Course website: http://www.chenzitian.net/teaching/MGMT3275/ MGMT3275-001 Friday Discussions Course website: http://www.chenzitian.net/teaching/MGMT3275/

Case background Assuming you are part of the strategic planning team at Uber for its next foreign expansion. Uber has already established its operations in many parts of the world. The current locations: https://www.uber.com/country-list/ After careful examination of the rest of the world where Uber currently does not have active operations, you conclude that Iceland is a highly potential market, but you are not sure. Before you present your plans and suggestions to the C-suite, you want to come up with a 10-20 slides proposal, considering all pros and cons, opportunities and risks. Each week, you sit down with your team to discuss the issues and summarize your weekly discussions into one or two PPT slides. due in three months. In the last week, you will accumulate and synthesize all the slides together into a recommendation for the C-suite.

Weekly #1 What is this company about? What is its main business? Where are its major customers, domestically or globally?

Weekly #2 What are the major competitive advantages (and disadvantages) of this company vis-à-vis the major domestic and global competitors? 1. Discuss what are the top N dimensions that are vital for Uber’s industry, list them below 2. Compare Uber with its local competitors in these N dimensions 3. Circle the areas in which Uber is a leader, and others in which Uber is a laggard Uber Lyft Taxi Public transit Own 1 2 3 4 5 … N

Weekly #3 What are the major firm-specific advantages (FSAs) (and disadvantages FSdAs) of this company vis-à-vis the major domestic and global competitors? Step1: Shortlist the competitive advantages from last week to only FSAs (and FSdAs). Step2: What are the boundaries for each of the FSAs (and FSdAs)? Step3: Present your findings below. Geographic boundedness Demographic boundedness Sociocultural boundedness Financial/economic boundedness Legal/political boundedness Other boundedness FSAs 1 2 3 … N

Weekly #4 What are the top three economies where Uber still has no operations, ranked by 2018 real GDP? Which economy is the BEST based on the fit between its location-specific characteristics and the ideal context boundaries identified from last week’s FSA-boundary chart? Please give a comparison table with evidence to support your conclusion above. See a template below. Geographic boundedness Demographic boundedness Sociocultural boundedness Financial/economic boundedness Legal/political boundedness Other boundedness Uber Economy 1 Economy 2 Economy 3 Best fit

Weekly #5 Compared to Uber home (US), your finally selected target location may still have some disadvantages/misfits (as presented in the table in the previous slide), can you identify a local joint-venture partner in the target that can compensate these misfits? (a valuable source: Mergent). What advantages this target can offer to compensate the location misfits? What advantages you can offer to bring it to the table for a joint-venture negotiation?

Weekly #6 Synthesis of your PPT works for the first half of the semester into a coherent report. Feedback for the first half of the semester Survey by March 1st Suggestions for improvement for the second half of the semester

Target’s regional comparator Weekly #7 Please compare US, your target foreign market (e.g., Iceland), a top comparator in the target region (e.g., Europe) where Uber has already established a subsidiary (e.g., UK) in the following measures: US Target Target’s regional comparator 2018 Heritage Foundation Index: 1) Overall economic freedom 2) Investment freedom 3) Labor freedom 4) Business freedom World Bank Doing Business database: 1) # of procedures and days to start a business 2) % of adults covered by credit bureau 3) Max. # of months of fixed-term labor contracts Hofstede’s cultural dimensions website: 1) Individualism vs. collectivism score 2) Power distance score World Values Survey, use the closest country in the linguistic family if this country is not covered: 1) % of people think work is “very important” in life 2) % of people think family is “very important” in life 3) % of people mentioned “would not like to have immigrants/foreign workers as neighbors” 4) % of people “strongly agree” or “agree” that “men make better business executives than women”

Weekly #8 Analyzing the financial/economic environment differences of your picked global market from the US (or wherever your current major market is) in detail through their effects on the net present value (NPV) of your foreign investments. Scenario (see NPV table) You are making an initial FDI of 140,090 (in local currency) in year 2018 in your target market, including 120,000 (in local currency) depreciable assets. Annual depreciation is 24,000 (in local currency). Salvage value in 2023 (if exit) if 30,000 (in local currency). Your assignment: find and calculate the following indicators Cost of capital in local currency Your target market inflation rate (mean) 2018-2023 Tax rate on profits in your target market Capital gain tax in your target market Spot exchange rate 2018 Net present value in 2018 (in US$) % 1 USD=

Performance Implications Weekly #9 Analyzing the legal/political environment differences of your target market and the home market (USA). 1) List again the enabling factors in the legal/political boundaries of Uber’s FSAs. 2) Compare your target market and the home market (USA) in these factors. Highlight factors (e.g., in red) that show significant differences. Useful databases for legal/political measures: PRS reports; Doing business; WGI; official government websites 3) Discuss briefly how the differences would affect Uber’s performance in the target market, i.e., which factors make it more difficult to replicate Uber’s FSAs in this target market.   USA Germany Performance Implications FSA EDLP Strong negotiation power over suppliers Strong negotiation power over labor Large zoning Efficient distribution and warehousing centers Satellite technology One stop for everything Customer first culture 24-7 2. Free bags 3. Easy credit 4. Bagging purchases 5. Sundown rule No price control No local sourcing regulation No unionization/low employee protection Liberalized land-use Large-area construction allowed No work hour restrictions No plastic regulations Liberalized credit market Low employee protection Regulated price competition Strong unionization/high employee protection Restricted land-use Large-area construction allowed  Work hour restrictions High employee protection Difficult to compete on pricing wars Difficult to have labor cost advantage Difficult to build economy of scale Difficult to build economy of scale for one stop for everything No night shifts after 8pm or Sundays No work after hours

Weekly #10 Analyzing the sociocultural environment differences of your picked global market from the US (or wherever your current major market is) in detail. Part1: Part 2: Predict potential conflicts, and between whom. Power distance Individualism Masculinity Adam Eve Jesus Confucius Icelander/Kuwaiti

Weekly #11 Are there any existing/potential disruptors to your industry? How would they affect your businesses? How do you prepare for the disruptors?

Weekly #12 A synthesis of the second half of the semester: Discuss how the environmental factors and disruptors in the second half of the semester would affect the Diamond model of your business in your target market.

Weekly #13 Synthesis of your PPT works for both halves of the semester into a coherent report.

Week16 – 12/5 Final presentation (10 minutes each team) Grade points of this semester-long project in the class: [1] Team presentation: 12% (6% materials + 6% presentation) [2] The final example (individual): 20% The final example will be open-book, written example in the classroom. All questions are related to the semester-long simulation project. It will consist of 10 single-choice questions (1% each x 10 = 10), and two short-essay questions (5% x 2 = 12).