1. OLI: O vs. L DR. VICTOR Z. CHEN UNC CHARLOTTE

2. Tonight  1. First team collaboration: go back to Wal-Mart in Germany and discuss what you would have done differently.  2. Circle time  3. New case: Tasting and selling Marmite  Quiz3

3. Quiz #2 1. Which of the following statements about Wal-Mart’s ownership advantage for FDI is CORRECT?  [A] Everyday Low Prices (EDLP) policy is an ownership advantage for Wal-Mart in Germany, because it is non- location-bound and can be used in the German customer- and labor markets.  [B] Super-large market construction in suburban areas is an ownership advantage for Wal-Mart in Germany’s stringent zoning regulations.  [C] Retail Link satellite/computer system is an ownership advantage for Wal-Mart in Germany as long as such technologies can be supported by local IT infrastructures.  [D] Friendly services such as bagging purchases and low-bar for credit cards are attractive to German customers. 2. Which of the following competitive advantages of Wal-Mart can be MOST easily used in Germany?  [A] 24-7 convenience. [B] Global logistics. [C] A complete range of products and services in store. [D] Cheap credit. 3. Which of the following entry modes would have MOST likely succeeded in Wal-Mart’s case in Germany?  [A] Acquisition of a large German retailer such as Metro, Aldi, and Rewe.  [B] Joint venture with a large Germany retailer such as Metro, Aldi, and Rewe.  [C] The same entry mode as Wal-Mart actually used, but hiring more unionized German workers, limiting store hours, reducing the choice range of produces.  [D] The same entry mode as Wal-Mart actually used, but building smaller convenient stores in urban areas.  Please send your answers to my graduate assistant Matthew Ashman (mashman91@gmail.com) and cc me (zchen23@uncc.edu) by 8pm.

4. Finding a good fit between locational advantages and ownership (firm-specific) advantages Brand advantages Control of resources Control of markets Management advantages Knowledge and experience advantages O Advantages Basic needs and potential Financial/economic conditions Legal/political forces Socio/cultural forces Competitive environments L advantages

5. Thought experiment 2 Change local institutions  Socio/cultural:  Languages  Norms, customs, social habits  Values/beliefs  Legal/political:  Governance  Government  Government practices  Economic/financial:  E.g., Open market  E.g., Strong shareholder protection  Source: Williamson, Oliver E. "The new institutional economics: taking stock, looking ahead." Journal of economic literature (2000): 595-613 Oliver E. Williamson 2010 Nobel Laureate in Economics Theocracy: e.g., Holy See, Islamic states, Iran, Tibetan Government in Exile, and states with state religions (Vatican City) Some new economic norms require regulatory change, e.g., lift of tariff, legal protection of minority shareholders

6. Marmite

7.  It was invented by accident.  Marmite won two world wars.  Marmite is French, pronounced Marmeet.  Jail staff are not keen on it.  There’s more than one Marmite.  Marmite doesn’t just come in jars.  Marmite used to be made in London.  A sculpture has been built in Marmite’s honour.  Marmite may keep away mosquitoes.  It’s good for you.  33% of Brits love it with 33% hate it. Britney Spears is a fan.

8. International market assessment  An evaluation of the goods and services that the MNE can sell in the global marketplace. 1. Basic need and potential 2. Financial and economic conditions 3. Political and legal forces 4. Socio-cultural forces 5. Competitive environment 6. Final selection

9. Quiz #3 1. Which of the following statements about Marmite’s ownership advantage for FDI is CORRECT?  [A] Marmite has a very uniquely likeable taste for a certain group of population.  [B] Marmite enjoys country-specific advantage such as UK’s reputation for foods.  [C] Marmite is healthy and nutritious.  [D] Marmite has a widely accepted brand awareness through its marketing and advertising spending. 2. Which of the following competitive advantages of Marmite can be MOST easily used in India?  [A] Taste. [B] Brand. [C] Health/Nutrition. [D] British colonial ties. 3. Which of the following entry modes would have MOST likely succeeded in Marmite’s case in India?  [A] Same product, same marketing message.  [B] Modified product, same marketing message.  [C] Same product, modified marketing message.  [D] Modified product, modified marketing message.  Please send your answers to my graduate assistant Matthew Ashman (mashman91@gmail.com) and cc me (zchen23@uncc.edu) by 8pm.

10. Contact Victor Z. Chen Belk College of Business UNC Charlotte +1 (704) 687-7645 zchen23@uncc.edu www.ChenZitian.com