1. ORGANIZATION AND ENVIRONMENT

2. Trouble at Amana
In 1967, Amana introduced the first microwave, and gained 60% of the market. A decade later, its market share declined to 6%. WHY?
Mis-forecast: microwave will SUBSTITUTE for traditional ways of cooking
Misunderstood the market: assumed that the market DOESN’T care about the price
Unprepared for new entrants: Low priced Japanese competitors

3. In 1990s: The Increase of Gas Price
Tesla Motors’s plan:
Produce battery in Thái Lan, transport to England to assembly, and sell the cars in US. But now, they produce battery in California.
GM:
Past several years, SVU and mini-truck were well sold in China. Now, people are looking for more economy cars.

4. How Gaz Price Affect Strategies
Reconsidering global strategy
Global strategy suggests that firms can make different components in different countries.
High gaz price means that transportation would be very expensive
Reconsiderting values of the product
Gaz consumption becomes a crital factor

5. How Current Recession Affect Business
Falling stock and slumping dividends
Credit impairment and bankruptcy
Employee lay-offs and benefit cut
Cut to quality
Reduce consumer access
Small firms would be more vulnerable to the recession

6. 2015: Failing of Oil Price 2014: >$110 June 2015: $60
Jan. 2016: < $30
Who are winners and losers?

7. How Trump Presidency may affect Vietnamese business?
Describe 4 ways Trump Presidency could affect VN businesses, according to the essay?
Can you list some more areas that may be affect by Trump Presidency?

8. Environment Factors
… are those that have impacts on the organizational performance but are not directly controlled by the organization

9. ENVIRONMENT AND STRATEGY
Economic
Technological
Political
Social
Global
Demographic
ORGANIZATIONAL PERFORMANCE

10. Macroenvironment – PEST
Political
Government stability
Taxation policy
Foreign trade regulations
Social welfare policies
Legal framework
Economic
Business cycles
GNP trends
Interest rates
Money supply
Inflation
Unemployment
Disposable income

11. Political Factors: Example

12. Ranking On “Easy To Do Business”
Rank 155 countries
Based on various indicators
Surveys law firms/ organizations

13. Which indicators make up the ranking?
Starting a business
• Procedures, time, cost and minimum capital to open a new business
Dealing with licenses
• Procedures, time and cost of business inspections and licensing (construction industry)
Hiring and firing workers
• Difficulty of hiring index, rigidity of hours of index, difficulty of firing index, hiring cost and firing cost
Registering property
• Procedures, time and cost to register commercial real estate
Getting credit
• Strength of legal rights index, depth of credit information index

14. Which indicators make up the ranking? (con.)
Protecting investors
• Indices on the extent of disclosure, extent of director liability and ease of shareholder suits
Paying taxes
• Number of taxes paid, hours per year spent preparing tax returns and total tax payable as share of gross profit
Trading across borders
• Number of documents, number of signatures and time necessary to export and import
Enforcing contracts
• Procedures, time and cost to enforce a debt contract
Closing a business
• Time and cost to close down a business, and recovery rate

15. IFC Rank Countries on “Easy to do Business”, 2005
1. New Zeala
2. Singapore
3. U.S.A.
7. Hong Kong
10. Japan
20. Thailand
21. Malaysia
27. Korea
35. Taiwan
91. China
99. Vietnam
114. Philippines
115. Indonesia
116. India
2006
1. Singapore
2. New Zealand
3. U.S.A.
5. Hong Kon
11. Japan
18. Thailand
23. Korea
25. Malaysia
47. Taiwan
93. China
104. Vietnam
126. Philippines
134. India
135. Indonesia

16. WB’s Ranking on Corruption 2006
2. New Zealand 71. China
5. Singapore India
16. Hong Kong Philippines
24. Japan Vietnam
35. Taiwan Indonesia
39. Malaysia
47. South Korea
64. Thailand

17. The Political Environment Map
High corruption
Indonesia
Philippines
Vietnam
India
China
Easy
Difficult
Thailand SK
Malaysia
Taiwan
Japan HK
Singapore NZ
Low corruption

18. Macroenvironment – PEST
Socio-cultural
Population demographics
Income distribution
Social mobility
Lifestyle changes
Attitudes to work and leisure
Consumerism
Levels of education
Technological
Government spending on research
Government and industry focus on technological effort
New discoveries /developments
Speed of technology transfer
Rates of obsolescence

19. Video: Fake Products in China
What impacts do counterfeiting products have on: a) Chinese economy (short and long term)? b) Real products (Chinese and other countries”)? Consumers?
Why is it so hard to stop counterfeiting in China (using PEST model)?
What should managers (Chinese and foreign) do to protect their real products under this situation?