. Information technology and technological changes have put global markets within the reach of small firms in remote locations. In spite of all its benefits, globalization is not a panacea. Critics of globalization point out that it has adverse effects on some firms and individuals. The opening case chronicles the meteoric rise of Wal-Mart from its humble Arkansas beginnings in 1962 to a global retailing giant with $218 billion in sales in 2002. The...
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...Introduction to International Business MHR 2000 Spring Semester 2013: Session 1 MWF 5:20-6:15 pm 105 Schoenbaum Hall Professor: Shad Morris Office: 718 Fisher Hall Telephone: 614.247.1732 Email: morris@fisher.osu.edu Office Hours: Monday 4:30-5:30 pm, and by appointment ------------------------------------------------- Teaching Assistant: TBA Required Text: Oded Shenkar and Yadong Luo, International Business—2nd edition (Sage). ISBN: 1412949068. Course Packet (must be purchased online through the Carmen course site) Course Website: http://carmen.osu.edu Suggested Reading: The Economist (https://www.economistsubscriptions.com/searchstudent/us/) Course Overview and Objectives The world is changing in fundamental ways. First, the development of a truly global market in products, services, capital and even certain types of labor is changing the basic terms of competition for an array of different firms and industries. In Thomas Freidman’s words, “The world is flat.” Second, although firms have operated around the globe for many years, they are becoming increasingly integrated yet differentiated, with tightly coupled but different activities in various locations rather than replicating themselves from place to place. Understanding the interaction between culture, knowledge, and the way businesses coordinate around the world is critical to understanding both the possibilities for and constraints on managing a business in today’s...
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...Course format › Tutorials (with student teams): • Theory tutorials (TT) • Application tutorials (AT) › Combining theory with application country Factbook • • • • Tools/Methods Application of tools Comparative analysis Recommendation › Industry perspective 2 2/4/2014 | 5 Assignments and Grading/Feedback › Team assignments (70%) & Individual assignment (30%) › Team assignments: • Paper on / synopsis of materials of Theory tutorials (30%) • Factbook grade (40%) › All assignments: minimum of 5 › Overall: minimum of 5.5 › Participation / performance as presenters, reviewers or chair (+/- 1 grade point on team assignments) › Are you allowed to take this course? Propaedeutics or positive BSA › Passing 2nd year courses but failing 1st year courses leads to removal from the program 2/4/2014 | 6 First Application tutorial (starting tomorrow) › Each team prepares a potential structure for their country Factbook › Teams present an overview of tools, concepts & frameworks › Teams may provide a first general overview of their two countries and their industry › From the discussions in the various tutorial groups we will extract a basic outline for the country Factbook • Made available on Nestor › Deliverable for this week: PowerPoint...
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...for equipment and managerial know-how. Australia’s HNZ group has proposed an acquisition and has offered their staff, equipment, and cultural know-how in exchange for technological expertise and heavy equipment. Finally the sister corporation VIH Cougar in the Gulf of Mexico could be further expanded. The analysis completed was a competitor analysis; Bristow, PHI, and CHC are all industry leaders bringing their own expertise to the table. Bristow is one of the largest companies in the industry and recently started using TCAS2’s (traffic collision avoidance system) for new equipment. PHI dominates the North American oil and gas market, and has the most air time experience of all firms. CHC also has strong ties with oil and gas firms, but after a significant loss they are looking to be acquired by another firm. Overall the helicopter industry is growing due to the new exploration sites for oil and gas, and many opportunities exist. The second part of the analysis was comparing the economic, political, legal systems: and cultural, ethical, and human rights standards of the three countries to gain further insight into the degree of risk each country has. Australia has proven to have a resilient economy during the recession due to the growing oil and gas industry. Foreign business has been encouraged through...
