International business

1. Drawing upon the new trade theory and Porter’s theory of national competitive advantage, outline the case for government policies that would build national competitive advantage in biotechnology. What kind of policies would you recommend that the government adopt? Are these policies at variance with the basic free trade philosophy?

2. In the last few decades, the auto industry has shifted from one in which a few, large companies primarily manufactured in their domestic markets and sold in their domestic markets, to one in which a few large companies serve the world market, manufacturing around the globe to capture competitive advantages wherever they can.

· Why do companies like Toyota and Nissan have large operations in the U.S. market? Why don’t American companies have a large presence in Japan?

· Consider why BMW and Mercedes have established manufacturing operations in the U.S. market, while American companies are shifting their production to places like Mexico. Similarly, reflect on the new agreement between Toyota and Mazda whereby Mazda will produce cars at its plant in Mexico for Toyota to sell in the United States.

· Finally, use the theories presented in the chapter to explain the changes in the industry, and to predict what may occur in the next decade. How will the Chennai region of India, referred to as the Detroit of India because so many automakers and suppliers have established operations there, change the industry? What are the implications of Morocco’s burgeoning auto industry? What will be the impact of the new trade agreement between Mexico, Canada, and the United States have on production? What are the implications of the move toward more electric vehicles by companies like Volkswagen?

3. Plot the position of the following firms on a Figure: Procter & Gamble, IBM, Apple, Coca-Cola, Dow Chemical, U.S. Steel, and McDonald’s. In each case, justify your answer.

4. The top management of your company, a manufacturer and marketer of smartphones, has decided to pursue international expansion opportunities in eastern Europe. To ensure success, management’s goal is to enter into countries with a high level of global connectedness. Identify the top three eastern European countries in which your company can market its current product line. Briefly justify your recommendations.