PART 1: CASE STUDY

CASE 1: IKEATHE GLOBAL RETAILER

Summary
The case examines the operations and strategy of IKEA, the household goods and home
furnishings retailer. IKEA was established in Sweden in 1943, and now operates 230 stores in
33 countries. IKEAs strategy is the same everywhereselling furniture and household items
that reflect Swedish style at low prices to the global middle class. So far, the formula is a
success. The company generated sales of $17.7 billion in 2005. IKEA relies on a network of
1,300 suppliers located in 53 countries, and while a similar product line is sold everywhere,
the company does adapt to meet the needs of consumers in different markets.

QUESTION 1: How has the globalization of markets benefited IKEA?
QUESTION 2: How has the globalization of production benefited IKEA?
QUESTION 3: What does the IKEA story teach you about the limits of treating the entire
world as a single integrated global market place?

QUESTION 4: What factors drove IKEA to start expanding across national borders?

GROUP 1, 2, 3 & 4


CASE 2: Walmarts Global Expansion
Summary
The closing case describes Walmarts international expansion strategy. Walmart, today the
largest retailer in the world, was a purely domestic company until 1991. When the company
decided to expand into Mexico, critics warned that the company was too American, that its
model would not work in other where markets where infrastructure, consumer tastes, and
preferences vary, and where established retailers already dominated. Walmart went ahead
with its expansion plans anyway, opening a joint venture operation in Mexico with local
retailer Cifera.
QUESTION 1: How does expanding internationally benefit Walmart?

QUESTION 2: What are the risks that Walmart faces when entering other retail markets?
How can these risks be mitigated?

QUESTION 3: Why do you think that Walmart first entered Mexico via a joint venture? Why
did it purchase its Mexican joint venture partner in 1998?

QUESTION 4: What strategy is Walmart pursuinga global strategy, localization strategy,
international strategy, or transnational strategy? Does this strategic choice make sense?
Why?

GROUP 5, 6, 7 & 8





CASE 3: Tesco Goes Global
Summary
The closing case describes Tescos international expansion strategy. Tesco, the British
grocer, has established operations in a number of foreign countries. Typically, the company
seeks underdeveloped markets in developing nations where it can avoid the head-to-head
competition that goes on in more crowded markets, and then enters those markets via joint
venture where the local partner provides knowledge of the market while Tesco provides
retailing expertise. The following questions can be helpful in directing the discussion.

QUESTION 1: Why did Tescos initial international expansion strategy focus on developing
nations?

QUESTION 2: How does Tesco create value in its international operations?

QUESTION 3: In Asia, Tesco has a long history of entering into joint venture agreements
with local partners. What are the benefits of doing this for Tesco? What are the risks? How
are those risks mitigated?

QUESTION 4: In March 2006, Tesco announced that it would enter the United States. This
represents a departure from its historic strategy of focusing on developing nations. Why do
you think Tesco made this decision? How is the U.S. market different from others Tesco has
entered? What are the risks there? How do you think Tesco will do?

GROUP 9, 10, 11 & 12

CASE 4: MicrosoftOutsourcing Xbox Production

Summary
The closing case focuses on Microsoft and the outsourcing of its Xbox production. Xbox was
Microsofts first entry into the video game market, and unlike its other products that included
computer peripherals such as mice, keyboards, and joysticks, Xbox represented a specialized
functional computer in its own right. Microsoft ultimately decided to outsource production of
the Xbox, believing that it did not have the manufacturing and logistics capabilities to make
Xbox itself.

QUESTION 1: What was the strategic advantage to Microsoft of outsourcing Xbox
production to Flextronics?

QUESTION 2: What were the risks associated with outsourcing to Flextronics? Did
Microsoft mitigate these risks? Do you think Microsoft would have been better off making the
Xbox itself?

QUESTION 3: How did Flextronics industrial park strategy enable the company to respond
to national changes in relative factor costs?

QUESTION 4: How important are Web-based information systems to the relationship
between Microsoft and Flextronics? What are the economic advantages of real-time
information flows between Microsoft, Flextronics, and Flextronics own subcontractors?

GROUP 13, 14, 15 & 16

CASE 5: Kodak in Russia

Summary
The closing case describes the approach Kodak took to establish itself as a leader in the
Russian consumer photography market. Kodak entered the Russian market in the early 1990s,
as the country was making its transition from a command economy to a market-driven
economy. At the time, the consumer market for photography was underdeveloped, few
distribution options existed, and the Kodak name was relatively unknown. Today, Russia is
one of Kodaks most promising markets.

QUESTION 1: How did the Russian market differ from markets in developed Western
nations? How were these differences likely to impact upon demand for photographic
products?

QUESTION 2: How did Kodak adjust its marketing mix in Russia to match local
requirements? Do you think this was the right thing to do?

QUESTION 3: Kodaks traditional film business is now under attack from digital
photography (in which Kodak is also a leader). Should Kodak adjust its marketing mix for
digital products to the Russian market? Why?

QUESTION 4: How does expanding internationally benefit Walmart?

GROUP 17, 18, 19 & 20

* CASE STUDIES - CLOSING CASE (refer to your IB text book)

PART 2: COMPANY ANALYSIS

Base on the case study
Report about the companys business: company background, nature of business,
product/service offered, etc.
The companys strengths and weaknesses related to global business activities.
Competitive Advantages
Discuss the competitive advantages of these companies. (For example, some
companies may gain a competitive advantage as a result of access to raw materials,
others may gain an advantage through the use of technology for production and
distribution or as a result of a well-known brand name).
Analysis on existing competitors and their global strategies.
Identify and analyze the opportunities and challenges faced the company in
expanding its business internationally.
Explain how the company overcame various challenges and conquered the overseas
market.
Suggest future strategies/actions that the company can adopt in overseas market - to
ensure long-term sustainability.
(No of pages: case study 8-10 pages, county analysis report 14 15 pages)
Submission Date: 21 May 2014