Classroom Exercises and Projects

Web-Based Exercises and Projects for Internationalizing Business Courses

Tunga Kiyak and S. Tamer Cavusgil

Michigan State University CIBER

29 May 2001

MSU-CIBER Market Potential Indicators for Emerging Markets URL: http://globaledge.msu.edu/ibrd/marketpot.asp Theme: This study uses multiple indicators to derive an overall ranking of foreign market opportunity for U.S. based exporters. It can serve as an excellent tutorial for teaching key macro-economic indicators of foreign market potential. Updated every year by MSU- CIBER, the Market Potential Indicators study includes 23 emerging markets as identified by the Economist magazine. Source: "Measuring The Potential of Emerging Markets: An Indexing Approach," S. Tamer Cavusgil, Business Horizons, January-February 1997, Vol. 40, Number 1, 87-91. Sample Discussion Questions: - What factors are especially useful for determining foreign market potential? - Should these factors be weighed differently for different companies/products/industries? - How would the indicators be modified for a service organization?

Big Mac Index URL: http://www.economist.com/markets/Bigmac/Index.cfm Theme: Each year the Economist magazine publishes a study that uses the Big Mac to compare exchange rates and purchasing power of over 30 countries around the world. It is based on the theory of purchasing-power parity (PPP), the notion that a dollar should buy the same amount in all countries. Comparing actual exchange rates with PPPs indicates whether a currency is under- or overvalued. Sample Discussion Questions: - What are the drawbacks of using raw GNP per capita as an indicator of a country’s consumption capacity? - How useful is the purchasing power parity (GNP per capita adjusted for differences in purchasing power) as an indicator of a country’s consumption capacity? - What additional adjustments would you wish to make to per capita GNP in order to better reflect a country’s capacity to buy and consume? - What are the disadvantages of using just a Big Mac instead of a more representative basket of goods? Fortune Global Most Admired Companies URL: http://www.fortune.com/indexw.jhtml?channel=list.jhtml &list_frag=list_3column_global_most_admired.jhtml&list=1 Theme: Using a large set of indicators this study presents a ranking of major companies worldwide based on their performance conceived broadly. Some of the indicators include quality of management; quality of products and services; innovativeness; long-term investment value; financial soundness; ability to attract, develop, and retain talent; community responsibility; use of corporate assets; and global business acumen. It is always interesting to relate high ranking on this index to various company characteristics such as international involvement. Sample Discussion Questions: - Do the rankings correspond to general expectations? - Do you think the rankings closely reflect or predict the financial performance of a company? - What, if any, is the relationship between the rankings and the degree of participation in international business by a company?

Financial Times World’s Most Respected Companies URL: http://specials.ft.com/wmr2000/ Theme: Same as above. It is also interesting to compare these two similar rankings compiled by two separate organizations. Sample Discussion Questions: - Do the rankings correspond to general expectations? - Do you think the rankings closely reflect or predict the financial performance of a company? - What, if any, is the relationship between the rankings and the degree of participation in international business by a company?

WM Mercer Quality of Life Survey URL: http://www.wmmercer.com/uk/english/resource/resource_news_topic121.html Theme: Part of an annual assessment of quality of life in 215 cities worldwide, this study looks at 39 quality of living criteria which includes political, economic, social and environmental factors, together with personal safety, health, education, entertainment, transport and other public services. This information is used by governments and major companies worldwide to determine appropriate allowances that reflect differences in the quality of living for personnel transferred abroad. Sample Discussion Questions: - How would this information be useful to (a) senior managers; (b) HR managers of multinational corporations? - How would this information be useful for decisions regarding the location of headquarters/manufacturing/research facilities? - Are these rankings related to such macro factors as the degree of industrialization or economic development of a country? Economist Intelligence Unit e-Readiness Rankings URL: http://www.ebusinessforum.com/index.asp?layout=rich_story&doc_id=367&channelid=6 Theme: A new study by the Economist Intelligence Unit looks at the largest 60 economies to measure the degree of each country’s business environment conduciveness to Internet- based commercial opportunities. Sample Discussion Questions: - Are these rankings related to such macro factors as the degree of industrialization or economic development of a country? - Would e-readiness be a good predictor of the country’s economic performance in the long run? - How would a company use this ranking in its overall international market entry strategy?

Transparency International Corruption Perceptions Index URL: http://www.gwdg.de/~uwvw/icr.htm Theme: Based upon a large scale survey of international business executives, this study provides an index of perceived corruption in the commercial sector of a large number of countries. Sample Discussion Questions: - To what extent are perceptions of corruption might damage a country’s reputation as a place to do business? - To what extent is perceived corruption associated with different political systems in place around the world? - Are these rankings related to such macro factors as the degree of industrialization or economic development of a country? - How can a business person make use of this information? How can and how should business people deal with corrupt business practices? If corruption is so wide spread around the world, does this put U.S. businesses at a competitive disadvantage?

