This website uses cookies to ensure you have the best experience. Learn more

International Business Chapter 7 Essay

635 words - 3 pages

General Motors and Daewoo: Married, Divorced, and Married Again

1. Are the conditions in the automobile industry facilitating or constraining an alliance strategy?

In my opinion, I think this question must be approach from the industry- based view, which would be the five forces. The automobile industry is very advanced industry which have very high entry barrier for the late movers because of special characteristics of automobile industry. First, automobile industry is connected with many other relative industries. In addition, it is a labor intensive industry which needs a lot of fixed cost and the capital for further investment. These characteristics also evoke many alliances between the relative firms in order to reduce the costs. Second, rivalry among existing firms has become very fierce in this industry since the economy started to decline. One of the wise ways to get through this crisis would be the ...view middle of the document...

When the problems such as labor strikes and the poor quality of LeMans occurred, their efforts to overcome these problems were poor and uncooperative to each other. Daewoo argued that the poor sales were not primarily due to quality problems, but due to GM’s poor marketing efforts that had not treated the LeMans as one of GM’s own models. Further, Daewoo was deeply frustrated by GM’s determination to block its efforts to export cars to Eastern Europe, which Daewoo saw as its ideal market. GM’s reasoning was that Eastern Europe was Opel’s territory. So Daewoo secretly developed independent car models, while GM initially was unaware of these activities. This incident brought huge tragedy to this “ideal couple”. Eventually, they divorced in 1992, with Daewoo buying out GM’s equity for $170 million.

3. In the second JV, have the partners improved their relational capabilities?

They sure did improve their relational capabilities after first divorce. In fact, the second marriage is more likely as a unilateral control of GM. Instead GM chooses to have another conversation, GM decided to take the lead of the second joint venture, by purchasing 67% of the stake. This second alliance make GM able to exports the cars that made in South Korea and Vietnam to over 140 countries. One of the most decisive moves is to phase out the Daewoo brand tarnished by quality problems and financial turbulence. Furthermore, GM was able make decision 100% for their profit. For instance, except South Korea and Vietnam, GM has labeled a vast majority of cars built by GM Daewoo as Chevrolet, a brand that GM usually pitches as more American than the Stars and Stripes. This decision could be very uncomfortable in the perspective of Daewoo Company, however, it makes more profit for GM, and that is why the decision was made.

4. How does this case inform the debate on alliances versus acquisitions?

The case of General Motors and Daewoo is very good instance to explain or describe the advantages and disadvantages of each alliances and acquisitions. This case is an example that shows when acquisition works the better than alliances. How high resource interdependence can create better value.

Other Papers Like International Business Chapter 7

Marketing Essay

644 words - 3 pages chapter 8 which discuss the international market selection I came to an understanding of defining international market selection and recognizing the difficulties in attaining them and describing how international marketers screen potential markets using secondary data. Secondly I came across the website www.ukti.gov.uk, and I found a variety of useful information. One of them is an article called Doing Business in Mexico, which was released on

International Finance Essay

555 words - 3 pages Chapter 1 2. Comparative Advantage. a. Explain how the theory of comparative advantage relates to the need for international business. ANSWER: The theory of comparative advantage implies that countries should specialize in production, thereby relying on other countries for some products. Consequently, there is a need for international business. b. Explain how the product cycle theory relates to the growth of an MNC. ANSWER

Global Business Today

2427 words - 10 pages \ eighth edition Global Business Today CharlesW. L Hill University of Washington McGraw-Hill Irwin contents PREFACE xiii PART ONE Chapter One Introduction 4 What Is Globalization? 6 The Globalization of Markets 6 The Globalization of Production 7 The Emergence of Global Institutions 9 Drivers of Globalization 11 Declining Trade and Investmen t Barriers 11 The Role of Technological Change 14 The Changing Demographics of the Global

Lesson Plan Far600

1837 words - 8 pages | |technical pronouncement | | |Malaysia, Australia, USA and UK is discussed. Due process in | |Mathews and Perera, chapter 7 | | |formulation of standard is explained. The free market and | | | | |regulated approach in standard setting in relation to

Ibm International Business Management

1810 words - 8 pages | |Chapter 6 of Daniels, Radebaugh and Sullivan (DRS) International Business. | |Tutorial materials: download from Moodle | |DISCOURSE

