1. Consider that in Fall 2017, the Trump administration uses U.S. trade policy by
imposing, say a 25% tariffs on steel imports from China as a fix to, what it
perceives to be, a China’s foreign exchange rate policy of devaluating the yuan
against the US dollar. Keep in mind that China in 2016 is the top exporter to the
U.S., followed by Mexico, who has pushed Canada down to the third spot. (Do
succinctly summarize the content of the theory, model, principles that will be
applicable as well as draw the appropriate diagrams and flow charts in doing the
analysis and answering the following questions. Provide full logical explanation
for your conclusions and answers. Please, be specific–as presented in the class
room lectures—in summarizing the content and logical analytics.)
a. How would business change for companies producing in the U.S. in the
tariff affected industry? Impact on competition, sales, profitability,
employment and wages? Also analyze the impact, if any, this would have
on business in that industry in Canada.
b. How would business change for companies in the rest of the U.S., that is
in industries not subject to the tariff? Impact on competition, sales,
profitability, employment and wages?
c. What would be the impact on offshoring activities of companies operating
independently out of the Canada, U.S., China and other emerging market
locations (consider only one location at a time)? Analyze possible effect
on wages of high-skilled workers relative low-skilled workers, possible
effects on kind of activities performed along the skills-value added supply
chain.
d. Keep in mind that both China and the U.S. are members of the WTO.
Outline what options are available to China in tackling this U.S. trade
policy? Discuss at least two options and their possible consequences for
businesses in the U.S.
e. Suppose you are running an export company that produces in China, does
foreign direct investment (FDI) in supply chains, and also exports to the
U.S. What prospects does your business face in the U.S., in Canada?
What feasible business options are available to you to maximize sales,
profitability and brand salience in the U.S. market? What feasible
business options are available to you to maximize sales, profitability and
brand salience in international markets and locations?
f. Suppose you are running an export company that produces in China, does
foreign direct investment (FDI) in supply chains, and also exports to the
U.S. What prospects does your business face in the U.S., in Canada?
What feasible business options are available to you to maximize sales,
profitability and brand salience in the U.S. market? What feasible
business options are available to you to maximize sales, profitability and
brand salience in international markets and locations? What achievable
market outcomes can you anticipate in competing in emerging markets
against Western-based firms with advanced technology and deeper
pockets than your company? 2. Expectations are that the U.S. economy in 2017-2018 is to perform better than
other major markets and the U.S. dollar has appreciated against most currencies,
including the Canadian dollar. What international business expansion or
softening would you analyze as opportunities or challenges, if you operate in
Canada a business (consider one sector at a time):
a)
b)
c)
d) in
in
in
in the oil-patch (energy) servicing sector;
retailing in Canada imported products made abroad;
wealth management in the financial-banking sector; and
designing gaming software and applications. In each case, discuss what strategies you would use to mitigate some of the
significant business risk under this given scenario. 3. Emerging markets are a major focus of international businesses, including
Canadian international businesses, going forward.
a) What are the most important opportunities and challenges facing businesses
operating in emerging markets today?
b) How might these challenges affect your decisions on how to expand
(greenfield investment, acquisitions, local sourcing of inputs, R&D and talent,
etc.) into emerging markets?
c) How can an involvement in overseas markets help a firm capture experience
curve advantages more rapidly? 4. Thunder Rock is a small microbrewery on the outskirts of Toronto. Sales have
grown rapidly in the last two years mainly through word of mouth. Thunder Rock
has a small brewery that is producing at full capacity at the moment. Thunder
Rock has been written up in many business publications as an example of a wellrun small business. As a result of the publicity they have received a lot of
attention from venture capitalists and companies that want to buy them out.
Thunder Rock wants to grow their business but is unsure which direction they
want to take. They could expand in the Canadian market, but it is saturated with
many microbreweries already. China is a huge untapped market that does not
have a lot of foreign beers yet. There are a couple of large Chinese breweries like
Tsingtao, that dominate the market but there are many foreigners now living in
China that have a different taste for beer than Tsingtao.
a) Describe in detail what would be your recommendation for how they
should enter the Chinese market.
b) Explain the reasons why you chose this entry strategy and the advantages
and disadvantages compared to other possible methods a business might
enter a country.
c) What strategy would you recommend the Canadian international business
in tapping the value in the globalization process in this case to avoid the
“blues zone” often encountered in emerging markets by multinational
headquartered in mature economies. Fully explain your reasoning.
