Case Studies on Economics - II - IBSCDC's

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Honda in China: GovernmentRegulations and Firm's Strategy

China's automobile industry, with itsincredible growth seems to be on the vergeof creating catalytic shifts in the globalautomobile industry, which has beendominated by the European and UScarmakers since a century. The strongsupport of the government has made itbecome the world’s second largest and mostdynamic auto market. Its cost advantageand high potential domestic market hasattracted automajors to set up theirmanufacturing unit in the country.However, in a bid to accelerate thetechnology’s pace, the government hasforced the foreign automakes to share theirtechnology know-how. As a result, Honda– Japan's first automaker to expand intoChina – has reshaped its strategies to worktowards creating an entirely new 'Made inChina' brand that will serve its long-terminterests in the Chinese car market, and aswell conform to the government’sregulations.

The case essentially focuses on thegovernment’s influence in the businessenvironment by means of regulations andlaws that affect the corporate strategies.Also, Honda's new 'China' brand initiative– its prospects and perils is discussed. Theintricacies involved in marketing the Chinabrand globally – low-brand image and poorcustomer perception – are broadly debated.Above all, the dilemma is outlined – shouldgovernment interfere in the market orleave it to the dynamic play of the marketforces?

Pedagogical Objectives

This case study has been organised to:

• Analyse the Chinese automobile market

• Examine the role of Chinesegovernment in the success of Chineseautomobile industry

• Critically understand the imperativenessbehind Honda's China brand initiative

• Assess the consequences of governmentinterference in corporate strategies in adynamic business environment like theChinese automobile market.

Industry AutomobilesReference GBE0123Year of Pub. 2009Teaching Note AvailableStruct.Assign. Available

Keywords

Honda, China, Automobiles, GM,Collaboration, Success Factors,

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Volkswagen, Operations, Fragment,Subsidy

Nokia (B): Business Interests vsGerman Pressures

Nokia is the largest mobile handset makerin the world with a 40% market share. Themobile handset industry is marked bydeclining prices and depressed marginsmaking companies look at low-costproduction options. Nokia, to be morecompetitive, is relocating its German plantto Romania where the wages are 10 timeslower. This abrupt announcement howeverstirs a wave of resentment with employees,trade unions, politicians and businessleaders who condemned Nokia's move.Nokia is also accused of being insensitiveto German culture and greedy for misusingstate subsidies. However, Nokia whilerefusing to alter its decision says that in arepeat scenario, the company would followexactly the same policy. This case study isthe second in a two part series on Nokia.Providing a brief outlook on the mobilehandset industry trends and thecompetitiveness of Germany, it details thefuror created after Nokia's plant closureannouncement. While debating on whetherglobal companies should follow country-specific approaches or a company-specificapproach when handling large scalerestructuring moves, it brings out lessonson how to manage complexities in globalissues.


The case is structured to let the studentsanalyse and understand:

• How to manage complexities inglobalised issues

• Whether global firms should adopt localpractices or use a company-specificapproach across different countries

• How to handle large-scale restructuringmoves like plant closure and relocation.

Industry TelecomReference GBE0122Year of Pub. 2008Teaching Note AvailableStruct.Assign. Available

Keywords

Mobile; National; Competitiveness;Government and Business EnvironmentCase Studies Germany; CAGE; Nokia;Bochum; Plant; Relocation; Complexities;Globalised; Low-wage; Employment;Unions; Labour Laws

Chinese State-owned Enterprises– Redefining the Role ofGovernment in Business

China's economy, since the start of thereform era in 1978, has seen stupendousgrowth aggregating over 10% growth inGDP for 5 successive years till 2007.Where economies the world over areadvocating capitalism, China has embarkedon becoming a 'socialist market economy',where the State continues to play animportant role in the development of theeconomy. Chinese State-owned Enterprises(SOEs) are making news with a number ofthem appearing on the global lists of theworld's top companies. Domestically too,despite a thriving private sector, some ofthe most profitable companies continueto be state-owned. China may haveundertaken economic liberalisation butpolitically the state continues to dominatemajor areas of activity. The case has beenwritten with a view to understandgovernment's role in business. Giving thefacts leading to the growth of China'seconomy in general and the restructuringand development of its SOEs in particular,this case leads to an argument on – is statecontrol of enterprises and protectionism ahindrance for growth and is state-ownership a dead-hand? Are China's SOEswell-equipped to compete in the cut-throatglobal environment without thegovernment sops?


The case is structured to let the studentsanalyse and understand:

• The factors that determine thecompetitive advantage of a nation

• China's competitive advantage

• The competitive advantage of China'sSOEs

• The government's role in thedevelopment of the SOEs

• Whether China's SOEs are competentto contend in the cut-throat globalenvironment.

