Course title: International Business (MBA program) 2126077 Year: 2017-2018 Lecturers: Prof. Phone Email address: Prof. and Mr. Guy Pross 03-9635767 talmor@colman.ac.il Office hours: According to appointment or after class Dean's office Building A - Dean of Behavioral Science and Psychology Mr Guy Pross Email address: Office hours: Teaching Assistant: guypr@colman.ac.il According to appointment 1Page
Course description: In the 21 st century, international business is an integral part of any type of organization. Business organizations all over the world, whether large or small, are engaged in international aspects of their activities. Clients may be foreign, the supply chain may be international, employees may be from different countries or the company may be registered somewhere outside the home country. Internationalization has become part and parcel of business management and in this course we will explore the basic concepts of internationalization, such as country competitiveness, foreign direct investment, international business strategies, entry strategies into foreign countries and functional strategies. We will examine international behavior of large as well as small companies from traditional industries as well as firms from high tech sectors and examine how theoretical tools can help analyze international strategies and behavior and plan for international business behavior. The various topics discussed during the semester will include the recent advances in the field and we will attempt to apply our understanding of the topics and related ideas to particular countries, industries and companies. We will discuss three case studies of firms that grapple with IB issues. The course entails frontal lectures, meetings with international business managers, including international entrepreneurs as well as in-class discussions. Students participate in case studies during the semester and take part in an exam at the end of the semester. Class attendance is required. 2Page
Course title International Business Course type Core/compulsory year 2017-2018 Prerequisites Strategic Management Website Moodle Course objectives Course topics To introduce theories and concepts of international business theories and processes and to create a basic understanding what international business entails, what it means to engage in internationalization of the business. At the end of the course, you should be familiar with the major IB theories and know how to use them to analyse business cases. Internationalization has become part and parcel of business management and in this course we will explore the basic concepts of internationalization, such as country competitiveness, foreign direct investment, international business strategies, entry strategies into foreign countries and functional strategies. We will examine international behavior of large as well as small companies from traditional industries as well as firms from high tech sectors currently and in the next decade. Course format This course introduces IB concepts and provides the basis for those that are interested in developing a deeper understanding of the topic in related courses. At the end of the course, you will be able to analyze international business behavior as well as international business opportunities. The course entails frontal lectures, meetings with international business managers, including international entrepreneurs as well as in-class discussions. Students have to hand in two case studies during the semester and take part in a take home exam at the end of the semester. Class attendance is required. 3Page
Course assessment 25% in class case study presentation 75% exam Attendance Attendance is strongly adviced in at least 80% of the sessions. You will see that the sessions are organized around the book, but the book should NOT be seen as a substitute for the lectures rather, the two are complementary. This means that all the material, topics, and examples covered during class time are supposed to be learned, and it is your responsibility to stay on top of the readings and lectures. We will post the lecture slides, but note that the slides are intended as a guide for the lecture, and not as a substitute. You will perform best if you take notes during lecture. We will not offer extra study sessions to cover missed lectures, or make-up assignments in the event that you miss one. Bonuses will be given to active and knowledgable students who present a 5 minute presentation about a firm while applying at least one theory taught in the course. 4Page
