Homework answers / question archive / Exam option 1: Entry strategy and marketing plan in emerging markets   The examiner will provide two case companies, one with its operational and strategic problems in doing business in emerging markets and the other one with its problems and challenges in negotiating business deals in emerging markets

Exam option 1: Entry strategy and marketing plan in emerging markets   The examiner will provide two case companies, one with its operational and strategic problems in doing business in emerging markets and the other one with its problems and challenges in negotiating business deals in emerging markets

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Exam option 1: Entry strategy and marketing plan in emerging markets

 

The examiner will provide two case companies, one with its operational and strategic problems in doing business in emerging markets and the other one with its problems and challenges in negotiating business deals in emerging markets. Each student is required to provide solutions for one of the two companies in a written format. The grading will be done based on the extent to which the contents of the report meets the learning goals.

 

UNIVERSITY OF SOUTHERN DENMARK FACULTY OF BUSINESS AND SOCIAL SCIENCES

Case company: Mate.bike

Official website:

https://mate.bike/da/

Video case description about Mate.bike:

https://vimeo.com/312155829

Case description (sources: MATE’s official website and CleanTechnica)

MATE is a Copenhagen-based startup founded in 2016 by the siblings Christian Adel Michael and Julie Kronstrøm Carton who want to engage today’s challenges of dense traffic congestion, climate change and health issues in general by creating unique, fun and affordable electric bicycles. MATE sprung out of some late-night ideation sessions between Julie and Christian. Julie was bored with the mundanity of life and out of the deep conversations with her brother they decided to take the plunge together. Their hard work, late nights, and the work they’ve done resulted in the MATE e-Bike. Christian has an entrepreneurial background with vast experience in procurement, sourcing and e-commerce, whereas Julie has an academic background as an Associate Partner at Copenhagen Institute for Futures Studies, just as she has worked with sustainable solutions and urban planning.

By making e-Bikes cool, sexy, practical, and affordable, Christian and Julie wish to take bicycling global as the preferred mode of transportation for more people in urban areas. In the summer of 2016 the company launched the original MATE on Indiegogo and successfully crowdfunded USD 6,8 millions. In July 2018, MATE launched its second crowdfunding campaign on Indiegogo to fund the new MATE X. This campaign has raised more than USD 13 millions, making it the most successful European crowdfunding campaign in history. Julie shared that, “crowdfunding was one of the ways we were able to make it affordable at such a low price,” noting that the model allowed them to not only share their product directly with customers but to talk with them along the way.

Since 2016, MATE has delivered its e-bikes to more than 7000 backers around the world, including a few to exotic locales like Kazakhstan, where they shipped 4 MATE bikes. Building on that success, the team at MATE has invested all their time, effort, blood and buckets of sweat into this beauty of an eBike that’s made perfect for any rider, any journey, in any given situation. It’s onward and upward for the team at MATE as they continue to pave the road in front of them as they move forward while working hard at not taking themselves too seriously. Julie shared that, “it needs to be fun and relaxed,” and that part of the key to building a business where they actually want to work is “getting people’s input on what they like and not being too self-serious.”

Exam Tasks

As a newly hired business development manager for emerging markets, you just received following tasks:

1. 1)  Please identify and analyze MATE’s core competences and internationalization capability.
2. 2)  What problems MATE can help to solve in Asian emerging markets? Do you see any potential for MATE to enter and expand into this part of the world?
3. 3)  Which Asian emerging market(s) have the most potential for MATE? In case you are requested to plan for next 5 years’ foreign expansion in the selected emerging market(s), how is your internationalization strategy going to look like? (Please describe and/or argue country selection, external business operating environments, entry mode choice, target customer, marketing programmes including product and service, pricing, distribution and communication decisions, etc.).
4. 4)  What else can you suggest to MATE in terms of entering and growing in the selected emerging market(s)?

Exam option 2: Negotiation strategy in emerging markets

 

1. All pages, incl. the front page, should include the following: Choose Exam ID:
2. All pages must be numbered.
3. You can hand in one pdf-document

Form of examination: Home assignment
Duration: 48 hours. Individual home-assignment
Location: Home assignment
Internet Access: Necessary
Length: Maximum 12 pages
Assignment hand-in: Digital submission in Digital Exam ( no later than 22Dec, 10:00 am)
Examination aids: All exam aids allowed. It is not allowed to communicate with others.