Portfolio Activity

4876 words - 20 pages 374-378 • Monczka, et al – Chapter 15 pp 584-585 • Monczka, et al – Chapter 14 pp 518-527 The International Purchasing Officer needs to: • Research and apply international legal requirements on sale of goods and Australian regulatory controls applicable to imports into Australia • Apply relevant INCOTERMS and trade terms to international purchasing • Draft exception clauses to business conditions • Prepare draft contract and access legal

Sustanining

260 words - 2 pages : Employee Health and Safety Chapter 19: International Human Resource Management Chapter 20: Managing International Assignments PART-B consists of a short case study with three questions and is worth 10 marks. You need to answer all questions in this part. Approximately two pages long relevant answer is sufficient for this part. This case has not been drawn from any specific topic area. However, an understanding of the ethical, legal and policy

Anything Relevant

4105 words - 17 pages | | | | | | |Chapter 7: |Segmenting Business Market p.230-231 |Using Multiple Segmentation Bases p.230 | |Customer-Driven Marketing |Segmenting International Market p.231-232 |Choosing a Targeting Strategy p.237

Chapter 1 Questions Ans Application

881 words - 4 pages the cash flows remitted by the European subsidiaries. 7. BENEFITS AND RISK OF INTERNATIONAL BUSINESS – As an overall review of this chapter, identify possible reasons for growth in international business. Then, list the various disadvantages that may discourage international business. Growth in international business can be stimulated by access to foreign resources which can reduce costs, or access to foreign markets which boost

Wgu Managing Organizations and Leading People

5484 words - 22 pages . Rooke, D. R. (2005). 7 Transformations of leadership. Harvard Business Review, 83(4), 66-76. Think you're a leader? Take our test to find out the truth. (2005). Healthcare Purchasing News, 29(7), 26. Click the following link to access the MindTap module: 6 / 18 C200 - Managing Organizations and Leading People Course of Study chapter 2 (“The Evolution of Management Thinking”) Changes Driven by Technology Technology change has a

Strategy Management

1724 words - 7 pages OUTLINE AND AIMS This course provides the student with an understanding of how international business strategy fits into the organisation and running of a company or multi-company corporation. The course consists of 8x three-hour sessions of lectures and case studies. The aim of the module is to introduce the student to the way in which a firm can achieve sustainable competitive advantage through strategy. LEARNIING OUTCOMES By the end of

Related Essays

International Business Chapter 9 Critical Questions

839 words - 4 pages Claudia Perez Chapter 9 (Critical Discussion Questions) 1. NAFTA has produced significant net benefits for the Canadian, Mexican, and U.S economies. Discuss. The North America Free Trade Agreement (NAFTA) was passed in 1994. Starting with eliminating the majority of taxes on products traded between the three countries fallowed with a gradual phase-out of other tariffs. The Agreement contributed to more exports. The two way trade between

Ungs2050 Essay

418 words - 2 pages Studies) | | 13 | Chapter 10: Business Ethics / Social Responsibility / Environmental Sustainability | 27- Mon 28- Wed | 10/1212/12 | | | | 14 | Chapter 11: Global/International IssuesStrategic Management from Islamic Perspectives | 29- Mon 30- Wed | 17/1219/12 | -Sharing Session of Project-Sharing Session of Project -Submission of Term Project Reports | Group 1,2,3,4Group 5, 6,7 |

Management Accounting Essay

1339 words - 6 pages the problems at the end of each chapter when compared to the 12th Edition. The International Edition has different problems at the end of each chapter and should not be used. OBJECTIVES: By the end of this course, you should be able to: -understand and appreciate the valuable role of managerial systems in business organizations; -understand and apply basic cost concepts, inventory process systems, budgeting, and performance

Social Business Essay

700 words - 3 pages Business under international instrument 7.2 Constitutionality of Social Business in Bangladesh 7.3 Government responsibility toward the Social Business Chapter eight 8.1 social enterprise what does it mean? 8.2How social enterprise works? 8.3On which strategies the entrepreneurs have to trigger their business? 8.4 Distinctions between social business and social enterprise 8.5 In what extent social business ahead for welfare of the