Harold decides to drop alcoholic drinks from the restaurant chain ...

[madam-professor]

Harold decides to drop alcoholic drinks from the restaurant chain menu in Saudi Arabia. Which of the following might have led to his decision?
 
  A) Alcoholic drinks are not allowed in Saudi Arabia.
  B) Saudi consumers prefer local alcoholic drinks.
  C) Imported alcoholic drinks are more expensive than local drinks.
  D) Saudi consumers prefer European alcoholic drinks .

Question 2

Describe the three strategic objectives for creating a competitive advantage in international business as proposed by Bartlett and Ghoshal. Provide an example to illustrate each objective.
 
  What will be an ideal response?

[IAPPLET]

Answer to Question 1

A

Answer to Question 2

a. Efficiency-The firm must build efficient international supply chains. Efficiency refers to lowering the costs of the firm's operations and activities on a global scale. MNEs with multiple value chains around the world must pay special attention to how they organize their R&D, manufacturing, supply chain, product, marketing, and customer service activities. For example, automotive companies such as Toyota strive to achieve scale economies by concentrating manufacturing and sourcing activities in a limited number of locations around the world.
b. Flexibility-The firm must develop worldwide flexibility to manage diverse country-specific risks and opportunities. The diversity and volatility of the international environment is a special challenge for managers. Therefore, the firm's ability to tap local resources and exploit local opportunities is critical. For example, managers may opt for contractual relationships with independent suppliers and distributors in one country while engaging in direct investment in another.
c. Learning-The firm must create the ability to learn from international exposure and exploit learning on a worldwide basis. The diversity of the environment presents the internationalizing firm with unique learning opportunities. Even though the firm goes abroad to exploit its unique advantages, such as technology, brand-name, or management capabilities, managers can add to the stock of capabilities by internalizing new knowledge gained from international exposure. Thus, the organization can gain new technical and managerial know-how, new product ideas, R&D capabilities, partnering skills, and survival capabilities in unfamiliar environments. As an example, it was Procter & Gamble's research center in Belgium that developed a special capability in water-softening technology, primarily because the water in Europe contains more mineral than in the United States.