Sessions overview Class Topic Lecturer meeting Reading materials 1 Introduction International Business and you 16.3.18 We kick off the course by looking at the world in the 21 st century through the eyes of Thomas Friedman http://video.mit.edu/watch/theworld-is-flat-30-9321/ and Pankaj Ghemawat Ch.1 http://www.ted.com/talks/pankaj_ghemawat_actually_the_world_isn_t_flat.html While Friedman argues that the world is flat Pankaj Ghemawat does not agree. You are invited to prepare a response to the arguments in relation to international business and participate in the discussion which is question driven and addresses what IB means to you. 2 Country of Origin: Israel in a globalizing world Guy Pross 23.3.18 Many smaller countries specialize in certain industries that allow them to develop competitive and comparative advantages Senor & Singer internationally. In this class meeting we will be examining a case study of one country, Israel, which has developed capabilities in certain high tech industries. We will employ an number of the models and theories such as Porter's Diamond to examine how this advantage was developed and how it is sustained. 3 Discussion of Apple in China Guy Pross 13.4.18 4 20.4.18 The World: institutions The global business environment is in many ways a celebration of 5Page differences. In this session we will start thinking systematically Ch. 2 about sources of variation in the global business environment. To do so, we will develop a framework based on institutional theory. Institutions are in part represented by the formal regulations and laws that exist in each country. In this session we focus on
understanding how (and why) policy frameworks differ across countries. In addition, we will consider how companies not only receive policy, but also use voice and exit to shape policy outcomes. Discussion of WEF report. 5 27.4.18 The World: culture Institutions also exist in more informal forms: the culture and value Ch.3 systems that vary across countries and shape the way managers operate and interact with each other, society and government. We will consider ways to measure culture and how cultural differences matter for things like decision-making and consumer behavior. 6 Discussion of Amazon case study Guy Pross 4.5.18 Ch. 4 7 The World: trade 11.5.18 Trade is the backbone of the global economy. It is the basis of Ch. 5 commerce and allows us to enjoy the fruits of labors performed elsewhere. Free trade is supposed to maximize welfare, and there are powerful policies in place in support of this logic. But in practice, there are also many barriers to free trade. What s going on? Furthermore, not all agree that free trade maximizes welfare and we will look at the various views during this class. 8 18.5.18 Trade and developing industries in developing markets autonomous driving and the automotive industry Guy Pross Ch. 11 9 25.5.18 Discussion of Mobileye International Business Strategy: MNEs and their behavior What are multinational enterprises (MNEs) and how do they Ch.6 6Page behave? MNEs use international strategies such as Foreign Direct Investment (FDI). This in fact the defining characteristic of (MNEs). FDI means owning value-adding assets abroad. What motivations do firms have for doing this? What firm-specific advantages make it
10 1.6.18 11 8.6.18 successful? And what do we mean when we say FDI is a substitute for trade? What is the TNI index? Strategies for developing markets Discussion of Gillette case study International Business Strategy: Entering Foreign Markets MNEs have a host of options for entering foreign markets. They may choose low commitment paths involving export or strategic alliances, or they may engage in FDI. But FDI also comes in different forms. For instance, firms can acquire existing assets in the target market, or they can erect a new facility. Or they may set up a new entity in the form of as a joint venture (JV) with another company. What factors influence the choice for one entry mode over another? Are these onetime decisions or do they evolve over time? Ch. 13 Guy Pross Ch. 10 12 15.6.18 13 22.6.18 Discussion of Uber case study International Business Strategy: The internationalization of Small and Medium Sized Firms Much of our attention is focused on the large multinationals we know from the daily media. But is international expansion something that involves all firms, regardless of size? And if small firms expand internationally, should they do so quickly and capitalize on firstmover advantages, or gradually so that they can profit from experiential learning? What causes small firms to seek international operations and how do they organize their activities, their resources and capabilities when they operate internationally? Guy Pross Ch. 9 7Page Text Book - compulsory reading Mike W. Peng. 2017. Global Business, 4 rd Edition. South-Western Cengage Learning.
