Group project - DUE-5/7

Group Strategy Project (Part 1): Global Industry Analysis

Week 5 Group Strategy Assignment

Company Selected: Nestle (Client’s home country: Switzerland)
Company’s Industry: Food and Beverage.
Countries selected: Italy, Austria, Norway, and Costa Rica

Project Overview

The Group Strategy Project of this seminar involves writing a proposal for a foreign direct investment by a major real company into a foreign country. This Week 5 Assignment is designed to provide the global industry comparative analysis that will support your decision as to which industry (Week 5) / country (Week 6) / firm (Week 7) in which to make the foreign direct investment. Thus Week 5 focuses on industry choice and a preliminary country choice. In Weeks 6 and 7 you will continue your research and analysis by performing a more detailed country choice and in Week 7, a partner firm choice.

NOTE: In each part of the Group Strategy Project, use some of the strategic management frameworks (if applicable) you have been learning about in this course or in your prior courses. These include:

• Industry structural characteristics rationale

• Competitive advantage rationale

• Resource Based View of the firm rationale

• Value Chain rationale

• Vertical integration rationale

• Horizontal integration rationale

• Financial rationale

• Political, Economic, Social, Technological, Environmental, and Legal Factors

General Instructions

Week 5 Overview & Deliverables

Chartering/organizing the project - The Part 1 paper is designed to answer three questions:

• What are the strategic growth needs of your clients’ business?

• What is the nature of the industry which allows you to grow and achieve competitive advantage?

• What markets (countries) are most attractive in achieving the growth goals?

More details on each element below. Note: earlier student teams have found it effective to do preliminary research around team interests and sources of data for the three phases before selecting a company and industry.

1. Your group should select an industry to analyze for your Group Strategy Project.

2. Your group should select a real multinational company from this industry to be your hypothetical consulting client, for which you will be making a strategic recommendation for investment into a foreign country.

3. Then, select 4 prospective countries and your client’s home country. Please post which industry, client company and countries you have selected into your Group Discussion Area as early in the week as possible. 

Summary/overview

For this first part of your Group Strategy Project your country recommendation should be based upon your analysis only of the market size and growth data and commentary specific to your industry for each country.

Based upon your market size, growth research and overall industry profit analysis, select a preliminary country that your team will be looking at to make an acquisition or joint venture in. Provide reasons for your decision based upon your research and on the various assigned readings so far this semester or from prior semesters (properly cite these).

In Week 6 you will be doing an expanded, more detailed, country comparison using a PESTEL analysis of risk versus opportunity which may result in a change in your recommendation. NOTE: A weighted attribute comparative analysis is helpful in comparing alternatives across multiple attributes and may be used in all three phases of the project.

The following is your Week 5 outline.

I. Description of your client company’s strategic growth objectives. Develop criteria that will allow you to compare markets (countries) and partners (acquisition or joint venture) Kenricka

II. Description of the growth and profit potential of your client’s industry. Shamekia

A. The home country structure and environment of the selected industry.

B. The global structure and environment of the selected industry.

III. Analysis of international markets

Identify 4 international markets (countries) that are attractive in meeting your client company’s growth goals. When selecting your markets (countries), your selections should provide new product and/or innovation market opportunity. Create a comparative benefit analysis based on the criteria of client need and the overall market (country) comparison questions below: 

1. What is the comparative market size of the industry in each of the 4 countries by 2020? (Hint: Use something like the number of passenger car registrations to size the automobile industry, other metrics for other industries) and how might that impact your decision on prioritizing the countries in your global business strategy? Alejandra

2. What is the comparative growth, both in absolute terms and in percentage terms from 2015 to 2020 for the industry you have selected in each of the 4 countries and how might that impact your decision on prioritizing the countries in your global business strategy? Sandra

3. What is the profitability of the industry based on the level of competition? Who are some of the key company players (both multinational and local) in your selected industry in each of the 4 countries and how competitive is the industry in each country, and how might that impact your decision on prioritizing the countries in your global business strategy? Domonique

IV. Provide a recommendation of which market (country) you are recommending and provide the reasons based on your comparative benefit analysis. Kenricka

Readings

Risvi, Q. (2010). Going international: A practical, comprehensive template for establishing a footprint in foreign markets. Ivey Business Journal, 74(3), 2. (UMUC Library)

Huei-Ting, T. & Eisingerich, A.B. (2010). Internationalization strategies of emerging markets firms. California Management Review, 53(1), 114-135. (UMUC Library)

Guillen, M. F., & Garcia-Canal, E. (2011). The rise of emerging market multinationals. IESE Insight, (10), 13-19. (UMUC Library)

Schmitz, A. (Trans.). 2012. Strategy and international business.

Multimedia

Khanna, T. (Speaker). (2005). HarvardFSS: Scope and global strategy.  [Video podcast]. (UMUC Library)

Data Tools

Global Edge industry insight reports – This link takes you to the Global Edge short industry reports, which gives insight into industry structure.

MBA Reference Guides

Kogut, B. (2006). International management and strategy. In A. Pettigrew, H. Thomas & R. Whittington Handbook of strategy and management (pp. 261-266). London: SAGE Publications Ltd. Doi: 10.4135/9781848608313.n12