leadership case study (easy) ( need 4 paraphrase)

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Hi, I need someone do this easy case study for me and give another 3 parphrase for it. so it's gona be 4 cases with the 3 paraphrasing



The Hyundai case can be found on pp. 100-115. The FIVE (5) case questions can be found on page 115.


Hyundai Elantra

Grading Rubric for QuestionsOn Late Submissions: If the assignment is turned in late, which means during class or after class, the questions will be graded according to the rubric below and then half of the points will be subtracted from the grade. For example, if you would have earned 3/3 on the questions; once the assignment is late, your score will be 1.5/3.
0 pointsNot answered at all and if answered, answered with a phrase or a couple words.
0.25 pointsThe question is not completely answered. Minimal answer with one complete sentence. Does not state complete facts from the case or only states beliefs.
0.5 pointsOnly a part of the question is answered. This part is a good answer which uses facts from the case as well as an informed opinion based on those facts.
0.75 points

1.Part of the question is completely answered. This part is a good answer which uses facts from the case as well as an informed opinion based on those facts.

2.The other part of the question is not completely answered. The answer is minimal with one complete sentence. This part of the answer does not state complete facts from the case and/or only states unsupported belief or opinion.

1.0 point

In order to receive full credit for this question, both parts of the question must be completely answered with facts from the case as well as a logical opinion based on those facts. In addition, if outside information from the Net is researched and used, this is an added benefit to create a superlative answer.



1. What are the roles of comparative and competitive advantages in

Hyundai’s success? Illustrate your

answers by providing specific

examples of natural and acquired

advantages that Hyun

dai employs to

succeed in the global car industry.

2. In terms of factor proportions

theory, what a

bundant factors does

Hyundai leverage in its worldwide

operations? Provi

de examples and

explain how Hyundai exemplifie

s the theory. In what ways does

Hyundai’s success contradict the theory? Justify your answer.

3. Discuss Hyundai and its position in t

he global car industry in terms of

the determinants of national competiti

ve advantage. What is the role of

demand conditions; factor conditions;

related and supporting industries;

and firm strategy, structure, and ri

valry to Hyundai’s international

success?

4. The Korean government has

been instrumental to Hyundai’s

success. In terms of national indus

trial policy, what has the government

done to support Hyundai? What can the government do to encourage

future success at Hyundai? What can

the government in your country

do to support development or mai

ntenance of a strong auto industry?

5. Consistent with Dunning’s Eclectic Paradigm, describe the

ownership-specific advantages, location-specific advantages,

and internalization advantages hel

d by Hyundai. Which of these

advantages do you believe has been mo

st instrumental to the firm’s

success? Justify your answer.