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...and people are more connected with each other more than ever before. This is contributed to globalization; which for our purposes is defined as the increasing speed and ease that capital, services, goods, technologies, people, information, cultures, and ideas cross borders at. This paper will be analysing the effects of globalization on many aspects of France. Historically, France has opposed globalization and this disdain started gaining ground during the early 1990s as Europe was becoming integrated. The French feared globalization because they wanted to preserve their own rich culture, and because they saw globalization as another form of americanization and wanted no part of that. An example of this would be in 1999 when “a forty-six-year-old sheep farmer named José Bové was arrested for dismantling the construction site of a new McDonald’s restaurant in the southern French town of Millau. He acted, he argued, in protest against U.S. retaliatory trade sanctions against European products (notably, French cheese) and the uncontrolled spread of free market globalization. By attacking McDonald’s, and getting himself photographed in handcuffs in the process, the publicity conscious Bové was striking out at the symbol of U.S.-inspired globalization, a perceived threat to French identity and culinary traditions” (Gordon, 1). José Bové tried to stand up against a global corporation who was eating away at french culture, his ideals struck a chord and he became famous quickly, symbolizing...
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...Introduction to International Business MHR 2000 Spring Semester 2013: Session 1 MWF 5:20-6:15 pm 105 Schoenbaum Hall Professor: Shad Morris Office: Telephone: Email: Office Hours: 718 Fisher Hall 614.247.1732 morris@fisher.osu.edu Monday 4:30-5:30 pm, and by appointment Teaching Assistant: ???????? Office: 040 Fisher Hall Office hours: Wednesday 10:30-11:30 pm, and by appointment Email: ?????@fisher.osu.edu Required Text: Oded Shenkar and Yadong Luo, International Business—2nd edition (Sage). ISBN: 1412949068. Course Packet (must be purchased online through the Carmen course site) http://carmen.osu.edu Course Website: Suggested Reading: The Economist (https://www.economistsubscriptions.com/searchstudent/us/) Course Overview and Objectives The world is changing in fundamental ways. First, the development of a truly global market in products, services, capital and even certain types of labor is changing the basic terms of competition for an array of different firms and industries. In Thomas Freidman's words, "The world is flat." Second, although firms have operated around the globe for many years, they are becoming increasingly integrated yet differentiated, with tightly coupled but different activities in various locations rather than replicating themselves from place to place. Understanding the interaction between culture, knowledge, and the way businesses coordinate around the world is critical to understanding both the possibilities for and constraints on...
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...Pejenca Industrial Supply LTD. Case 3.9 COMM 1007EL-02 Austin Davey February 15, 2012 Executive Summary Pejenca Industrial Supply Limited of London is in need of an $150,000 extension to their facility to provide them with additional inventory space that they are in desperate need for. Pejenca needed to decide whether or not they were in need of a loan to finance this extension or whether it could be paid through their cash and revenues on hand. Pejenca had a time limit of one week to make their decision regarding the expansion and how they were going to finance it. The cash sources and uses analysis showed that Pejenca in its current time has a negative cash flow from operations, which could have potential meaning that Pejenca cannot handle to finance its current amount of inventory, this however does not mean that Pejenca has no cash. The ratio analysis' were more positive, showing that Pejenca has strength in their liquidity, stability, profitability, however not so much in their growth which was potentially due to the inventory limitations. From looking at the projected financial statements it was clear that even without the loan Pejenca had enough money to finance the extension themselves as their cash balance in the projections was much above the required $130000. Because of these factors discussed briefly above and more in depth below, our recommendation was that Pejenca not request a loan and finance the extension themselves. A loan costs extra money due to interest...
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...country location for this $3–4 million investment. Gail Childs, her immediate supervisor and General Manager for International Reservations, would want her report soon in order to get the final go-ahead from Delta’s CEO. Although a number of countries were possible options, Mary reviewed again the pros and cons for Mexico, Chile, and Argentina. CO The Internationalization of Customer Service NO T By 2000, telephone customer service was growing rapidly throughout the world. Many companies chose to outsource their telephone customer service operations to outside call centers; others kept such operations in-house. Other than locating call centers, also known as contact centers, within a region to be closer to customers, the principal reason for U.S. companies to move telephone customer service outside of the United States was to reduce costs. Because labor costs constituted between 60–80% of a call center’s operating expenses,1 airlines, computer firms, credit card companies, and others that used telephone customer service extensively were moving these operations overseas at a rapid pace. In Latin America, the rate of growth for such services was over 25% a year.2 While India was a popular low-cost destination for U.S. companies needing English-speaking call center staff, establishing a call center in Latin America made sense for companies seeking to establish contact centers for customers in that region, or for companies wanting to serve...
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