Industry Not ApplicableReference GBE0121Year of Pub. 2008Teaching Note AvailableStruct.Assign. Available

Keywords

China; State Owned Enterprises;Competitive Advantage; Porter; CountryAnalysis; Global Competitiveness;Government in Business; Reforms; Global;Government and Business EnvironmentCase Studies Economies; Opportunities

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Exit of Foreign Universities: CanSingapore Still be the Education

Hub?In 2006–2007, Singapore had seen threereputed foreign universities exiting theirventures from its place. Singapore, an islandstate, termed as a 'benevolent dictator' hasshown miracles in transforming itsunderdeveloped economy status in themid-1970s, to a developed economy withina span of two and a half decades. Itsmanufacturing strength has been rolesetting and beyond excellence. Theeconomy that was a predominantlymanufacturing-driven diverted its focustowards knowledge-allied sectors by themid-1990s. However, to its dismay thebackbone of knowledge – educationalinstitutions seem to have an inherentdrawback. Despite a strong primary andtertiary educational system, Singapore'swand is failing to prove its magic over theforeign higher educational institutions.


The case is structured to let the studentsanalyse

• The critical success factors of nationsas educational hubs

• A government's role in promoting itsnation as an educational hub

• The factors of students' attractiontowards educational destinations.

Industry EducationReference GBE0120Year of Pub. 2008Teaching Note AvailableStruct.Assign. Available

Keywords

Singapore; Lee Kuan Yew; Goh Chok Tong;Lee Hsien Loong; Foreign Universities;Economic Development Board; ThinkingSchools; Government and BusinessEnvironment Case Study; Global Schoolhouse; International Enterprise; Boston ofEast

Swedish Economy: SynchronisedStagnation?

How far is government spending a drag onthe economic growth? Not as much asSwedish government’s costs, in the nameof social security net. On one hand,government spending is discouraginginvestments by burdening corporates andcommoners with high taxes. On the otherhand, it is dragging down the buoyancyresulting from productivity growth inprivate sector. The consequence is reflectedin increasing unemployment. Added to thehigh public spending are the labour marketrigidities in Sweden that help keep the

employment rate down. Future too ispainted gloomy, as the aged populationswells – to escalate social net; jobs too areto be shortly migrated – aggravatingstructural unemployment. This case studyhelps discuss how the government’s socialexpenditure, with labour market rigidities,would lead to further economic problemsand also in analysing the economic effectsof productivity-led growth.


• To understand the mechanics of‘crowding out effect’

• To understand the relationship betweencorporate taxes, personal taxes andprivate investments

• To analyse the effects of labour marketrigidities

• To understand the relationship betweenproductivity-led growth (in developedeconomy) and employment rate.

Industry Not ApplicableReference GBE0119Year of Pub. 2007Teaching Note AvailableStruct.Assign. Available

Keywords

Swedish Economy; Stagnation; PrivateProductivity; Public Spending; GDP PerCapita; GDP Growth Rate; HumanDevelopment Index; Employment Rate;Government and Business EnvironmentCase Study; Public and Private Investment;Sweden’s population structure; WelfareCosts

Sri Lanka Tourism: Trials andTribulations

Over the years, Sri Lanka has been atourists’ delight. With its gifted naturalbeauty, the country had immense potentialfor sustainable tourism. Before 1960s, theSri Lankan tourism sector’s status wasgraded low by its government. But withsurge in number of tourists and the SriLankan tourism sector becoming the fourthlargest foreign exchange earner andemployment generator, the ‘islandcountry’ took up several initiatives topromote tourism in a big way. However,the progress of tourist activities retardeddue to continuous ethnic strife and naturaldisasters like tsunami. To restore fadingimage of tourism, the Sri Lankangovernment initiated revival strategies bycollaborating with international agencieslike United Nations World TourismOrganisation (UNWTO), United NationsDevelopment Programme (UNDP) andUnited Sates Agency for InternationalDevelopment (USAID). With its revivalstrategies in place, it is to be seen if the Sri

Lanka Tourism Board would be able tocapitalise on the surging global tourismtrends to attain one and half billioninternational tourist arrivals by 2020.


• To understand the dynamics of globaltourism industry

• To examine the development of SriLankan tourism and its contribution tothe country’s economy

• To discuss brand positioning and imagebuilding strategies adopted by Sri LankaTourist Board

• To analyse the branding initiatives ofSri Lanka Tourist Board

• To understand the importance of riskmanagement in tourism industry

• The revival strategies adopted by SriLanka Tourist Board.

Industry TourismReference GBE0118AYear of Pub. 2007Teaching Note AvailableStruct.Assign. Available

Keywords

Sri Lanka Tourism Industry; Sri LankaTourist Board; Branding Initiative; RevivalStrategies; Impact of Natural Calamitieson Tourism Industry; DestinationMarketing; Government and BusinessEnvironment Case Study; Child SexTourism; Eco Tourism; Risk Management;Challenges in Positioning and Branding

Volatile Oil Prices – Speculationsor Economies?

