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Solution Manual For International Business: The New Realities, Global Edition, 5th Edition, S. Tamer Cavusgil, Gary Knight, John Riesenberger
Solution Manual For International Business: The New Realities, Global Edition, 5th Edition, S. Tamer Cavusgil, Gary Knight, John Riesenberger
■ Under Country Insights click on a region, then select a country, Zimbabwe for example.
http://globaledge.msu.edu/Countries/Zimbabwe
Everyone in the class should be assigned a different country. Each student is then
responsible for becoming an expert on that country. Twice during the term, each student
could report on their country, and summarize a newspaper article published in their
country, i.e. an International Newspaper Memorandum assignment.
[1] An exciting way to introduce your students to International Business is the CIA Maps,
from the CIA World Factbook, which provides an interactive and fun tool to introduce to
international business:
https://www.cia.gov/library/publications/the-world-factbook/
[2] Another great way to introduce student to the world of international business is to
direct them to the BBC website:
http://news.bbc.co.uk/1/hi/country_profiles/default.stm
Key Themes
■ In this chapter, there are five themes:
[1] Key concepts in international business
[2] How international business differs from domestic business
[3] Who participates in international business
[4] Why firms internationalize
[5] Why you should study international business
■ This chapter is the introduction to the text, as well as to the foundation concepts. The
first part of this text (Chapters 1–8) explores globalization from a macro, environmental
level, while the second part (Chapters 9–17) examines international business from a more
■ Next, ask students what they would like to do professionally, after they graduate. Once
they respond, ask if they can accomplish that successfully without understanding
international business, and the impact of global trends on their industry and business? The
answer is, of course, a resounding NO!!!
• Key message
In the past, internationalization tended to refer to corporations in developed Western states
buying into markets in developing or emerging economies. As the manufacturing balance
has shifted toward emerging economies, internationalization has become increasingly
concerned with corporations in emerging markets making inroads into developed Western
economies.
• Classroom discussion
■ This example reflects the ongoing process of economic integration and growing
interdependency of countries worldwide, but in reverse of the preconceived notion of the
process.
■ The internationalization of many Chinese businesses is an example of the determination
of private businesses to systematically increase the international dimension of their
business activities.
■ This allows Chinese manufacturers to become part of the widespread diffusion of
products, technology, and knowledge worldwide.
■ The case illustrates how globalization both compels and facilitates companies to expand
abroad—international expansion is easier due to market and product globalization.
■ Access to markets has made cross-border activities more appealing to all types of firms.
■ Use this vignette to engage the class—this is a prime example of long-term implications
of the reliance on emerging countries such as China for manufacturing. It makes the
corporations cash-rich and eager to invest in new ventures to diversify and grow.
Divide the class into small groups and work on the following questions, with each group
providing a brief presentation of their answers.
QUESTIONS
1-1. What might be the underlying motivations of emerging markets MNCs like
Geely?
■ Mergers and acquisitions are common in international business as a strategy for market
expansion, resource acquisition, and exploitation of available opportunities.
■ The acquisition of Western brands by MNCs originating in emerging markets is a fairly
new phenomenon. The case study showcases the brand and technology acquisition by a
Chinese firm.
■ The motivations for such an acquisition can be varied. However, merger and acquisition
(M&A) and FDI researchers have found that access to technology, research and
development facilities, brand-new markets, a favorable taxation system, a skilled
workforce, and geographical advantages are some of the pressing motivations for
acquisitions.
■ Besides competition and market forces, there are institutional motivations as well. In
many cases, policies and regulations influence the decision.
■ After reflecting on the case study, it appears that Geely acquired LTC to own an iconic
brand with international appeal and advanced manufacturing technologies.
■ Creating a presence and recognition in the global market may have been another
underlying motive for this particular acquisition. Also see P. Deng ‘Why Do Chinese Firms
Tend to Acquire Strategic Assets in International Expansion?’ Journal of World Business
44 (2009), pp. 74–84.
■ In ever-changing global markets, firms compete with each other but collaborate and
cooperate as well.
■ Objectives for international cooperation among firms also vary. as the case of merger
and acquisitions mentioned earlier demonstrates. (A list of motives can be found in E.
Todeva and D. Knoke “Strategic Alliances and Models of Collaboration,” Management
Decision 46, no. 5 [2005], pp. 725–742).
■ Geely was in a partnership with LTC before fully acquiring it.
■ The collaboration between Geely and LTC was mutually beneficial, with Geely supplying
much-needed cash to run LTC and LTC sharing technological know-how and operational
knowledge in return.
■ Geely’s past internationalization record includes its acquisition of Volvo Cars in the
aftermath of the 2008 financial recession.
■ The Geely-LTC partnership helped LTC survive and a vital cash injection ensured a
continuation in the production of the iconic taxi. This perhaps saved the iconic brand from
vanishing from the market like many big brands in the past.
■ Notably, from seemingly humble and unknown beginnings, Geely established itself
among global auto manufacturers with increasing recognition of its strengths in
cooperating with or acquisition of big brands. With regard to tangible and intangible
competitive advantages, this cooperation has served to increase the international
capabilities of both companies.