Global Strategy

  • BoeingA corporate strategy article by Thunderbird students  Amanda Bhatia, David Freeman, David Wilson, Geoffrey Christanday, Jennifer Mousseau and Matthew Larson

    As China’s economy develops, so do the prospective opportunities for foreign firms eager to sell their goods and services to these new Chinese customers.  However, many multinational corporations have already tried and failed – and yet – what makes these MNC’s keep coming back?

    On March 6, 2012, Boeing and COMAC (Commercial Aircraft Corp. of China) announced[i] to the world that they will be joining forces for the first time ever, in creating a “collaboration agreement to partner in areas that will enable commercial aviation industry growth in China and potentially around the world”.  This partnership sounds well intentioned, but could make Boeing, and even Airbus (their current main competitor) nervous as to their future prospects in China and the future global market.  Will Boeing's partnership with COMAC provide Boeing with an opportunity to meet strong aircraft demand forecasts in China in coming years, or instead mean the creation of their own competitor?

  • by R. Dharni, A. Ibanez, T. Phan, J. Mendenhall, and P. Zamorano

    Grupo Televisa SAB’s recent acquisition of a 50% stake in near-bankrupt Mexican wireless company Iusacell has been touted by company management as core in its strategy to become an “integrated media-telecom Company.”  While the deal has been widely panneddue to the high, $1.6 billion valuation for a company in an industry most analysts see as having few synergies with any of the company’s existing businesses, the bigger risk may lie in how the deal impacts Televisa’s successful foray into global markets.

    As the dominant entertainment media company in Mexico, commanding 70% of the television broadcasting market1, Televisa has progressively built a robust global footprint through content licensing agreements, minority ownership stakes in foreign media entities, and content creation and distribution partnerships.  The company has parlayed this global strategy into a market capitalization of over $11 billion2 where it stands alone as the world’s largest Spanish-speaking media company. However, if recent statements in the press are any indication, it appears Televisa does not see its domestic and global success in media as the right trajectory for the company’s future.  Instead, the company is betting heavily on its telecom strategy to drive future growth.

  • By M. Evans, L. Hammes, W. Herberger, B. Berg, T. El Wahsh, D. Rassloff

    Banking in Post-Revolution Egypt Gets Upwardly “Mobile”

    Without mobile phones, the Mubarak regime might still be thriving today. But political reform and social change are not the only ripple effects of widespread mobile usage. Mobile banking stands to create a dramatic new stimulus to the Egyptian economy. In a country where remittances from foreign workers contribute US$9.5 billion annually to the economy (Bloomberg News, 2010) and transfers between relatives within the country are common, one might think that transferring funds would be easy and convenient. Transferring funds should be an accessible service in a banking system that is well regulated and thrives on the competition between 39 banks. But for most Egyptians, these basic, common transactions are far from straightforward.

  • By Kaleena Rivas, Madhavi Rao, Andrew Rivas, Amar Memon, Antonio Pérez Malpica

    Background

    Since their introduction in 1979, mobile phones have been constantly evolving and becoming an integral part of our daily lives. From the first generation of devices based on cellular networks to the introduction of digital technologies like GSM and SMS and all the way to ultra-fast third and fourth generation (4G) networks, mobile phones have become more powerful, have increased their capabilities and have turned into essential devices for consumers around the world.

    According to the International Data Corporation (IDC), in September of 2010 Nokia (Symbian OS) had 40.1% of the worldwide smartphone market share followed by BlackBerry (17.9%), Android (16.3%), and Windows Phone (6.8%). The IDC predicts that by the end of 2011, Android will become the leading OS system with 39.5% of worldwide market share due to their popular royalty-free business model, their partnerships with key global mobile carriers and the popularity of its applications (most of which are free). In order to increase its market share in the smartphone industry, Microsoft must deal with the strategic issue of proving the value of its Windows Phone 7 OS to their ecosystem partners and customers particularly in emerging markets where most of the growth is expected to occur.

  • By Benjamin Steinsieck, Vikash Sharma, Erin Keefer, Matthew Miller, Tala Soubra, Clay McCarter

    Tradition has it that the main gate at Brown University is opened only twice a year; once in the fall to allow new students to enter the campus, and again in the spring to allow graduating students to pass out into the wider world armed with an education from one of the world’s great universities. But is the notion of the leafy, cloistered university outdated?

    On the face of it, many of the world’s most venerable academic institutions haven’t changed much in the last hundred years. But the world certainly has. Technological advances and shifting political climates mean that information and commerce know fewer borders. Today’s college students demand institutions that will prepare them to become residents in this new global community and businesses demand a workforce that is globally intelligent.