The oil market has always played asignificant role in shaping the globaleconomic and political developments. Oilhas predominantly occupied the majormarket share in energy consumption andwas expected to maintain its 40% marketshare till 2020. Thus, time and again, therise in oil prices have been creating ripplesin the world's socio - economic milieu since1948. In the time frame between 1948 tilldate, oil prices have experienced anumpteen number of rises and falls. Couldthis be attributed to the disequilibrium indemand and supply, or to the increasedspeculation in the oil market? Analysts saidthat the high prices were a result of thepaper prices i.e. in the commodity market.Market watchers had pointed out theincrease in trading of oil futures contractsby the hedge funds. Some analysts pointedout that the steady increase in moneysupply in the world's leading economiesled oil prices to rise. Moreover, theystressed that actually the inflation adjustedprices had fallen below the 1979 level.



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• To discuss the historical perspectives ofthe world oil market

• To analyse the oil demand and supplyfactors

• To analyse the factors behind thefluctuations in the world oil prices

• To debate the future trends in the globaloil market.

Industry OilReference GBE0117KYear of Pub. 2006Teaching Note Not AvailableStruct.Assign. Not Available

Keywords

Crude oil; World oil market; World oildemand; World oil supply; Money supply;Speculation; Nymex; Iraq war; Yom Kippurwar; Ethanol; OPEC (Organisation of thePetroleum Exporting Countries); Long andshort position; Derivatives market; Futuresand spot market; World oil reserves

Central and Eastern Europe:A Missed Opportunity for

Outsourcing?Since 1990s, a number of countries andregions had emerged and profiledthemselves worldwide as populardestinations for outsourcing. Central andEastern Europe (CEE), China, India,central and South America were the notableones. Among these major offshore regions,there existed differences in terms of costcompetitiveness, growth potential,productivity and business environment.China was a major manufacturing base. Formost of the global companies, China wasan important market, a low cost sourcingand manufacturing base and a source oftalent. However, it was noticed that forthe companies serving Western Europe,CEE had competitive edge over China interms of overall costs, transportation,market opportunity, talent pool and afavorable business environment. Analystsopined that, contrary to the popular belief,CEE as a whole had become the home ofoutsourcing operation for a large numberof European and US companies withincreasing forays of companies from Asia.This case will explore the comparativeinvestment opportunities of CEE vis-à-vis China. It also highlights how China andCEE countries positioned themselves tothe companies of US and Western Europeas a preferred outsourcing destination.


• To discuss the competitive advantagesof the Central and Eastern Europe overother outsourcing destinations

• To understand the evolution of theCentral and Eastern European countriesas an outsourcing destination

• To understand the rise of India and Chinaas outsourcing destination

• To debate whether the Central andEastern European countries wouldoutweigh the other outsourcing giantssuch as India and China.

Industry OutsourcingReference GBE0116KYear of Pub. 2006Teaching Note Not AvailableStruct.Assign. Not Available

Keywords

Central and Eastern Europe; Outsourcing;Offshoring; European Union; VelvetRevolution; Berlin Wall; Rise of India andChina; Oracle Corporation; Nokia; Biatel;Czech Republic; Hungary; Poland;Carpathian Mountains; Regional languagevendors

Debt Relief: The African ParadoxSub-Saharan Africa (SSA) is by far the mostindebted and aid-dependent region in theworld, with total external debt stock ofaround 52.5% of its gross domestic product(GDP) in 2004. African countries togetherreceived around $540 billion of debtbetween 1970 and 2002, revealed a UnitedNations Conference on Trade andDevelopment (UNCTAD) report. Thoughthey repaid close to $550 billion inprincipal and interest, the debt stockoutstanding at the end of 2002 was $295billion (at 2005-end, it was over $300billion). Economists traced these cascadingdebts to a number of causes. Some attributethe crisis to loans that had been given bycreditors without much consideration onhow countries could pay them back, whileothers blame it on rich countries thatextended loans under conditions thatserved their own interests. Moreover, loanswere often given to inefficientgovernments or military regimes that wereno longer in existence. Rising interest ratesand flawed economic policies had servedto multiply these debts manifold. Thesituation in the region posed a dilemmafor the world. On one hand, it was clearthat these countries were not in a positionto repay their debts without starving entiregenerations. The incidence of AIDS hadincreased the medical expenditure in theregion to alarming proportions andthousands of children died of malnutritionand related diseases each year. Many ofthe countries in the region were spendingmore on servicing debt annually than onhealth care and education combined. Insuch a situation, cancellation of 100% ofdebt for these countries seemed the onlyfeasible option. On the other hand, many

of the African least developed countrieshad squandered and misused the loansextended to them in non-productiveexpenditure, instead of investing them ingrowth generating and developmentalinitiatives. They had opted for further loansto pay off the old ones, creating a spiral.This raised questions about accountabilityof both debtors and creditors. Manyeconomists felt that the inherent socialstructure of these countries promotedeconomic inequality and the benefits ofloan cancellation would not trickle downto the lowest strata of society. This caseinvestigates the causes and dimensions ofthis debt crisis and explores whether, inthe absence of radical changes in thepolitical and social structure in the region,debt cancellation would be a tangible long-term solution to the problem.


