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Unformatted text preview: SEMESTER AT SEA COURSE SYLLABUS (REV 7/2010 TO INCLUDE FDPS)
COMMERCE 4559-501- Emerging Markets
Professor Steven Dickstein
Shipboard Contact: [email protected] PRE-REQUISITES
This business course will be appropriate for students from any business major or economics. It
may also offer an interesting elective opportunity for majors or minors in Cultural Anthropology
or area studies who are interested in how business must adapt to different cultures and economic
landscapes. This reflects the importance of history (in particular, relationships with the United
States) and geo-politics in understanding business practices and differences in emerging markets.
Students should be able to use case study methods to analyze diverse business situations, to work
effectively within a team environment, and to communicate clearly for both oral and written
“They traded actively throughout the Atlantic world. On the eve of the Revolution a
larger part of per capita income in the Colonies came from foreign trade than in any other era of
American history.” (excerpted from Washington’s Crossing by David Hackett Fisher). The
original Colonies could be considered emerging markets in their time, providing raw materials
and new markets for England. The nature of this relationship was a source of the friction that
precipitated the Revolution. This example of colonial trade is just a snapshot in time
demonstrating “globalization” and “emerging markets”. Our course subject is really not new at
all, but rather addresses new global relationships, specifically between the United States and the
emerging markets often referred to as BRIC (Brazil, Russia, India, China) and others.
Today, global trade is an important contributor to national wealth with the United States
looming as its largest player with estimated 2007 imports and exports totaling over $3 trillion.
In the second half of the 20th century, American commercial and geopolitical interests converged
in the fundamental belief that increasing global trade is like the rising tide that raises all ships.
The challenge comes in the recognition that not all nations participate and benefit equally. The
importance of emerging markets is explained by their large populations and rising opportunity,
reflecting a convergence of historical significance: the collapse of Communism, new market
economies in China and India and the overall decline of trade imperialism.
As companies seek competitive advantage in the global marketplace, they are forced to
develop strategies to deal with Emerging Markets. This course is designed to study and to
understand the differences of these markets. Our focus then addresses how these issues affect
commercial opportunities in several of the areas to be visited and to understand the different development progress of emerging economies. What approach must companies use to succeed
in emerging markets and why do many attempts at entry fail?
This course has several objectives. These include:
1) Developing an understanding of Emerging Markets and the implications for multinationals
and local competitors. 2) Exploring the challenges to effective operations in the Emerging Markets of several
countries to be visited and how these affect costs, flexibility, responsiveness to customer
requirements, and competitive advantage. 3) Looking at how history, cultural influences and political developments explain the
challenging and often unique business relations with the United States. 4) Developing students' analytical and communication skills through the study of actual
business cases, current event readings, and field assignments during port visits. COURSE MATERIALS
There is no course text but rather customized materials from excerpts, articles, cases, and
selective readings are being organized into a Course Packet for sale on the ship. In addition,
articles or other brief source materials are provided on the course web site.
Reserve SOURCES (Optional Chapter for class 7):
The World is Flat; Thomas Friedman; Farrar, Strauss and Giroux; Expanded
Edition- 2006; ISBN 0-374-29279-5 COURSE OUTLINE
The following schedule is not an absolute contract. Lectures may proceed faster or
slower than indicated but will not affect the scheduled date for the Exam or other graded
assignments. It is the students' responsibility to monitor the class progress and prepare
accordingly. The best strategy is to do the assigned reading before material is discussed in class.
Specific, graded ASSIGNMENTS are listed in boldface and underlined on their DUE DATE.
The sequence of topics is influenced strongly by the scheduled port stops. Although not
explicitly stated in this schedule, the beginning of the first class after each port visit may be
devoted to a general discussion of observations and experiences (and separate from any specific
assignments/ FDPs). 2 Date Topic C1- Introduction: REVIEW SYLLABUS & assign teams; Teaching with the case
Discussion: Why the interest in Emerging Markets? C2- Lecture: UNDERSTANDING HOW CULTURE AFFECTS BUSINESS
OUTSIDE THE U.S. (A compilation from personal experiences and
collected mistakes that American business executives may make.)
Discussion: Why is culture even more important in business relationships?
in Emerging Markets? C3- Lecture: UNDERSTANDING EMERGING MARKETS
When are Emerging Markets no longer emerging? (Packet) C4- Lecture: HOW EMERGING MARKETS DIFFER (or BRIC rules!)