  • Nestlé_GF_GL-300dpiBy Alan Bright, Judy Buhrman, Jenni Ellingson, Jon Harrop, Marra Longo, Anu Narayan

    Switzerland-based Nestlé, SA, touts itself “the world's leading Nutrition, Health and Wellness Company.” Their mission, described as "Good Food, Good Life," is to “provide consumers with the best tasting, most nutritious choices in a wide range of food and beverage categories and eating occasions.”[1] However, their size and global ubiquity is also marked with a checkered past of questionable marketing and sourcing practices in the developing world, which has long made them a target of boycotts by human rights watch-groups. In the 1970’s Nestle gained notoriety for its role in the well-known Nestlé baby formula scandal, in which predatory promotion methods that targeted poor mothers were linked to deaths and malnourishment among infants in lesser-developed countries (LDC’s). More recently, Nestlé has come under fire from groups like the International Labor Rights Fund, Global Exchange, and Green America, for its failure to ensure that its commodities, such as cacao, are purchased from suppliers that do not exploit child labor.[2] In spite of a 2005 pledge to eliminate child labor from their supply chain by 2005, Nestlé’s Chairman and former CEO Peter Brabek-Letmathe recently called such a goal “nearly impossible.”[3] Emerging markets play an increasingly important role in Nestlé’s portfolio and global strategy Nestlé’s vulnerability to public relations attacks – and apparent inability to account for all of their global business practices – is due in part one of their biggest strengths as a global corporation: the flexibility and independence they have accorded to their subsidiary operations in emerging markets.

  • Home_brandingUnder Armour (UA) competes in an industry that faces ethical challenges in all operations.  The ethical standards of UA span to all sectors of the business to include the following: product production, manufacturing, operations, and global aspects of the corporation. Yet, UA is leading the way in concurring ethical challenges through successful tactics that make them stand out from competitors.  UA is a market leader, not only in innovation, but in ethical standards, eco-friendly operations, and business practices, throughout the active wear industry.

    Athletic Apparel: A Tainted Industry?

    True to the apparel industry, active wear has not been immune to labor issues as outsourcing to less developed countries has introduced questionable practices and possible human rights violations.  The lack of environmental and human labor regulations has given the industry a suspect reputation and often times a stigma that, “no news is good news” for the industry’s human labor practices.

  • Cisco SystemsBy Executive MBA students Marc Simony, Sherrie Zollinger, Kellie Teelander, Casey Hirschman, Fayda Khalek and Dewan Simon

    What do you do when you have $40 billion in the bank, net profits of $7.7 billion, an average annual unlevered free cash flow of around $9 billion, the world economy in shambles, and you need to continue to grow because stagnation will kill your stock price?

    At Cisco Systems, Inc. (NASDAQ: CSCO) you announce a $10 billion share buyback to protect your stock price, and you try to maximize your sunk costs and IP (pun intended; both Intellectual Property and Internet Protocol). Cisco has a plethora of business units, but most are geared toward supporting packet flow over Cisco’s core business — networking infrastructure. Networking infrastructure, in this case, represents a large portion the sunk costs, because sold gear does not return any post-sale revenue scaled to the use and value it provides the purchaser.

    Cisco doesn’t want to just sell shovels; it wants to be part of the gold rush. The easiest solution would be to attach a packet meter to Cisco’s switches and routers, give them away for free, and charge for their utility. It is unlikely, however, that businesses would buy into this. Option two would be for Cisco to “stuff” the network pipe and exhaust its use, leading to higher online capacity demand, and  enabling Cisco to sell more of its routers, Unified Computing Systems, and cloud-enabling virtualization technology—the full data center stack!

  • First Solar global strategyBy Gregg Gallager, Arnold Jee, David Lembo, Colleen Manley, Eric Moldabayev and Paola Torres

    First Solar (FS) was originally founded as Solar Cells in 1984 by inventor and visionary Harold McMaster. McMaster with the help of Jim Nolan made the switch from amorphous silicon to Cadmium telluride (CdTe). This switch in thin film technology allowed Solar Cells to manufacture moderately efficient (7%) and low-cost thin film cells on a large scale.

    In 1999, Solar Cells was purchased by True North Partners, LLC (an investment company of the Walton Family) and the name was then changed to First Solar. In 2006, FS became a publically traded company and released its IPO on the NASDAQ to become the first “pure play” renewable company listed on the S&P 500. Since its public offering, FS has never looked back as it ranked 10th in the Fortunes Fastest Growing Companies and sixth as the world’s most innovative companies in 2010. Today FS has remained true to its innovative spirit by being an industry leader in the manufacturing of photovoltaic, thin film solar modules worldwide.  As the leader of the solar energy industry, FS has dominated their competition as a result of their innovation in productivity, cost reduction measures, and implementation of environmentally friendly solutions.

  • Cloud ComputingHow will SalesForce.com meet the ever-increasing competitive pressure in the cloud computing market they helped to create?

    By Mohammed Ahmed, Eric Boone, Ilya Gouts, Laurent Monod, Davron Nurbaev, John Perez, Ravi Thotapalli and Detelina Trendafilova

    The vibrant world of enterprise software and cloud computing paradoxically generates larger-than-life executives in its own ranks through managing the business of corporations and monitoring client relationships. Consider Larry Ellison, the billionaire CEO of Oracle. It's no accident that Marc Benioff worked for Ellison for 13 years before founding San Francisco-based SalesForce.com in 1999, a company based on the premise that business software--and maybe all software--was changing from a product to a service. Leaving Oracle was a risk for Benioff, but risk-taking is in keeping with his outsize, jovial personality which brought criticism the first time he stated software was dead.

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