• To understand the economic history ofAfrica

• To analyse the causes and dimensions ofAfrican debt crisis

• To analyse whether hundred percent debtrelief will benefit Africa

• To discuss the importance of politicaland social structure in utilising debt reliefeffectively.

Industry Not ApplicableReference GBE0115KYear of Pub. 2006Teaching Note Not AvailableStruct.Assign. Not Available

Keywords

Government and Business EnvironmentCase Study; Debt cancellation; Africa;Heavily indebted poor country (HIPC);Least developed countries (LDC); Sub-Sahara; Economics; Poverty;Development; Growth; Debt trap; HumanDevelopment Index; AIDS; Education;Arms conflict in Africa; G8 summit

Russian Pharmaceutical Market:The Export Destination

The Russian pharmaceutical market wasnot only one of the fastest growing sectorsin the Russian economy but also one ofthe most lucrative and diverse pharmamarkets in the world. The domestic drugcompanies could not meet the huge demandfor the drugs due to their incompetence inmanufacturing high-end specialized drugs.Further, the Russian consumers also hadan affinity for foreign drugs. More thanhalf of the drugs were therefore importedfrom various countries. Aventis, the Frenchgiant, exported the largest volume of drugsto Russia in 2004. India also exported asignificant volume of drugs to Russia, with

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Doctor Reddy's Laboratory topping the listamong the Indian companies in 2004. Thiscase provides an overview of the Russianpharma market, its dynamics and thevarious strategies adopted by the foreigndrug makers.


• To understand the RussianPharmaceutical industry

• To discuss Russia as a potential exportdestination

• To analyse the operational hindrancesin Russia

• To debate on the strategies adopted bythe foreign drug makers.

Industry PharmaceuticalReference GBE0114KYear of Pub. 2005Teaching Note Not AvailableStruct.Assign. Not Available

Keywords

Government and Business EnvironmentCase Study; Russia; Pharmaceutical market;Export; Aventis; Pfizer; Novo Nordisk;Growth; Subsidiaries; Import; 1998 crisis;Over the counter; Generics; Patented drugs;Shifting loyalties; Doctor Reddy'sLaboratory

The Politics of EnergyRussia based Gazprom, globally the largestgas producing company planned to enterinto the market of US and China, the twolargest energy markets globally. It also planto strengthen its presence in Europeanmarket. For a long time the company wasthe sole gas supplier of Russia, CIS countriesand east European countries. But thecompany's plan to make an entry in thewest European countries raisedcontroversies. US government perceivedthe move of Gazprom as an initiative ofKremlin to control over US allies throughthe company. Along with this companieslike British Petroleum planned to increasetheir reach in the targeted markets. Apartfrom Russia, other energy rich countriesof the region, like Belarus, Estonia, Latviaand Lithuania also planned to export gasesin Europe and thereby reducing dependenceover Russia and Gazprom. These countriestried to build up a separate pipeline to carrygas to European countries, bypassingRussia. Gazprom also started to developnew pipeline network to reach its targetedmarket. This case deals how gas plays amajor role in geo political game, Gazprom'sstrategy to expand, how the expansionstrategy of Gazprom was perceived andpitfalls in Gazprom's strategy to expand.


• To understand the business dynamics ofnatural gas market

• To discuss the business model ofGazprom

• To analyse the geo political environmentrelated to Gazprom's move.

Industry EnergyReference GBE0113KYear of Pub. 2006Teaching Note Not AvailableStruct.Assign. Not Available

Keywords

Government and Business EnvironmentCase Study; Gazprom; ENI (Ente NazionaleIdrocarburi); BASF Chemical Corporation;Commonwealth of Independent States(CIS); Orange revolution; BritishPetroleum (BP); Baltic pipeline; Baku;Sakhalin gas field; European Union (EU);North European gas pipeline; Perestroika;Glasnost; Blue stream pipeline; East bloccountries

Dubai: Shifting From Oil toTourism, Transport & Trade

In the early 1990s, it was discovered thatthe known oil reserves of Dubai, one ofthe seven emirates that comprised UAE,would exhaust by 2016. This led thegovernment of the city state to look fornew growth opportunities. Accordingly, thegovernment of Dubai decided to reduce itsdependence on oil as a major contributorto the GDP and focus on other areas of theeconomy. The case starts with a briefhistory of the emirate and then goes on toits growing prosperity due to the discoveryof oil. The subsequent section attempts tohighlight how the government of Dubaitransformed the emirate from a fishingsettlement to a hub of tourism, trade andtransport. The concluding section raises aquestion regarding the state's ability toensure political and civil stability whichDubai was exposed to.


• To understand the transformation ofDubai into a modern industrial city anda leading investment destination

• To discuss how Dubai reduced itsdependence on oil and focused on otherareas

• To assess Dubai's efforts to shape upsectors like tourism, trade and transport

• To analyse how Dubai gradually built upits attractive infrastructure.

