Chapter 1 expanding abroad: motivations, means, and mentalities
Case 1-1 Cameron Auto Parts * Alex Cameron got the family biz when graduated in 2001, when the American economy fell into a recession * History * Auto Pact, big three ship car parts between Canada & US, with tariff free * Cameron focus on small engine parts and auto accessories * Car Sales dropped in 2000, because declining North America and entry of Japanese * High pressure for modernization and cost reduction * Operational survival: cut workforce, overtime, part-time, subcontracting * Recovery and diversification * The short-term future seemed positive, but the popularity of Japanese car forced it to diversify * Working as an OEM Cameron did little to be innovative * Alex brought in a team of designers, concentrating on developing products with a wider ‘non-automotive’ market appeal * The first year no progress, Alex lured away a key engineer from the Canadian firm, and mid-2003, developed its own line of flexible couplings * Marketing the new product * Hired eight field sales representatives, stress product quality, service and speed of delivery, but not price. * Financing plant capacity * Increasing sales of flexible couplings required a new separate plant, but the financial position is not strong enough to support it * Foreign markets * Took a European Patent * A licensing opportunity * Meet foreign customer, McTaggart in 2004 * Can’t build the market in Britain on the basis of shipments from America, since the large transaction & transportation cost * A license with McTaggart might be a good way of achieving swift penetration of the UK market via MT’s sales force. * 2% licensing fee include a free tech flow-back clause * Mixed views, good idea to get cash, or lost the UK market and special tech.

Case 1-2 Jollibee Foods Corporation: International expansion * Jollibee, a Philippine hamburger chain * Proposed US operations: focus on recent immigrants and Philippine expatriates * Hong Kong: adjust menu, change operations, and refocus on ethnic Chinese customers * New Guinea: emerging market * Company history * Industry background * Moving offshare: 1986-1997 * Early forays: early lessons * Singapore: partnership, relations deteriorate * Taiwan: 50% joint venture, conflict over operations * Brunei: joint venture, sent managers from Philippines to operate * Indonesia: conflict with partners * Building an organization: world-class image, recruiting experienced internationalists * Strategic trust: expatriate, first-mover advantages * Operational management: * New entry: Franchise Services Managers, standardized production, adaptive dining areas; * Oversight and continuing support: monitoring financial and operational performance, quality control; * International vs. domestic practice: mass-based positioning; * customizing for local tastes * strained international-domestic relations * International Division’s relations with Philippine-based operations seemed to deteriorate * Financial problems created for the rapid expansion * Restructuring, shrank the International Division * A new international era: 1997 * A fresh look at strategy: international expansion had been driven less by biz considerations than a pride in developing * Strategy in action * Papua New Guinea: raising the standard * Hong Kong: expanding the base, hire more locals and enhance brand recognition, localize menu * California: supporting the Settlers, target the Philippines there * Looking forward

Case 1-3 Acer, Inc.: Taiwan’s Rampaging Dragon * Aspire, a new home PC developed by Acer’s North American subsidiary (a sales&marketing oriented RBU) * Birth of the company * Early successes through employee ownership, delegated accountability, management frugality and JV * Expansion abroad – primarily through asia, middle east and latin America – was greatly helped by a growing number of new products, OEMs for IBM * Identify potential overseas acquisitions, set up offshore companies and seek foreign partners and distributors * Make Acer a globally recognized name, rapid design, development and manufacturing capability as competitive advantage * The professionalization of Acer * Look outside for new recruits and new ideas * Rebuilding the base * ‘global brand, local touch’ * Distributors equity partnerships in the RBU * Relying instead on mutual interest and voluntary cooperation of a network of interdependent companies * Client server org model * Headquarter as server, use resource to support client biz units * Decentralization, independent profit-responsible biz units * The fast food biz concept * Stan’s Smiling Curve * Acer America and the Aspire * Uniload system, manufacture and delivery time was cut, reducing inventory * Home PC, with design aesthetic, multimedia capabilities * Stan Shih’s Decisions * Critics: innovative new product was just too risky to leave to an inexperienced group in an RBU with limited development resources

Chapter 2 understanding the international context:responding to conflicting environmental forces

Nike Case 2-1 p101 * Labor abuse: coerced overtime, dangerous working conditions. Lower costs by outsourcing all manufacturing with low paid workers, move factories to new, lower cost region. * Indonesian: labor strike, Jeff Ballinger – labor activist, movement and media attacks * Nike: Public Relation department draft series of regulations for its contractors (safety standards, environmental regulation and worker insurance) * Criticism of Nike’s labor practices from outside of Indonesia, anti-Nike campaign * Nike hires Young, the respected civil rights leader to conduct an independent evaluation of its Code of Conduct, but criticism of report’s research methodology and conclusions. * Nike was actually furthering progress in the developing countries, providing jobs and wages to people. * Fiscal Year 1998, Nike faced downturn, lost battle to competitors, anti-Nike
Case solutions * A series of sweeping reforms to reform 3rd world working conditions , including raising the minimum age, adopting U.S. clean air standards in all factories, expanding monitoring program, expanding educational programs, making loans * Get more involved with Washington-based reform efforts – independent monitoring, combination of internal monitoring and audits by accounting firms. Fair Labor Association (FLA) * Nike was running extensive training programs for its contractors’ factory managers
Criticism:
* Still fail to deal with wages * FLA standards cover for only U.S. corporations

* What are the central facts of the case relevant to our lesson? Nike outsourced all manufacturing to the 3rd world and thought it could outsource CSR as well. * What are the issues they enable us to address – while firms can outsource activity to others they cannot avoid taking responsibility for what goes on in their supply chain whether they own it or not. * How are these issues dealt with in the case and why They ignored the problem, hired Morgan Stanley to finesse it, then a PR Executive to fix it * How are the issues resolved or not in the case – the PR effort did not work and in the end Nike became an exemplar of how to lobby supply chains to get working conditions genuinely improved. However this left untouched the issue of wages lower than could support a person. Nike still wanted very low costs. * How in your view should they be resolved? By enterprises operating with supra-national global supply chains to become socially proactive like IKEA and Nokia.

Global Wine Wars: New World Challenges Old Case 2-2 p119 * Old world wine producers constrained by embedded traditions and practices, restrictive industry regulations, and complex national and European Community legislation. New world wine companies challenge the more established Old World producers by introducing innovations at every stage of the value chain – win global market share.
Stirrings in the New World * Boom in domestic demand for both quality and quantity that established the young wine industry in these New World countries. * Since postwar economic boom, New World wine producers developed in a very different industry environment than most of their European counterparts. Unconstrained by either small size or tradition, New World producers began to experiment with new technology in both grape growing and wine making. New world producer also innovated in packaging and marketing. * The traditionalists argued that in the drive for efficiency and consistency, and in the desire to cater to less sophisticated plates, New World producers had lost the character the character and unpredictable differences that came with more variable vintages made in traditional ways. Unauthorized labeling
Maturing Markets, Changing Demand * Declining demand in world consumption coupled with some radical changes in consumer tastes and preference, presenting industry participants with an important new set of opportunities and threats. * For Old world region, no new land available to plant, numerous regulations prescribing grape varieties for a region’s wines. Government supports and subsidies to support the overproduction of primarily low-quality, cheap wines, purchase of surplus wine, payment to reduce vineyard acreage.
The Battle for Britain * As the world’s largest and most competitive import market, the UK represented not only a major market opportunity but also crucial territory in any quest for world wine domination, * Brand Power: Government efforts to compensate for lack of branding through classification scheme had only partially successful in ensuing consumer confidence. It was the New World that made branding and labeling a routine part of wine marketing. Some intermediaries starting filling the need for consistent quality and supply that branding ensured. Other traditional producers link up the established marketing and distribution powerhouses. * Increasing Distribution Power: Most EU producers were very isolated from increasingly fast-changing consumer tastes and preferences and lack of bargaining power with retailers. New World control operations from the vineyard to the retailer and develop significant distribution advantages from scale and scope. Size had also given the New World bargaining power. With cost advantage, New responded with aggressive pricing. * Besides dominance in market share, Australian wines were largely positioned in the premium and super-premium segment, indicating the greatest potential for growth. French wine sales were less expensive and faced greater production costs. * Recommendation for French producers: 1. Adopting some of the technical and marketing advance, 2. Developing a much stronger commitment to branding 3. Producing more consistent wines with the fruit-driven taste – criticism: should claim the right to be unique, to be specific.

HSBC Holdings Case 2-3 p 138“The world’s local bank” * HSBC Holding PLC completed acquisition of US based consumer finance company Household Int’l which gave HSBC access to a broad U.S. retail demographic scope. Skeptical analysts – the risks outweigh the rewards. * HSBC (origin is Hongkong Bank) expanded dramatically through acquisition in the postwar years.
Managing HSBC * Organization and Control: 11 independent banks, separate balance sheet - to promote rapid decision making and local accountability, the head office provide only essential functions. * Culture and Character: Thrifty, cautious, disciplined and risk averse. * Bond brought new vigor to HSBC’s acquisitions, pushing beyond the constraints of its traditional commercial banking approach in a bid to gain traction in new and high-growth financial segments. * Branding: the group was meeting the limits of decentralization. This was reflected in market value – formulated a new strategic plan, since then pulled the whole group more tightly together to ensure that the whole really is greater than the sum of the parts. Bond in 1998 adopted the HSBC brand to subsidiary around world. * Performance: Bond wanted HSBC’s different divisions and main countries to work together to cultivate its most profitable customers. * Household Int’l: 2nd-largest US consumer finance firm, used a 13-year database of consumer behavior to generate risk profiles for every adult citizen of US. * Household tripled HSBC’s provisions for bad or doubtful debts (NPLs). * HSBC expected to move quickly to launch the Household model in Brazil, China, India, and Mexico. External obstacles: how best to access and evaluate data on repayment risk in emerging markets- absent useful third-party data. Internal: HBC’s reliance on Household’s skills required smooth cultural integration and training across the two organizations.

Chapter 3developing transnational strategies: building layers of competitive advantage

Case 3-1 TCL Multimedia p210 1. What are the central facts of the case relevant to our lesson?
TCL expanded its international market through majority-owned joint ventures. It purchased the TV assets of France’s Thomson S.A. then made TCL the world’s largest TV manufacturer in 2004 2. What are the issues they enable us to address
How to strengthen its technical and competitive position; integration to efficiency and culture barrier
Japan advanced technology, Korea quick learner; large but not strong 3. How are these issues dealt with in the case and why
Create value in consumer products, sell high-margin products at the high end, reduce costs by increasing unit sales volume and run an efficient supply chain when integration 4. How are the issues resolved or not in the case
Not significant. 5. How in your view should they be resolved?
Sell some inefficient part, focus on profitable assets
Case 3-2 The Global Branding of Stella Artois p226 1. What are the central facts of the case relevant to our lesson?
Interbrew develop the premium product Stella Artois, as the company’s flagship brand in key markets around the world. 2. What are the issues they enable us to address
It was an ongoing challenge to maintain the funding levels required by the ambitious development plans for Stella Artois. 3. How are these issues dealt with in the case and why
Focus resources in the right places
Converging on a long-range approach towards global branding, a more balanced brand development program.
Careful planning on a city-by-city basis, marketing efforts and funding, locally tailored 4. How are the issues resolved or not in the case
SA in Belgium 5. How in your view should they be resolved?
Case 3-3 The Globalization of CEMEX P241 1. What are the central facts of the case relevant to our lesson?
CEMEX expands international market in the high-growth markets by acquisitions 2. What are the issues they enable us to address
How to compete with other 5 big cement companies and keep sustainable advantages
Remove the culture barriers with the acquired companies 3. How are these issues dealt with in the case and why
Strengthening of capital structure, broaden its sources of capital
Innovation based on Mexico
Restructure the organization, use IT
Standard integration process: Post-merger integration 4. How are the issues resolved or not in the case 5. How in your view should they be resolved?
Case 3-4 General Electric Medical Systems, 2002 p261 1. What are the central facts of the case relevant to our lesson? 2. What are the issues they enable us to address 3. How are these issues dealt with in the case and why 4. How are the issues resolved or not in the case 5. How in your view should they be resolved?

