Strategy Project

Group BRIC Country Strategy Assignment – Part I

Learning Goals of the Team Project

The learning goal of the Project is to provide an opportunity for student teams to learn how to apply the concepts and frameworks of strategic management to recommend the important strategic decision of a real company to make a foreign direct investment (FDI) to acquire or form a joint venture with another company in one of the BRIC (Brazil, Russia, India, and China) countries. In doing so, students will become familiar with the growing importance of the BRIC countries to the twenty first century global economy and also to the long term merger and acquisition opportunities of multinational companies.

BRIC refers to Brazil, Russia, India and China. The term BRIC was created by Jim O’Neil the Chief Economist of Goldman Sachs Investment Bank in 2001 and is now widely used in business and academia to refer to the four countries that are likely to have a profound impact on the global economy and business environment in the twenty first century. As part of the globalization theme of this Strategy Seminar we want you to become familiar with these countries and their potential role in corporate global business strategy.

The Project involves your writing a proposal for a foreign direct investment by a major real company into one of the BRIC countries. This Week 5 Assignment is designed to provide the strategic country/industry comparative analysis of opportunity (market size and market growth) and cultural distance, that will support your prioritization of the BRIC countries to do the foreign direct investment in. In week 6 you will provide strategic country and comparative country risk assessment. In week 7 you will combine the strategic opportunity and risk assessments to make your final country selection and recommend a market entry strategy.

Global and BRIC Industry and Cultural Analysis

Select the industry to research for the Project and research it from the country industry reports that are provided in the Week 5 Content Area and comment on the strategy implications of what you have read.

Selected:
Automotive Industry

Also, select a real U.S. multinational company from this industry to be your hypothetical consulting client, for which you will be making a strategic recommendation for investment into one of the BRIC countries.

Company selected: TESLA

Based upon your assessment of the overall opportunity, as defined by market size and growth for the single data variable that you have determined to use and the Hofstede Cultural Distance Ratings, prioritize the BRIC countries for making an acquisition or joint venture in. Provide reasons for your decision based upon your research and on the various assigned readings so far this semester or from prior semesters (properly cite these).

Note: For this first part of your BRIC Project your country recommendation should be based upon your analysis only of the opportunity (market size and growth data), Cultural Distance and commentary specific to your industry.

To summarize the country comparisons of all of these dimensions, please use the template provided in the Week 5 Module to create a bubble chart.

You will be provided a large amount of country and industry data to get you started, however, additional library research is encouraged.

Use the following outline to structure your Week 5 Paper

International Acquisition Proposal.
I. Strategic Opportunity Assessment and Analysis

A. The structure and trends of the selected industry in the United States
a. Describe a few key issues and trends facing the selected industry in the U.S.

B. The structure and trends of the selected industry in each of the BRIC countries. Describe a few key issues and trends facing the selected industry in each country.

C. The cultural distance of the BRIC countries from the culture of the United States. Use the six Hofstede Cultural Dimensions ratings for the countries.

D. The importance of the BRIC countries to the selected industry.
a. Describe the reasons why companies in the selected industry should be considering a BRIC strategy.

E. Recommendation. Analysis of the data and recommendation for the prioritization of the BRIC countries for your client company’s expansion, based only on the opportunity assessment and the cultural distance assessment.

Opportunity (market size and market growth) Assessment

For each of the BRIC countries plus the United States, use the EIU Country/Industry Reports in the Week 5 Module Area to discuss how your selected industry is doing in each country.

Use the Economist Intelligence Unit (EIU) Reports for each country (in Module 5) to develop country reports discussing your selected industry in each BRIC country and the United States.

Also, you will need to identify three key data variables to be indicators of market size and growth for each country. Choose indicators that are related to the industry that you selected, i.e. number of passenger car registrations for the automotive industry. Put these in a comparative table, like the one below and discuss before then selecting ONE of them to be your main indicator of market opportunity.

Cultural Distance Assessment

Use the Hofstede Cultural Dimensions ratings for each country

HOFSTEDE CULTURAL DIMENSIONS BY COUNTRY

to develop country reports comparing the culture of each BRIC country to that of the United States. Use the following template to assess the cultural dimensions of each country.

HOFSTEDE CULTURAL DIMENSIONS COUNTRY REPORT

HOFSTEDE CULTURAL DIMENSIONS COMPARATIVE DISTANCE FROM THE UNITED STATES (NOTE: CALCULATE THE DIFFERENCE OF EACH DIMENSION FROM THE UNITED STATES (IGNORE PLUS OR MINUS)