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Copyright © 2014 Pearson Education Inc. Chapter 6 International Business: The New Realities, 3rd Edition by Cavusgil, Knight, and Riesenberger Copyright © 2014 Pearson Education Inc. Learning Objectives 1. Theories of international trade and investment 2. Why do nations trade? 3. How can nations enhance their competitive advantage? 4. Why and how do firms internationalize? 5. How can internationalizing firms gain and sustain competitive advantage? Copyright © 2014 Pearson Education Inc. Theories of International Trade and Investment Copyright © 2014 Pearson Education Inc. Theories of International Trade and Investment Copyright © 2014 Pearson Education Inc. Theories of International Trade and Investment Copyright © 2014 Pearson Education Inc. Mercantilism and Neomercantilism • Mercantilism: A belief popular in the 16th century that national prosperity results from maximizing exports and minimizing imports. • Today, some argue for neomercantilism --- the idea that the nation should run a trade surplus. • Supporters of neomercantilism include: ▪ Labor unions (who want to protect domestic jobs), ▪ Farmers (who want to keep crop prices high), and ▪ Some manufacturers (that rely on exports). But is neomercantilism best for all? Copyright © 2014 Pearson Education Inc. Free Trade The absence of restrictions to the flow of goods and services among nations. • Free trade is usually best because it leads to: ▪ More and better choices for consumers and firms ▪ Lower prices of goods for consumers and firms ▪ Higher profits and better worker wages (because imported input goods are usually cheaper) ▪ Higher living standards for consumers (because their costs are lower). ▪ Greater prosperity in poor countries. Copyright © 2014 Pearson Education Inc. Comparative Advantage • The foundation concept of international trade that answers the question of how nations can achieve and sustain economic success and prosperity. • It refers to the superior features of a country that provide it with unique benefits in global competition. • Comparative advantages are derived either from natural endowments or from deliberate national policies. Copyright © 2014 Pearson Education Inc. Examples of National Comparative Advantage • France has a climate and soil superior for producing wine. • Saudi Arabia has a natural abundance of oil for the production of petroleum products. • Over time, Japan has acquired a superior base of knowledge and experience for producing cars. • Over time, India has acquired a superior base of IT workers for producing computer software. What are the comparative advantages in your country? Copyright © 2014 Pearson Education Inc. Competitive Advantage • A foundation concept that explains how individual firms gain and maintain distinctive competencies, relative to competitors, that lead to superior performance. • It refers to the distinctive assets, competencies, and capabilities that are developed or acquired by the firm. • The collective competitive advantages held by the firms in a nation are the basis for the competitive advantages of the nation at large. Copyright © 2014 Pearson Education Inc. Examples of Firm Competitive Advantage • Dell’s prowess in the management of its global supply chain • Samsung’s technological leadership in flat-panel televisions • Cadbury’s capabilities in international marketing and distribution • Herman Miller’s design strengths in office furniture (e.g., Aeron chairs) Copyright © 2014 Pearson Education Inc. Absolute Advantage Principle A country should produce only those products in which it has absolute advantage or can produce using fewer resources than another country (Labor Cost in Days of Production for One Ton) Copyright © 2014 Pearson Education Inc. France Germany 4 5 6 7 A 1 One Ton of Cloth Wheat France 6 8 Germany 10 4 B 2 3 Cloth 8 Labor days 9 10 Example of Absolute Advantage 1 2 3 4 5 6 7 Wheat Copyright © 2014 Pearson Education Inc. 8 9 10 Labor days Adam Smith (1723-1790) Copyright © 2014 Pearson Education Inc. Comparative Advantage Principle It is beneficial for two countries to trade even if one has absolute advantage in the production of all products; what matters is not the absolute cost of production but the relative efficiency with which it can produce the product (Labor Cost in Days of Production for One Ton) Copyright © 2014 Pearson Education Inc. France Germany 4 5 6 7 B 1 One Ton of Cloth Wheat France 8 6 Germany 2 4 A 2 3 Cloth 8 Labor days 9 10 Example of Comparative Advantage 1 2 3 4 5 6 7 Wheat Copyright © 2014 Pearson Education Inc. 8 9 10 Labor days Comparative Advantage Principle (cont’d) “Two men can make both shoes and hats, and one is superior to the other in both employments, but in making hats he can only exceed his competitor by one fifth or 20 percent, and in making shoes he can excel him by one