Wendy Jeffus

Harvard Summer School

International Business

Introduction Introductions

– Dr. Wendy Jeffus– Brian Levin

“Beyond the Textbook: What is this class about?”

– Class: World Perspective Course Websites:

– Textbook: www.mhhe.com/hill– Harvard:http://courses.fas.harvard.edu/sum/32268– Beyond the Course: www.wendyjeffus.com

Syllabus– Textbook: International Business by Charles Hill - 7th

*http://isites.harvard.edu/k62285

Info Sheet & Syllabus Handout: Student Info Sheet Handout: Syllabus

– Friday Optional Sessions (exam review, presentation prep, & report feedback)

– Group Projects– Exams

Expectations– Mid-term & Final Exams (Mandatory Attendance)– Group Projects– Beyond the Classroom

No Excuses

http://www.youtube.com/watch?v=obdd31Q9PqA

Group Projects Group Assignments Case Studies

– Prepare a 10 min PowerPoint presentation 1) Summarize the case 2) Relate the case to the chapter 3) Update the case with current events

Final Report – 10 min. 10 pages.

First Assignment (up to 5 points towards final case grade)– 1 slide – 2 minutes (timed) – 3 copies

Course Webpage http://courses.fas.harvard.edu/sum/32268 Syllabus Info Sheet Group Assignments Class Slides

– All slides will be posted after the lecture Read the assigned chapters before class and you’ll be able

to keep up. (We don’t want you to know the “punch line”)

Dan Levin International Entrepreneurship

Wendy Jeffus

Harvard Summer School

Chapter 1: Globalization

The World Is Changing…

My first cell phone… My first video game… My first internet connection… Email – Online Shopping – Social Networking

1983 1994

Source: http://motoinfo.motorola.com/motoinfo/20th_anniversary/docs/timeline.pdfWikipedia.org

Atari (discontinued in ’92) 1984

The Globe is Shrinking…

1500-1840 1850-1930 1950s 1960s

Best average speedof horse-drawn coaches& sailing ships- 10mph

Steam locomotives~ 65mphSteamships~ 36mph

Propeller aircraft~300-400mph

Jet aircraft~500-700mph

Photo source: http://www.masternewmedia.org/images/wealth_network.jpg

Telepresence version 1.0

http://youtube.com/watch?v=rcfNC_x0VvE

Telepresence Magic

Small Businesses Reach Global Customers Parker’s Maple Barn

– Note: the population of Mason, NH was 1,147 at the 2000 census.

Source: www.parkersmaplebarn.com

Consumers are Changing… “Yesterday” “Tomorrow”

Sources: www.fueleconomy.gov, http://coolproductexpo.stanford.edu/NewCarver_Gen3.jpg, http://www.cepro.com/images/uploads/enviro_friendly.jpg

Companies are Reacting to Changehttp://www.fritolay.com/

Global Rivalries

Automobiles, airplanes, earthmoving equipment, & video games.

Ford (U.S.)

Toyota (Japan)

Boeing (U.S.)

Airbus (France)

Caterpillar (U.S.) Komatsu (Japan)

Photo sources: company websites and wikipedia

Sony (Japan)Nintendo (Japan)Microsoft (U.S.)

What is “Globalization”? Globalization is the shift toward a more integrated and

interdependent economy Two components:

– The globalization of markets “National markets” become “global markets”

– The globalization of production Global sourcing

Starbucks: 49 countries

Source: Company websites and annual reports

McDonalds: >100 countriesCitigroup: 98 countries

Globalization of Production

Designed in Germany…

Assembled in Mexico…

…with parts made in the U.S. and Japan

…which come fromKorean steel andMalaysian rubber.

The gas wasbought at a BPservice station…

…which camefrom a well off of the coast ofBenin...

…owned bya French company

…delivered viaa Danish ship.

Globalization of Production

Boeing: 777

Japan: Fuselage, Wings, etc.

Singapore: Doors & Landing Gear

Italy: Wing Flaps

Macroeconomic Trends Reduction of barriers to trade

– WTO (Chapters 6-9) IMF/World Bank (Chapter 11) Changes in communication, information, & transportation

technologies.– What was the average cost of a 3 minute phone call from NY to

London in 1930? $244.65

– Approximately how many people used the Internet in 1990? Less than 1 million

See also: http://www.corp.att.com/history/milestones.html, http://www.internetworldstats.com/stats.htm

Telecommunications is creating a global audience. Transportation is creating a global village… from Buenos Aires to Boston, from Birmingham to Beijing, people watch MTV, wear blue jeans, and listen to iPods...