Chapter 4 developing a transnational organization: managing integration, responsiveness, and flexibility

Case 4-1 Philips versus Matsushita: A New Century, a new Round p350 * Traditional strategy: * Philips: worldwide portfolio of responsive national org * Matsushita: based its global competitiveness on its centralized highly efficient operations in Japan * During the 1990s, both experienced challenges, force them to re-establish their competitiveness
Philips: Background * Established in 1892 by Gerard &Anton Philips; By 1900, the third largest light-bulb producer in Europe; caring for workers * Technological competence and geographic expansion * Early time, one-product focus enabled innovations; advances made in new production technology; leader in industrial research; commercial success gave Philips the financial strength to compete * International expansion to enable mass produce * Export → building sales org→local joint venture→decentralized sales org with autonomous marketing company → local production facilities * Broaden its product line * Philips: organizational development * Traditions: a shared but competitive leadership by the commercial and technical functions * During the WWII, transfer assets and resources abroad, enable Philips build an independent national organizations (NOs) that had a great advantage to respond to country-specific market conditions; Product development become a function of local market conditions * NOs responsible for financial, legal, and administrative matters, product divisions (PDs) in Eindhoven for development, production, and global distribution; eight separate laboratories in Europe and US * Corporate structure: geographic/product matrix; NOs report directly to management board; within NOs, joint technical and commercial leadership; expatriate managers foreign tours of duty * Philips: attempts at Reorganization * Trade barriers reduced, new technologies demanded larger production runs, competitors moved production to low-wage areas, Philips loss ability to bring products to market * Chairmen reorganized the company, but financial performance remained poor, global competitiveness still in question 1. Van Reimsdijk and Rodenburg Reorganizations, 1970s * Van - ‘Yellow Booklet’ outlined the disadvantages of matrix org: disagreement between NO and PD lower the speed of reaction of an enterprise * ‘tilting the matrix’: reduce product line (close inefficient plants), build scale by concentrating production, increase the flow of goods among NOs; but implemented slow * Rodenburg – establish International Production Centers (IPCs), replacing dual leadership with single management, but the power of NOs continued 2. Wise Dekker Reorganization, 1982 * Close large number of inefficient operations to reduce cost; Exchange biz and entered alliances * Continue to replace dual leadership and tilt the matrix; reduce board size, bring experienced directors, create subcommittees; redefine the product planning process. * But still sales declined and profits stagnated 3. Van der Klugt Reorganization, 1987 * Set a profit objective of 3%-4%, targeting Japanese competitors * Designated core and non-core biz * Restructured 14 PDs to four core global divisions; Group Management Committee; reallocate headquarter staff to PDs * Move product-line to the most competitive markets, required parent company gain firmer control over NOs; repurchased publicly owned NAPC shares * Research lab focused on specific biz areas * Close plants and eliminate employees to increase efficiency * Unanticipated losses, Van and half board were replaced 4. Timmer Reorganization, 1990 * Huge job cuts; established new performance rules and contract financial goals * Sold off various biz to focus resources, but profitability still below 4%; McKinsey: value added per hour low * 1994 start new growth strategy by expanding software, services, and multimedia, through innovative capability; but the earlier divestment of high-tech biz and cut R&D personnel prohibit the strategy * Critics claimed the drive for cost-cutting and standardization led to ignore new market demands 5. Boonstra Reorganization, 1996 * Sold off biz, worldwide restructuring * Shift production to low-wage countries; eliminate the old PD/NO matrix; relocate headquarters to Amsterdam * Focus on established tech, major resources to marketing * Performance improved significantly in the late 1990s 6. Kleisterlee Reorganization, 2001 * Outsource basic manufacturing and become a technology developer and global marketer
Matsushita: background * Established in 1918 by Konosuke Matsushita * 250-year corporate plan with 25-year sections, codified in creed and seven spirits * In the post-war boom, introduced a flood of new products; broad line of 5000products and 25000 domestic retail outlets; assured sales volume and access to market trends and consumer reaction * Post-war growth slowed, focused on export markets * The organization’s foundation: divisional structure * Small biz & internal competition; leverage its technology to develop new products * Corporate treasury operated like a commercial bank, loan to division * KM expected uniform performance across the divisions and managers * Central research laboratory (CRL) develop technology, product divisions develop product and engineering; copycat * MATSUSHITA: internationalization * Early time, tech exchange and licensing agreement with Philips * Expanding through color TV * 1953, opened overseas branch office in US, selling its products under their private brands through mass merchandisers and discounters * 1960s, open plants in Southeast Asia and Central and South America, shift basic production to low-wage countries, retain high-value in Japan * 1970s, establish assembly operations in Americas and Europe, then Canada; 1974, brought Motorola’s TV biz and start Quasar Brand in US... * Building global leadership through VCRs * Launched its commercial broadcast video recorder in 1964, and introduced consumer version in 1966 * Under gov pressure, gave up its own format Betamax, adopt the established VHS standard * Built production to meet own needs and OEM customers; capacity increased sharply while licensed the VHS format to other manufacturers; cost reduced and quality improved * Changing systems and controls * Mid 1980s, wholly owned, single-product global plants reported directly to the appropriate product division; overseas sales and marketing subsidiaries and overseas companies producing a broad product line reported to Matsushita Electric Trading Company (METC) * 1970s, central product divisions strong control; 1980s, instead of controlling inputs, monitor measures of output (quality, productivity, inventory levels) * Headquarters-subsidiary relations * Local managers had autonomy on how to achieve the targets set by METC & product divisions * 700 patriate Japanese managers and technicians play vital communication role * Yamashita’s operation localization * Boost offshore production; four localization: personnel, tech, material and capital * Give overseas sales subsidiaries more choice over the products they sold * Hope to develop the innovative capability and entrepreneurial initiatives * Tanii’s integration and expansion * Integrate domestic and overseas operations, shift operational control nearer to local markets, relocated major regional headquarters functions out off Japan, but the overseas subsidiary companies acted as implementing agents * Buy innovative overseas companies, acquired MCA * Japan’s economy recession, Tanii shift the company’s focus from expansion to cost containment * Morishita’s challenge and response * Cutting headquarters staff and decentralizing * Market for consumer electronics collapsed, excess capacity and new competition drove down prices * Strong yen making exports uncompetitive, shift production offshore to low-cost Asian; management unwilling to restructure * Develop tech and innovation offshore, invest in R&D partnerships and technical exchanges * Nakamura’s Initiatives * Move the company to ‘meet customer needs through systems and services’ * Flatten the hierarchy and empower employees to respond to customer needs; all key headquarters functions relating to international operations were transferred to overseas regional offices * Destruction and creation; plants were integrated into multi-product production centres; factories be consolidated or closed; marketing shift to two corporate marketing entities * But still loss

Case 4-2 Rudi Gassner and the Executive Committee of BMG International p366 * This case explores the roles of CEO Rudi Gassner and the 9-person executive committee in leading BMG International. BMG International is the international music subsidiary of Bertelsmann, a German company that is the second-largest media conglomerate in the world. * Rudi Gassner is a very effective leader. His leadership style can best be described as a transactional one although he also displays some qualities of transformational leadership. His transactional leadership characteristics are displayed decision to prepare a yearly business plan for each Managing and Regional Director. His focus on clarifying goals and providing rewards and bonuses contingent on performance is a typical behavior associated with transactional leaders. * He also had displayed the four key sets of leader behaviors associated with transformational leadership, namely: inspirational motivation, idealized influence, individualized consideration and intellectual stimulation.
Building international (responsiveness): * When Gassner came into BMG-I, it was a company with ‘no goal, no mission and didn’t make profit’. The Managing directors MDs of the company has no sense of responsibility, they were all waiting for senior boss to assign them tasks to do. At the very beginning, Gassner emphasized on two strategies: 1)globalization, which indicated to enter into more countries for business; 2) domestic repertoire清单. Required developing non English speaking repertoire. * Rudi Gassner also made very aggressive bonus plan to motivate the MDs. He also appointed company’s financial officer; global A&R marketing coordinator(bring back local artists; show their own to local market); human resource executive and international legal and business affairs executive. * -------------------------------------------------
There was annual managing directors’ convention for corporate staff and Rudi Gassner and MDs and JV partners to get together. Object: provide a forum for the MDs and JCs to give repertoire representation to each other in an attempt to sell their local repertoire to the other countries.
Regional structure (integration): * 1989, Gassner concluded that it was time to aggregate the countries into five regions and hire a regional director for each. * German-speaking territories; UK; Central Europe(rest of the Europe); Spain/ Latin America; Asia/ Pacific area. * Now Gassner worked through RDs to maintain the annual business plan. February, MDs-RD-G; March: G-RD-MD. Everybody walk out with the same goals. MDs’ bonus criteria are also defined, since betriebsergebnis(Germany term for net profit plus interest rate) is the primary criterion for bonus. * RD: we are involved throughout the process, but Rudi has the final approval. * The financial result based performance measurement can be too inflexible. * Rudi was same still maintain close contact with companies around the world. He called it a very flat hierarchical structure. He believe that managing an international company, one has to travel extensively, ‘because it is all about people’. * 1989, Gassner formally created Executive Committee consisting of five RDs, four corporate staff and himself. For everyone to involve in strategic/ investment decision making. Because ‘globalisation is not breaking down pieces, but have to have a global strategy. * RDs were supposed to convince corporate staff for help in their region. * Purpose: to let the RDs get together for them to tell their colleagues what they are doing. * RDs and Rudi’s contact kept frequently and closely, especially in Europe. In 1991, Europe subcommittee was established. * Resistance: role of RDs differes: increasing shares; reducing costs; or performing as pioneer, etc. overtime, fortunately, RDs mutually respect. They called the EC a soccer team. * While RDs and corporate staff sometimes thought Gassner too difficult to influence. * Impose will to agenda; dictator (but still successful leader); only receptive when RD talking about his own area issue; only separate meeting could best influence him. * -------------------------------------------------
Rudi: personally he liked to win argument; if one wants to change his mind, he has to prepare the whole working process since Rudi has already thought everything through. He also was worried that the EC was not working toward the original goal; let everyone contribute to the problems that went beyond their boundaries. Rudi thought this could be the reason that people in this group have different characteristics. * Final issue: In particular, the case describes a 1993 decision that Gassner and the executive committee must make about whether or not to change managers' business plans and bonus targets as a result of a newly negotiate reduced manufacturing cost. * Rudi: new targets for MDs, worried that if not, MDs will become ‘complacent’. * RDs: no. when condition’s bad, targets were not changed, how come this time change.
What are the central facts of the case relevant to our lesson?
BMG international 从1987到1993以来在Rudi Gassner的带领下非常成功得进军了国际市场，占据了市场份额同时，获得了很高的利润。Rudi领导下的BMG-I一开始以发展新的国际市场提高responsibility为任务。这个时候开始公司就采用financial手段来motivate MD创造成绩。后来逐渐发展以后，Rudi认为，市场之间需要有integration，于是设立了regional director，来协调地区的发展。此外为了有一个更好的‘国际’战略，Rudi创立了executive committee，并每年4次EC meeting。来让RD们，corporate staff们和他相互交流意见和介绍他们各自的发展。为了有一个共同的认识，并让RD参与到非自己地域的区的问题处理中。
2. What are the issues they enable us to address 在1993年的MD convention当中，欧洲区的RD成功通过negotiating降低了从兄弟公司进货的transfer price。这个新的价位使得公司高层陷入了纠结，是否要相应调整对欧洲的MD的bonus的target的重整？Rudi认为需要而RD们觉得不应该。（这个是文章最初和最后提出的没有解决的问题）这个也是由于motivation政策的不flexibility造成的。 此外，EC的设立的目的是为了让RD更多交流并参与到彼此的商业决策中，但是ECM没有很好实现这一点。
3. How are these issues dealt with in the case and why ECM没有很好实现EC的目的原因有很多，Rudi自身，如同RD们所说的，可能过多决策，使得RD们的意见得不到传达和落实。此外，Rudi认为，EC中成员各自性格的不同也使得交流更为难以实现。Rudi本身的领导特质。 4. How are the issues resolved or not in the case ECM后来只成为一个process让RD们觉得自己在take responsibility。Inflexible的奖励政策使得新问题出现的时候产生了矛盾。
5. How in your view should they be resolved? 说不清楚。可以是适当调整，权衡两者意见。或者是另设名目（文中有提一种名目当时ECM上有人提出来，但是后来被否决了）。 Case 4-3 Bombardier Transportation and the Adtranz Acquisition
Acquisition of Adtranz: expand BT’s revenues and geographic scope & increase its competencies in propulsion system and train controls, and would complete its product portfolio.
BT:
* 5 geographically-based operating units (North America, Atlantic Europe, Continental Europe, Mexico and China. * 1 market/functional unit
Adtranz:
* Organized around product segments and functions making its structure and allocation of responsibilities quite foreign to Bomdardier.
Bomdardier begin to diversify: 1. Transportation:
Using rubber-wheeled cars licensed from the supplier to the Paris subway system, BBD’s work won positive reviews from Montreal commuters.
Mid-1980s, BT looked to capitalize on industry uncertainty by purchasing companies at low prices and growing its market share through these acquisitions. 2. Aerospace:
Through several Acquisitions 3. Corporate balance:
1990s, BBD clearly established itself as a diversified company.
Bombardier Growth philosophy: * Acquisition that allowed it to add value to the business through the application of its existing competencies, it a way of financial plays, and a way for BBD to complement or strengthen its existing businesses * BBD had strengthens in product costing and tendering, as well as in product assembled; Just-in-time—reduce the inventory levels; BBD sought ways to control product technology and design, assembly and distribution while outsourcing other non-core functions. * BBD tried to eliminate waste and turn around underperforming assets by applying tried and tested management approaches.
Bombardier had a good level of credibility in the market place, despite being the smallest of the 4 rail manufactures and tail service providers. It was seen to be one of the most effective in terms of its ability to deliver contracts and to manage and govern itself.
The Global Rail Transporation Industry
In 2001, the railway ransportation industry could be ddivided into six distinct segments: 1) Services 2) Propulsion and controls 3) Total transit system 4) Rail control solutions 5) Rolling stock 6) Fixed installations
Public policy and the role of governments in regulating the industry * The role of governement and the attitudes and values of the public and government differed among countries and continents. * Public policy decisions affected both the demand for fuel and the demand for public transportation as an alternative to the automobile. * European policies promoting reductions in congestion(堵车), pollution abatement (减轻污染), urban development, traffic safety and energy conservaion would continue and that support for public transportation systems would continue for the foreseeable future. * Governement regulations significantly affected industry structure in one other important way.