third or 33 percent; Will it not be for the interest of both that the superior man should employ himself exclusively in making shoes and the inferior man in making hats?” David Ricardo, 1817 Copyright © 2014 Pearson Education Inc. Comparative Advantage Principle (cont’d) • While Germany can make both items cheaper than France, it is still beneficial for Germany to trade with France. • The key is the ratio of production costs. In the exhibit, Germany is comparatively more efficient at producing cloth than wheat: it can produce three times as much cloth as France (30/10), but only two times as much wheat (40/20). • Germany should specialize in producing cloth and import all the wheat it needs from France. France should specialize in producing wheat and import all its cloth from Germany. • Each country benefits by specializing in the product in which it has a comparative advantage and importing the other product. Copyright © 2014 Pearson Education Inc. Comparative Advantage Principle (cont’d) • The principle applies to all goods. It reveals how countries use scarce resources more efficiently. Example •Arguably, no country is better than Japan at making cars and cell phones. But because Japan is especially good at making cars, it concentrates its resources on making them. •Other countries, such as China and Finland, focus on making cell phones. •In this way, Japan makes maximal use of its resources, and the world gets great cars. Copyright © 2014 Pearson Education Inc. Comparative Advantage Principle (cont’d) Copyright © 2014 Pearson Education Inc. Limitations of Early Trade Theories • Fail to account for international transportation costs. • Governments distort normal trade by selectively imposing protectionism (e.g., tariffs) or investing in certain industries (e.g., via subsidies). • Services: Some cannot be traded; others can be traded freely via the Internet or global telephony. • For many firms, scale economies and superior business strategies provide efficiencies and other advantages. Early trade theories failed to account for this. (E.g., Japan lacks comparative advantages, but its firms succeeded anyway, via superior strategies.) Copyright © 2014 Pearson Education Inc. Factor Proportions Theory • Also known as the factor endowments theory, it argues that each country should produce and export products that intensively use relatively abundant factors of production and import goods that intensively use relatively scarce factors of production. Copyright © 2014 Pearson Education Inc. Factor Proportions Theory • Also known as the factor endowments theory, it argues that each country should produce and export products that intensively use relatively abundant factors of production and import goods that intensively use relatively scarce factors of production. • However, the Leontief Paradox revealed that countries can successfully export products that use less abundant resources (e.g., the U.S. often exports labor-intensive goods). Implies that international trade is complex and cannot be fully explained by a single theory. Copyright © 2014 Pearson Education Inc. International Product Life Cycle Theory • Each product and its associated manufacturing technologies go through three stages of evolution: introduction, maturity, and standardization. • In the introduction stage, the inventor country enjoys a monopoly both in manufacturing and exports. Example: The television set. Copyright © 2014 Pearson Education Inc. International Product life Cycle Theory (cont’d) • Each product and its associated manufacturing technologies go through three stages of evolution: introduction, maturity, and standardization. • In the maturity stage, the product’s manufacturing becomes relatively standardized; other countries start producing and exporting the product. Copyright © 2014 Pearson Education Inc. International Product life Cycle Theory (cont’d) • Each product and its associated manufacturing technologies go through three stages of evolution: introduction, maturity, and standardization. • In the standardization stage, manufacturing ceases in the original innovator country, which then becomes a net importer of the product. Today under globalization, for many products, the cycle occurs quickly. Copyright © 2014 Pearson Education Inc. New Trade Theory • Argues that economies of scale are an important factor in some industries for superior international performance, even in the absence of superior comparative advantages. Some industries succeed best as their volume of production increases. Example The commercial aircraft industry has very high fixed costs that necessitate high-volume sales to achieve profitability. Copyright © 2014 Pearson Education Inc. Comparative vs. Competitive Advantage Copyright © 2014 Pearson Education Inc. Critical Role of Innovation in National Economic Success • Innovation is a key source of competitive