Additional reading materials Almor, T. 2001. Towards a contingency view of market entry strategies: Contextual and strategic factors. The Journal of Euromarketing, 10(1): 5-25. Almor, T. and Hashai, N. 2004. The Competitive Advantage and Strategic Configuration of Knowledge-Intensive, Born Global Firms: A Modified Resource Based View. Journal of International Management: 10: 479-500. Dunning, J. 2001. The Eclectic (OLI) Paradigm of International Production: Past, Present and Future. International Journal of the Economics of Business, 8(2), 173 190. Hashai, N. and Almor, T. 2004. Gradually Internationalizing Born Global firms: An Oxymoron? International Business Review, 13(4): 465-483. Hofstede, G. 1983 The cultural relativity of organizational practices and theories. Journal of International Business Studies, 14(2): 75-89. Oviatt,B. and McDougall, 2005. Towards a theory of international new ventures. Journal of International Business Studies 36, 29 41. Peng, M. 2002. Towards an Institution-Based View of Business Strategy. Asia Pacific Journal of Management, 19: 251 267. Senor, D., and Singer, S. 2009. Start-Up Nation: The Story of Israel s Economic Miracle. Twelve, New York. 8Page Rugman, A. M., & Verbeke, A. 2004. A perspective on regional and global strategies of multinational enterprises. Journal of International Business Studies, 35(1): 3 19
Assignments Throughout the semester, we will discuss case studies in class. Each group will discuss one question to one case study during the semester. You can work on the cases in groups of four at most. Grade: 25% of final grade for each assignment. Technical details: the group that is presenting should discuss the question in class for 3-5 minutes at most. The group will hand it the presentation to the lecturer before class hard copy format. Grades to the presentations will be returned the week after the presentation. Questions for each case study are presented below: Apple in China 1. Present a short introduction / background to the case study. 2. Analyze the Chinese cell phone industry and compare it to the USA culture using Porter s diamond. How do the two countries compare? Present comparisons and explain. 3. Can you explain why the Chinese market initially reacted tepidly to the 5C model and why Apple's products were much more successful in the Chinese market once they were repositioned targeting the higher end segment of consumers? 4. Discuss Apple's problems with branding in China and try to relate it to cultural differences. 5. Discuss Apple's future options. Amazon 1. Present a short introduction / background to the case study. 2. Did Amazon make sensible choices in its emerging markets entry strategies? Consider formal institutional aspects in the different countries. 9Page
3. How should companies and investors measure success in emerging markets using the WEF model? 4. Considering the competitive landscape in China, India, and Latin America, how do the informal institutions compare use Hofstede s measures. 5. Discuss Amazon's future options in the different countries. Mobileye 1. Present a short introduction / background to the case study. 2. Analyze the competitive posotion of Mobileye. Use Porter s Five Forces Model to discuss how Mobileye builds its competitive advantage in the marketplace. 3. Consider the pressure from OEMs on Mobileye to lower their prices. How does this impact their pricing strategy? (full price strategy VS discount bundling). What are the tradeoffs between margins and maintaining marketshare? 4. Discuss the two different visions for a driverless car future as presented by Google Vs Mobileye and accordingly consider if Mobileye should seek to collaborate with Google, or should they try to keep Google and arms-length? Gillette 1. Present a short introduction / background to the case study. 2. Analyze how razor consumers in the US differ from those in India while using the institutional approach address formal and informal institutions. 3. Use the trade models to analyze Gillette s strategy in India address various options. 10Page
4. If Gillette wants to become a strong presence in other developing countries, as well how should its management go about it FDI or other strategies? 5. Discuss Gillette's future options. Uber 1. Economic risk across different sectors of the world economy is an integral part of analysis as it indicates future business prospects. Please assess the risks and opportunities of the private road transportation industry in the US and in India and discuss the differences. You may use data published by the World Economic Forum with regard to the US and India (refer to the 1 st and 2 nd pillars): https://www.weforum.org/reports/the-global-competitiveness-report-2016-2017-1 2. Uber entered China in addition to India. If they would have asked you, which market entry strategy should it have chosen based on the experience in India? Please provide at least two alternatives and explain the pros and cons of each and why one is preferable to the other. 3. Use Hofstede's model to discuss differences in behavior of Uber's Indian vs. American customers and taxi drivers. 4. What are the barriers to entry for Uber into Indian market and do you think that Uber suffers from liability of foreignness in that market?. 5. Use the OLI framework to analyze Uber's operations in the Indian market. 6. What international strategy does Uber use in India according to the I/R model? Would you advice the management to change the strategy using the I/R framework if so how? 11Page Final exam Grade: 75% of final grade.
This is an individual exercise which will take place in class according to the date provided by the School. The exam will be a multiple choice exam and may include a short case study. It will address the theoretical materials as well as the case studies discussed in class. 12Page