The examiner will provide two case companies, one with its operational and strategic problems in doing business in emerging markets and the other one with its problems and challenges in negotiating business deals in emerging markets. Each student is required to provide solutions for one of the two companies in a written format. The grading will be done based on the extent to which the contents of the report meets the learning goals.

UNIVERSITY OF SOUTHERN DENMARK FACULTY OF BUSINESS AND SOCIAL SCIENCES

Case company: Volkswagen

Official website:

https://www.volkswagenag.com/

Case description: VW’s Long-Term Negotiation Thinking pays off in China (by Dr Bob March)

At the time this case was written, Volkswagen (VW) was the first foreign overseas car-maker in China to have been making a profit in China over the past ten years. It all began in October 1984, when VW signed a joint venture agreement with China. One of the country’s first major joint venture agreements, it involved several government authorities, including the Ministry of Foreign Trade and Cooperation (MOFTEC, now MoCom), the State Planning Commission, the State Economic Commission, the Ministry of Finance, the Bank of China (BOC), the Municipal Government of Shanghai, and the China National Automobile Industry Corporation (CNAIC). A manufacturing facility was built in Shanghai, and VW’s partners were Shanghai Tractor and Automobile Corporation (STAC), with a twenty-five percent share, as well as the BOC, Shanghai Trust and Consultant Company, and the CNAIC, which together had a twenty-five percent share.

Being first into China has proved lucrative for VW. In 1986, its first plant had a capacity of 30,000 vehicles; in 2003, there were two plants turning out 400,000 vehicles. Again in 1986, national car sales were less than 30,000; in 2002 they were 720,000, of which VW had a fifty-three percent share. The company has achieved market leadership through product quality, reputation, and pricing; indeed, every Chinese knows VW. In terms of the potential of China as a car market, it is still early days. Since its entry into the WTO, the prices of imported cars have decreased significantly, but no other carmaker has yet been able to whittle away VW’s competitive edge. In addition, plans are afoot to import VW’s lower priced Skoda to China, to position the maker in the cheaper segments of the market. VW was approached by the China National Technical Import Corporation in 1977, and in 1978 a Chinese delegation visited VW headquarters in Wolfsburg, Germany. The first VW delegation went to Beijing in 1979. So there were six years of negotiations, involving at least seven parties on the Chinese side, and major contracts were negotiated, including a joint venture contract, a technology transfer agreement, articles of association, supply agreements, and a planning agreement.

According to Heinz Bendlin, one of the original VW negotiators with China, even in the early days the Chinese behaved courteously. He has commented as follows: “In China one has to be patient and be prepared to spend considerable time solving problems step by step, or ibu ibu, as the Chinese say. Setting deadlines or showing impatience leads to disadvantages in negotiations.” “The Chinese like to negotiate in rather large groups. Fairly frequently, three or four VW people negotiated with ten to twenty Chinese. However, typically only one would speak while the others took notes. They were all very disciplined.” “There were times when they would cultivate a friendship, seemingly to manipulate situations.” “Do not show that opinions are divided on a given topic within your team, and avoid discussions in front of them... speak as a team with one voice.” “We should listen carefully to the Chinese. Never try to convince them by saying that only your products or plans are outstanding.” “Do not show that opinions are divided on a given topic within your team, and avoid discussions in front of them.”

 

Exam Tasks

1. 1)  How negotiation styles differ between Chinese and German negotiators? To what extent are cultural factors responsible for the very different negotiation styles and attitudes between Chinese and German businessmen? Explain why.
2. 2)  Graham and Lam (2003) have described the importance of the Zhongjian ren, or intermediary in all negotiations with Chinese business people. What is an intermediary in the context of international business negotiations? Why or why not hiring an intermediary enough to ensure the deal progressed successfully in China?
3. 3)  Luo et al. (2012) and others have highlighted the importance of guanxi in doing business in China. What is guanxi? What are the advantages and disadvantages of using it in negotiating with Chinese businessmen. How to establish and maintain a long-lasting and healthy guanxi in China? What other negotiation strategy and tactics could have been applied by Western businessmen during negotiation process in China?
4. 4)  What are the key characteristics of a successful cross-cultural negotiator in negotiating in Asian emerging markets?

 

Note: Answer any of the two options.