advantage. • The firm innovates in four major ways. It can develop: (1) A new product or improve an existing product (2) New ways of manufacturing (3) New ways of marketing (4) New ways of organizing company operations. • Many innovative firms in a nation leads to national competitive advantage Copyright © 2014 Pearson Education Inc. Critical Role of Productivity in National Economic Success • Productivity is the value of the output produced by a unit of labor or capital. • It is a key source of competitive advantage for firms. • The greater the productivity of the firm, the more efficiently it uses its resources. • The greater the aggregate productivity of the firms in a nation, the more efficiently the nation uses its resources. • Aggregate productivity is a key determinant of the nation’s standard of living. Copyright © 2014 Pearson Education Inc. Productivity Levels in Selected Countries (Output per hour in manufacturing, 1990–2010; Indices, where 2002=100) Copyright © 2014 Pearson Education Inc. Michael Porter’s Diamond Model: Sources of National Competitive Advantage Copyright © 2014 Pearson Education Inc. Diamond Model Sources of National Competitive Advantage (cont’d) • Factor conditions – Quality and quantity of labor, natural resources, capital, technology, know-how, entrepreneurship, and other factors of production. Example An abundance of cost-effective and well-educated workers give China a competitive advantage in the production of laptop computers. Copyright © 2014 Pearson Education Inc. Diamond Model Sources of National Competitive Advantage (cont’d) • Related and supporting industries – the presence of suppliers, competitors, and complementary firms that excel within a given industry. Example The Silicon Valley in California is a great place to launch a computer software firm because it is home to thousands of knowledgeable firms and workers in the software industry. Copyright © 2014 Pearson Education Inc. Diamond Model Sources of National Competitive Advantage (cont’d) • Demand conditions at home – the strengths and sophistication of customer demand. Example Japan is a densely populated, hot, and humid country with very demanding consumers. These conditions led Japan to become one of the leading producers of superior, compact air conditioners. Copyright © 2014 Pearson Education Inc. Diamond Model Sources of National Competitive Advantage (cont’d) • Firm strategy, structure, and rivalry – The nature of domestic rivalry, and conditions that determine how a nation’s firms are created, organized, and managed. Example Italy has many top firms in design industries such as textiles, furniture, lighting, and fashion. Vigorous competitive rivalry puts these firms under constant pressure to innovate, which has propelled Italy to a leading position in design, worldwide. Copyright © 2014 Pearson Education Inc. Industrial Cluster • A concentration of suppliers and supporting firms from the same industry located within the same geographic area. Similar to Porter’s Related and Supporting Industries. • A strong cluster can serve as an export platform for the nation. Examples Silicon Valley; pharmaceutical cluster in Switzerland; footwear industry in Pusan, South Korea; IT industry in Bangalore, India; fashion cluster in northern Italy; and Silicon Valley North near Ottawa, Canada. Copyright © 2014 Pearson Education Inc. National Industrial Policy • A proactive economic development plan employed by the government to nurture or support promising industry sectors with potential for regional or global dominance. Initiatives can include: ▪ Tax incentives ▪ Monetary and fiscal policies ▪ Rigorous educational systems ▪ Investments in national infrastructure ▪ Strong legal and regulatory systems Copyright © 2014 Pearson Education Inc. Examples of National Industrial Policy • Vietnam’s government in the 1990s privatized state enterprises and modernized the economy, emphasizing competitive, export-driven industries. Vietnam became one of the fastest-growing economies, averaging around 8 percent annual GDP growth. • Singapore adopted probusiness, proinvestment, export-oriented policies, combined with statedirected investments in strategic corporations. The approach stimulated economic growth that averaged 8 percent annually from 1960 to 1999. Copyright © 2014 Pearson Education Inc. Examples of National Industrial Policy (cont’d) • The Czech government in the 1990s created a business-friendly legal and regulatory environment. The country privatized state-owned companies. Government FDI incentives attracted numerous MNEs, such as Daewoo, ING, Siemens, and Toyota. • New Zealand’s government, starting in 1984, transformed the country from an agrarian, protectionist, regulated economy to an industrialized, free-market economy that today competes globally. Copyright © 2014 Pearson Education Inc. Transformation of New