MM04
International Marketing
Assignment – I
Last Date of Submission: 15th October 2014
Maximum Marks: 100
Assignment Code: 2014MM04B1
Attempt all the questions. All the questions are compulsory and carry equal marks.
Section-A
1.
Distinguish between the ethnocentric and polycentric approach to international
Marketing? Under what circumstances is the polycentric strategy a preferred approach for
International Marketers? Give examples to support your answer
2.
Discuss the critical cross cultural challenges encountered by international marketing
Managers? Discuss how these challenges can be addressed by multinational firms?
3.
Explain why the Uruguay round of GATT is one of the most prominent rounds of trade
negotiations? After WTO replaced GATT - What are the pivotal issues related to
Emerging economies which WTO needs to address immediately?
4.
Explain the difference between the Theories of Absolute Advantage and Comparative
Advantage related to foreign trade? Briefly describe the concept of the Factor
Endowment Theory of Foreign Trade? Do you perceive that the assumptions of these
trade theories are realistic?
Section-B
Case Study: Global Environmental Scanning
Google's Problems in China
Google was founded by Larry Page (Page) and Sergey Brin (Brin), who were students at Stanford
University, California, USA. While at Stanford, Page logged on to the World Wide Web, looking for a
topic for his doctoral thesis. He decided to work on the link structure of the Web. He found that though
links from one page to the other could be followed easily, it was important to keep track of the backlinks as well. He started working on back links and called his project 'Back Rub.' Brin joined Page in
working on Back Rub. Together, they created a ranking system which ranked the links depending on
their importance. They came up with an algorithm called PageRank which took into account the
number of links to a particular site and the number of links into the linking sites.
Google Meets 'The Great Firewall'
On January 25, 2006, the US based Google Inc. (Google), the world's largest search engine, announced
that it was ready to censor the content that it made available in China. Google's Chinese website
www.google.cn would be censored by the company itself on the basis of the instructions of the
government. Before this, the government agencies in China used to censor the content on Google's site
that violated the regulations imposed by the Chinese government on Internet usage and access in
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China. The topics that were sensitive for the Chinese government included Tiananmen Square, Tibet,
the Dalai Lama, Taiwan independence, human rights and the Falun Gong spiritual movement.
Google had been providing services for users in China through its global search engine
www.google.com, which has its servers in the US. This meant that the content had to pass through
Chinese firewalls, which often stalled the browser and slowed it down.
The slowdown was also associated with filtering and censorship carried out by the Chinese
government and Internet service providers (ISPs). For this reason, Google decided to place its servers
in China and agreed to self-censor the content and let the users know of it. However, human rights
activists and advocates of freedom of the press all over the world expressed their displeasure at
Google's move.
After censorship, users searching for 'Falun Gong spiritual movement', for example, would be
directed to sites and articles condemning the movement; sites that supported the movement were
omitted from the search. Google was of the view that after censoring its content, the company's
website would become easily accessible in China. The company announced, "In order to operate from
China, we have removed some content from the search results available on Google.cn, in response to
local law, regulation or policy." Google also announced that users would be informed whenever access
was restricted.
A survey carried out by China Interne Network Information Center in August 2005 revealed
that Google was losing market share to its competitor Baidu.com, which had emerged as the leading
search engine in China.
Google in China
In September 2000, Google began operating a search engine in Chinese by offering 24 million web
pages in Chinese language as localization had tremendous customer appeal and Chinese internet users
preferred consulting internet sites having Chinese language. By 2002, Google had gained lot of
popularity in China owing to its simplicity and ability to carry out searches effectively.
During that time, the Chinese government was blocking several websites through IP filters
intermittently. The blocking increased during times of heightened security like the anniversary of
Tiananmen Square events, the national party congress, etc. But users of Google could circumvent the
government censorship through cached pages...
Google Loses Market Share
By early 2004, users in China had thought that Google was unreliable and started using alternative
search engines. Elliot Schrage, Vice-president, Global Communications and Public Affairs of Google
said that Google was seven times slower than its rival Baidu and Google itself was not happy with the
way its services were being operated in the country...