Industry Tourism & TransportReference GBE0112KYear of Pub. 2006

Teaching Note Not AvailableStruct.Assign. Not Available

Keywords

Government and Business EnvironmentCase Study; Dubai; Dubai InternationalAirport; Dubai shopping festival; Emirates;Abu Dhabi; Dugas; Burj Al Arab; Dubai DutyFree; Jebel Ali Port; DP World; Desertmiracle; The Palms; United Arab Emirates(UAE); Dubai World Trade Centre; PortRashid

Ireland: Destination for FDIIn the late 1990s, Ireland emerged as oneof the most favored manufacturingdestinations for knowledge-basedcompanies from Europe and US. Softwareand hardware companies like Microsoft,Intel, IBM, and Apple as well aspharmaceutical giants such as Pfizer,Bristol-Myers Squibb and GlaxoSmithKline,had multiple manufacturing facilities inIreland. Also, Financial Services and MedicalTechnology companies had set upoperations there. By 2003, manyknowledge-based foreign companies,allured by the Irish government's initiativesand its favorable business environment,invested billions to establish multipleoperations in Ireland. The rivalry betweenthe companies resulted in intensecompetition for hiring and retaining,otherwise scares, quality employees. Also,due to the slump in the country's economy,rising inflation and insufficientinfrastructure, Ireland was beginning to loseits competitive advantage in attractingFDI. At the same time, many countries inAsia (mainly China and India) and EasternEurope started emerging as potential, low-cost manufacturing destinations, whichwere expected to absorb all futureinvestments by the MNCs. So, Ireland hasto shift gear toward higher, value-addedproduction.


• To understand Ireland's competitiveadvantages as outsourcing destination

• To analyse business and economicenvironment of Ireland in general andlabor as well as capital market inparticular

• To analyse the possibilities of Ireland inmaking Clusters of knowledge basedcompanies

• To discuss the future of Ireland as FDIdestination compared to China , Indiaand CEE countries.

Industry Country PerspectivesReference GBE0111kYear of Pub. 2006Teaching Note Not AvailableStruct.Assign. Not Available




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Government and Business EnvironmentCase Study; Ireland; FDI (foreign directinvestment); Knowledge economy; Singlemarket; European Union (EU);Information and communicationstechnology; National development plan;Intellectual property rights; Worldeconomic forum; Growth competitivenessindex; Business competitiveness index;OECD (Organisation for Economic Co-operation and Development)

Brazil’s Success withBio-fuels:The Road to Economic

IndependenceIn 2006, Brazil’s energy company Petrobrassigned an agreement to carry out a feasibilitystudy for a new $225 million pipeline tocarry ethanol from the center-west state ofGoia to the coastal state of Sao Paulo. Thepipeline would have a capacity to transportabout 1 billion gallons of the ethanol fuelannually to the Petrobras’ refinery at SaoPaulo where it would be mixed with gasoline.It would also create new opportunities forethanol export through the state’s ports.Efforts like these made Brazil produce arecord 819 million gallons of ethanol forexport from 2006-2007 harvest, making itthe world’s leader in renewable energyresources, with roughly 60 % of its sugarproduction invested in ethanol conversion,exceeding 4.2 billion gallons during theseason.

Brazil was the biggest economy in SouthAmerica with an annual GDP growth of2.9%. Brazil’s extensive bio-fuel programmade its 19 million drivers, fill ethanol intheir cars in the country’s 34,000 gasstations, relieving the country from theburden of importing fossil fuels. More thanhalf of Brazil’s flex-fuel automobiles ranon gasoline, ethanol or a mixture of both.By 2010, Brazil hoped to double itsproduction from the 2006 level. TheNational Alcohol Program (ProAlcool)was launched in 1975 and since then, Brazilhad produced over 90 billion liters ofethanol from sugarcane. The installedcapacity in 1988 was over 16 billion litersannually, distributed over 661 projects. In1989, over 12 billion liters of ethanolreplaced about 200,000 barrels of importedoil a day. From 1976 to 1987 the totalinvestment in ProAlcool reached US$6,970,000 million and the total savingequivalent to imported gasoline was US$12,480,000 million. An analysis ofBrazil’s economic indicators showed animproving trend. Stronger exports anddiminishing imports in lieu of decreasingfossil fuel import was evident from thefact that Brazil had trade balance of US$0.7 billion in 2000 which rose to US$ 77.7billion in 2006. External debt andunemployment rates were decreasing, but

forex reserves in hand were steadilyincreasing.With its potential contributionto a sustainable and renewable energysupply, biofuel’s socio-economic impact onthe rural population was immense. In theyears to come, Brazil would be leading thebiofuel aspirants and continue to developtechnologies benefiting millions of people.In the process, it would help free the worldfrom Green House Gas emissions and makeit a safer place to live. Brazil would behailed as the beacon of light, showing theway for the rest of the world to follow.


