case study
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INTEGRATIVE CASES
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n this chapter, the objective is to discuss cases that draw on the frameworks and perspectives developed throughout the casebook and that include important issues from each of the earlier chapters.
GM IN CHINA
For GM China, the year 2004 brought a wide variety of new challenges that added to an already complex business environment. The industry structure was changing quickly.
Demand and supply projections for motor vehicles had promised substantial increases in sales and profits, but suddenly the optimism faded. China’s new membership in the World
Trade Organization (WTO) created expectations of “a level playing field” for foreign investors, but—at least in the short run—major barriers remained. Government intervention persisted, particularly the requirement of a joint venture partner, competition from government-owned assembly firms, and arbitrary rules such as sector-specific credit restrictions. Violation of intellectual property, with the copying of foreign automobile designs and the false branding of parts, was an ongoing threat. Meanwhile, inflation was increasing, and the government was unsure whether and how to use monetary and fiscal policies. Of great importance, the government had purposely kept the renminbi undervalued for many years. Pressures were building for the government to change its foreign exchange rate policy, but a higher renminbi would suddenly decrease GM China’s international competitiveness.
INTEL’S SITE SELECTION DECISION IN LATIN AMERICA
Intel decided to locate its next assembly and testing plant in Latin America. Four countries had made the short list: Brazil, Chile, Mexico, and Costa Rica. Ted Telford, International
Site Selection Analyst for Intel, needed to recommend a final site. There were two key issues that had to be resolved first: (a) What kind of business environment was most
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5/10/2005
6:00 PM
Page 561
6
INTEGRATIVE CASES
I
n this chapter, the objective is to discuss cases that draw on the frameworks and perspectives developed throughout the casebook and that include important issues from each of the earlier chapters.
GM IN CHINA
For GM China, the year 2004 brought a wide variety of new challenges that added to an already complex business environment. The industry structure was changing quickly.
Demand and supply projections for motor vehicles had promised substantial increases in sales and profits, but suddenly the optimism faded. China’s new membership in the World
Trade Organization (WTO) created expectations of “a level playing field” for foreign investors, but—at least in the short run—major barriers remained. Government intervention persisted, particularly the requirement of a joint venture partner, competition from government-owned assembly firms, and arbitrary rules such as sector-specific credit restrictions. Violation of intellectual property, with the copying of foreign automobile designs and the false branding of parts, was an ongoing threat. Meanwhile, inflation was increasing, and the government was unsure whether and how to use monetary and fiscal policies. Of great importance, the government had purposely kept the renminbi undervalued for many years. Pressures were building for the government to change its foreign exchange rate policy, but a higher renminbi would suddenly decrease GM China’s international competitiveness.
INTEL’S SITE SELECTION DECISION IN LATIN AMERICA
Intel decided to locate its next assembly and testing plant in Latin America. Four countries had made the short list: Brazil, Chile, Mexico, and Costa Rica. Ted Telford, International
Site Selection Analyst for Intel, needed to recommend a final site. There were two key issues that had to be resolved first: (a) What kind of business environment was most
561
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•