What are the nonfinancial incentives Explain about each
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International Business
Case Studies
CASE STUDY (20 Marks)
In 1982, seven people in Chicago died
after taking Tylenol due to an unknown suspect lacing the capsules with cyanide
after the products reached the shelves. In the immediate aftermath, Tylenol's
commanding 37% market share dropped to just 7% nationwide, despite the problem
being contained to the Chicago area. Tylenol was not responsible for the
tampering of the product, but to maintain the product's reputation, Johnson
& Johnson pulled all of the Tylenol from the shelves, absorbing a loss of
more than $100 million dollars. Tylenol was successfully reintroduced with
tamper resistant packaging, discounts, and sales presentations to the medical
community. The brand survived due to swift action and effective public
relations from Johnson & Johnson.
Answer
the following question.
Q1.
Why the market share of Tylenols dropped despite no fault of their own?
Q2.
Comment on the corrective actions taken by Johnson & Johnson.
CASE STUDY (20 Marks)
The case discusses the entry and the
subsequent exit of the US based electronics retailer Best Buy in China. Best
Buy entered China by opening a procurement office in 2003. After studying the
market for quite some time, it decided to acquire Jinangsu Five Star Appliance
Co, (Five Star), the fourth largest electronics retailer in the country, in
order to have a wide presence in the market. In China, Best Buy followed the
dual brand strategy that it followed in the Canadian market. As per this
strategy, the company operated Five Star as a separate brand, different from
the Best Buy stores, the first of which was opened in 2006 in Shanghai. In
China, electronic retail stores usually consisted of vendor representatives who
promoted their own products. Customers could bargain and get the product at a
lower price. This led to a highly chaotic environment in the stores. Best Buy
refrained from using this model and positioned it differently from the local
vendors. It did away with the vendor representatives and had its own
salespeople manning the stores. The salespeople in the Best Buy stores did not
interfere with the customers and provided assistance only when asked for. Inthe
Chinese stores, the products were displayed in glass cases. Best Buy, in
contrast, displayed products in such a way as to enable the customers to touch
and feel the product. Though Best Buy's first store was highly successful and
went on to become one of the top 10 Best Buy stores in the world, it could not
sustain the momentum. It could not open stores as rapidly as it had planned to
and the opening of the second store was delayed. Also, though customers
appreciated the modern shopping experience at Best Buy they still preferred to
shop at local stores as they offered lower prices. Though Best Buy opened nine
stores by 2010, the local competitors ended up opening hundreds of stores. Due
to high competition and the high costs of operations, Best Buy decided to exit the
market in February 2011. Without examining the strategies adopted by the
competitors in the market, Best Buy's adopted pre entry strategies, its entry
into the market, the strategies it adopted in the Chinese market, and its
subsequent decision to exit the market.
Answer
the following question.
Q1.
Explain the nature of problems faced by retailers like Best Buy in emerging
markets like China.
Q2.
Examine the reasons that prompted Best Buy to exit the market.
Q3.
Analyze the retail industry in China.
CASE STUDY (20 Marks)
Research has shown that nonfinancial incentives
can have equal effect on employee motivation when compared with standard financial
incentive systems. In a society that does not allow for significant income
disparity, nonfinancial incentives can play a key role in motivating employees
to sell. Nonfinancial incentives for employees include: Reserved preferred
parking spaces Increasingly flexible work hours (e.g. late start) Additional
vacation hours Reduced work hours on Fridays Free meals or gym membership
Access to a company vehicle Tickets to popular events The specifics of these
incentives can be tailored to fit the available incentive budget. In addition,
management should query the employees to determine other areas of interest for
future incentives. In order to emphasize the desired corporate culture,
recognition for high performing employees should be public; moreover,
attendance for public recognition events should be mandatory for all employees.
By providing such recognition, a social structure can be established that
intrinsically motivates employees to perform and thus gain status. Public
recognition can be combined with nonfinancial incentives in order to establish
a focused strategy for motivating employees to perform to their utmost. Since
the societal nature of Austrians promotes herding of people, there is a danger
of social rejection if an employee is seen as different from the group. Hence,
the employee must be perceived as being rewarded for contributing to the collective
good. When establishing culture change, it is critical that employees be
comfortable with management so that they have confidence in the path forward
and are not afraid to raise new ideas and objections, which can often be
incredibly helpful to the process. It also increases the likelihood that
employees will “buy in” to the new culture. In order to conquer the gap between
both multinational Backgrounds and between management and employees,
teambuilding events that mix cultures and job functions should be established.
The type of events can be tailored to the employees’ interests (e.g. lunches,
company retreats, sporting events, or other activities). Cross functional collaboration
between various service departments is essential for client to implement core
mission value and transition from a service based company to a solutions based
company. Managers and employees must be educated on the various offering in other
departments. Cross functional team projects and activities will ensure that
employees get to know their counterparts in other departments and understand
the benefits of solutions based offerings.
Answer
the following question.
Q1.
Give an overview of the case.
Q2.
What are the nonfinancial incentives? Explain about each.
CASE (20 Marks)
Strategic R & D by TNCs in
Developing Countries TNCs have had long units in developing host countries for
adapting products and processes to the local conditions, and in a few cases, to
products for local markets. Since the min1980s, however, they have also started
locating strategic R & D centres in some developing countries, for
developing generic technologies and products for regional or global markets.
The main incentives for this are : (a) access to highly qualified scientists as
shortages of research personnel emerge in certain fields in industrialised
countries, (b) Cost differentials in research salaries between developing and industrialized
countries, and (c) rationalisation of operations, assigning particular
affiliates the responsibility for developing, manufacturing, and marketing
particular products worldwide. Th new trends are more visible in industries
dealing with new technologies, such as microelectronics, biotechnology, and new
materials. In these technologies, the location of R & D can be
geographically delinked more easily from the location of manufacturing. It is
also possible to separate R & D in core activities from that in noncore activities.
Consequently, countries like India, Israel, Singapore, Malaysia or Brazil serve
TNCs as good locations for strategic R & D. For instance, Sony Corporation
of Japan has around nine R & D units in Asian developing countries. It has
three units in Singapore conducting R & D on core components such as
optical data shortage devices, integrated chip design for audio products and
CDROM drives, and multimedia and microchip software. It has three units in
Malaysia working on video design, derivative
models and circuit blocks for new TV
chases, radio cassettes, discman and hifi receiver designs. It has one unit in
Republic of Korea focusing on the design of compact discs, radio cassettes,
tape recorders, and car stereos. It has one in Taiwan designing and developing
video taperecorders, minidisk players, video CDs, and duplicators. Finally, it
has one unit in Indonesia focusing on the design of audio products. Such units
often work in collaboration with science and technology institutes in the host
country. For instance, Daimler Benz has established such a unit in Bangalore,
India, in collaboration with the Indian Institute of Science to work on
projects related to its vehicles and avionics business. Current work includes
interface design of avionics landing systems and smart GPS sensors for use by
the group’s business worldwide. Source: World Investment Report 1999.
Answer
the following question.
Q1.
Explain why MNCs have located R & D centres in developing countries?
Q2.
Mention the areas where R & D activities can easily be decentralised.
Assignment Solutions, Case study Answer sheets
Project Report and Thesis contact
ARAVIND – 09901366442 – 09902787224
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