Questions for Discussion
1. For those of us that have traveled internationally, one of the most common symbols of U.S. business operation is the ‘American based fast food’ service providers such as McDonalds, Burger King, Starbucks, etc. Using the content of Chapter 12, what would you suggests is the more important research data or analysis that is used by a McDonald or BK in their decision to conduct business in a specific country/economy.
Although market potential is an obviously important factor when a large fast-food chain like McDonald’s or Burger King is investigating a new region, logistics might be the most important factor for them. McDonald’s sources all of the produce for its hamburgers locally in each region it operates. This means the market must have the logistical capability to produce and transport the necessary ingredients to each restaurant. In the US, especially in Texas, this may be something that we take for granted. Once you get further away from the food source, the difficulty of procuring fresh fruits and vegetables, not to mention meat, is extremely problematic.
2. Compare and contrast the use of primary market research vs. secondary market research by firms attempting to decide if international operation is right opportunity for the firm.
Despite its name, secondary market research is likely the first market research a firm will perform when investigating a new market opportunity. Secondary research is relatively inexpensive and can provide a wide range of broad information about the market. Secondary research may help a firm disqualify a market before more expensive primary market research is conducted. Primary market research is generally more expensive and may require the use of a market research firm. Additionally, it can be expected that the final step of primary market research is for the firm to actually visit the target market and get a final idea of what the market really looks like.
3. After you have listen/read our media story for Lesson/chapter 12, you will have more information about ‘living and working’ abroad. Our Chapter 12 material focuses on assessing and analyzing international opportunities—let me ask that you “put the two topic areas together.” In other words, what are the ‘living and working’ issues that should be considered by a U.S. corporation as it attempts to decide if international operations is right for the firm. Identify two or three with a brief explanation.
When looking to begin operations in another country, US firms should first decide if they are going to need to move some of their US workforce to the new location. If they must, it is important that they take social conditions into account before making the final determination. When living overseas, US employees will be interested in the cost of living. During my time in Australia, I was constantly agitated by the expense of living. In general, everything was much more expensive than Texas. Culture is another important area. Australia is a perfect example of a place where Americans can fit in easily and only need to pick up a few idioms before fitting in well. If an employee must learn another language in order to operate effectively, this is going to limit the pool of available employees. Finally, if this is expected to be a long-term assignment, the suitability of raising a family may come into play. My father-in-law works most of the year on site in Kazakhstan. He lives in a small dorm room, and families are not permitted. Obviously, this would be problematic if he had small children and needed to be at home.
Wild, J. & Wild, K. (2013). International Business: The Challenges of Globalization. (7th ed.). Upper Saddle River, NJ: Pearson.