The Launch of Google.cn
Google wanted to have a major presence in China. The market was lucrative because of its size. China
had the second largest number of Internet users after the US. Google felt that only a local presence
could help it to provide better and more reliable services to customers. To operate in China, Google
needed an Internet Content Provider license, which required it to filter its content. In April 2005, after
obtaining permission from the Ministry of Information Industry in China, Google announced the
opening of a representative office in Shanghai (Mainland China), and registered the URL www.google.com.cn...
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The Road Ahead
Analysts opined that with Internet users would have a better experience after the launch of Google.cn,
and Google may once again emerge as the most preferred search engine in the country. According to
findings reported by Keynote Systems in January 2006, Google was in a strong position to challenge
Baidu in the Chinese search engine market. The study concluded that Chinese users, once they started
using Google, preferred it to any other search engine...
5.
Discussion Questions:
a.
b.
c.
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Briefly examine the problems faced by Google in China.
Outline the relevance of assessing the legal and business environment in the
Chinese online media industry?
Evaluate the impact of government regulations on the operations of foreign
Internet companies like Google in China? Where did Google go wrong?
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MM04
International Marketing
Assignment – II
Assignment Code: 2014MM04B2
Last Date of Submission: 15th November 2014
Maximum Marks: 100
Attempt all the questions. All the questions are compulsory and carry equal marks.
1.
Section-A
Explain the global segmentation and positioning strategies of firms like Coke and Mc-Donalds in
emerging economies like India? Do both MNCs offer customized and adapted products in India
for achieving business success? Give examples to support your answer
2.
Discuss in details the contribution of E-commerce and e-business in promoting global trade
volumes? Give examples of sectors which have benefitted immensely with the rapid
advancement of IT?
3.
What are the external factors influencing international prices of imported products?
Give two examples of Firms adopting Market Skimming and Penetrative Pricing
Strategies?
4.
Describe the characteristics, capital involvement and ownership status of the following modes
of entry into global markets:a)
b)
c)
d)
Franchisee Operations
Joint Ventures and alliances
Wholly Owned Subsidiary
Licensing
Section-B
Case Study
Coca-Cola's Business Practices: Facing the Heat in a Few Countries
Introduction
From January 1, 2006, the University of Michigan in the US put on hold the sale of the products of The
Coca-Cola Company (Coca-Cola) in all its campuses, thus becoming the tenth US University to do so.
The ban was the outcome of a relentless campaign by student activists and trade union groups, who
accused Coca-Cola of violent labor practices in Colombia and creating environmental problems in India.
The University of Michigan issued the orders for the ban based on the recommendation of its
University Dispute Board. This was following the inability of Coca-Cola to meet the deadline of
December 31, 2005 that required agreeing on a protocol on the findings of the commission formed by
a set of universities in the US. The commission had offered to investigate the company's labor practices
and that of its bottlers in Colombia. Coca-Cola did not want the findings of the commission to have any
legal consequences but the attorneys in an earlier lawsuit against Coca-Cola and its bottlers in
Colombia insisted that the findings should be legally admissible in court of law in the US.
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Coca-Cola's annual contracts with the University of Michigan, which had over 50,000 students, were
worth around US$ 1.4 million in sales in 2005. The campaign by student activists and trade union
groups to ban Coca-Cola had been going on for several years in different countries. Coca-Cola was
accused, along with its bottling partners, of hiring paramilitary death squads in Colombia to kidnap,
intimidate, or kill its union leaders and other workers at its bottling plants. Since 1989, around eight
union leaders of Coca-Cola's plants in Colombia had been murdered and many others abducted and
tortured. In India, Coca-Cola had to face opposition from the local people around its factory in
Plachimada, Kerala, who charged that the company was responsible for the draining of the
underground water table.