Infrastructure Model * Both Europe and the US railindustrywas designed to operate as a monopoly. – high sunk costs, low marginal costs and demands for managerial co-ordination. * In 1998, UK became the first counry in the EU to totally privaize its rail system (both infrasturcture and rolling stock). But had 2 troubles: 1). Thegovernement was forced to operate the infrastructure element of the system when Railtrack went bankrupt in October 2001. 2), worried about safety risks associated with spreading accounability across multiple for-profit companies. * UK model more closely fit the cultural and social paradigm emerging in the EU and was thus being adopted cautiously and to differing degrees throughout the EU. * The belief: by shifting to private ownership of rolling stock, the railway industry would eventually emulate the automobile or air transport models.
High-Speed Trains * By early 2000s, European Commission: a European-wide high-speed train infrastructure- its highes investment priority in transportation infrastructure. * For Europe to fully benefit from the on market model, decisions in infrastructure policy required a European, and not a nationalistic,approach.
Customers
* The privatization of many national railways had changed the financing arrangements and customer base within the European rail car industry. * In counries with private rail operators, revenues were generated hrough ticket sales and government subsidies while expenses were incurred through infrastructure franchise fees, day-to-day train maintenance, fuel and labor costs and leasing expenses.
DaimlerChrysler and Adtranz History * 1920 in the US the roots of Chrysler * 1880s in Germany the history of Daimler-Benz * 1926 began producing cars under the Mercedes Benz brand * By the 1980s, competition in the global automobile market had increased draticlly, Daimler-Banz was looking to diversify its business. * In 1995, DB’s CEO, Edvard Reuter, was forced to resign and was replaced by the aerospace division head, JurgenSchrempp. * By the mid-1990s, Rober Eaton had assumed the position of CEO at Chrysler at a time when the economic conditions in the automobile industry included an excess manufacturing capacity and an Asian economic crisis. * DainlerChrysler AG was formed in 1998
Adranz
* Four primary players in the rail business in Europe when DaimlerChrysler merger: Alstom, Siemens, Adtranz and Bombardier. * In the late 1990s, Adtranzrepresened less than three per cent of Daimler Chrysler’s revenues.
Production Challenges 1) Adtranz’s reputation for producing high quality products was poor. It was having quality, reliability and certification problems with its core Electrostar and Turbostar model trains designed for the UK market. 2) Adtranz’s customer support function and its initial contract bidding processes were viewed by some as inadequate.
A strategic acquisition for Bombardier
Reasons for acquisition: 1. Europe is the nexus of technological advances in the industry (North American’s train – two heavy and costly to operate.) 2. Green movement and strong government support signaled long-term growth in the demand for rail transportation in Europe 3. Balance the revenue streams produced by its various groups – counter-balance the growth of aerospace group. (Although transportation business’s margin is low, it is a huge cash generator.) 4. Adtanze’s advantage in variability and project management + BT’s production and cost control system. 5. BT’s expertise in subway, trams and light rail cars + Adtanze’s expertise in propulsion system, high-speed and inter-city cars and signalling system. 6. Adtraze’s $2.7 backlog and more service facilities for customers in the European market.
Acquisition process * Negotiation with DC * A limited due diligence process * Disagreement on asserts valuation would be submitted to an independent arbitrator for adjustment. * New management team was set up to streamline Adtranze’s operations. * Negotiation with the European Commission * Divest non-strategic transportation asserts in Germany and, to extend several years a series of supply contracts with smaller companies based in Austria and Germany. * Try to shape the focus of the merger task force to the European market in total, not to any specific country in terms of the market share of the combined company.

Case 4-4 World Vision (WV) Int’l AIDS Initiative Challenging a Global Partnership
Aids Hope Initiative was an ambitious attempt to implement common goals and strategies in fundraising, programming, and advocacy across the 48 independent members of the World Vision Partnership. (Ken Casey was the director of this initiative)
Birth of WV Int’l
WV was a $1b Christian relief and development partnership linking 48 national members in a global federation. * A Visionary Founder: “Faith in Action”
Founded in U.S., extended to other countries
Meeting emergency needs in crisis areas of the world through existing evangelical新教会的agencies * A New Leader, A new Approach: The Evolving Mission Questioning the sustainability of traditional model of selecting and supporting individual children→community development
In 1973, WV made a commitment to both relief and development in WV’s mission, significant changes to the structure and governance. * Moving Toward Partnership: Forming WVI
In 1976, a new distinct entity, WV Int’l was formed as the common program-delivery arm of WV’s 4 main funding-raising support offices. WV national entities in developing countries became members of WVI’s council.
Building the World Vision Partnership: Defining a Federation WVI’s council created a central int’l office to provide coordinated management of the global field operations funded by the core support offices, which became a separate power base. * Challenging Central Control Conflict among field offices (program-delivery), support offices (fund-raising) and Int’l offices * Creating Area Development Programs The 11 large-scale development programs were struggling. Proposed solutions: a new approach that sought to retain the benefits of scale while engaging more local involvement in community-level transformational development. * Engaging Federalism Centralizing the things that can be done better and cheaper that way and decentralizing other things that can be managed more effectively on the front lines. The key to federalism is to ensure the right of intervention held by the leader at the center. * Designing the Structure and Governance
Federal structure, partnership-based governance model
Fund-Raising in the Partnership: WV-U.S.
As WV-U.S. president, Stearns was responsible for US operations: fund-raising, advocacy, and int’l program development. * Revitalizing WV-U.S.: Marketing, Metrics, and Money
Marketing teams to be research driven in defining what appealed to donors, double-digit growth every year for 4 years with an unchanged marketing budget * Managing in the Partnership: All in the Family
Through the Strategy Working Group, we make joint decisions that benefit the global org and our mission better than if any one of us acted alone.
Program Delivery in the Partnership: The AIDS Hope Initiative * Recognizing the Need: Lessons for a Latecomer
WV isn’t addressing the AIDS crisis, but needed to be a priority * Launching the AIDS Hope Initiative
The HIV/AIDS Hope Initiative outlines the need and identifying the scope of the problem * Assessing the Challenge
Difficult
* Resistance from Donors
Funding such a big initiative would be a challenge and hoped to implement a joint marketing effort across the partnership offices, but encountered resistance from the marketing department. * Resistance from the Field
But while Mlay held regular meetings with national directors and hosted conferences and forums to determine how to allocate his technical resources, he had only limited ability to determine the strategy of national programs. The ADPs are strong, but people are ashamed to speak about it. Few program officers knew about HIV/AIDS work.
The South African Conference
Casey released a 1st draft of the Hope Initiative matrix. It laid out the goals, beneficiaries, values, and key design principles for each of the 3 HIV/AIDS program areas: Prevention, care and advocacy.
Conference: Casey’s goal was to bring together the national directors, senior program officers, and area development managers from 17African countries.

Case 4-1 Philips versus Matsushita: A New Century, a new Round p350 1. What are the central facts of the case relevant to our lesson? * Philips * worldwide portfolio of responsive national org * structure: national organizations (NOs) & product development (PDs); geographic/product matrix * dual leadership by technical and commercial * Matsushita * based its global competitiveness on its centralized highly efficient operations in Japan * divisional structure, small biz & internal competition * Corporate treasury operated like a commercial bank, loan to division * uniform performance across the divisions and managers * Central research laboratory (CRL) develop technology, product divisions develop product and engineering; copycat * During the 1990s, both experienced challenges, force them to re-establish their competitiveness 2. What are the issues they enable us to address * * Efficiency: too many plants * Flexibility: conflict between NOs and PDs, lower the speed of reaction * Learning: knowledge flow within the enterprise not well * Efficiency: excess capacity, strong yen * Flexibility: the overseas subsidiary companies acted as implementing agents * Learning: knowledge transferred between divisions 3. How are these issues dealt with in the case and why * * Close inefficient operations, build scale by concentration; shift production to low-wage countries; outsource * eliminate the old PD/NO matrix; replacing dual leadership with single management * start new growth strategy through innovative capability * shift production; downsizing * localization, meet customer needs through system and services; delegation or decentralization; * develop innovative capability and entrepreneurial initiatives, invest in R&D partnerships and technical exchanges 4. 5. How are the issues resolved or not in the case * * Loss in 2001, financial pressures * Still loss 6. 7. How in your view should they be resolved? * * Outsource even more of its basic manufacturing, become a technology developer and global marketer * Strengthen knowledge transfer between dif divisions, meet consumers needs

Case 4-2 Rudi Gassner and the Executive Committee of BMG International p366 1. What are the central facts of the case relevant to our lesson? * BMG International is the international music subsidiary of Bertelsmann, a German company that is the second-largest media conglomerate in the world. * Rudi Gassner was assigned the president and CEO of BMG in 1987, brought huge growth in the international market * Rudi motivated MD through financial bonus; created RDs and Executive Committee to exchange knowledge 2. What are the issues they enable us to address * MD lack of motivation→ financial bonus→ the financial result based performance measurement can be too inflexible. * Knowledge couldn’t transfer well within the MDs→ Flatter structure, RDs * RDs not communicate and cooperate→ EC &ECM→ ECM isn’t efficient for knowledge exchange between RDs 3. How are these issues dealt with in the case and why 4. How are the issues resolved or not in the case * Flatter hierarchy so Rudi overburden, many issues couldn’t be dealt with immediately * Gassner too difficult to influence, personally he liked to win argument; RDs don’t like to speak during the ECM * 1993 whether or not to change managers' business plans and bonus targets as a result of a newly negotiate reduced manufacturing cost? * Global artist development, new tech, expansion into new entertainment arenas and cost control 5. How in your view should they be resolved? * Delegation * Rudi deal with global strategic thinking on the part of the EC, to promote cooperation * Repertoire: local artist development, JV, acquisition

Case 4-3 Bombardier Transportation and the Adtranz Acquisition p382 1. What are the facts of the case? * BT was one of three major operating groups of BBD, was one of the world’s largest manufacturers of passenger rail cars * BT structured into five geographically-based operating units; but AD organized around product segments and functions * Through Acquisition of Adtranz, BT has expanded its revenues and geographic scope, increased its competencies in propulsion system and train controls, and completed its product portfolio. 2. What are the issues it raises? * Before acquisition, both BT and Adtranz faced certain problems:
BT:
* Sort of loss balance between aerospace industry (high margin, low cash generator) and rail transportation industry (low margin, high cash generator) need to strengthen the rail business to grow as a diversified company. * Still lack tech. advantage in certain fields, lack variability * Relative low market share in Europe which has huge growth potential in the future
Adtranz: huge decline in share of revenue in DC * Poor reputation for producing high quality products, having quality, reliability and certification problems with its core Electrostar and Turbostar model trains designed for the UK market. * Inadequate customer support function and initial contract bidding processes
During acquisition * Disagreements may arise during the asserts valuation process with DC * EU’s competition policy may be an obstacle
Further issues – How to get Adtranz ‘right’? * How to build compatible organisational structure * How to instil a project management culture * How to integrate BT’s manufacture philosophy into Adtranz * How to arrange personnel change between BT and Adtranz * How to locate the new company 3. What is the enterprise doing about the issues? * Acquisition is the solution to the previous problem * For problems arise during acquisition: * Negotiation with DC * A limited due diligence process * Disagreement on asserts valuation would be submitted to an independent arbitrator for adjustment. * New management team was set up to streamline Adtranze’s operations. * Negotiation with the European Commission * Divest non-strategic transportation asserts in Germany and, to extend several years a series of supply contracts with smaller companies based in Austria and Germany. * Try to shape the focus of the merger task force to the European market in total, not to any specific country in terms of the market share of the combined company. 4. Are the enterprises succeeding in dealing with them? 5. What do you think can be done now?