Paraphrased from International Business 7th edition by Hill, p. 14

Global Managerial Issues Countries are different

– Culture– Economic Development– Politics– Economic Systems– Legal Systems

Differences creates wider range of problems that are more complex Government limits and intervention on trade and investment Currency conversion issues

Who is Stanley Ho? “The King of Gambling” A Hong Kong tycoon who

continues to dominate the Macau market with 17 casinos.

Forbes 701st richest person in 2009.

Sources: The World's Billionaires", Forbes, 8 March 2007.“Macau” Wikipedia, “Betting on growth,” Economist, Jan 25th 2007.

Who is Sheldon Adelson? Forbes 178th richest

person in 2009 (used to be world’s 6th richest).

The Chairman and CEO of Las Vegas Sands (NYSE: LVS)

The Venetian in Macau has 870 tables and 3,400 slot machines in the world's largest gambling hall.

Sources: www.venetianmacao.com, “Macau wow,” Economist, Aug 30th 2007.

Political Risk: The Chinese authorities slowed down visas issued from southern China.

Global Billionaires3. Carlos Slim

(Mexico)4. Ingvar Kamprad

(Sweden)5. Karl/Theo Albrecht

(Germany)6. Mukesh Ambani

(India)7. Lakshmi Mittal (India)8. Amancio Ortega

(Spain)9. Bernard Arnault (France)10. Li Ka-shing (Hong Kong, China)

Carlos Slim Helú

Ingvar Kamprad

Lakshmi Mittal

Bernard Arnault

Amancio Ortega Gaona

Karl/Theo Albrecht

Mukesh AmbaniLi Ka-shing

Billion$ Business Ideas… Italy ($10 billion)

Idea: Make chocolate a part of the morning meal by selling a chocolate hazelnut spread that is delicious with breakfast toast.

U.S. ($5.3 billion)Idea: Put up a bunch of lockers off a highway somewhere. Sell to the masses.

U.S. ($5 billion) Idea: Take a polo shirt. Add a little horse decal. Price at $50. Watch it sell like crazy.

U.S. ($4.4 billion)Idea: Sell books over the Internet--saving customers the enormous hassle of going to a bookstore.

Germany ($1.5 billion x 2)Idea: Sweet, chewy candies in all sorts of shapes.

Source: Forbes, “Why didn’t I think of that?” March 08, 2007.

Billion$ Business Ideas… U.S. ($4.5 billion)

Idea: Create stuffed bean bags shaped like cute animals with precious names. Put out a limited amount, so collectible value skyrockets.

Thailand and Austria ($3.1 billion, $3 billion) Idea: Concoct a super-caffeinated carbonated beverage heavy on the B vitamins. Market to athletes and the party crowd.

Italy ($3 billion) Idea: Make shoes with tiny holes in the sole that release sweat--thereby eliminating stinky feet.

U.K. ($1.6 billion) Idea: Invent upright device that sucks dirt off the floor.

U.S. ($1.1 billion) Idea: Put a coffee shop on every corner of America.

Source: Forbes, “Why didn’t I think of that?” March 08, 2007.

Is Globalization A Good Thing? The Great Globalization Debate (July 20th)

– Bring Your Cameras!

Who Thought of THAT? Beer for Dogs?

Source: http://www.beerfordogs.com/

http://www.youtube.com/watch?v=gKdWfhJityQ

Other Interesting Ideas… “20 Most Important Inventions for the Next 10

Years”– http://images.businessweek.com/ss/09/02/0225_inventions/1.htm

Sustainable Dance Floor– www.sustainabledanceclub.com/index.php?t=project

Innovative Companies

Final Projects What interests you?

– Where would you like to work?– Where would you like to travel?– Where would you like to invest?

www.medical-tourism-colombia.com, wikipedia.orghttp://www.cbc.ca/news/background/healthcare/medicaltourism.html

First Group Assignment Due next class.

– What country do you plan to enter?– What product do you plan to offer?

This should be brief – imagine it is an “Elevator Speech”– 1 slide – 2 minutes (timed) – 3 copies

Suggestions – Have backup projects and countries in mind.– Be willing to change!