Coca-Cola's Business Practices
Coca-Cola had always believed that it conducted its business with responsibility and ethics. The
company's business practices were aimed at creating value at the marketplace, providing excellent
working conditions, protecting the environment, and strengthening the communities in the places of
operation. Commitment to quality and a code of business conduct were evolved to ensure good
business practices. According to Coca-Cola, its commitment to quality was reflected in every facet of its
business. These included commitment to product quality, quality in business processes, and in its
relationships with suppliers and retailers. The quality system was reviewed constantly so that the
performance bar for these standards was always kept high. The quality guidelines were communicated
to all business units and their implementation reviewed. The company introduced the Coca-Cola
Quality System (TCCQS) to achieve these quality objectives of delivering the highest quality standards
in respect of efficient business processes, product quality, and relationships with suppliers and buyers.
i.e. offering TOTAL QUALITY MANAGEMENT across all business dimensions.
Labor Practices in Colombia
Colombia is widely considered as one of the most dangerous countries in the world for trade union
activists and union leaders. The country was in the midst of a four-decade-old civil war involving leftist
guerrillas, right-wing paramilitary groups, and government forces.
The civil war claimed approximately three thousand lives a year including those of many trade
union leaders and workers. It was reported that in 2000, three out of every five trade unionists killed in
the world were from Colombia. In 2001, SINALTRAINAL, a Colombian labor union, charged that CocaCola and its bottlers Panamerican Beverages (Panamaco), Bebidas y Alimentos De Uraba, and CocaCola Femsa, were linked to the violence against its union members in Colombia. Around eight union
leaders of Coca-Cola's plants in Colombia had been murdered since 1989, and many others had been
abducted and tortured. Coca-Cola was accused of hiring paramilitary death squads to kidnap, torture,
or kill union leaders and intimidate worker union activists at its bottling plants...
Trade Practices in Mexico
Mexico was a very important market for Coca-Cola as the country was second, after the US, in terms of
per capita consumption of soft drinks in the world. The Mexican market for soft drinks was estimated
at US$ 6.6 billion for the year 2004. Over the years, some of the highest profit margins for Coca-Cola in
its overseas operations came from Mexico. Coca-Cola was the number one seller of soft drinks in
Mexico with a 70% market share. Coca-Cola's largest bottler in Mexico was Coca-Cola Femsa (CCF) in
which Coca-Cola had a 40% stake...
Environment & Product Issues in India
In India, Coca-Cola was accused of draining the underground water table, of releasing improperly
treated industrial effluents, and of selling products containing pesticide residues above standard limits.
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The focal point of the environmental accusations in India was the Coca-Cola plant located in Kerala.
Coca-Cola, through its subsidiary in India, The Hindustan Coca-Cola Beverages Pvt. Ltd., had established
a bottling plant at Plachimada locality in Palakkad district in Kerala.
The unit was established in 1998-99 in a 40-acre plot that had previously been used for
irrigation of paddy and other food crops. The factory site was located in the proximity of a main
irrigation canal that drew water from a nearby barrage and reservoir...
Boycott of Coca-Cola Products
In July 2001, SINALTRAINAL, with the help of United Steelworkers of America (USWA) and the
International Labor Rights Fund (ILRF), filed a lawsuit against Coca-Cola and its Colombian bottlers at a
court in Miami, Florida, under the Alien Tort Claims Act (ATCA) of the American Judicial System. It
accused them of being responsible for a campaign of murder and intimidation against its unionized
workers and charged that it was using right wing paramilitary groups for the purpose. The US judge
dismissed these charges against Coca-Cola in Colombia but approved the charges against the local
bottlers in Colombia...
Coca-Cola's Response
Coca-Cola opened an exclusive website, www.cokefacts.org, to address these allegations, especially
those related to Colombia and India. In an official statement featured on the website, Coca-Cola
claimed that the allegations against the business practices in Colombia were false.
Two different judicial enquiries in Colombia, one by a Colombian court and the other by the
Colombia Attorney General, had found no evidence against Coca-Cola or its bottlers linking them to the
murders of the union members. Coca-Cola also quoted a judgment in the lawsuit at Miami, Florida,
wherein the judge had dismissed the charges against Coca-Cola, Columbia...
5.
Discussion Questions:
a.
What are the issues and allegations faced by Coca-Cola in Colombia, India, and Mexico?
b.
Examine the challenges faced by multinational companies due to the rise in consumer
activism?
c.
What other options are available to Cocoa Cola for fighting the allegations made
concerning pesticide content in beverages?
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