CASE 1

(a) What was the critical catalyst that led Kodak to start taking the Japanese market seriously?

Kodak: The Changing Strategies By 2000, Kodak, the company that pioneered the imaging industry by inventing easy-to-use cameras and photographic film, was in deep crisis. With the advent of digital cameras in the mid 1990s, Kodak found its sales declining as consumers preferred the new cameras, which did not use films. The growing popularity of digital cameras led to a slump in film sales, which was a major revenue generator for Kodak. Additionally, the new technology attracted a lot of competition from traditional as well as new players. In order to maintain its lead in the industry, Kodak decided to adopt the new technology and reinvent itself from a camera and film manufacturer to a digital imaging company. The case discusses the evolution of the digital camera market and the shrinking film business. It also highlights the strategies

adopted by Kodak to embrace the new technology to sustain its leadership position.

(b) From the evidence given in the case do you think Kodak’s charges of unfair trading practices against Fuji are valid? Support your answer.

On December 5, 1997 the US lost its first major trade dispute in the newly formed

World Trade Organization(WTO). The high-profile case pitted photographic paper and film giants Kodak and Fuji against one another along with their respective governments, the US and Japan. Kodak claimed that Japan's photographic market & distribution structure, "deny[ed] [Kodak] fair and equitable market opportunities."1 Essentially, Kodak was arguing that it could not penetrate the Japanese market beyond a certain level due to structural restraints, government intervention, and back-room policies that favored Fuji.8 On the other hand, Fuji & the Japanese government contended that Kodak's poor showing in Japan was due to deficient marketing, management, and investment in the Japanese market. Fuji and the Japanese government refused to enter into negotiations with Kodak because they perceived Kodak's allegations as groundless. This refusal to even discuss Kodak's complaint prompted a May 1995 Kodak filing with the US Trade Representative's office under Section 301, which allows the US to use unilateral action against unfair trading practices. This was viewed to be Kodak's best chance to pry open the Japanese market. To Kodak's jeopardy, the case was turned over to the WTO's Dispute Settlement Body in June of 1996. On December 5, 1997 the WTO ruled against Kodak and the US saying it had found no evidence that, "Japan rigged its domestic markets to favor Fuji Photo Film Co. over Kodak."3

CASE 2
1 Which company is truly Multinational ? Why?

A Truly Multinational Company

The Axel Johnson Institute, the predecessor to Nordic Water, was founded as early as in the beginning of the sixties in Nynäshamn. It was an exceptional institute, as it was privately owned. From the beginning the business concept was clean water. Here they should develop, design, manufacture and deliver machines and equipment for water and wastewater treatment.

It appears to have been an excellent business idea. At the Institute they were innovative and soon they obtained patents for a number of products which were exported under the name of Axel Johnson Engineering with great success. The business was doing well and soon we became leaders on the international market. A position which we have managed to keep over the years. The company has developed and changed in many ways but it has always adhered to the original business idea. Today our name is Nordic Water and our head-office is in Göteborg. Besides we have offices and service divisions in Nynäshamn, Mariestad, Klippan and Hanhals. Our main market is outside Scandinavia. So far we have offices in Norway, Germany, The Netherlands, Spain and China. We may not be the biggest but we are world leaders when it comes to water purification.

From the standpoint of the multinational marketer, the differences between nations overseas are great. In the past, these differences generally led a U.S. company to view its strategy in each country strictly as a local problem. However, in recent years the situation has been changing, and the experiences of a growing number of multinational companies suggest that there are real potential gains to consider in standardizing various elements of the marketing programs used in different areas. These gains range from substantial cost savings and more consistent dealings with customers to better planning, control, and exploitation of ideas with universal appeal. One of the most widely discussed developments of the past decade has been the emergence of multinational companies as important competitors in an ever-growing number of industries. As the trade barriers in Western Europe and elsewhere have diminished, more and more companies have found attractive opportunities for expansion in countries other than their traditional home markets. For some of these companies, operations abroad have become so extensive and so complex as to require significant changes in organization and operating methods. The problems confronting management in a truly multinational company are clearly different in degree, if not in kind, from those of traditional firms.
: At a time when most CEOs would be drawing their retirement plans, Sundram Fasteners’ (SFL) CMD Suresh Krishna, 67, is busy plotting the company’s growth strategy. Over the next five years, his target is to take SFL and its associate companies’ turnover from Rs 800 crore this fiscal to Rs 2,000 crore. Naturally when I met him, my question was: Forty four years of hard work at SFL, what keeps you going? His reply was: Set a target, achieve it and keep raising the bar to prevent complacency from setting in. A look back at the history of SFL reveals how Mr Krishna not only set bigger and bigger targets but more importantly, looked at the big picture to transform SFL into where it is today. Production facilities in three

countries with the fourth likely to commence manufacturing soon in China; an export market that encompasses over 15 countries and a quality...

2: List three differences between Company , Multi National company and Trans Multi National Company ?

Difference between a global, transnational, international and multinational company

18062007
• • • • Multinational International Transnational Global

We tend to read the following terms and think they refer to any company doing business in another country.

