International Business Assignment 3 1. What is the staffing policy that Lenovo is pursuing?       

K. Toufarova

Lenovo hires the very best people (with required skills and capabilities) regardless of their nationality Lenovo creates a workplace where employees achieve their greatest potential Lenovo’s HR/personnel is the global workforce that is capable of going head-to-head with its competitors in the battle for dominance the global PC business. Thanks to the diversity of its workforce, Lenovo is able exceed market expectations Lenovo strives to attract, retain and develop its workforce Its employees must have skills and capabilities required for working in a global enterprise Fair share of women in management positions Lenovo engage same amount of Chinese and same amount of Americans in its top management team

2. What strategy do you think the company is pursuing? Does its staffing policy match its strategy? Lenovo is pursuing a geocentric staffing strategy/policy. Yes, the staffing policy matches the Lenovo’s business strategy, which is to exceed market expectations and be a strong player on the global market. So that Lenovo uses its staffing strategy, engaging the global workforce to fulfil its business strategy. Lenovo consider its workforce as the global workforce that is capable of going head-to-head with its competitors in the battle for dominance in the global PC business. 3. What are the strengths of Lenovo’s staffing policy? Can you see any potential weaknesses, or problems, that the company might encounter as a result of this policy? STRENGTHS  Lenovo strives on retaining managers, engineers, salespersons (key people) in company by moving company’s headquarter to New York (otherwise it would lose them)  According to Lenovo’s goal to become truly global enterprise with the global workforce, Lenovo applies its staffing policy (geocentric staffing policy), which makes Lenovo a strong player on the global PC business  Lenovo appoint its employees to a position on the ground of their required skills and capabilities regardless of their nationality POTENTIAL WEAKNESS  The company uses the same set of principles to guide workforce management in all locations. Then it needs to be very astute about how those principles are applied in every local market so that it remain responsive to the needs of people in different environments. 4. If Lenovo is to become a truly global enterprise, what should the HRM function do to enable the company to attain this goal? HRM must:       Keep on its geocentric approach Be appointing women to leadership positions Develop the workforce to reflect its diverse marketplace Develop team spirit in its company Develop programs for expats Support its employees in career growth and life balance

II. Read the case on Brazil’s Gol (page 670). Then, answer the following questions: 1. What were the benefits to Gol of a listing on the New York stock exchange in addition to the San Paulo Bovespa? According to its strategy, Gol wanted to get a solid group of long-term investors that understood the business and a group of research analysts that understood this sector in order to exploit its expertise to achieve its (Gol’s) goals. If we take a closer look at the majority of investors in the company, they have high positions in trade of the equities of Jet Blue, Southwest and Ryanair. That’s mean that they understand the business in this sector. The benefit of a listing on the NYSE in addition to the Bovespa was that they reached investors based in South America (Gol strives to be a low-cost carrier in South America) as well as investors based in USA (Jet Blue, Southwest). 2. Why do you think the Gol stock offering was oversubscribed? Because Gol is one of the most profitable airline in the world, that operates in a growing industry. It is popular and successful company offering services that are highly rated by customers and the expected value of the company will most probably rise up according to the positive prognosis and Gol’s strategic plans. 3. Do you think Gol would have raised as much money if it had just listed on the New Sao Paulo exchange? Absolutely not, the US investors would not have easy access to the stock exchange, which offering the Gol’s stocks, if it would be located in South America only. Moreover, the majority of investors are engaged in trading with the equities of JetBlue, Southwest and Ryanair (in the US). 4. How might the joint listing of the New York and San Paulo stock exchanges affect Gol’s ability to raise additional capital in the future? The advantage of offering Gol’s stocks over both stock exchanges is that more investors have an access to those stocks. New investors might come up. Also, new investors who are share holders of other companies operating in another sector (e.g. aircraft factory industry) might strike a deal or bargain between Gol and the other companies. It might rise up the value of the company and improve its profitability. III. Read the case on Wal-Mart’s Foreign Expansion (page 118). Then, answer the following questions: 1. Do you think Wal-Mart could translate its merchandising strategy wholesale to another country and succeed? If not, why not? Its merchandising strategy - in some form, can be applied at another countries as well, but in order to succeed, the strategy needs to be customized to the local customer’s needs, which can differ country to country. Their shopping habits may also differ. E.g. customers in Mexico lacked cars, and did not buy in large volumes as consumers in the United States did. Wal-Mart customized its strategy to meet the local conditions, hiring local managers who understood Mexican culture, letting those managers control merchandising strategy and building smaller stores, which were accessible by foot. Today Wal-Mart is Mexico's largest retailer and the country is widely considered to be the company's most successful foreign venture (with Cifra). In developed countries like Britain, Germany and South Korea was Wal-Mart less successful. In all three countries it found itself going head to head against well-established local rivals who had nicely matched their offerings to local shopping habits and consumer preferences. Moreover, consumers in these countries preferred higher quality merchandise and were not as attracted to Wal-Mart's discount strategy as consumers in the United States and Mexico. Wal-Mart was forced to customize its merchandising strategy in China as well. And after establishing the union with Trust-Mart chain, it began to grow constantly.

2. Why do you think Wal-Mart was successful in Mexico The customization, persistence, low prices, and teaming up in a joint venture with Cifra, paid off. Wal-Mart worked to customize its assortment, size and location of shops. It has also adapted to local market shopping habits and preferences. On the other hands it also worked to educate consumers by showing them the benefits of its American merchandising culture and they began to change their shopping habits. Wal-Mart was able to lower its own costs, and it passed these on to Mexican consumers in the form of lower prices. 3. Why do you think Wal-Mart failed in South Korea and Germany? What are the differences between these countries, and Mexico? Because of the fact, that Wal-Mart applied its discount/low price strategy, but customers in South Korea and Germany have had different preferences. They primarily required quality goods and resisted the discount strategy. On the other hand customers in Mexico were low cost oriented. 4. What must Wal-Mart do to succeed in China? Is it on track? Since Wal-Mart opened its first shop in China in 1996 it expanded very slowly. Wal-Mart discovered that the Chinese were bargain hunters, and open to the low price strategy. In terms of their shopping habits, the Chinese seemed more like Americans than Europeans. But to succeed in China, Wal-Mart also found it had to adapt its merchandising and operations strategy to mesh with Chinese culture. The other thing that Wal-Mart learned is that in China, success requires it to embrace unions. In 2006 Wal-Mart broke with its long standing antagonism to unions and agreed to allow unions in its Chinese stores and bough a stake in the Trust-Mart chain. Now China lies at the centre of its growth strategy and the company insists that it will continue to open new stores in China at a "double digit rate”, so that the company is on the right track. 5. To what extent can a company like Wal-Mart change the culture of the nation where it is doing business? However Wal-Mart discovered that the Chinese are bargain hunters and their shopping habits seemed more like Americans, it also discovered that to succeed in China, the Wal-Mart’s merchandising and operations strategy must mesh with Chinese culture. The Chinese probably will not be wanting to buying previously killed fish and meat in cellophane just because of the Wal-Mart merchandising and operations strategy. They will strongly keep on their cultural values.