Case 4-4 World Vision (WV) Int’l AIDS Initiative Challenging a Global Partnership 1. What are the central facts of the case relevant to our lesson? * WV was a $1b Christian relief and development partnership linking 48 national members in a global federation. * Aids Hope Initiative was an ambitious attempt to implement common goals and strategies in fundraising, programming, and advocacy across the 48 independent members of the World Vision Partnership. (Ken Casey was the director of this initiative) * The evolution of World Vision’s organizational structure and governance. 2. What are the issues they enable us to address * Conflicts among field offices (program-delivery), support offices (fund-raising) and Int’l offices * Resistance from Donors: required a joint marketing effort across the partnership offices, but encountered resistance from the marketing department, since ‘it may hurt our image’, and it’s costly * Resistance from the Field: difficult to travel and communicate; Mlay had only limited ability to determine the strategy of national programs, for advisory councils and boards connect to the local community and society; The ADPs are strong, but people are ashamed to speak about it; Few program officers knew about HIV/AIDS work. 3. How are these issues dealt with in the case and why * Federal structure, partnership-based governance model * Marketing teams to be research driven in defining what appealed to donors, double-digit growth every year for 4 years with an unchanged marketing budget * The South African Conference 4. How are the issues resolved or not in the case * Centralizing the things that can be done better and cheaper that way and decentralizing other things that can be managed more effectively on the front lines. The key to federalism is to ensure the right of intervention held by the leader at the center. * Marketing teams to be research driven in defining what appealed to donors, double-digit growth every year for 4 years with an unchanged marketing budget * bring together the national directors, senior program officers, and area development managers from 17African countries, tackle the HIV/AIDS problem with the same energy 5. How in your view should they be resolved?

Chapter 5 Creating worldwide innovation and learning: exploiting cross-border knowledge management

Case 5-1 Time Warner Inc. and the ORC Patents * 1992, optical recording corporation (ORC) sued Time Warner Inc. for patent infringement * Philips licensed the CD tech in partnership with Sony, but never believed that the Russell patents owned by ORC were valid nor that any CE products infringed these patents * Background * ORC was incorporated in 1984 to exploit a tech invented by Russell. * With the debenture funding and the transfer agreements signed, ORC ready to hire Russell and transfer SLC’s tech to Toronto * Jim Russell * Adamson and Philips visited Russell’s lab * SLC sold tech licenses unsuccessfully due to complicated and expensive product, financial burden * Russell demonstrated the tech feasibility * 1984, Sony and Philips developed CD player, SLC and Russell was left on the sidelines * Adamson employed patent agent Orange to protect the new research focus, intellectual property rights * Discovering a treasure * Orange concluded that the newly released CD players and discs might infringe one or more of the claims in the Russell patents * 1986, Adamson retained the services of Adrian Horne, and advise every electronics firm that they may infringe the Russell patents * Estimate cost to sue for patent infringement, the royalty revenues is huge * ORC’s met with Philips and DuPont in 1986 in NY, exchange views, no progress toward a licensing agreement; P&D thought no patents infringed, and questioned about the validity of the Russell patent * 1986, Adamson’s initial trip to Tokyo, had conference with Japanese firms arranged by Far East Associates, the claims to patent infringement was taken seriously by the Japanese firms; Sony invited ORC team for another meeting later * 1986, another series of presentations and meeting at each company’s offices; ORC felt that Sony’s decision would predetermine other firms in Japan; US is the largest CD market, and the site of most comprehensive patent protection; ORC never having Japanese patent issued, Sony presented a package of over 25 US patents, cited as Prior Art against the Russell. * Publishing the ‘Blue Book’ * To the patent defense from Sony, Adamson and Russell reviewed the documents that Sony had provided; Orange prepared a technical response for each reference and compiled these results in a bound booklet for distribution to each prospective licensee * Distractions 分心along the way * ORC would likely run out of cash by the end of 1987, which gained through a tax credit program of the Canadian gov * The Canadian gov wished to rescind their tax credits and were demanding an immediate cash reimbursement * All claimants were incorrect in their positions and vowed privately to resist their claims even into bankruptcy * The Sony Protocol * Sony desired to be the exclusive agent for all of Asia * Lost financial strength * The end game? * 1988, a final meeting with Sony, adding pressure * If ORC went into bankruptcy, the Russell patents would revert to their former owner, SLC, very litigious * ORC’s first license * Sony signed a license with ORC: accept Sony as the exclusive agent with full authority to license all CD player manufacturers based in Asia and pay Sony an administrative fee, reduce royalty demands, transfer the right to sue Asian CD player manufacturers for patent infringement to Sony as exclusive agent. * Adamson managed to retain his full ownership of the Russell patents through ORC, had a royalty cash flow. * Onward * More difficult challenges was to determine the size of the infringing production unit volumes and sales revenues * 1988, ORC succeeded in licensing the Philips for both CD players and media, then, Sony’s CD media * But Time Warner still responded as ‘non-infringement and invalid patent’ * Enforcing ORC’s patent rights * 1990, ORC retained Davis Hoxie firm, which represented to sue WEA Manufacturing for patent infringement * Due to the patent expiry date of ORC’s key US patent was passed before any court could rule on the matter, WEA had no threat to stop an infringing production. * Warner declined ORC ‘s settlement proposal to the modest US$3 million * Will they like us in Wilmington? * Adamson concerned about a potential American prejudice toward a Canadian company, but the survey proved that he should not * The rubber meets the road * The trial began in 1992, and it was to run for 5.5 weeks * The cost was very expensive; the Time Warner litigating team had mounted a very credible defense; technical complexity and possible jury confusion * 1991, Adamson shelved ORC’s research program and reduced the technology development team, focusing resources on the Time Warner litigation. * Adamson felt that he had bet ORC’s entire future on the outcome of the court case against Time Warner. * In 1992, the large CD manufacturer, now called Time Warner, was ordered to pay ORC US$30 million in patent violations

Case 5-2 P&G Japan: the SK-II Globalization Project

1970
1980
1990
2000

P&G
Enters
Japan
Accumulated
Losses =
$200 M
Acquires Max
Factor – Enters
Beauty Care
Max Factor
Japan Loses
$50 M
SK-II Becomes
Major Japanese
Product
O2005
Begins

Management Philosophy * DurkJager, 1996-2000 * Sought to Leverage Global Presence * Introduced Aggressive Restructuring 1999 * From Geographic Based to Product Based * Stepped up New Product Introduction * More Ambitions Goals * A.G. Lafley, 2000- * Big Brands, Big Markets * Cut Costs, Cut Headcount
Competition
* Local Competitors – Kao and Lion * Understood Distribution System * Understood Market * P&G had 3% Market Share * Poor Marketing Strategy * Missed 80% of Market * SK-II a Late Entry * Competition Already Established
ExternalEnvironment
* Cultural * Japanese Very Sophisticated * Wide Range of Cultures/Life Standards * Economics * Japan-Wealthy, China-Poor * Economies Independent * Governments * Protect Local Companies * Lax Enforcement of Trademark Laws
02005：
* Initiated in 1999 by DurkJager * “Stretch, Innovation and Speed” * Structure Company on Product Lines not Geographically * Accelerate New Product Release * Elimination of Corporate Bureaucracy
Key issues:
1) P&G must develop a new global strategy to succeed. * Abandon Lagging Products and Concentrate on Successful Ones * Reorganize the Company into a Global Competitor * Sell the Japanese Subsidiary
2)Can P&G develop SK-II into a Worldwide Beauty Care Product? * Organize the Company Along Product Lines not Geography * Continue to be the Technology Leader * Roll Out to Other Asian Countries * Sell off the SK-II Product Line
3)Is O2005 an Effective Strategy, or Should P&G Switch to Another? * It Takes Time for a Restructure to become Effective * It was Ill-Conceived and Should not be Continued
Recommendations:
* Reorganize the Company into a Global Competitor * Continue to be the Technology Leader * O2005 Needed Better Implementation

* 1980s宝洁本来在第一任副总裁带领下走的是各国负责各自的销售如此形式，为了达到local responsiveness。然后同时在每个国家采用宝洁的政策，战略，结构等等。每个国家的GM负责各国的profit。但是这个形式由于各自运行各自国家并搞各自的研发，cost不能被cover了；然后各个国家之间缺少联系，产品不能被推广到更大的市场。此后，宝洁本来hands-off的RGs开始参与其中了。在欧洲，RG组织减少共同的fixed assets，提倡共享资源，提高效率。然后各国之间开始一起开发和推广新产品。1986的时候，美国地区把原来的division分类改成了product的分类。然后1989有了一个global category executive，这个的role是要发真推广global的product，管理全球战略和开发。但是profit还是国家的GM负责。之后宝洁又建立起了4个regional divisions，之后宝洁在开发新的市场方面有了很大提升。但是当时的matrix structure复杂化了operation和决策的制定，产品的开发，推广进度很慢。 * 宝洁日本一直都没怎么贡献给他的parent company。但是作为战略性的存在，Jager在继任之后，做了一系列的调整。首先，他认为宝洁之前没有做好的原因是没有了解日本消费者的喜好；没有创新自己的产品；没有很好利用本地的供应链。通过改善这三个方面，1988年的时候，宝洁的洗衣粉和帮宝适产品在日本市场领头了market share。当宝洁建立亚洲区regional division的时候，Jager成为了副总裁。然而之后日本经济的衰退又给了宝洁打击，尽管宝洁当时收购了MAX FACTOR的系列产品，但是由于没有了解日本消费者的购物习惯，这个收购并没有能在经济衰退的时候帮助宝洁日本。同期的日本竞争者却仍然保持增长的growth。继Jager之后，Lafley继任了亚洲区副总裁，他看到这个情况后，立即削减了MF的产品种类，同时重新制定战略。之后再各方努力下，MF也开始了盈利。 * 1996年Jager调回总部做了运营官的时候，提出了O2005计划，指出宝洁历来的成功都有新产品，创新的功劳，所以在未来，公司也应该提倡这方面的建设。之后再Jager和当时的CEO Pepper的运行下，R&D投入在宝洁各处都出现了很大增长。公司的文化也逐渐形成了‘stretch，innovation，and speed’如此。Jager并提倡要为了创新要注重take risk。在具体管理方面，Jager把compensation紧密联系到performance。同时改进了budget的制定，使其更加efficient。在O2005下，宝洁的4个区变成了7个global business units（GBUs），负责推广开发自己负责的产品同时又要做到efficient。原来的regional organizations变成了7个market development organizations（MDOs），负责把GBU的推广落实在local。同时在structure方面，减少阶级制，减少了top到bottom之间的管理层，使决策和信息的传递更加迅速有效。 * 宝洁公司的改变，也促使宝洁日本的相应变化。1997年的时候，宝洁日本主要在着重MF和SKII的推广和发展。都是prestige skin care products。MF之后的改变在于适应了日本的化妆品营销方式。SKII是宝洁日本在日本收购的一个品牌，看中了他的科技成分和创新因素。SKII本身很受日本消费者的欢迎，是他们的喜好。大量的广告投入使得SKII的份额增长到了70%。在日本的成功之后，SKII又被推广到了香港和台湾。两地的消费者也很喜欢这个产品。SKII作为一个high margin的产品成了日本宝洁的一大推广候选。然而，SKII在日本之外，很少有exposure。欧洲区的GM de Cesare认为欧洲人的喜好是Olay开始的，可能比较难认同日本这个品牌。 * 与此同时，在Jager的innovation推广下，日本的很多创新开始被宝洁世界各地共享。日本的化妆品市场的成熟度，也使得他成了innovation的发源地。日本本身的激烈竞争，促使宝洁日本联合其他区的R&D共同发展对应的战略，并且改进做的更好。MF 的Lipfinity就是一个例子。Translate breakthrough technology into a market-sensitive product innovation。 * O2005的实施调整了一些人力relocation。 Paolo de Cesare到了大阪去管理MF Japan。Lafley take care of Beauty Care GBU。DC同时也成为了BCGLT的一员，这个是由3个key MDO的GM是成立的。Lafley作为leader。DC于是又被任命管理SKII的世界推广。 * GLT组织研究发现worldwide need for some certain products，于是他们用新技术创新，同时localize adaption和marketing。他们发现，美国，欧洲，日本的消费者的洗脸喜好不一样。但是有共同点。于是GLT朝这个这个共同点利用宝洁全球的技术员资源发展技术。Chassis的技术的时候，并上特别的cleaning cloth的发明，和SKII的特别的ingredient，Pitera的合作，有了一个新的产品，基于SKII以上。美国的研发组在Olay基础上也做了改进。SKII方面不同于以前的多步清洁，通过科技元素更简便了步骤，达到同样的目的。--SKII Foaming Massage Cloth。Priced $50。而同样Olay的类似产品只要$7. 日本方面在marketing则更强调对科技成分的诠释。 * DC当时看到SKII在香港台湾的成功使他选择把SKII的市场推广到更多东南亚地区。但是那里的市场比较小。于是他又看到了中国区和欧洲区。 * SKII has three ways to improve its performance: * The main problem of entering deeper into SK-II’s remaining Japanese market is the slowing market growth rate. Innovation may be the key to solve this problem. In order to, SK-II may add new product series. Such innovation needs the support of backstage technologies, which means P&G have to consider prioritising investments towards new technology for the brand. Apart from this, superior in-store service will be another key point. Having professional beauty counsellors providing superior instore services may attract more customers. * There are mainly two problems faced when considering entering into the mainland China. One problem is that most of Chinese customers are only educated with a two to three step skin care process, while SK-II have to educate its customers with a four to six step skin care process. The other risk for SK-II is that whether Chinese customers can accept the premium price of SK-II’s products. However, it should be taken into account that the large market of China can be divided into three market segments: rural area, low income urban area and the wealthy area including most of the biggest cites in China like Beijing, Shanghai and so on. The market which SK-II should target is the wealthy area of China, where customers are more educated and more likely to accept expensive skin care products. Besides, customers in the wealthy part of China have great similarities with those in Taiwan, Hong Kong and South Korea, where SK-II has already introduced its beauty products. Thus, such successful experiences will help when entering mainland China. * When it comes to the European market, the main problem is how to bring a brand new beauty brand into a highly competed market. The risk here is that the European market is a totally different market from SK-II’s Asian markets; it is hard to know whether such a new brand will be accepted by the local customers. Besides, SK-II’s successful experiences in other Asian markets may not work this time. Because there is plenty of uncertainty in the European market and there are no similar experiences to take suggestions from, therefore it may be a good idea for SK-II to have some test points first in Europe rather than begin with a sudden mass entry. UK may be a good starting point as there are quite a few major department stores which distribute prestige brands rather than Germany or France where beauty products are mainly distributed in thousands of perfumeries where SK-II cannot provide its trained counsellors to serve its customers. * 公司的高层，Lafley是支持的。但是Jager怀疑是否这类产品fit P&G的portfolio。他觉得不符合P&G的营销策略。O2005带来了一些负面的因素，特别在欧洲区，新的‘globally‘策略没有估计到local的特点。同时O2005的制定促使GM们扩大他们的sales和volume，standardize和centralize。如此GLT的产品有了财政压力。因为化妆品品牌要求更多的local sale forces，更多local costs。

