International Management: Culture, Strategy, and Behavior 11th Edition by Fred Luthans Solution man

Why are Russia and Eastern Europe of interest to international managers? Identify and describe some reasons for such interest and also risks associated with doing business in these regions.
Answer: Russia and Eastern Europe are of interest to international managers because they present an opportunity to get in on the “ground floor.” Even though these countries have struggled with the transition to a market economy for several years, MNCs that are willing to take the substantial risks involved with operating in these countries may find substantial rewards in years to come. However, investment in Russia and Eastern Europe may not produce immediate returns. It may be years, perhaps even decades, before some investments become profitable.
Many MNCs have secured a foothold in Asia, and many more are looking to develop business relations there. Why does this region of the world hold such interest for international management? Identify and describe some reasons for such interest.
Answer: Asia has been of interest to MNCs because of the tremendous growth in this region in the last decade. Although the growth has been uneven, the following countries continue to present numerous investment opportunities: Japan; Hong Kong; Taiwan; Singapore; South Korea; and emerging Southeastern Asian countries such as Malaysia, the Philippines, Singapore, Brunei, Thailand, Cambodia, Myanmar, Vietnam, and especially China. A large population base, relatively inexpensive labor, and natural resources have been the important reasons for investments in this region.
Why would MNCs be interested in South America, India, the Middle East and Central Asia, and Africa, the less developed and emerging countries of the world? Would MNCs be better off focusing their efforts on more industrialized regions? Explain.
Answer: Each of these regions has its own characteristics, which may be attractive to certain multinational corporations. Countries in South America have a trading bloc (Mercosur), India has a huge population base and considerable untapped potential, the Middle Eastern countries have enormous oil wealth, and countries of Africa have a tremendous supply of natural resources. All these regions are beset by some significant problems. Multinationals considering investment in the less-developed and emerging countries must carefully weigh the risks and benefits of operating in these regions.
MNCs from emerging markets (India, China, and Brazil) are beginning to challenge the dominance of developed country MNCs. What are some advantages that firms from emerging markets bring to their global business? How might MNCs from North America, Europe, and Japan respond to these challenges?
Answer: Many obstacles are faced by multinationals when attempting to enter emerging markets such as India, China, or Brazil. MNCs must be persistent when dealing with these governments. One response is to help these countries realize that foreign investments have a positive effect on the economy. Another alternative would be to threaten to invest the money in another economy.
Internet Exercise: Global Competition in Fast Food
Websites:
http://www.mcdonalds.com
www.jollibee.com.ph/
http://yum.com/
Suggestions for Using the Exercise
This exercise can be an excellent vehicle to compare the approaches of three international food service companies. Each of the brands discussed in this search has a mission, vision, plan, or philosophy.
McDonald’s: McDonald’s is the leading global food service retailer with more than 34,000 local restaurants serving approximately 69 million people in 118 countries each day. More than 80 percent of McDonald’s restaurants worldwide are owned and operated by independent local men and women. McDonald’s customer-focused plan to win provides a common framework for global business yet allows for local adaptation. Through the execution of initiatives surrounding the five elements of the plan to win (people, products, place, price, and promotion), the company has enhanced the restaurant experience for customers worldwide and grown comparable sales and customer visits in each of the last eight years. This plan, combined with financial discipline, has delivered strong results for its shareholders.
Yum! Brands, Inc.: Yum! Brands, Inc., based in Louisville, Kentucky, has nearly 40,000 restaurants in more than 130 countries and territories. The vision and strategy of Yum! Brands have the following objectives:
    Build leading brands across China in every single category. Drive aggressive international expansion, and build strong brands everywhere.
    Dramatically improve U.S. brand positions, consistency, and returns.
    Drive the industry to gain long-term shareholder and franchisee value.
Jollibee: A dominant market leader in the Philippines, Jollibee has also embarked on an aggressive international expansion plan in the United States, Vietnam, Hong Kong, Saudi Arabia, Qatar, and Brunei, firmly establishing itself as a growing international QSR player. The values followed by Jollibee include customer focus, excellence, respect for the individual, teamwork, a spirit of family and fun, the humility to listen and learn, integrity, and frugality. Its mission includes serving food that tastes good and bringing the joy of eating to everyone.