A New World Order (Bangkok Post)
In Recession Focus on Emerging Markets (BW) C5- Discussion: “Learning to See”- Observing foreign business & culture.
How do we analyze statistics to understand EM?
Five Myths about Emerging Markets (Packet)
TEAM EXERCISE 1 Due: Statistical summary and comparison of selected countries C6- Discussion: Africa- Emerging or sinking?
The Rise of the Marhreb (BW)
South Africa Emerges From the Shadows (BW)
Mugabe Presses Law Requiring Foreign Entities… (WSJ, 2/19/2010) 3 C7- Lecture: IDENTIFYING RISKS IN EMERGING MARKETS
Note on Country Risk and Competitive Advantage in Latin America
OPTIONAL- Chapter 16, Virgin of Guadelupe, (The World is Flat) C8- C9- C10- Case Discussion on Uncertainty/ Risk:
Novartis Indonesia (A) (Packet) IN-CLASS TEAM ASSIGNMENT: Current event- Discuss article(s) that show the
problems or opportunities that companies experience in their entry to
emerging markets; Lecture: STRATEGIES FOR EMERGING MARKETS
Strategies that Fit Emerging Markets (Packet) C11- Discussion: Case 1- The Etale Fishing Company
TEAM CASE ASSIGNMENT 1 due: The Etale Fishing Company (Packet) C12- Lecture: UNDERSTANDING THE ROLE OF INDIA IN THE GLOBAL
ECONOMY AND ITS COMPETITION WITH CHINA
Discussion: Outsourcing- good or bad for America, for India? What other
countries compete for business, and how?
Vietnam: The China of 25 Years Ago? (BW, 2/13/2009)
Caterpillar Joins Onshoring Trend (WSJ,. 03/12/2010) C13- C14- TEAM ASSIGNMENT- Field Trip Due: Paper submission and class presentation of
field trip exercise Lecture: THE “AMERICAN WAR” AND HOW IT AFFECTED
Discussion: The ethics of labor practices in emerging markets, specifically
Vietnam; the Nike story 4 C15- Lecture: CHINA- THREAT OR OPPORTUNITY? Is “first mover” an
advantage or risk in emerging markets?
Discussion: Understanding Hong Kong
Tomorrow’s Global Giants? (Packet) C16- Lecture: CHINA- THREAT OR OPPORTUNITY? (cont’d)
It’s Not Too Late to Enter China (Packet) C17- Discussion: Case 2- The Plant Location Puzzle
TEAM CASE ASSIGNMENT 2 Due: Plant Location Puzzle (Packet) C18- Lecture: BUILDING A WORLD-CLASS COMPANY IN AN EMERGING
Emerging Giants- Building World-Class Companies in Developing
Countries (Packet) C19- C20- TEAM EXERCISE 2: In class Simulation: A business proposition will be
introduced in class. Each team will develop and present a strategy for
market entry identifying the risks, threats and opportunities.
Lecture: THE ROLE OF TRADE AGREEEMENTS
Discussion: CAFTA- fair? Helpful to the development of henispheric
Trade Deals will Face More Critics (WSJ, 11/29/2008)
EU and Central America Forge a FTA (WSJ; 5/19/2010) C21- Discussion: How has your viewpoint on Emerging Markets changed as a result
of the course, case analysis and visits? What strategy might you
advise your future employer to take in Asia, for example?
Review for final exam C22- INDIVIDUAL ASSIGNMENT: Peer evaluations due- see last page of syllabus
TEAM ASSIGNMENT- Field Trip Due: Paper submission and class presentation of
field trip exercise C23- FINAL EXAM
5 FIELD COMPONENTS
The Semester at Sea experience is designed to include field assignments as part of the
coursework. For this class, there are two field-related assignments. These may comprise ANY
two among the FDP supplement to this syllabus available in the course website and are to be
completed in teams (though they do not necessarily have to be the same CASE teams):
• Instructor-developed FDPs
Alternative FDPs outlined in the attachment
Instructor-developed McDonald’s assignment which requires observations at any three
different port visits.