Andrew Hines over at BNET has brief and clear definitions of each of these terms, Get your international business terms right. Each term is distinct and has a specific meaning which define the scope and degree of interaction with their operations outside of their “home” country.

• • • •

International companies are importers and exporters, they have no investment outside of their home country. Multinational companies have investment in other countries, but do not have coordinated product offerings in each country. More focused on adapting their products and service to each individual local market. Global companies have invested and are present in many countries. They market their products through the use of the same coordinated image/brand in all markets. Generally one corporate office that is responsible for global strategy. Emphasis on volume, cost management and efficiency. Transnational companies are much more complex organizations. They have invested in foreign operations, have a central corporate facility but give decision-making, R&D and marketing powers to each individual foreign market. Andrews’s advice is if in doubt about the right term to use, try the generic term“international business”.
A Multinational Corporation (MNC) is a corporation with extensive ties in international operations in more than one foreign country. Examples are General Electric, Exxon, WalMart, Mitsubishi, Daimler Chrysler, etc... A Transnational Corporation is a MNC that operates worldwide without being identified with a national home base. It is said to operate on a border less basis. •

Explain why MNCs have located R & D centres in developing countries?

CASE – 3

(a) Explain why MNCs have located R & D centres in developing countries?

Theories of the globalisation of innovation assume that multinational corporations (MNCs) distribute their innovation activities hierarchically, with advanced technology being confined to the advanced industrialised countries, while more routine low-end innovation is decentralised in a few developing countries. The emergence of about 40 research and development (R&D) centres in Beijing, China, many of which engage in basic and advanced applied research, challenges the above assumption. This article argues that the cheap and abundant highly skilled labour of the latecomer countries is an essential factor in attracting global R&D activities but that this factor is far from being a sufficient condition for the presence there of advanced R&D activities. Through its analysis of the historical transformation of local institutions and of their codevelopment with MNCs, this paper identifies four major knowledge assets that explains why Beijing could attract advanced R&D activities. First, Beijing has developed a strong entrepreneurial culture that creates highly motivated engineers who are eager to learn new knowledge from abroad. Second, the experienced Chinese returnees provide a critical bridging role between Western R&D management knowledge and local engineer culture. Third, the lack of inter-firm trust and networks makes the entrance of MNCs into a 'loose' cluster much easier. Fourth, the large and dynamic Chinese market that desires high-tech products with low prices shortens the product life cycle, forcing MNCs to upgrade their R&D facilities in China. The findings show that the co-development of local institutions with the MNC R&D centres can create locational windows of opportunity for advanced R&D activities to be carried out in unconventional sites outside the Triad countries. This article concludes with the discussion on how Dunning's Ownership, Location and Internalisation (OLI) framework and Mathew's Linkage, Leverage and Learning (LLL) framework might be useful in explaining this new phenomenon.

(b) Mention the areas where R & D activities can easily be decentralised. 2. Decentralized R&D in the contemporary MNE The authors distinguish two different environments in which R&D labs are performing. The first context is characterized by the fact that R&D activities work along with other functions within the subsidiary in order to develop a particular product which would be brought on to the market by the subsidiary. In order to better address local needs, the R&D laboratory uses company-level knowledge and develops its own manufactured goods. The second context reflects a more contemporary view, implying that laboratories shape the company’s core knowledge. The way foreign R&D centers may achieve such a task is by reaping foreign comparative advantages (technological heritage, scientific competences…) and applying the latter in a company-wide strategic research. This can be done by developing key capabilities and specialize in a specific field which will make the lab essential for the company’s growth. Decentralized R&D labs will specialize in an area of competence reflecting the host-country knowledge legacy, and eventually enhance the enrichment of group-wide technology. The key challenge in managing decentralized R&D centers is to maintain and ensure a global coherence and focus of research.
Purpose – The purpose of this paper is to open up the research and development (R&D) organisation by separating product and process innovation and exploring these activities in terms of the structural variable of centralisation versus decentralisation. Design/methodology/approach – Case studies of three multinational firms, representing food and beverage, mining and minerals, and pulp and paper industry. Findings – Dual structures may exist within the R&D organisation, one for product innovation and one for process innovation. Consequently, it is suggested that the conventional notion of R&D organisational design, equating R&D more or less with product innovation, does not present a complete picture for many firms.

Research limitations/implications – Opening up the R&D organisation will help further the understanding link between the organisational structuring of product and process innovation, and the efforts of organisations to develop resources and competitive advantages. Practical implications – The findings have implications for managing the strategy-organizational fit concerning innovation in process industry. Originality/value – The conventional view regarding R&D as a single entity – either centralised or decentralised – does not present a complete picture. This paper clarifies the link between strategic innovation determinants and the organisational configuration of R&D.

CASE -4
VK Ltd a multi-product Company, furnishes you the following data relating to the year 2000. First Half of the year Sales Rs. 45,000 Total Cost Rs. 40,000 Second Half of the year Rs. 50,000 Rs. 43,000

Assuming that there is no change in prices and variable costs and that the fixed expenses are incurred equally in the two half years periods calculate for the year 2000. 1. The Profit Volume ration 2. Fixed Expenses 3. Break-Even Sales 4. Percentage of margin of safety. 5 marks each

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