IBS Case 5-3McKinsey & Company – Managing Knowledge & Learning * From the beginning * Founded in 1926 by James “Mac” McKinsey * An integrated approach McKinsey called his General Survey Outline – an analysis of a company’s goals, strategies, policies, organization, facilities, procedures, and personnel * One Firm Policy – Requires consultants to be recruited and advanced on a firm-wide basis, clients be treated as a McKinsey & Company responsibilities, and profits be shared from a firm pool, not an office pool. * Every assignment should bring the firm something more than revenue (Experience, Prestige) * Extraordinary domestic growth through the 1950’s provided a basis for international expansion that accelerated the rate of growth in the 60’s. – Offices were opened in: London, Geneva, Amsterdam, Dusseldorf, and Paris. * Growing Concern * The economic turmoil of the oil crisis * Slowing of the divisionalization process * Growing sophistication of client management * Entrance of new competitors like Boston Consulting Group (BCG) * Steps to Change * Commission on firm Aims and Goals 1971 * The firm had been growing too fast * “Our preoccupation with the geographic expansion and new practice responsibilities has caused us to neglect the development of our technical and professional skills” * Too willing to take routine assignments from marginal clients and the quality of work done has been uneven. * Consultants lacked the deep industry knowledge or specialized expertise that clients were demanding. * Recommit itself to the continuous development of its members. * Slow growth * Emphasize “T-Shaped” consultants – those who supplemented a broad generalist perspective with an in-depth industry or functional specialty. * Appoint a full-time director of training – Training and development of consultants * Move towards a product driven approach – Create industry-based Clientele Sectors in consumer products, banking, industrial goods, insurance, and so on * Assemble working groups in two areas – Strategy &Organization * Knowledge development * Ongoing and institutionalized * 15 centers of competence to help develop consultants and the ensure the continued renewal of the firms intellectual resources * Change the internal status hierarchy * “Snowball making” – practice development, internal effort for improving knowledge * “Snowball throwing” – client development, external consulting * Everyone must become snowball makers and snowball throwers * Building a Knowledge Infrastructure * McKinsey Staff Paper series (1978) – Consultants published key findings (The problem was that this was too time consuming). * Practice Bulletins – Two page summaries of important new ideas that identified the experts who could provide more detail. * Knowledge Management Project (1987) * The firm had to build a common database of knowledge accumulated from client work and development. * Each practice area (Clientele Sector and Competence Sector) must hire a full time practice coordinator who could ask as an “intelligent switch” * The firm had to expand its hiring practices and promotion policies to create a career path for deep functional specialists whose narrow expertise would make them more I-shaped than the normal profile of a T-Shaped consultant * Firm Practice Information System – Computer based Practice Development Network (PDNet) * The Knowledge Resource Directory (KRD) – A listing of all firm experts and key document titles by practice area * From T-shaped to I-shaped Consultants – Transition to deep functional specialists with narrow expertise (Cause some uncomfortable feelings for the firm and some technical expertise consultants) * The knowledge infrastructure and transition of McKinney& Company led to a revived growth and new offices * Refining Knowledge and Management * Replaced the leader-driven knowledge creation and dissemination process with a “stewardship model” of self-governing practices focused on competence building. * Integrating groups and knowledge Sectors into 7 Functional Capability Groups. * Client Impact * CPDC Clientele and Professional Development Committee All Partners Conference & Client Impact Committee Shift from Engagement Team (ET) to the Client Service Team (CST) Add long term value and increase the effectives of individual engagements * Three Consultant Profiles * Jeff Peters, Sydney Office * John Stuckey assembles a 5 member team for a financial industry project in Australia * Group leverages the international knowledge of the Firm to create a great set of recommendations for client. * Is McKinsey becoming too introverted? * Warwick Bray and European Telecoms * Exhibits inter-cooperation between branch offices and the companies Intranet. * Can using information from other sectors pose danger? * Stephen Dull and the Business Marketing Competence Center * Developed Business to Business (BtoB) Initiative – New competence center focused on cutting-edge issues in marketing. (E.g. segmentation, multi-buyer decision making, and marketing partnerships). * Is technology eroding personal relationships? * A New Focus * Rajat Gupta becomes MD (1994) * Capitalize in the firm’s long term investment in practice development driven by Clientele Industry Sectors and Functional Capability Groups supported by PDNet and EPIS. * Practice Olympics – Knowledge development approach * Six special incentives * Expand on the model of the McKinsey Global Institute, a firm sponsored research center. (Change center and operations center) * Technology * The Dark Side to Technology and how McKinsey can avoid it. * Future Directions

Case 5-4 The Transformation of BP TheBritish Pharmacopoeia * The Transformation of BP * In 1992 BP, UK’s largest industrial enterprise, cut dividend and removed CEO to overcome a series of interlinked challenges. * BP had become a model of both financial performance and CSR. * The case looks at how that transformation was achieved, and in particular at the way in which changes in the management of the company influenced both performance and reputation. * Building the Platform for Superior Performance * A series of mergers and acquisitions is to achieve scale. The organization learns: 1. People work better in smaller unit 2. Any org scale could create proprietary knowledge through learning (share info.) 3. Get peers to challenge and support each other 4. More had to do with the company as a whole, reputation * Creating Performance Leaders? The Atomic Organization * Increasing emphasis on leadership development and deployment * 10 or 12 yrs ago, BP was a collection of fiefdoms, separate → coherent overall strategic direction ,one share price and one set of metrics. Restructuring, merge Business Units, break down functional walls * Setting the Targets: The Performance Contract * Performance Contract process – define the goal, define the input to achieve the goal and monitoring * Providing the Stretch: The Peer Challenge * Peer Group Business Unit Leaders meet to allocate budget, challenge targets, review progress in meeting targets * Integration through Collective Learning * If performance management was the foundation of Act I, then relentless collective learning was the leverage point. * Intellectual Curiosity at the top * Balancing the competitive nature of the performance-driven side of BP’s culture was the intellectual curiosity and openness to knowledge sharing of the people in the company, especially evident in the top team. * Relentlessly Building Human Capital * The focus on the development of individual talent began from the top team felt to the long-term intellectual health of BP. * Leveraging through Peer Assist * Performance Contracts and Peer Challenge were the backbone of the performance management process. The heart of the collective intellectual and social capital of the org was most evident in Peer Assists. Buz Unit Leaders regularly provided help to one another. * Creating Purposeful Conversations * At BP, management explicitly focused on enhancing the depth, breadth and quality of conversations at all levels, as a means to supporting org-wide learning. Improve quality by: linking conversations to purpose, and legitimizing dissent and challenge. * Aligning Org and Individual Values * Tension between society and oil industry: societal impact of the extraction of oil and the environmental impact of emissions during refining and consumption of fuel. * Awakening of a Force for Good * There is no conflict between investing in reputation and creating long-term shareholder value. BP’s plans for addressing climate change. * From Act I to Act II: the Challenges and Questions * BP launched a new corporate branding: the attributes of the brand-progressive, green, innovative and performance-driven-were the values that would shape BP’s future. Organic growth * The Reorganization of 2001 * One change was to consolidate the business unites, thus reducing total number. * The role and deployment of the Group Vice Presidents were also change – personally accountable for the performance. * (At heart of this change) Acknowledgement of the regional role as an enabler of organic growth * A consolidation and strengthening of the functional competencies of BP

Case 5-1 Time Warner Inc. and the ORC Patents 1. What are the central facts of the case relevant to our lesson? * The American inventor Russell has many patented inventions and he successfully demonstrated the technical feasibility of recording a digital audio signal optically. * ORC was incorporated in 1984 to exploit a tech invented by Russell. * After helping SLC resolving the debenture funding and signing the transfer agreements, ORC hired Russell and transfer SLC’s tech to Toronto 2. What are the issues they enable us to address a. The patent agent of ORC found that the newly released CD players and discs might infringe one or more of the claims in the Russell patents b. Financial problem c. difficult to determine the size of the infringing production unit volumes and sales revenues 3. How are these issues dealt with in the case and why d. met with Philips and DuPont in 1986 in NY, exchange views, no progress toward a licensing agreement; e. 1986, Adamson’s initial trip to Tokyo, had conference with Japanese firms arranged by Far East Associates f. 1986, another series of presentations and meeting at each company’s offices g. 1988, a final meeting with Sony, adding pressure h. 1990, ORC retained Davis Hoxie firm, which represented to sue WEA Manufacturing for patent infringement 4. How are the issues resolved or not in the case i. Sony signed a license with ORC: accept Sony as the exclusive agent with full authority to license all CD player manufacturers based in Asia and pay Sony an administrative fee, reduce royalty demands, transfer the right to sue Asian CD player manufacturers for patent infringement to Sony as exclusive agent j. 1988, ORC succeeded in licensing the Philips for both CD players and media, then, Sony’s CD media k. Time Warner still responded as ‘non-infringement and invalid patent’ l. Adamson felt that he had bet ORC’s entire future on the outcome of the court case against Time Warner. m. In 1992, the large CD manufacturer, now called Time Warner, was ordered to pay ORC US$30 million in patent violations

Case 5-2 P&G Japan: the SK-II Globalization Project 1. What are the central facts of the case relevant to our lesson? * After the success biz in Japan, consider to make SK II a global brand, expanding to China and Europe * Paolo de Cesare, the president of Max Factor Japan, the hub of PG fast-growing cosmetics biz in Asia, reported to GLT 2. What are the issues they enable us to address * The main problem of entering deeper into SK-II’s remaining Japanese market is the slowing market growth rate. * Culture difference: consumers, distribution channels, and competitors * Mainland China: most of Chinese customers are only educated with a two to three step skin care process, while SK-II have to educate its customers with a four to six step skin care process. The other risk for SK-II is that whether Chinese customers can accept the premium price of SK-II’s products. * When it comes to the European market, the main problem is how to bring a brand new beauty brand into a highly competed market. The risk here is that the European market is a totally different market from SK-II’s Asian markets; it is hard to know whether such a new brand will be accepted by the local customers. Besides, SK-II’s successful experiences in other Asian markets may not work this time. * O2005 restructuring 3. How are these issues dealt with in the case and why * Innovation SK-II may add new product series. Such innovation needs the support of backstage technologies, which means P&G have to consider prioritizing investments towards new technology for the brand. Apart from this, superior in-store servicewill be another key point. Having professional beauty counsellors providing superior instore services may attract more customers. * The market which SK-II should target is the wealthy area of China, where customers are more educated and more likely to accept expensive skin care products. Besides, customers in the wealthy part of China have great similarities with those in Taiwan, Hong Kong and South Korea, where SK-II has already introduced its beauty products. Thus, such successful experiences will help when entering mainland China. * Because there is plenty of uncertainty in the European market and there are no similar experiences to take suggestions from, therefore it may be a good idea for SK-II to have some test points first in Europe rather than begin with a sudden mass entry. UK may be a good starting point as there are quite a few major department stores which distribute prestige brands rather than Germany or France where beauty products are mainly distributed in thousands of perfumeries where SK-II cannot provide its trained counsellors to serve its customers. * Jager considered the luxury products neither played well to ‘stack it high, sell it cheap’ marketing skills nor leveraged its superior tech * After O2005, GMs focused more on maximizing sales volume than profits, putting the beauty care biz under budget pressure

