Assignment 1: Individual Research and Short Paper—Exiting International Markets
When companies exit markets, they need to consider the legal and social aspects in order to avoid complications with stakeholders such as labor, local municipalities, vendors, and taxing authorities. Through this assignment, we will review some of the regulatory issues multinational companies need to consider when exiting foreign markets.
At times, foreign companies realize that staying in a specific country may not be the right course of action. When Mercedes decided to sell its stake in Chrysler in the U.S., both companies had major stakes in exiting so that all stakeholders would benefit. Refer to following Web site to learn more.
- Automotoportal. (2007, April). DaimlerChrysler to sell Chrysler group to Cerberus. Retrieved March 15, 2009, fromhttp://www.automotoportal.com/article/daimlerchrysler-to-sell-chrysler-group-to-cerberus
Select an MNC that decided to exit all or a portion of its investment in the U.S. marketplace as your focus. Using news article archives, research the company’s strategy and write responses to the following questions:
- Who become new stakeholders when companies choose to exit a country?
- What are some of the regulatory matters that need to be addressed?
- Did your selected MNC exit the market entirely or are they still doing business using other venues, including distribution and sales with other product lines? Explain.
- What were some of the MNC’s considerations as they exited these markets?
Write a 4-page report in Word format. Apply current APA standards for writing to your work.
Use the following file naming convention: LastnameFirstInitial_M3_A1.doc.
By Wednesday, May 22, 2013, submit your assignment to the M3: Assignment 1 Dropbox.
Assignment 2: Course Project Task 3—International Market Exit Strategies(Ikea)
Just as companies need to use strategies when entering markets, strategies have to be devised when exiting markets. Exiting a market without a comprehensive strategy can result in increased costs and unintentional, negative publicity. For this part of the group project, we will focus on the issues associated with ceasing or limiting activities in countries and the regulatory concerns that need to be addressed.
Carry out individual research using the University online library resources and Internet resources. Then, in your group, discuss the following factors with your chosen MNC in mind. Use the information generated through this discussion for slides in your individual PowerPoint presentations. You should have 3 to 5 slides covering the regulatory requirements the client MNC might encounter when exiting international markets.
Consider the following for your research and discussion.
- What are some of the political and economic issues a company may face when exiting a specific country? How does the cost to move a company out of a country differ from the cost of continuing operations in that market? Cite specific examples to support your points.
- Identify at least five different local regulators a company would need to satisfy prior to exiting a country. Discuss which of these regulators would hold more authority. Give reasons to support your choice.
- Why do some countries regulate exiting firms more than other countries? What can companies do to anticipate these regulations?
Through the week, actively participate in the discussion analyzing the client MNC’s exit strategy and post your comments to the Discussion Area.
Discussion will be open through Friday, May 24, 2013. The designated scribe for this particular discussion will post a synopsis of discussion points and decisions to this Discussion Area by Saturday, May 25, 2013.
Module 3 Readings
Early in the week, complete the following:
· Read the overview for Module 3
· From the textbook, International business law and its environment, read the following chapters:
· Sales Contracts and Excuses for Nonperformance
· The Documentary Sale and Terms of Trade
· From the Argosy University online library resources, use the following as a supplemental text for topics in this module:
· Mack, C. S. Business strategy for an era of political change. Retrieved fromhttp://www.thecampuscommon.com/library/ezproxy/ticketdemocs.asp?sch=auo&turl=http://site.ebrary.com/lib/argosy/docDetail.action?docID=10005699&p00=business%20strategy%20political%20change (ebrary collection)
· From the Internet, read:
· Collaborative for Development Action, Inc. (2003, February). Corporate engagement project: Exit strategies. Retrieved from http://www.cdainc.com/publications/cep/issuepapers /cepIssuePaperExitStrategies.pdf
· Automotoportal. (2007, April). DaimlerChrysler to sell Chrysler group to Cerberus. Retrieved fromhttp://www.automotoportal.com/article/daimlerchrysler-to-sell-chrysler-group-to-cerberus
· U.S. Department of State. (n.d.). Doing business in international markets. Retrieved fromhttp://www.state.gov/e/eeb/cba/
· HLB International. (n.d.). Doing business in… (booklets). Retrieved from http://www.hlbi.com/DBI_list.asp
· The Economist Intelligence Unit: The Economist. (2006, November). Barriers to entry: Coping with protectionism. Retrieved from http://graphics.eiu.com/files/ad_pdfs/eiu_UKTI_protectionism.pdf