YOUR customized proposal (subject to instructor approval) for independent Field Study
based on other excursions or private plans that relate to course topics. Only one of the
two may come from outside the above options. Note that the due dates for this work are identified above and may follow, oftentimes by several
weeks, the actual visit. Depending on class size, in-class presentations may be limited to one
FDP alone. METHODS OF EVALUATION- Organized by sequence of importance, not schedule
A substantial portion of each student’s grade will be derived from activities and work
performed as a group. These teams will be organized by the instructor in the first session with an
objective of achieving cultural, gender and educational diversity. DESCRIPTION
(1) Final Exam PERCENTAGE
25 % (2) Team Case Assignment – 2 @ 12% ea 24 (3) Team Exercise – Stat summary &
In-class simulation @ 5% ea 10 (4) Team FDP Assignments (any 2 @ 12% each)
(5) Team Presentation- Current Event
(6) Class Participation 24
100% TOTAL 6 A Note on Team-Based Work
"I searched for stardom, stardom I could not see.
I searched for victory, victory alluded me.
I searched for Teamwork and found ALL THREE."
(from a Nike national ad) You will discover during your academic life at most institutions and beyond into your
careers that a team approach to problem-solving is an essential part of course content. While the
dynamics of teamwork can be challenging due to differences in personality, schedules, and
interests, research has consistently shown that the collective output of a team is invariably
stronger than the work of an individual. These various assignments- in teams set up by the
instructor in the first class- are intended to provide an early experience of this learning style. (1) EXAM (25%)
The exam will cover lecture material and supplemental readings from all classes.
Students will not be tested on individual or team assignments nor on the Field Projects. The
format will include multiple choice and short answer based on a mini-case. (2) TEAM ASSIGNMENTS- Cases (24%)
There are two Case assignments. Each one has specific questions to answer.
The purpose of these cases is to understand decision-making and cultural influences in
Emerging Markets. There is not always an absolutely correct answer, so papers will be
evaluated based on completeness (are all questions addressed) and analysis. It is not necessary to
re-state facts provided with these cases, but summary exhibits and detailed supporting work are
The format is an five page limit plus up to three Attachments or Exhibits (optional).
Please use double-spacing, a minimum font of 12 points, and normal margins. A cover page
should include each team member’s name and clearly identify the case. Scoring will be
distributed equally among the questions with a portion of the total value reserved for the
presentation- following instructions, free of errors, good business writing.
(3) TEAM ASSIGNMENTS- STAT SUMMARY & IN-CLASS SIMULATION (10%)
1. Statistical Summary - There are various measures that demonstrate the differences
between emerging and developed markets. Let us selectively identify FOUR for the
latest year of complete data, 2009: GNI per capita, Purchasing Power Parity (PPP);
Growth Rate (as reflected in the % change of GDP for the latest available year-to-year
comparison) and the Number of Days to Open a Business. This information (for the three
listed) can be found in the home page of statistical data developed by the World Bank.
At the top, there is an alphabetical dialog listing each country that leads to this data:
Base = United States
Vietnam For the FOURTH measure, include the latest World Economic Forum Global
Competitiveness Index Rank.
Assignment- Create a one page table to summarize this data with the U.S. as the
top line. Add a one-half page summary of what this communicates, including
your assessment on whether the results seem consistent with our understanding of
an Emerging Market.
2. In-class Simulation – I will hand out an outline of a business plan for an American
MNC entering an Emerging Market within its core business line and without a local
partner or acquisition. You will analyze and critique this proposal including your
forecast of success (or not) and what changes you might propose to the entry strategy.
You will present your conclusions to the class that same session. (4) INDIVIDUAL FDP ASSIGNMENTS (24%)
Review the options in the Course Website supplement FDP ASSIGNMENTS. You may
select ANY two to prepare for the assigned dates in the Course schedule. The written portion is
limited to FIVE pages and three Exhibits, which are optional. This supplement also provides
format guidelines for the two assignments.
The class presentation will be an informal sharing of your findings and should include
visual aids. You will be evaluated on how effectively and clearly you communicate what you
saw or did, and any related findings. The actual class size will determine whether there will be
one or two (as shown currently) in-class presentations of the FDP assignment and the exact time
You do not need to request prior approval for the Field Component you will use for this
assignment unless it represents an activity or proposal not specifically listed in the Course
website summary. (5) CURRENT EVENT (7%)
For this assignment you will do a literature search to find a reasonably recent (2010
publication date preferred) example of a company from the developed world (not necessarily
limited to the U.S.) doing business in an emerging market. It does not necessarily have to be
8 about a country on our itinerary. You may select an example of a successful venture or a
troubled one. Alternatively, you may use a more general article(s) describing emerging markets
in ways that converge with our course content.
The assignment requires a copy of the articles (two expected) and a ten-minute maximum
in-class presentation of what the key issues are, what the success or failure factors were, and how
did the article relate to our course definitions of an Emerging Market.
The grading criteria include:
• Relevance to the course (2 points)
• Clarity of the summary- do you understand the material and would a reader not
familiar with this article likewise grasp the key points? (4 points)
• Presentation style; balance of participation
(6) CLASS PARTICIPATION (10%)
In-class Participation is a subjective measure that reflects your preparation and
willingness to contribute meaningfully to class discussions. This is NOT necessarily in direct
correlation to how MUCH you speak; quality is valued over quantity. Active participation is an
important part of the learning process and invaluable in developing verbal communication skills.
Class attendance is monitored on a daily basis. However, it will NOT earn participation
points, but excessive absences may penalize this component. OTHER
• The University of Virginia Honor Code, as outlined in your orientation materials, applies at
all times and to all graded work. If you have any question about its intent or application,
please contact the instructor or the administrative dean of the program. • If you encounter or even foresee any difficulty in meeting the course requirements, including
shore field trips, due to the impact of a disability or other condition, please see me as soon as
possible so arrangements can be made to accommodate your concerns or condition. • This course includes various land excursions throughout Latin America. You will be
representing the University of Virginia and a very visible diplomat for the United States.
Your behavior and attitude throughout these experiences should reflect the highest standards
of professionalism and respect to our host countries as well as to one another. • Please feel free to meet with me at any time to discuss any concerns or issues about the
course, travel arrangements, or your individual performance. 9 PEER EVALUATION- WHAT IS THIS & HOW IS IT USED? The PEER EVALUATION form is designed to assess the contribution of the individual
members of a group effort based on a confidential breakdown in $ that reflects the division of
labor. Although the syllabus warns that these inputs “may be used to change grades” (or
similar), I look for three conditions before applying any grade adjustment:
1. Is the difference significant? (One team member rated at $2,900 compared to another at
$3,100 does NOT justify grade action.)
2. Is there consensus within the team? (Although the measures may differ, I look for any
lesser effort to be reflected in ALL the individual inputs, excluding the affected student.)
3. Does the Comment section provide a clear explanation of WHY the team member was
rated poorly? (I want to avoid grade action based on personality differences or clashes on
the approach or solution to the problem. I am looking for examples of lack of effort or
When a team must make up for the lack of contribution by one of its members, there is no bonus
or extra credit to those students. The PEER EVALUATION process only penalizes nonperformance. The actual reduction is reflected as a % adjustment of the final case(s) grade. It is
not equal to the computed distribution of effort although such math is used as a guideline. Also,
excluding exceptional cases, the deduction is rarely more than 50% in recognition that the team
has some collective responsibility for all members regardless of individual effort.
Since adjustments (if any) cannot be applied until the Evaluations are submitted in the final week
of class, case grades are not necessarily final until exam week. Peer Evaluation submissions are
confidential; a student affected by the process may not see the inputs used in determining any
grade penalty, but the reason will be explained clearly. 10 CONFIDENTIAL PEER EVALUATION
Your group has been given $12,000 for each team effort as a consulting fee. Divide the
money among your group based on the quality and effort of each team member’s
contribution. Please include DISCUSSION only if the distribution is meaningfully
Summary Case 1 Case 2 Your Name
_____________________________________ __________ __________ __________ _____________________________________ __________ __________ __________ _____________________________________ __________ __________ __________ _____________________________________ __________ __________ __________ ____________________________________________ ____________ ____________ ____________ $12,000 $12,000 $12,000 Team Members: TOTAL:
Discussion: For the two FDP assignments- if you feel that the contributions of any individual
team member were unequal, please provide the following information on the
back of this sheet: name of each team member, distribution of a similar
$12,000 based on effort, and a brief explanation for the difference.
11 FDP ASSIGNMENTS – Emerging Markets General Comments
ALL FDP trips require respectful attire; no shorts or flip flops. Collared shirts are
preferred. While you need to maintain a critical view of all you hear and see, this
must be accomplished in a courteous way without upsetting the people you will be
meeting. Everyone is encouraged to participate in the Q & A session and any other
aspect of the visit. Approach
The goals of a facility visit may be orientation (employees learning how another
department operates) or evaluation (customer audits or internal analysis). This
may be designed to simply share “best practices”. For the purpose of this Semester
at Sea course requirement, the focus should be on applying or experiencing course
content and how it applies (or possibly not!) The visit to an American Chambers of Commerce has different objectives. The
Chambers are a global association based in Washington, D.C. A visit to such a
location typically involves a general orientation of the business climate in that
country for foreign companies (primarily American, but not exclusively.) The
Chamber acts as a social center, network resource, information communicator and
advocate for foreign companies to the local authorities. The membership will also
comprise local companies trying to make contact with foreign multinationals and
oftentimes foreign companies who do not have the benefit of a similar organization
from their own homeland. These locations are normally offices only in the
business section of the capital or major cities, so there is no tour involved. 12 The FDP PAPER for a Company Visit General
The focus of your visit is to understand HOW the company in an emerging market
operates within its home country and how this might differ from the same
operation in the Developed world. In some cases, the operation may be designed
as an export platform to serve other markets, in which case you may not find
obvious evidence of lesser capabilities in quality, operations, etc. For example, a
terminal or freight forwarder operating in Panama is rarely serving the local
market, so the operations are designed to be up to similar standards as the
customers served. Some things you may find in the tour may be actually
BETTER! The goal of your assignment is to develop a total profile of the location
that evaluates how it currently performs and in what ways its activities reflect (or
not) the emerging country it is based in. Suggested Approach
Step 1- Understand the industry and country environment. Just because a facility
may be situated in a particular country (i.e. Nike in Vietnam) does not mean it
derives much business from there. In this instance, the location is a source plant
for export (referred to as a “supply chain”). The primary Nike competitors are
Reebok, Adidas and New Balance who may or may not use Vietnam as a sourcing
point. One implication of this is that a visit to the Nike plant in Vietnam will not
likely provide much information about where or how the output is marketed other
than, simply, where the shipments are going. LESSON- Just because you are
visiting a factory in any particular country does not mean you will learn about the
domestic markets, especially if most of the output is for export. 13 Therefore, the first step is an understanding of WHERE these products are sold and
WHY they are being produced, in some cases, very far away from their intended
markets. (Usually, it will be the customer, NOT the source of production, that sets
the standards.) Keep the paper focused on the location visited, so that if it does
not serve the local/ domestic market, try to learn about its role in the company
supply chain. Try to understand what makes the company in general and this local
in particular successful and how it compares to other competitors both in this
country, other emerging markets and even, possibly, the country of intended sale.
(This process is called benchmarking, or comparing to the industry’s best.) Step 2- With the starting point of the country conditions and industry parameters,
you narrow down your focus to the company. Try to understand its mission
statement or vision and business objectives. Cut through all the “feel good” issues
such as good corporate citizen, etc. to the core of what they want to accomplish
and how they expect to achieve this. You will want to assess whether this mission
statement or strategy is consistent with the functional areas of the business. You
might think of this Step as establishing the identity of the target company. Step 3- Consider a SWOT analysis- Strengths, Weaknesses, Opportunities, Threats
(see Michael Porter, HBS). Since the biggest future opportunities are likely to be
WITHIN emerging markets, is this location likely to move from an export model
to serving domestic customers? How does the company appear to be performing
relative to what it SAYS it wants to be and how well it is positioned. What this
means is that it is possible to be making profits or appearing successful but, at the
same time, not actually satisfying the mission statement. Step 4- From all the inputs and analysis, what are your findings? Do you have
any recommendations for action? In what ways does the location (an emerging
14 market) HINDER or ENHANCE the ability of the business to be successful?
Include any observations of successful execution; the assignment is not intended to
only find the faults. Your paper might also include information from newspapers, trade publications,
web sites, industry trade associations, customer or supplier interviews, stock
market or analysts’ data. (Limit your scope to free library resources.) A single
visit may not provide sufficient information to reach final conclusions or
recommendations, but your work can be very effective by demonstrating an
understanding of what you have seen and relating it to course content. The following section is intended as a model outline for the actual paper. Please
refer to the APPROVED FDP list since in some cases specific issues have been
identified to address. (Of course, feel free to raise others!) The in-class presentation is intended to summarize your findings, keeping in
mind that much of the class may not have participated in the same FDP. 15 MODEL OUTLINE – Company Visit
Cover- Company, team members, and date
Index- Organization of topics by page number
Executive Summary- a one page (MAX!) summary of key facts &
Brief overview of company (business, history) 2. Country Analysis
External factors (regulations) 3. Industry Analysis
What is the business or segment?
Competitive forces & factors (including international factors)
Driving Forces (or Benchmark)- what are the key success factors? 3. Company Analysis
Strategy and mission
Non financial considerations (might include strategy issues,
management, ethics, legal compliance, others)
Financial Analysis (if available)- Trends, comparisons
* Operating & investment ratios (See text))
* Trends analysis
Note: Financials are used to explain performance, to support any
financing recommendations, or to identify current problems. You do
NOT need to include financial data for information only except to
describe the scope of the business. 4. Recommendations on Strategy and execution (i.e. operations, marketing,
etc.) 5. Exhibits (Include exhibits, charts, tables, or other quantitative tools used in
support of your analysis and conclusions) 16 6. End Notes/Bibliography 7. As an option, and separate from any other section herein, I would
welcome your supplemental comments as to any topics the hosts felt unable
or unwilling to discuss or perhaps those issues for which you may not have
been provided accurate or complete information. Note that the overall length of the main body of work (without Exhibits and
Bibliography) is limited to 5 pages. An additional 3 pages are allowed for
attachments or tables, as applicable. Any bibliography or other references do not
count in these allowances. Grading methods are explained in the syllabus. Each company will be different, and it would not be unusual for your report to
cover more or less than what is shown. Feel free to meet with me to discuss any
concerns you may have.
__________________________________________________ The FDP PAPER for a Chamber of Commerce Visit
A Chamber visit provides a more “macroeconomic” viewpoint of country
• What are the barriers or challenges for foreign companies doing business
• What is the primary role of the Chamber in this country?
• How is a Chamber organized?
• What are the key country issues at present for the Chamber members?
• Is regulatory treatment different for companies trying to serve a local
market versus using a facility as an export platform (a frequent criticism of
China)? You should expect an honest viewpoint that local government
officials may not be willing to provide. As an example, consider the
diplomatic briefing upon arrival at a port; you will likely find a very
different emphasis or discussion than in tourist brochures you may have read
(example- crime in South Africa). 17 So, the key to a Chamber visit is finding out what’s really going on and what issues
are most important to the members (things like intellectual property protection, for
example). Here is a format template for the paper although you can customize as you see fit. MODEL OUTLINE – Chamber Visit
Cover- Chamber location, team members, and date
Index- Organization of topics by page number
Executive Summary- a one page (MAX!) summary of key facts &
Brief overview of the chamber history and current membership 2. Country Analysis/ Overview
External factors (regulations) affecting American companies 3. Industry Analysis
Are investors treated equally across all businesses/ industries?
Impact of foreign investment on the local economy
Driving Forces (or Benchmark)- what are the key success factors for
doing business in ____? 3. Chamber Analysis
Strategy and mission; why join?
Profile of the membership (by country, industry)
Key activities or initiatives undertaken in 2009
What has been the most important accomplishment of the
Chamber this year?
Collaboration, if any, with other regional American Chambers
or with other foreign chambers in ______?
18 F. 4. What is/are the key issue(s) for the coming year? Recommendations on Strategy and execution. Should the Chamber take on
a larger role? How well is it serving the member needs? Note that the overall length of the main body of work (without Exhibits and
Bibliography) is limited to 5 pages. An additional three pages are allowed for
attachments or tables, as applicable. Any bibliography or other references do not
count in these allowances. Grading methods are explained in the syllabus. INSTRUCTOR NOTE: This approach
may also be used for the Chennai FDP
(Andre) to the American Consulate. 19 Independent FDP (Instructor Designed) Assignment
McDonald’s- Understanding and Comparing Emerging Markets.
This assignment requires independent field work, unrelated to any specific side-trip
option, and presumes prior (i.e. U.S. based) familiarity with McDonald’s
restaurants. The business model for this company is based on: value- offering low
cost to the customer, consistent quality, uniformity of offerings (i.e. we expect to
find a similar menu at most any domestic location, which supports the operational
ability to hold costs down) and speed of service.
For an American customer, this means that a meal at McDonald’s is fast and
cheap. Is this equally true in the countries to be visited? One way to test this
premise is express the cost of an arbitrary item- say a BIG MAC- in terms of time
rather than $. In other words, let’s consider how long it takes an American to earn
enough money to buy a Big Mac.
Since data on Personal Income tends to be inconsistent, let’s use GDP per Capita
as an indicator. Here is the approach to this assignment and a baseline calculation
for the United States assuming one Big Mac costs $3. For this example and all
other calculations per country, assume 2,000 productive hours per person per year.
a. Go to https://www.cia.gov/cia/publications/factbook/index.html
b. Below the Heading: THE WORLD FACTBOOK, enter the Country of
interest, in this case- United States.
c. Look for the data on GDP PER CAPITA. (For 2008 this shows
d. Calculate how much time is required to “earn” a Big Mac based on the
common assumption throughout of 2,000 hours of productive time per
$47,000 / 2,000 = $ 23.50 per hour
The cost of the Big Mac / Per capital wealth per hour = Hours
required to “earn” a Big Mac
$3.00 / $23.50 = 0.128 hours (or 7.7 minutes)
20 What this communicates in very gross terms is that American productivity
(or wealth) takes less than 8 minutes of economic activity to “earn” a Big
Mac. Assignment Specifications
BEFORE you make any calculations or visits, please answer these questions
(and do NOT revise them later to fit your actual findings!)
1. How would you expect similar calculations for the various
countries visited to compare and why?
IN COUNTRY RESEARCH (For any 3 port stops)
2. How similar is the physical set-up of the restaurant compared to a
3. Are the items on the menu similar? How does “speed of service”
4. Take the local price of a Big Mac and convert that to U.S. $ (the
exchange rate can be found at most local banks or in the WSJ).
Make a similar time calculation as shown above.
5. What do these calculations reveal about Emerging Markets? Is this
conclusion consistent with your expectations (#1)?
6. What factors or assumptions might distort the validity of your
conclusions? Instructor Comment: You are welcome to substitute any other American or
well-known Western chain for McDonald’s in this exercise. However, be
CERTAIN before you get started that you will be able to visit a location in
three different countries. 21 CAUTION: Start this exercise early in the itinerary. Also, it must be completed
by the time we sail from China; Japan is not eligible for inclusion as it is not an
emerging market. ALL STATISTICS & CALCULATIONS IN YOUR WORK SHOULD BE
UPDATED TO THE LATEST AVAILABLE DATA. 22 TRIP LISTING SUMMARY AS OF JULY, 2010
The following instructor FDPs should follow the COMPANY template above:
• Coke Bottling Plant (Casablanca)
• Wine Production and Marketing in South Africa (Capetown) [Note: you
have the option to focus on one winery alone or both, at your discretion. It
might be interesting to compare the two.]
• Stayam Brakes (Chennai)
• Nissan Plant (Yokohama)
• Kirin Beer Plant (Kobe)
(Note for the two Japan FDPs: Japan is not an Emerging Market, so the focus of
your work needs to orient to understanding the supply chain- what inputs are
sourced from emerging markets OR what products are produced for specific
export/ sale into emerging markets. How does the company make location
decisions as to sourcing or sales?)
Other Faculty Company visits:
• Tata Consultancy Services (Chennai- Andre)
• Nike Plant (Vietnam- Andre) The American Chamber of Commerce has locations in Accra, Capetown, Chennai,
Saigon (Ho Chi Minh City), Hong Kong, and Japan. Use the CHAMBER template
for any one of these. [Note: If you are a foreign student or simply have an interest
in another national Chamber, you are welcome to substitute it with the same
assignment. I would ask, as a supplement, for your hosts to explain how their
mission and role may be different than an American Chamber.] 23 Other Because of the variety and number of instructor offerings for FDPs, I will
EXPECT that at least one of the two assignments for this course will be derived
from the listing above. You are welcome to propose any other independent study
to fulfill the course requirement; however, please discuss your ideas well in
advance to smooth your planning. Other Comments:
1. It is critical that when planning FDPs for this course that you space them out
to allow completion of at least one in time for the first assignment deadline.
There is no problem, on the other hand, if you complete BOTH FDPs during
the first half of the voyage.
2. Even though the course requires only two FDPs, you are certainly welcome
to participate in more.
3. The same FDP may be used to fulfill the requirements for different courses,
but the assignment specifications will differ (in other words, two separate
reports will likely be required).
4. Hawaii is NOT eligible to fulfill any FDP assignments in this course. 24 ...
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This note was uploaded on 01/24/2011 for the course COMM 4559 at UVA.