Case 5-3McKinsey & Company – Managing Knowledge & Learning 1. The facts of the case to be covered * McKinsey has grown from an obscure firm of “accounting and engineering advisors” to the world’s most prestigious consulting firms. The company started successfully by finding a gap in the market and going after it. * When they realize that geographic expansion cause them to neglect the development of our technical and professional skills, McKinsey &Company shift the focus back to building knowledge development * Through series of project, McKinsey re-built their core competence in knowledge management and started to focus on geographic expansions along with the sustainable innovative development. 2. The issue those facts raise * After a massive global expansion in 1960s, McKinsey faced external and internal challenge (1970s) * External: The economic turmoil of the oil crisis, slowing of the divisionalization process, growing sophistication of client management, and entrance of new competitors like Boston Consulting Group (BCG) * Internal: * The firm had been growing too fast * “Our preoccupation with the geographic expansion and new practice responsibilities has caused us to neglect the development of our technical and professional skills” * Too willing to take routine assignments from marginal clients and the quality of work done has been uneven. * Consultants lacked the deep industry knowledge or specialized expertise that clients were demanding. * Facing the problem of choosing the right knowledge development approach (shift from short-term to long-term focus) 3. The action that can be being taken to deal with the issues identified For the first issue: * Slow growth * Emphasize “T-Shaped” consultants – those who supplemented a broad generalist perspective with an in-depth industry or functional specialty. * Appoint a full-time director of training – Training and development of consultants * Move towards a product driven approach – Create industry-based Clientele Sectors in consumer products, banking, industrial goods, insurance, and so on * Assemble working groups in two areas – Strategy &Organization, to focus on using the company’s functional expertise * Knowledge development * Ongoing and institutionalized * 15 centers of competence to help develop consultants and the ensure the continued renewal of the firms intellectual resources * Change the internal status hierarchy * “Snowball making” – practice development, internal effort for improving knowledge * “Snowball throwing” – client development, external consulting * Everyone must become snowball makers and snowball throwers * Building a Knowledge Infrastructure through series of projects (see above)
For the second issue * Rajat Gupta becomes MD (1994) * Capitalize in the firm’s long term investment in practice development driven by Clientele Industry Sectors and Functional Capability Groups supported by PDNet and EPIS. * Practice Olympics – Knowledge development approach * Six special initiatives – multi-year internal assignments led by senior partners that focus on emerging issues that were of importance to CEO. * Expand on the model of the McKinsey Global Institute, a firm sponsored research center, to study implications of changes in the global economy on business. (Change center and operations center)

Case 5-4 The Transformation of BP TheBritish Pharmacopoeia
1. What are the central facts of the case relevant to our lesson? * In 1992 BP, UK’s largest industrial enterprise, cut dividend and removed CEO to overcome a series of interlinked challenges. * BP had become a model of both financial performance and CSR.
2. What are the issues they enable us to address? * 10 or 12 yrs ago, BP was a collection of fiefdoms, separate * Tension between society and oil industry: societal impact of the extraction of oil and the environmental impact of emissions during refining and consumption of fuel
3. How are these issues dealt with in the case and why * Restructuring, merge Business Units, break down functional walls →coherent overall strategic direction, one share price and one set of metrics. * BP launched a new corporate branding: progressive, green, innovative and performance-driven * The Reorganization of 2001 * One change was to consolidate the business unites, thus reducing total number. * The role and deployment of the Group Vice Presidents were also change – personally accountable for the performance. * (At heart of this change) Acknowledgement of the regional role as an enabler of organic growth * A consolidation and strengthening of the functional competencies of BP

Chapter 6 engaging in cross-border collaboration: managing across corporate boundaries

Case 6-1 Nora-Sakari: A Proposed JV in Malaysia * The final negotiation between Nora (Malaysia) and Sakari (Finland) to set up a JV company in Malaysia to manufacture and commission digital switching exchanges in telecom industry. * The Telecom Industry in Malaysia * TMB - the national (largest) telecom company - needs to invest billions in telecom infrastructure but lack expertise and technology. Local telecom companies allowed to s bid for contract, common to form partnership with MNCs. * Nora’s Search for a JV Partner * Nora was interested in a RM2b contracts from TMB, acquiring the knowledge in (digital) switching technology from its MNC partner. Nora considered Sakari as a serious potential partner – open architecture, small but customized products * Nora Holdings SdnBhd * The Company: leading companies in tele industry in Malaysia * The Cable Business: secured two cable-laying projects formed a JV with two Japanese companies, acquired 63% stake in a local cable-laying company. * The Telephone Business: household name in Malaysia as telephone manufacturer * The Payphone Business: one of the company’s most profitable lines of business * Other Business: several * The management: complementary roles, trust, and mutual understanding between Osman (founder) and Zainal (managing director), close relationships with Malaysian politicians, R&D priority, promoting Islamic values * SakariOy * Sakari was also a niche player in the global switching market, attributed its emphasis on R&D as its key success factor in the telecom industry. Sakari was still a small company, lacked strong marketing capability and relied on JVs to enter world market. After loss in 1991, the company focused on three main areas, reduction of employees. During rapid growth phase of Finland, Salari played a major role in the Finnish telecom equipment manufacturing sector. In 2001, Sakari was Finland’s largest publicly-traded industrial company and derived the majority of its total sales from exports and overseas operation. . * The Nora-Sakari Negotiation * Nora and Sakari negotiated for more and 2 years. Nora based its bid on supplying Sakari’s technology, along with other 4 companies, succeed in the RM2b bid, but Sakari was criticized to be a small company with little int’l exposure. * The May 21 Meeting: Nora and Sakari held a meeting to finalize the formation of the JV. Main issues: 1. Nora’s capability in penetrating the South-east Asian market; 2. The efficiency of Malaysian workers in the JV. Negotiation on May 21 turned out to be particularly difficult when Sakari become interested in bidding a recently-announced tender for a mojor telecom contract in the U.K., led to the formation of two opposing “camps”: in favor of Nora-Sakari JV or focusing resources on entering U.K.. * The July 8 Meeting: Nora team requested that Sakari ask Pekkarinenn (Sakari’s senior account) to leave the negotiation since he was extremely arrogant and insensitive to local culture. Some issues were difficult to resolve had often led to heated arguments between 2 negotiating teams, including: 1. Equity Ownership 2. Technology Transfer 3. Royalty Payment 4. Expatriates’ Salaries and Perks 5. Arbitration * The Decision * An agreement had not yet been reached, companies such as Siemens, Samsung could still be potential.

Case 6-3 Eli Lilly in India: Rethinking the Joint Venture Strategy * Lilly is a leading pharmaceutical firm based in the US, Tallarigo is the president of Intercontinental Operations * JV of Lilly and Ranbaxy (CEO Brar) established in 1993, had grown to a full-fledged org * But Lilly was re-evaluating the directions for the JV, Ranbaxy intent to sell its stake * The global pharmaceutical industry in the 1990s * Forward/backward integration * Rapid growth: increasing incomes, demand for better health care; market concentrated in NA, Europe and Japan; the largest four firms claimed 20% of sales * R&D expensive; bulk production; decentralized manufacturing and packaging; marketing to physicians and the paying customers; controlled by gov agencies * Patents guarantee the exclusive legal right to profit from its innovation for 20 years (product patent); time lag to launch * Hesitant to invest in countries where the IP regime was weak * In developed countries, patent protection was strong, but price controls; the differentials prices threat to pharmaceutical suppliers; rise of generics, unbranded drugs challenging the market power * The Indian pharmaceutical industry in the 1990s * Before independence, importing drugs * After independence, first public sector drug company HAL established in 1954, IDPL in 1961 * Saw changes in Patents Act 1970 and DPCO, drugs more cheap, local manufacturing companies emerged, multinational companies exited for lack of patent protection * 1990s, economic reform and globalization, FDI was encouraged * Eli Lilly and Company * Founded by Colonel Eli Lilly in 1876, largest pharmaceutical company in US 1940s-1985, R&D was crucial to its long-term success * Export → affiliates overseas → 1980s, International Corporation → 1992, Mayr wanted operation in Asia, which opening up for FDI * Ranbaxy Laboratories * Began in 1960s as a family biz, a serious research-oriented firm * Turning into a global corporation by Singh’s visionary management and Brar’s operational leadership * By the early 1990s, grew to become India’s largest manufacturer of bulk drugs and generic drugs * Capital costs is lower to comparable US plants, higher price in other countries induced international market * R&D expense will increase in future * The Lilly Ranbaxy JV * Ranbaxy provided low-cost sources and Lilly was one of the only players not yet in India * First meeting held at Lilly’s corporate center in Indianapolis in late 1990 * Signed the JV agreement in 1992, 50% share each * Mid-1990s, entered into two other agreements to generics, but within less than a year, terminated * The start-up * Mascarenhas and Gulati hired a team; Ranbaxy had to get gov approvals, licenses, distribution and supplies * By the end of 1993, began launching products and recruitment * High turnover rate: promote from within, training program * Ethical conduct: tell the truth, gain the trust and respect of doctors; strong and cohesive working relationship of M&G; communicate Lilly’s value to the new JV * Challenges: dealing with gov regulations and financing the affiliate * Product: off-patent drugs (Ceclor), added value by Lilly; patented drugs, barrier to entry * Marketed Ceclor, a Ranbaxy manufactured product, adding value by providing medical inf and unique marketing activities * Break-even by 1996, becoming profitable * The mid-term organizational changes * New director Chris Shaw, building systems and processes to bring stability to the fast-growing org * SOPs, expand product line, streamline the sales and marketing * Continued steady performance during late 1990s * Gulati returned in 1999, expanded the JV, got an excellent growth rate in 2001 * The new world, 2001 * Industry continued to grow, consolidation trend, concentrate on core high-margined prescription preparations * Challenge: R&D cost and time, competition from generics, cost-containment pressure * Lilly had moved up quickly and success in antidepressant drug, working on high-potential products, international sales success significantly; reevaluate JV in the 21st C market * Ranbaxy: mission to be a research-based international company, large R&D budget; three other JV, manufacturing globally; financial burden in 2000 * India went to WTO in 1995, patent protection; gov allow FDI; consolidation of major companies; gov intent price control and encourage R&D * Evaluating strategic options * The task force developed several scenarios and presented dif options for the board to consider * Ranbaxy is expected to divest the JV, and invest the cash in its growing portfolio of generics manufacturing biz in international markets; other Indian companies may buy Ranbaxy’s stake in the JV * Lilly emphasized India is an important market esp. after patent protection in 2005; the partnership has been a very positive element in its strategy; provided manufacturing and logistics support from Ranbaxy.

* Lilly是一家美国制药公司，专注于研发新药，1992年开始开拓亚洲市场；Ranbaxy是一家印度制药公司，优势在于研制generics (仿制药) 。 * 印度独立后制药公司开始建立，1970年后由于取消产品专利，本地企业大肆发展仿制药，低价使外国公司推出市场。1990年经济改革后，政府鼓励FDI，外国公司开始重新进入。 * 1992年，Lilly和Ranbaxy成立了JV ELR，R帮L开拓印度市场，L帮R打响国际品牌。他们股份个半，领导层个半，合作亲密无间相当和谐。但是由于专利无保障，ELR主推那些无专利产品如CECLOR * 至2001年，L总公司发展得很好，由于印度1995年加入WTO，有了专利保障，L更看重印度市场。但是R由于国际化扩张太快，资金周转不灵，于是有意撤出ELR的资金，投入到国际市场中。所以两者开始协商这个问题。文章中没有结论 * NEW DELHI, JULY 5. The U.S. based Eli Lilly and Company has bought the 50 per cent stake owned by Ranbaxy Laboratories in the joint venture Eli Lilly Ranbaxy (ELRL) for $17 million, a top company official said.

Case 6-1 Nora-Sakari: A Proposed JV in Malaysia 1. The facts of the case to be covered * The final negotiation between Nora (Malaysia) and Sakari (Finland) to set up a JV company in Malaysia to manufacture and commission digital switching exchanges in telecom industry. 2. The issue those facts raises * The May 21 Meeting: Nora and Sakari held a meeting to finalize the formation of the JV. Main issues: 1. Nora’s capability in penetrating the South-east Asian market; 2. The efficiency of Malaysian workers in the JV. Negotiation on May 21 turned out to be particularly difficult when Sakari become interested in bidding a recently-announced tender for a major telecom contract in the U.K., led to the formation of two opposing “camps”: in favor of Nora-Sakari JV or focusing resources on entering U.K.. * The July 8 Meeting: Nora team requested that Sakari ask Pekkarinenn (Sakari’s senior account) to leave the negotiation since he was extremely arrogant and insensitive to local culture. Some issues were difficult to resolve had often led to heated arguments between 2 negotiating teams, including: 3. The action that can be being taken to deal with the issues identified * Not mentioned in the case, since an agreement had not yet been reached, companies such as Siemens, Samsung could still be potential partners to provide the switching technology.

Case 6-2 Renault/Nissan: the making of a global/alliance
Facts:
* The world’s automobile industry after more than 100 years’ development, has reached some degree of over-capacity. And there was rising trends that companies seeking size through strategic partnerships or mergers. Ford acquisition of Volvo in 1998 and the merger of Daimler and Chrysler in the same year were typical examples.
Renault and Nissan were at that time having an urgent to go into each other’s markets, meanwhile to solve current problems in both companies and create more synergies to win in the market place. * The Nissan’s bureaucratic structure led to high cost in operation. There was little cost control in the internal processes. Meanwhile the increasing costs of R&D due to new regulations in this industry made Nissan suffered a lot. It was too emphasis on compete against Toyota while ignored the customer needs. Emphasizing too much on scale not on profit; no explicit long-term growing profit goal; lack of communication between department and divisions. Nissan was at that time bearing 23 billion Euros of debts, and facing potential bankruptcy. * Renault was on the worlds’ top 10 automotive companies. Renault was just failed an alliance with Volvo, while still it was increasing its desire to enter the Asian market. R has several contact with Asian major players, therefore has gained experience dealing business with Asian companies. R was suffered from corporative financial crisis during the 80s, and covered from this several years early.
Issue:
* Renault was just not financially safe enough to alliance with Nissan. It took risk for R to work with Nissan who has so huge debts. * Different cultures in the two countries. The managerial aspects particular: Keiretsu structure, etc. * Synergies had to be discovered. * Same time Daimler-Chrysler was also interested in Nissan. Competition
Actions:
* The two companies’ CEO first met and established with each other a ‘trust-worthy’ impression; they have common thoughts in the cooperation. * Renault and Nissan corporately group study team to study each other’s competencies to look for synergies. Major synergies are: complementary market, products, and personality. Renault’s previous experience with Asian countries also offered some benefit in relationship with Nissan. They ended up sharing each other’s design and production platforms, reduces the costs; utilize the distributions system for promote products. * Renault, who has taken major role in the study of this alliance, detailed a big picture and made proposal to the Nissan team of what it had concluded. Hanawa was surprised that R did such a detailed job and impressed by R’s determination and clear minds (they know what they want from the beginning). * Regard the managerial differences, R appointed the ‘cost killer’ Carlos Ghosn to be the COO in Nissan; he later made tremendous positive changes to the organization. * The objective of this alliance was very clear for the both: long-term profitable growth and to aiming to be no.1.
Comments on the alliances * DC and Nissan failed the negotiation probably because DC was interested in merger. Compared to M, Nissan was concern more about independence. R offered such option for them, and showed full respect to the N company (second biggest in Japan) and Japanese culture. * Renault’s alliance strategic effectively performed afterward. At that time, merger will probably reduce R’s shareholders’ confidence in this cooperation since the huge debt of Nissan; meanwhile, independence position can more effectively motivate employees in Nissan through such alliance. Alliances made the two companies focus on the synergies through this cooperation, and finally made progress. * The alliances between Daimler and Chrysler however, end up far away successful as R-N. The intention of Bentz to work with Chrysler, a U.S. car manufacturer was to enter the middle to lower market globally. While C was not as precisely as the German company, and it worked independently, without solving issues that already existed in product quality, which finally even affect the reputation of Daimler-Chrysler group.
Case 6-3 Eli Lilly in India: Rethinking the Joint Venture Strategy 1. The facts of the case to be covered * Lilly is a leading pharmaceutical firm based in the US, Ranbaxy Laboratories is a pharmaceutical firm based in India * JV of Lilly and Ranbaxy established in 1993, had grown to a full-fledged org till 2001; * excellent collaboration, Ranbaxy helped Lilly exploit Indian market, Lilly helped Ranbaxy expand the international network * But Lilly was re-evaluating the directions for the JV, Ranbaxy intent to sell its stake 2. the issue those facts raises * Ranbaxy is expected to divest the JV, and invest the cash in its growing portfolio of generics manufacturing biz in international markets; other Indian companies may buy Ranbaxy’s stake in the JV * Lilly emphasized India is an important market esp. after patent protection in 2005; the partnership has been a very positive element in its strategy; provided manufacturing and logistics support from Ranbaxy. 3. the action that can be being taken to deal with the issues identified * The task force developed several scenarios and presented dif options for the board to consider * NEW DELHI, JULY 5. The U.S. based Eli Lilly and Company has bought the 50 per cent stake owned by Ranbaxy Laboratories in the joint venture Eli Lilly Ranbaxy (ELRL) for $17 million, a top company official said.

Chapter 7 Implementing the Strategy: Building Multidimensional Capabilities

Case 7-1 Larson in Nigeria (Revised) * David Larson, vice-president of int’l operations for Larson Inc., was disturbed by the negative tone of the report of the Nigerian affiliate. Larson believed the future prospects for Nigeria were excellent and was concerned about what action he should take. * Company Background * Larson was a New York based multinational corporation in the wire and cable business. Ownership and management remained in the hands of the Larson family and was highly centralized. Revenue was primarily generated from the sale of power, communication, construction and control cables. Technical service was an important part of Larson, licensing was not a viable method of serving foreign markets. * Background on Nigeria * Nigeria’s annual inflation rate was high, thus naira value changed (decrease vale to US dollar). * The Nigerian Operation * Larson established a JV in Nigeria in 94 with local partner who held 25% equity. In 99, Larson promised Nigerian authorities that the share of local ownership would increased to 51% in 5-7 years. * The Nigerian operation had become less attractive since doing buz in Nigeria was more costly. Larson had become increasingly unhappy with local partner (solely concerned with quick paybacks at the expense of long-term growth). * David Larson recognized that the right partner in JV was important, it was necessary for the partner to be in a strong financial position. * George Ridley, the Nigerian firm’s CEO placed high value on order and control, causing chaotic situation in Nigeria, inability to attract good local employees, while his best expatriate staff requested transfers to other foreign operations (want to leave Ridley). * The Decision * Maintaining operations in Nigeria, design a plan to increase local Nigerian equity, replace Ridley but unsure about the timing and method to use.

Case 7-2 BRL Hardy: Globalizing an Australian Wine Company
Facts:
Australian wine industry grew rapidly in 1990s, while the changing market conditions forced companies to search wider customers abroad. BRL Hardy was the second largest wine company in Australia.
Hardy &Son is known as award-winning quality wines; while BRL’s was specialized in specialized in fortified, bulk, and value wines. They just had different organizational and product cultures. Hardly was doing a lot of work in expand to Europe market through several acquisition. While the result turned out to be problematic. And the domestic downturn even made the Hardly into loss. At the same time, BRL was struggling finding new markets. They then found complements in each other and work together by BRL merger Hardly.
New merger was led by a group of majority from ex-BRL company for the purpose to solve priority, the financial issue; and then grow market share in European market, especially the UK market. Millar also concentrated on changing of culture, ex-Hardy people was rarely involved in this process, because Millar was promoting a decentralized organization which ex-Hardy was not.

Issues:
The merger company had several financial problems at the beginning, especially the Hardy, who excessed its capacity when going international. Davis, who was responsible for BRLH products international markets found that the products in global market had poor performance.
Carson and the UK team of BRL Hardy want to promote D’istinto, a new line of joint-venture product between UK subsidiary and Italian wine company. However, they were facing a doubts since they had failed to successfully launch another joint venture product with Chilean company.
UK team wanted to promote one brand that was designed by them that fit UK customer tastes; at the same time, the parent company was trying to roll-out an Australian brand that had been successful in Aus. Carson had to choose between the two options.

Actions:
CEO of the merger company, who also was CEO of ex-BRL Company pointed out that there was need to change the organizational culture. He took a more decentralized approach, to delegate small risks to managers. Ex-Hardy workers had to work harder to let their opinions been paid attention.
Davis thought UK as the prior place for the company’s products to grow its market share. He built up ‘quality wine for the world’ slogan and created hierarchy stepstairs for company’s wines which from a range of quality and prices.

Carson after he took over the responsibility of UK market, quickly adopted several approaches to change the financial situation in UK market where ex-Hardy played.
Carson proposed to grow some high potential brand from 20,000 in 1991 to 60,000 in 1992, by: 1) Build on hardy-brand products 2) Build on a French wine product 3) Protect a Chilean product
While the problem came because the differences in managerial aspects: 1) BRL people only trust in Hardy people who had –‘earned their stripes’ 2) BRL who was a bulk-wine-oriented company has different marketing strategies with Hardy 3) Carson wanted to relable and reposition some of the exited Hardy products(sole in low margin) in UK market, while the top executives
However, the home office agreed the action, and in 1993, the relabled and relaunched products did well in UK market. Davis released that it was better to let people to implement things that they believed in, while still worried about the difficulties occurred when evolving the BRLH company’s long-term strategy with local responsiveness.

Mid 1990s, BRLH decided to become an international wine company, by utilize worldwide sharing(production facilities, global brands, international distribution, etc.). the company wanted to do as multinational packaged goods companies. However, many people didn’t think this was the same as branding for other commodities. Carson thought the UK market was not ready as the Aus. that for wine get branded. He elaborated, labeling is more important.
Carson has been focusing on not only the merger company’s wine, but also non-Aus product, the total volume can bring the scale of economies to sales and distribution; also Carson sourced multiple regions for vintage in order to minimize the risk of quality of grape harvests; he also recognized that retailers simplify wine buying by dealing only a few key suppliers who could provide broad line wine with good quality; meanwhile, currency fluctuations exposed traded products like wine to be exported to currency-driven price variations. The four reasons made Carson to devote his organization to dealing with two non-Aus wine sources, which as his way to be international: 1) 1997, 50/50 JV with Chilean supplier, and together produce products that can be sold in Europe under Mapocho brand. 2) Sourcing particular red wine sources in Europe, and found a group of co-op farmers. To marketing the products, he code-named it Mata Hardy.
Carson wanted to 1) offset the shortage of red wine in Aus; 2) full line to maximize his leverage as a distributor; 3)develop brand for consumers who do not have very much knowledge about it.
Carson provides a series of wine at different price points with brand name D’stinto. He believed that this product line can help BRL Hardy better compete in the Europe market.

However, meanwhile, the Mapocho project was not going well. They blamed each other for causing poor quality of products. This failure resulted in great costs also raised doubts from the home office whether should approve the D’istinto product, because of fear to 1) Former illfated venture with Italian company 2) Concern of product cannibalization (price overlapp) 3) The capacity of the marketing force in UK was not able to carry another brand when it already had a problematic Mapocho.
At the same time, company was trying to launch a new Aus product to extend the company’s existing range of fighting brands. After the relabeling Hardy’s products in UK, there was a gap of price below 4.49 pounds. Company wanted to created certain product to fill in the gap. Consider the management constrain in UK, Paul Browne took responsibility the marketing of this product in UK. * Paul’s Kelly’s Revenge: fun brand, aimed at first time drinker and many young drinkers.
Meanwhile, home office was also developing ne product targetd at similar price point. * The Banrock Station: positioned as environmental responsible product and had successful sales in Aus as premium products. While in UK it would be similar price as K’sR
The two creators of the products criticized each other’s products. Millar expressed his opinion on KR, and concern for Browne. He felt he had loss more control than expected to local managers. When Millar was trying to build more links between Europe and Aus, Browne just did what he thought the opposite.

The problem is common in super-national firms, they have to take care of integrated strategy while also delegate several responsibility to local managers, there is a balance to run company well.

Case 7-3 Silvio Napoli at Schindler India (A) 4. Schindler Holdings Ltd. Is a respected Swiss-based manufacturer of elevators and escalators, Luc Bonnard is the vice chairman, board of directors 5. The company’s Indian subsidiary set up in New Delhi in March 1998, Napoli is dispatched to run it 6. The biz plan is about selling ‘core, standardized products’, outsourcing all manufacturing and logistics activities to local suppliers to cut cost 7. Three challenges * Order of nonstandard product * Intense cost pressures from importing customs and risen transfer prices * Requests not forthcoming form the European plant 8. Schindler’s India Explorations * The growing commitment i. 1925 first elevator installed in India ii. 1958 local distributor iii. 1985 technical collaboration with BBL to manufacture, market and sell its elevators iv. 1995 Schindler saw huge growth potential in India, but failed the collaboration with BBL v. 1998 wholly owned subsidiary vi. Schindler sought to transform the company’s culture from engineering-based manufacturing to customer-oriented service company * Silvio Napoli’s Role vii. The hierarchy is clear in the company viii. Head of corporate planning & staff to the corporate executive committee (VRA) * The Swatch Project ix. Aimed to develop a standardized elevator at a dramatically lower cost, in order to expand its installed base x. Napoli developed the S001, outsourced, redesigned the entire supply chain to halved the standard cycle time * The Indian entry project xi. There was no ideal partner in India, and legally feasible to start up a wholly owned company xii. Napoli made a biz plan, and offered to creating the Indian subsidiary 9. Forming Schindler India * New culture, new challenges: family and work * Recruiting the team: M.K. Singh – managing director, T.A.K. Mattews – head field operations, Ronnie Dante – general manager for engineering, PankajSinha – head of human resources, Jujudhan Jena – CFO * Developing the relationships: dif management styles and personal characteristics, but could balance 10. The India Biz Plan * Basic elements: standard products and outsourcing * The Indian elevator market xiii. Low-tech manual elevators 50% shares, international players will favor by the ban on collapsible gate elevators xiv. Middle segment, promising due to rapid urbanization xv. Top end market, small but growing, hotel * Competition xvi. Four major players, relied on local manufacturing xvii. Highly price sensitive, but service also important xviii. The maintenance service has high margin * The standard product strategy xix. The most effective way is to focus on a narrow product line of simple, standardized elevators xx. S001 – low rise segment, S300p – mid rise segment xxi. Sales and service could be dif * The outsourcing strategy xxii. Outsource production of most components, logistics and basic installation work xxiii. Safety-related components would be imported from European plant; maintenance contracts would stay with Schindler xxiv. Set up a local manufacturing network to preserve quality reputation 11. From analysis to action: implementing the plan * Biz challenges xxv. Order for the nonstandard product xxvi. The transfer prices increased 30% xxvii. Cost pressure * Reflections of a middle manager xxviii. Feel lonely in the middle http://www.lwcresearch.com/filesfordownloads/SchindlerCase.pdf IBS Case7-4 Timing the dragon: Cummins in China
这篇文章主要是讲Cummins在中国的JV遇到的三个主要的ISSUE，之前都是在讲废话哦~~ 直接可以看下面的链接做背景阅读http://baike.baidu.com/view/738476.htm
他的三个ISSUE我在下面列了表，文中没有给出solution, 但我找到的材料有，列了点。最后是他的实际解决方案，也是搜来的 1. Streamlining Chongqing Cummins Joint Venture | Problems | Options for Solutions | Low performance | * Recognize common objectives: profitability. market share, mutual learning | Economic downturn | | Too many employees and high cost for social welfare | * Improve personnel efficiency: * Use positive motivations | Quality issues | * Relate salary to firm performance and product quality (Six Sigma) * Use job rotation to increase the skill base of current employees | High inventory | * Employee training programs | Top management conflicts | * Resolve top management conflicts * Increase communications channels: formal managerial meetings; informal gatherings (Dim sum party) | | * Visit US plants to understand Cummins’ culture * More cultural sensitivity from both sides | | What could have been done to prevent these problems? * Do not absorb all the employees of CQAEP * Clarify the partnership changes from licensing to a JV | No partner and no board when CHEDTC went bankrupt | What about the future of CCEC? How to make CCEC more profitable? * Depends on corporate strategy of Cummins and Chongqing partner * Build long-term relations with customers since they no longer have CHDTC * Increase product quality and export engines * Increase component localization | 2. Distribution and Service Organization in China | Problems | Solutions | Complexity of distribution system: CCEC, DCEC, DFM have their own distribution systems | * Unite the channels and let Cummins China Inc. (CCI) be in charge of distribution | Different visions of service: profit center (Cummins) or additional cost (DFM) | * How to convince Chinese partners that unifying the distribution channel is beneficial? | | * CCI can increase bargaining power since it can offer a variety of products | | * Increase service quality | | * Maintain brand name | 3. Staffing the Organization in China | Problems | Options for Solutions | Who should replace Steve Chapman? | | What are the qualifications of his successor? | * Bilingual * Culturally sensitive * International experience * Alliance experience * Technical knowledge (a plus) |
Cummins in China in 2005 * Cummins did exceed its target US$ 1 billion in China * China emerged as one of Cummins most profitable markets, * China brings in over 15% of Cummins sales and over 30% of company’s profits * As of 2003, the integrated structure of Cummins service division was launched, which has been instrumental in resolving the co-ordination of after-sales service within China remains a challenge for the company * Cummins’ first attempted to fill Chapman’s position with the Korean area business organization – which was very short-lived since the problems were exacerbated with the language barrier. * Finally, Cummins used a private recruiting firm to hire John Watkins, who at the time of hiring was the executive director for China, at Northwest Airlines. * Watkins filled the position quite well * Chapman was promoted to group vice-president, emerging markets and businesses

Case 7-1 Larson in Nigeria (Revised) * Facts: David Larson, vice-president of int’l operations for Larson Inc., was disturbed by the negative tone of the report of the Nigerian affiliate. Larson believed the future prospects for Nigeria were excellent and was concerned about what action he should take. * Issues: * The Nigerian operation had become less attractive since doing buz in Nigeria was more costly. * Larson had become increasingly unhappy with local partner. * George Ridley, the Nigerian firm’s CEO placed high value on order and control, causing chaotic situation in Nigeria, inability to attract good local employees, while his best expatriate staff requested to leave. * Action: Maintaining operations in Nigeria, design a plan to increase local Nigerian equity, replace Ridley but unsure about the timing and method to use.

Case 7-2 BRL Hardy: Globalizing an Australian Wine Company

Case 7-3 Silvio Napoli at Schindler India (A) 1. The facts of the case to be covered * Schindler Holdings Ltd. Is a respected Swiss-based manufacturer of elevators and escalators, its Indian subsidiary set up in New Delhi in March 1998, Napoli is dispatched to run it * The biz plan is about selling ‘core, standardized products’, outsourcing all manufacturing and logistics activities to local suppliers 2. the issue those facts raises * Order of nonstandard product * Intense cost pressures from importing customs and risen transfer prices * Requests not forthcoming form the European plant 3. the action that can be being taken to deal with the issues identified * seek Bonnard’s help, propose a revised plan, or try to sort out the challenges himself

Chapter 8 the Future of the Transnational: An Evolving Global Role

Case 8-1 IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labour (A)
Introduction:
German TV reported report that IKEA’s Indian carpet suppliers were using child labour.
Short-term decision of cutting off the supplier – Indian rugs
Long-term decision to deal with regulatory and public pressure
The birth and maturing of the global company * Founded in 1943 by Ingvar Kamprad as a mail-order company; products include pens, watches, picture frames, and table runners * In 1948, added furniture to his newsletter, gave up small items * In 1951, opened a display store, stopped accepting mail-orders * 1953, introduced self-assembled furniture in newsletter, lowered prices * Between 1953 & 1958, Sales doubled from 3 million Swedish krona to 6 million Swedish krona * Large furniture retailers in Sweden felt threatened; pressure from them forced IKEA to look abroad for new sources * In 1961, IKEA contracted with several furniture factories in Poland; to assure quality as well as maintain a good relationship, IKEA brought its know-how, taught its processes, and provided machinery to new suppliers * Usually way of identifying new sources – buy unused production capacity to lower the price * In 1965, Kamprad self-financed a showroom located in the suburbs of Stockholm
Expanding Abroad * 1963: Oslo, Norway 1973: Zurich, Switzerland 1974: Germany, became IKEA’s largest market * Became a larger, more complex company * Servicing customers with many features: playroom for children, low-priced restaurant, and “Sweden Shop” * Carried more products: Textiles, Kitchen utensils, Flooring, Rugs & Carpets, Lamps, and Plants
Emerging culture and value * Create better everyday life for the many people – Good quality furniture to mass market consumer * Distinct organizational culture, e.g. open-plan office landscape * Management process stressed simplicity and attention to detail * Cost consciousness * Search for creative solution is highly prized
Waking up to environmental and social issues * Its relationship with suppliers was dominated by commercial issues. That relationship began to change during the 1980s, however, when environmental problems emerged with some of its products. And it was even more severely challenged in the mid 1990s when accusations of IKEA suppliers using child labor surfaced. * The Environmental Wake-Up: Formaldehyde
Issue: Tests showed some IKEA products emitted more formaldehyde than was allowed by legislation, the case was widely publicized and the company was fined, sales dropped.
Action: the company quickly established stringent requirements regarding formaldehyde emission, work with suppliers, and address broader environmental concerns more directly. * The Social Wake-Up: Child Labor
Issue: The use of child labor.
Action: the company appointed a third party agent to monitor child labor practices at its supplier’s factories. * Early Lessons: A Deeply Embedded Problem.
Even with these (child labor) laws on the books, exploitive child labor-including bonded labor-was widespread because laws were poorly enforced and prosecution rarely severe.

Case 8-2 Genzyme’s Gaucher Initiative: global risk and responsibility * Since 1998, Genzyme Corporation’s Gaucher Initiative (GI) had been providing drug to sufferers of Gaucher disease worldwide * Partnership with Project Hope, GI located and treated patients in less developed countries as Egypt, but the fast-growing free distribution program presented a barrier to commercial objectives, and GI isn’t the permanent solution to providing care * How to balance the humanitarian and commercial principles? * Birth of a Company * Henry Blair founded the company in 1981, began with supplying raw materials, generating cash flow for further growth * Laying the foundation * Built on a LT relationship with NIH, to manufacture and supply the enzyme GCR for Gaucher disease (rare and deadly * Genzyme developed a production process for the enzyme required for the trials * New management, New Priorities * Termeer joined Genzyme in 1983, as president * developed a few broad strategic principles: Diversify portfolio of targeted products and markets, focus on niches; Remain independent, vertical integration, internal funds * operating problems: building a professional team and a sound management structure * values: patient and conscience to pp’s life * Betting the Ranch * The NIH trials showed the drug doesn’t work * Termeer not given up, then made a new drug application * Going Public * 1985, went public, financing R&D by creating a limited research partnership * Genzyme in Liftoff * Merge with IG, diversification, funding, bring Ceredase to market * Building a product pipeline * Contracted to supplier, process * 1991, marketing in U.S. * The most expensive therapy: raw material, complex extraction, small number of patients * Overcapacity, so expansion * Responding to regulatory pressures * Genzyme criticized for high cost of drug * Termeer showed the expensive process and philosophy of responsibility * Ceredase Assistance Program (CAP) * Passed the examination * Going to market * Recruiting ‘passionate practical dreamer’ * Sales force worked patients by patients, with insurance * Link R&D and plant engineers & technicians to patients * Sales grew rapidly * Opening foreign markets * Pioneering initiatives * Tierney was sent to Europe, did marketing, building relationships with patients, physicians, and gov officials * Heek was recruited to manage the European headquarters * Universal global pricing * A mobile missionary * Moved to emerging markets, Israel, Egypt, 1996 Asia * The key is to hire a smart local person * But LDC couldn’t afford the therapy and request free product from CAP * The Gaucher Initiative * Setting Up the Program * There is a critical need, but can’t take on the responsibility forever, goal is the country will eventually take responsibility * Hope Project was elected as the worldwide distribution network * It would not mixed a commercial agenda with humanitarian mission and the program is independent of Genzyme * Implementing the program * Established a secretariat and independent six-member medical review board * Carry out in Egypt and China case by case * 2000, 37 Egypt, 23 China, 2001, 140 totally * The Humanitarian/commercial tension * If pp know the free products, they wouldn’t pay for it * Sales in developed nations low, should exploit it in developing countries * Competitors will share the responsibility? * The Egyptian dilemma * Building a presence, having an impact * New demands, new expectations * Registration in Egypt is expensive, sales stopped * New CEO of Hope interested in expanding relationship with Genzyme * Facing the problem * Two choice: register the drug and get a local presence in Egypt; Hope not taking any more patients
Genzyme是一家制药公司，以提供原料起家，之后纵向一体化，开始研发制造销售；注重公司独立性，目标NICHE MARKET.
Ceredase是一种治疗Gaucher病（家族性脾性贫血，很罕见，严重致命）的药，由于原料研发制作等原因很昂贵。公司很注重与病患的关系，CAP计划免费送药给那些买不起的患者。公司开始开拓发展中国家市场，那里的穷人较多，赠送药品加重了公司经济负担。
公司与HOPE PROJECT在中国埃及合作赠药计划，作为独立项目，无商业目的，最终目的希望国家自己担负起这个责任。但是申请者与日俱增，这与公司盈利的目的相违背（如果人们知道可以免费赠送，就不会买了；发达国家销售量下降，需要提高发展中国家销售量；竞争者会分担责任吗？）
目前最大的问题在埃及，因为注册太贵，那里的销售停止了，但救助对象不断增加。现在面临两个选择：不再在埃及救助新的对象（大部分人同意）；或者注册产品后开始销售，救助继续（Tierney坚持）

Chapter 8 the Future of the Transnational: An Evolving Global Role

Case 8-1 IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labour (A)
Facts:
* German TV reported report that IKEA’s Indian carpet suppliers were using child labour. * Short-term decision of cutting off the supplier – Indian rugs * Long-term decision to deal with regulatory and public pressure
Issues:
1. Environmental: Tests showed some IKEA products emitted more formaldehyde甲醛than was allowed by legislation, the case was widely publicized and the company was fined, sales dropped. 2. Social: The use of child labor.
Actions:
1. The company quickly established stringent迫切的requirements regarding formaldehyde emission, work with suppliers, and address broader environmental concerns more directly. 2. The company appointed a third party agent to monitor child labor practices at its supplier’s factories.

Case 8-2 Genzyme’s Gaucher Initiative: global risk and responsibility
Facts：
* Since 1998, Genzyme Corporation’s Gaucher Initiative (GI) had been providing drug to sufferers of Gaucher disease worldwide * Partnership with Project Hope, GI located and treated patients in less developed countries as Egypt
Issue:
* the fast-growing free distribution program presented a barrier to commercial objectives, and GI isn’t the permanent solution to providing care * How to balance the humanitarian and commercial principles?
Actions:
* register the drug and get a local presence in Egypt or * Hope not taking any more patients