The case anticipates familiarizing thestudents on:• The diminishing production of fossil

fuels• Growing importance for bio fuels such

as Biodiesel and Bioethanol• Brazil’s growth to dominance in biofuel

production• Methodology of Bioethanol production• Brazil Government’s support and

measures to use of bio fuels• Biofuel’s socio-economic impact on

developing countries.

Industry Bio-fuelsReference No. GBE0110CYear of Pub. 2006Teaching Note AvailableStruc.Assign. Not Available

Keywords

Bio fuels; Brazil’s success in Biofuels; Bioethanol Bio diesel; Flex fuel vehicles; SaoPaulo Ethanol factory; Petrobras;Proalcool Reduction in GHG emissionsfrom biofuel; Bioethanol from sugarcaneand corn; Economic impact of biofuels oneconomy; H-Bio diesel E-85, E-100, E-20, Fuel blending; Fermentation processfor ethanol.

The Mittal Arcelor BidOn January 27th, 2006, Lakshmi NivasMittal (Mittal), the founder and Chairmanof Mittal Steel, the world’s largest steelcompany launched an • 18.6 billion ($22.7billion) hostile bid for Arcelor, the second-largest steel company in the world. Mittal,the man behind the company specialized inacquiring sick steel units and turning themaround. According to Mittal, the bid wasonly an extension of his growth strategy.However, Mittal’s bid for Arcelor createdpolitical turmoil and opposition. Arcelorwas one of the few pan-European companiesand considered by the EuropeanGovernments as a ‘corporate jewel ofEurope’. While Mittal substantiated the bidsaying that the combined entity would largelybenefit the steel industry, Arcelor Chief, GuyDolle rejected the bid pointing to theincompatibility of the two entities and the

lack of an industrial basis to the takeoverplan. According to Mittal, the takeoverwould create an entity which would have abetter bargaining power with suppliers andalso entail synergies in marketing andmanufacturing efficiencies. He also arguedthat the tie-up would help the steel industryovercome problems of overcapacity, innateto the industry. The EuropeanGovernments expressed concern about joblosses and corporate governance issues.

In an effort to defend Arcelor, a number ofsteps were taken. The LuxembourgGovernment, which was the single largestshareholder, passed amendments in itstakeover laws. Although it denied it wasaimed against Mittal, the move wasobvious. Arcelor announced an increaseddividend to its shareholders. Despite fierceopposition to the bid, Mittal made a formalnotification to the Commission, theEuropean Union’s highest antitrustauthority for scrutiny of the offer. In thiscontext, it was to be seen if Mittal wouldsucceed in the bid and if such intenseopposition to the bid was justified.

The case allows for discussion on: Issuesinvolved in cross-border takeovers;Economic and political factors that comeinto play in a takeover; Synergies thatemerge through takeovers and Defensivestrategies adopted by the target company.This case would help management studentscovering courses on Business Environment,Economics and related subjects.

Pedagogical Objective

• To discuss:Issues involved in cross-bordertakeovers; Economic and politicalfactors that come into play in a takeover;Synergies that emerge throughtakeovers and Defensive strategiesadopted by the target company.

Industry Steel IndustryReference No. GBE0109CYear of Pub. 2006Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Mittal Steel; Arcelor; Mittal; Bid; Takeover;Steel Industry; Takeover Defenses; EuropeSteel Industry; Consolidations; PoliticalEnvironment; Lobbying; CorporateGovernance; Deals; Acquisitions; BusinessEnvironment.

Unocal Bid and the FalloutIn August 2005, the Chinese oil companyChina National Offshore Oil CorporationLimited (CNOOC Ltd) withdrew its $18.5billion takeover offer for Unocal, aCalifornia-based energy company. Itacknowledged that its bid had created broadpolitical and public antagonisms in theUnited States and had little chance of being

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completed. CNOOC Ltd.’s withdrawal fromthe bid ended a hotly contested takeoverbattle between CNOOC Ltd. and Chevron,the huge American energy company. Bothcompanies were vying to acquire Unocal’soil and natural gas assets, much of it whichwas in Asia. The Unocal shareholders on10th August 2005 voted in favor ofChevron, in spite of a higher bid byCNOOC Ltd. The case details the politicalclimate that prevailed during the bid. Itprovides scope for discussion on how thepolitical environment could impact thefate of a business deal and also the futureof Sino-American relations on account ofthe failed bid.


• To discuss how political climate affectsa bid

• To discuss world oil scenario and thefuture of Sino-American trade relations.

Industry Oil & Natural gas companyReference No. GBE0108CYear of Pub. 2006Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Unocal; CNOOC; Oil & Natural Gascompany; Chevron; political climate; Sino-American trade relations; shareholdervalue; takeover; bid; world energy scenario.

The French ‘Non’: Will the EUBreakdown?

The European Union (EU) was formed tobring the nations of Europe closer in termsof trade, finance, economics andcommerce. A common Constitution for allmember states was framed which was to beratified by them to come into force. ByMarch, 2006 12 countries had completedthe ratification process. Only France andHolland had rejected the constitution bynational referendum.