IMD World Competitiveness Scoreboard URL: http://www.imd.ch/wcy/ranking/index.cfm Theme: Compiled by the International Institute for Management Development annually, the World Competitiveness Scoreboard uses a combination of macro-economic, political, and social indicators as well as qualitative criteria to rank order countries. Sample Discussion Questions: - How would you characterize the methodology for assessing a country’s overall competitiveness? What refinements would you wish to make to this methodology? - What type of changes is there in the rankings from year to year? How stable are the rankings? What do you think are the deriving factors behind any significant changes? - What are the implications of these rankings for companies doing business globally? World Bank Competitiveness Indicators URL: http://wbln0018.worldbank.org/psd/compete.nsf Theme: Similar to above, but relies only on quantitative data. It is also interesting to compare these two similar rankings compiled by two separate organizations. Sample Discussion Questions: - How would you characterize the methodology for assessing a country’s overall competitiveness? How is it different from the IMD methodology? What refinements would you wish to make to this methodology? - What type of changes is there in the rankings from year to year? How stable are the rankings? What do you think are the deriving factors behind any significant changes? - What are the implications of these rankings for companies doing business globally?

Foreign Policy Magazine Globalization Index URL: http://www.foreignpolicy.com/issue_janfeb_2001/atkearney.html Theme: Conducted together by the Foreign Policy Magazine and A.T. Kearney, this study also aims to quantify the extent of globalization around the world. At the same time, the study tries to assess the impact of globalization on income inequality, democratization, and corruption. Sample Discussion Questions: - Does the degree of globalization imply a higher level of economic, social, or political achievement? - Do the rankings bear any relationship to either the competitiveness rankings or the corruption perception rankings? - What are the implications of these rankings for companies doing business globally?

Heritage Foundation & Wall Street Journal Index of Economic Freedom URL: http://www.heritage.org/index/ Theme: This study is a practical reference guide to the economies of 161 countries, with detailed information about economic policy. It examines the degree to which regulations associated with countries can hinder or enhance GNP growth. Sample Discussion Questions: - To what extent are perceptions of corruption might damage a country’s reputation as a place to do business? - To what extent is perceived corruption associated with different political systems in place around the world? - Are these rankings related to such macro factors as the degree of industrialization or economic development of a country? - What can public policy makers in these countries do in order to facilitate more rapid economic development? - What are the implications of these rankings for companies doing business globally? Freedom House Freedom in the World Survey URL: http://www.freedomhouse.org/research/ Theme: A comparative assessment of the state of political rights and civil liberties in 191 countries. The fact that it is conducted annually makes it possible to monitor the progress and decline of each country over time. In fact, all rankings since 1972 are downloadable as a single Excel spreadsheet. Sample Discussion Questions: - To what extent are perceptions of corruption might damage a country’s reputation as a place to do business? - Are these rankings related to such macro factors as the degree of industrialization or economic development of a country? - What can public policy makers in these countries do in order to facilitate more rapid social and political development? - What are the implications of these rankings for companies doing business globally?

Stat-USA / NTDB URL: http://www.statusa.gov/ Theme: A subscription based service, provided by the U.S. Department of Commerce. The National Trade Data Bank (NTDB) provides access to Country Commercial Guides, Market Research reports, Best Market reports, as well as U.S. import and export statistics. These documents provide great insight into the commercial and economic environment of each country and the opportunities available to businesses in these markets. (Note: Country Commercial Guides are also accessible for free from the State Department: http://www.state.gov/www/about_state/business/com_guides/index.html) Sample Discussion Questions: - How can managers use Country Commercial Guides in the process of planning their international market entry? - Which of these resources would be more useful for: (a) country selection; (b) industry market potential analysis; (c) company sales potential analysis? - Which five markets offer the best opportunity for American medical equipment manufacturers, or the industry of your choice?

MSU-CIBER GlobalEDGE Diagnostic Tools URL: http://globaledge.msu.edu/DiagTools/DiagTools.asp Theme: This subscription-based service provides five diagnostic tools. Each tool takes the user through a set of questions designed to assess a scenario. Best known among these tools is Companies Readiness to Export (CORE). CORE is a self-assessment tool for new to export companies. This decision support system measures a company’s readiness on two dimensions: organization readiness and product readiness. It also generates a list of strengths and weaknesses in the context of exporting. Distributor provides a systematic means for screening and evaluating potential foreign intermediaries. Partner is useful for decision makers interested in qualifying potential equity and non-equity alliance candidates. Freight is a tutorial designed to understand the role of freight forwarders involved in international shipping and it enables the user to compare and contrast candidate intermediary companies. Company Globalization Potential is a diagnostic tool designed for the larger multinational company interested in an overall assessment of their organizational degree of globality. It takes into account factors such as organizational culture, leadership, management routines and processes, and management strategy.