Zealand’s Economy, 1992 to 2012 Statistic New Zealand in 1992 New Zealand in 2012 GDP per capita 51% of the G7 average 89% of the G7 average Unemployment rate 9.8% 5.6% National debt 89% of the nation’s GDP 30% of the nation’s GDP New Zealand’s success resulted from: • Implemented various pro-business policies – fiscal, monetary, tax; investment in education • Emphasized high-value industries, such as IT and pharmaceuticals, that greatly grew GDP and reduced unemployment. Copyright © 2014 Pearson Education Inc. New Zealand (cont’d) • Government-controlled wages, prices, and interest rates were freed and allowed to fluctuate with market forces. • The banking sector was liberalized, foreign exchange controls were eliminated, and the New Zealand dollar was allowed to float according to market forces. • Most trade barriers were removed, and New Zealand joined several free trade agreements. • Agricultural and other subsidies were eliminated. • The government worked earnestly with labor unions to reduce wage inflation, helping maintain jobs in New Zealand and minimizing outsourcing. Copyright © 2014 Pearson Education Inc. New Zealand (cont’d) • The government initiated programs to encourage development of a knowledge economy. New Zealanders continuously upgraded skills and knowledge, providing a supply of scientists, engineers, and trained managers. • Personal and corporate income tax rates were cut. The tax base was diversified to stabilize government revenues. This helped foster entrepreneurship, boost consumer spending, and attract FDI into New Zealand. • The government cut spending and borrowing, leading to lower interest rates and stimulating the economy. • State-owned enterprises – such as the national airline, telecom, and other utilities – were privatized. Copyright © 2014 Pearson Education Inc. Stages in Company Internationalization Domestic Focus Copyright © 2014 Pearson Education Inc. Stages in Company Internationalization Domestic Focus Pre-export Stage Copyright © 2014 Pearson Education Inc. Stages in Company Internationalization Domestic Focus Pre-export Stage Experimental Involvement Copyright © 2014 Pearson Education Inc. Stages in Company Internationalization Domestic Focus Pre-export Stage Experimental Involvement Active Involvement Copyright © 2014 Pearson Education Inc. Stages in Company Internationalization Domestic Focus Pre-export Stage Experimental Involvement Active Involvement Committed Involvement Copyright © 2014 Pearson Education Inc. Stock of Inward FDI: Leading FDI Destinations (Billions of U.S. dollars) and Percentage Growth, 2000 to 2010 Copyright © 2014 Pearson Education Inc. Stock of Outward FDI: Top Sources of Outward FDI (Billions of U.S. dollars) and Percentage Growth, 2000 to 2010 Copyright © 2014 Pearson Education Inc. How Firms Gain and Sustain International Competitive Advantage • Since the MNE was traditionally the major player in international business, scholars have offered numerous explanations of what makes these firms pursue, and succeed in, internationalization • Because FDI has been MNEs’ main strategy in international expansion, theoretical explanations have tended to emphasize it. Copyright © 2014 Pearson Education Inc. FDI Based Explanations: Monopolistic Advantage Theory • Argues that MNEs prefer FDI because it provides the firm with control over resources and capabilities in the foreign market and a degree of monopolistic power relative to foreign competitors. • Key sources of monopolistic advantage include proprietary knowledge, patents, unique know-how, and sole ownership of other assets Example Novartis earns substantial profits by marketing various patent medications through its subsidiaries worldwide. Copyright © 2014 Pearson Education Inc. FDI Based Explanations: Internalization Theory • Explains how the MNE chooses to acquire and retain one or more value-chain activities inside itself. • Such ‘internalization’ provides the MNE with greater control over its foreign operations. • Internalization avoids the drawbacks of dealing with external partners, such as reduced quality control and the risk of losing proprietary assets to outsiders. Example In China, Intel owns much of its value chain, to ensure that Intel knowledge, patents, and other assets are not misused or illicitly obtained by potential rivals. Copyright © 2014 Pearson Education Inc. FDI Based Explanations: Dunning’s Eclectic Paradigm • Three conditions determine whether or not a company will enter a given foreign country via FDI: 1. Ownership-specific advantages – knowledge, skills, capabilities, relationships, or physical assets that the firm owns and which are the basis of its competitive advantages 2. Location-specific advantages – similar to comparative advantages, they are specific advantages that exist in the country that ...
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Tutor Answer