The case discusses the effect of the Frenchnegative vote on the EU charter, stepstaken to counter it, the issues facing theEuropean community, and the dilemma onhow to remain a strong cohesive unit despitepulls and pressures from different directions,by ensuring that individual governmentpartners were able to solve their problemswith the constitution, within the frameworkof a ‘United States of Europe’.


• To discuss the problems faced by theEuropean Union to function as aseparate entity incorporating differentcountries with similar goals and acommon currency.

Industry PoliticalReference No. GBE0107CYear of Pub. 2006Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

European Union; Economic Community;Referendum; Charter; Leadership; Euro;Currency ; Turkey; Strategy; Trade;Barriers ; Integration; immigration;Netherlands; Member Countries.

Kyoto Protocol andAuto-emissions (A) – A Prelude

This is the first of a two-case series thatdeals with divergent emission controlregulations faced by auto-makers in differentcountries prior to ratification of KyotoProtocol. The fuel economy standardsenforced by the policy makers varied fromthe ‘command and control’ systems (onlyfor domestic products) of the US to thevoluntary agreements and consensusapproach in Europe, Canada and Japan. Thecase talks about different corporateresponses from the automobile industry inthe light of growing uncertainties in globalharmonization of regulations, costsinvolved and the potential market for lowemission vehicles. In the US, frequentconflicts are surfacing between the stategovernment and federal governmentregarding fuel economy standards while inEurope uniform standards exist. The caseexplores the contrasting scenario prevailingbetween the market-pull strategies of theUS auto-makers and the technology-pushapproach of European auto-makers. Abroad-based consensus approach adopted bythe political machinery in Japan has helpedauto-companies to have the first moveradvantage in tapping the market potentialfor fuel efficient hybrid vehicles which areeco-friendly. The Japanese auto-makersseem to be better positioned as far ascompliance cost is concerned. The potentialuse of a market based Kyoto mechanismlike emissions trading is expected to helpauto companies to reduce their compliancecosts


• To discuss about different corporateresponses from the automobile industryin the light of growing uncertainties inglobal harmonization of regulations,costs involved and the potential marketfor low emission vehicles

• To discuss the contrast between US andEuropean auto makers.

Industry AutomobileReference No. GBE0106BYear of Pub. 2005Teaching Note Not AvailableStruc.Assign. Not Available

KeywordsKyoto Protocol; Automobile Emissions;Corporate Strategy; Regulatory system;Corporate Average Fuel Economy; Global;Climate Location; Partnership for a NewGeneration of Vehicles; Company AverageFuel Consumption; Voluntary Standards;Mandatory standards; Fuel Economy;Compliance costs; Command and controlsystems; United Nations Framework;Convention on Climate Change; EmissionsTrading.

Kyoto Protocol andAuto-emissions (B) – Industry

ResponseThis is the second of a two-case series onresponsiveness of the automobile industryto check auto emissions under the Kyotoregime. With global harmonization ofemission control strategies, the autoindustry in countries like Canada andmember countries of European Union iswitnessing voluntary commitments by theautomakers to cut down emissions. Despitewithdrawing from Kyoto negotiations, theUS has put in place stricter fuel economystandards. The automobile industry isexpecting to minimize the risk of costintensive technological improvements byactively participating in Kyotomechanisms like emissions trading, cleandevelopment mechanism (CDM) and jointimplementation (JI). The case talks aboutthe initiatives by the Ford Motor Companywhich is the only auto-manufacturerparticipating in the U.K. emissions tradingprogram and the Chicago ClimateExchange. Toyota Motor Corporation isactively involved in CDM and JI. Theseinitiatives are opening new opportunitiesfor other auto-makers to join the fray. Themarket uncertainty of the auto-industryregarding consumer acceptance of eco-friendly vehicles also seems to be gettingresolved with growing global demand forhybrid vehicles. Automobile companies likeToyota and Honda have made significantprogress in exploiting alternate fuels likehydrogen. But automakers are still skepticalabout the cost-effectiveness of newalternatives. It is expected that market-based Kyoto mechanisms will sustain thetempo of emission control initiatives andhelp to achieve overall reduction in autoemissions.


• To discuss about the initiatives taken byFord

Industry Automobile IndustryReference No. GBE0105BYear of Pub. 2005Teaching Note Not AvailableStruc.Assign. Not Available


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Keywords

Kyoto Protocol; Automobile emissions;Emissions trading; Clean DevelopmentMechanism; Joint Implementation;Emission; standards; Toyota MotorCorporation; Company Average Fuel;Consumption; Voluntary Agreements;Mandatory standards; Fuel economy;Compliance costs; Chicago ClimateExchange; The Ford Motor Company;Technological Advancements.

Arcleor: The Gem ofLuxembourg

The Luxembourg based Arbed (later itbecame Arcelor) was the number one steelcompany in Europe and the third largestin the world. Until 1974, the steel industrywas the major contributor to the GDP ofLuxembourg and also the major employer.In 2002, Arbed merged with Usinor (Spain)and Aceralia (France) to form Arcelor. By2005, Arcelor became world’s number onesteel company with a global turnover of•32.6 billion. The Luxembourggovernment was a major shareholder with5.6% share in Arcelor.

In January 2006, Mittal Steels, world’snumber two steel company, offered to buyArcelor for •18.6 billion. Together Arcelorand Mittal were expected to account for10% of global steel production and amarket capitalization close to $40 billion.Mittal gave an assurance the he wouldprotect European jobs and maintain thenew headquarters of the combined Mittal-Arcelor in Luxembourg itself. But Mittalwas criticized by Belgium, France andLuxembourg government. India and the EUcriticized politicians of these countries forinterfering as it was against the spirit offree competition and globalization. TheLuxembourg government was in a dilemma,should it approve the takeover?

The case highlights the importance of acompany for the growth and developmentof a country. The case also explains theeffect of a cross border merger on theforeign relations of different countries. Thecase highlights how the Government, beinga shareholder in a company, can affect thecompany decisions.


• To study the importance of Steelindustry in the growth and developmentof Luxembourg

• To study the political impact on theprospects of the Arcelor

• To study the effect of Arcelor mergeron the prospects of the Luxembourgsteel industry

• To discuss the role of government andextend of intervention in business andindustry.

Industry Iron and SteelReference No. GBE0104AYear of Pub. 2006Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Arcelor; Luxembourg; Mittal Steel; Arbed;Restructuring; Iron and Steel industry;Hostile bid; Aceralia; Usinor.

National Pride vs Business Logic:Alitalia’s Strategy within a

Strategy

Alitalia was established in 1946 and was amonopoly in the Italian Airline industrytill the mid-1990s. However, with factorslike the airline deregulation, arrival of low-cost airlines, Iraq war, terrorist attacks atNew York in 2001 and the SARS epidemicin Asia, it went into trouble and posted aloss of $1,107.6 million in 2004. Alongwith the Italian government, it drafted afour-year restructuring plan (2005-2008)to return profit. The plan included lay-offs, the splitting of the company intotwo units, financial aid from thegovernment and the acquisition of abankrupt Italian low-cost airline, Volare.Alitalia expects that the acquisition wouldenable it to foray into the low-costsegment, and enable it to earn quick profits.However, sceptics feel that the initiativeis just a protectionist measure as there isno rationale behind a financially-troubledcompany acquiring another bankruptcompany with the help of state aid, whichis against EU Competition Commissionrules.


• To highlight the downturn of Alitaliasince the mid-1990s and its restructuringstrategies to turn itself around

• To understand how state protectionismcan affect the business prospects of anational carrier

• To discuss whether the acquisition ofVolare by Alitalia is just a politicalmanoevoure by the state or there lies abusiness logic which can help Alitalia toturn profitable.

Industry AirlinesReference No. GBE0103Year of Pub. 2006Teaching Note AvailableStruc.Assign. Not Available

Keywords

AirOne; Ryanair; easyJet; British EuropeanAirways (British Airways); Volare Airlines;Italy’s airline industry; Italy’s low costcarriers; Economic protectionism;Alitalia’s restructuring initiatives; Code-sharing partnerships; Alitalia’s financialproblems; European Low Fares AirlineAssociation; SkyTeam alliance; Alitalia’saggressive pricing.

Telecom Industry in Russia:Besieged with “Oligarchic”

BattlesThe Russian telecom industry, one of thefastest growing and profitable sectors, hadfaced negligence under the SovietGovernment, resulting in under-investment. Having recognised theimportance of developingtelecommunications for a moderneconomy, the post-Soviet Governmentmade reforms that helped the industry togrow. However, there are certainimpediments such as limited foreigninvestment, and excessive rules andregulations that hinders the industry’sdevelopment. One of several controllingfactors is the dispute between the oligarch,Mikhail Fridman and the CommunicationMinister, Leonid Reiman over a 25% stakein the country’s third largest telecomcompany, MegaFon. The legal battle thatstarted in 2003 between the two, haswitnessed charges and counter charges,accusing each other for resorting to murkytactics. It has cast shadow on the future ofthe industry drawing parallel with theRussian oil industry and the fate of MikhailKhodorkovsky, the Russian oil oligarch.


• To analyze the environmental factorsin Russian telecom industry

• To discuss the reasons for Russiantelecom industry not being able toattract enough FDI and also assess theaccompanying political risk in operatingin the Russian telecom industry

• To discuss how the dispute betweenLeonid Reiman and Mikhail Fridman willaffect the telecommunication companiesand the future of the telecom industryin Russia

• To analyze whether this controllingbattle would result in Alfa Group (MikhailFridman) meeting Yukos’ fate

• To debate ways and means to makeRussian telecom industry on par withthe global telecom industry standards.

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Industry TelecomReference No. GBE0102Year of Pub. 2006Teaching Note AvailableStruc.Assign. Not Available

Keywords

Russian telecommunication; