Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: SEMESTER AT SEA COURSE SYLLABUS (REV 7/2010 TO INCLUDE FDPS) FALL, 2010 COMMERCE 4559-501- Emerging Markets Upper Division 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 assignments. COURSE DESCRIPTION “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? COURSE OBJECTIVES 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 method 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 Supplemental Readings: When are Emerging Markets no longer emerging? (Packet) C4- Lecture: HOW EMERGING MARKETS DIFFER (or BRIC rules!) Supplemental Readings: 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? Supplemental Readings: Five Myths about Emerging Markets (Packet) TEAM EXERCISE 1 Due: Statistical summary and comparison of selected countries C6- Discussion: Africa- Emerging or sinking? Supplemental Readings: 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 Supplemental Readings: Note on Country Risk and Competitive Advantage in Latin America (Packet) 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 Supplemental Reading: 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? Supplemental Readings: 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 VIETNAM’S DEVELOPMENT 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 Supplemental Reading: Tomorrow’s Global Giants? (Packet) C16- Lecture: CHINA- THREAT OR OPPORTUNITY? (cont’d) Supplemental Reading: 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 MARKET Supplemental Reading: 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 emerging markets? Supplemental Readings: 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 7 10 ______ 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 encouraged. 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: 7 YPE=VIEWADVANCED&WSP=N&HF=N/CPProfile.asp Base = United States China Ghana India Japan Morocco South Africa Spain 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 allowance. 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 responsibility.) 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 unequal. Stat 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 & recommendations 1. Introduction A. Purpose B. Brief overview of company (business, history) 2. Country Analysis A. Economic Conditions B. External factors (regulations) 3. Industry Analysis A. What is the business or segment? B. Competitive forces & factors (including international factors) C. Driving Forces (or Benchmark)- what are the key success factors? 3. Company Analysis A. Strategy and mission B. Non financial considerations (might include strategy issues, management, ethics, legal compliance, others) C. 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 conditions. • What are the barriers or challenges for foreign companies doing business here? • 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 & recommendations 1. Introduction A. Purpose B. Brief overview of the chamber history and current membership 2. Country Analysis/ Overview A. Economic Conditions B. External factors (regulations) affecting American companies 3. Industry Analysis A. Are investors treated equally across all businesses/ industries? B. Impact of foreign investment on the local economy C. Driving Forces (or Benchmark)- what are the key success factors for doing business in ____? 3. Chamber Analysis A. Strategy and mission; why join? B. Profile of the membership (by country, industry) C. Key activities or initiatives undertaken in 2009 D. What has been the most important accomplishment of the Chamber this year? E. 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 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 $47,000.) 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 year. $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 U.S. location? 3. Are the items on the menu similar? How does “speed of service” compare? 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. SUMMARY 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 ...
View Full Document

This note was uploaded on 01/24/2011 for the course COMM 4559 at UVA.

Ask a homework question - tutors are online