Demsey
School: Cornell University

Attached.

1

1.

What are the roles of comparative and competitive advantages in Hyundai’s

success? Illustrate your answers by providing specific examples of natural and acquired
advantages that Hyundai employs to succeed in the global car industry.
The ability of a given firm to have its goods and services offered at a lower opportunity cost
when compared to similar companies and have huge margins when it comes to sales is what is
referred to as comparative advantage in business (Chowdhury,12). Hyundai has captured a great
comparative advantage in the automobile industry by the highly demanding consumers as
research has shown that other major companies have South Korea as a major product testing as
they have been considered to be one of the greatest demanding consumers in the global.
Resource utilization and maximization to improve the customer relation and delivery of services
that are of quality standards and setting the given organization on the forefront of its competitors
is a competitive advantage. Hyundai has clinched this advantage by its major geographical
distribution that was brought by their move to invest in KIA company (Ramraika,28). This saw
through the development of several production plants across China, Turkey, and India. This saw
through the great access of the market.
2.

In terms of factor proportions theory, what abundant factors does Hyundai leverage

in its worldwide operations? Provide examples and explain how Hyundai exemplifies the
theory. In what ways does Hyundai’s success contradict the theory? Justify your answer.
The major leverage that Hyundai holds is the great technology usage in production plants. The
labor at these plants too are really skilled and are gotten at very affordable rates by the company
that in turn helps the company in saving on the initial unit production cost (Nunes,50). The raw
materials too by Hyundai are outsourced from very affordable suppliers without compromising
in the quality of their products. This ensures that Hyundai supplies great vehicle units at an

2

affordable cost to the entire globe. This theory is exploited to capacity by Hyundai, however, a
contradiction to the theory by the company comes in with the government policy when it comes
to the restrictions posed on imported goods to the country.
3.

Discuss Hyundai and its position in the global car industry in terms of the

determinants of national competitive advantage. What is the role of demand conditions;
factor conditions; related and supporting industries; and firm strategy, structure, and
rivalry to Hyundai’s international success?
After Hyundai had a breakthrough on their engineering capabilities to the fullest, they were able
to develop new designs on their vehicles that they began to export to the large United States
market that was a complete success that so about 280,000 units annually as it had created a
demand condition in the united states market with their sleek designs (Kim,9). Hyundai ensured
that it capitalized on the already establishment of KIA in the automobile industry. They made
good use of the production plants by KIA that were spread on the entire global that opened up
the markets to their products and not forgetting that KIA already had very skilled engineers at
their plants that came through for Hyundai to help them develop the better quality vehicle units
that were open for ready export to the entire global and hence meeting the exporting necessity of
the late 1970’s that made Hyundai venture successfully to the United States that was later a
success for them as the demand for their products grew seriously.
4.

The Korean government has been instrumental to Hyundai’s success. In terms of

national industrial policy, what has the government done to support Hyundai? What can
the government do to encourage future success at Hyundai? What can the government in
your country do to support development or maintenance of a strong auto industry?

3

The policies made by the government in regards to the importation of products from different
countries create a better environment for the growth of Hyundai as a local industry as a good part
of its production would be ready for usage by the local market in South Korea who have a high
demand needs while the rest of its units are up for export at relatively lower prices to the other
nations that have the strong currencies like for this case the United States dollar (Sussan,511).
The nations might promote such industries by making sure that the policies on the taxation of the
raw materials needed by the local industries are reduced and hence influence low production
costs for the localized industries.

5.

Consistent with Dunning’s Eclectic Paradigm, describe the ownership-specific

advantages, location-specific advantages, and internalization advantages held by Hyundai.
Which of these advantages do you believe has been most instrumental to the firm’s success?
Justify your answer.
Hyundai created a very huge internalized international ventures that open up space for new ideas
and a major breakthrough on skills and technology in production plants which gave them better
internalization advantages. On the other hand, the operations of Hyundai that had widened over
very many countries gave it a great location-specific advantage that ensures that all the possible
market options are completely exploited to ensure a maximum profit maximization. Gaining a
part of KIA with its investing ventures on the company put Hyundai at a great ownershipspecific advantage as it acquired the already grown global connections that had been set already
by KIA motors (Moon,92).

4

Reference
Chowdhury, A., & Neogi, D. (2016). Identifying Suitability of Commodities for Trade Among
Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC)
Nations: An Application of Revealed C...

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Anonymous
Good stuff. Would use again.

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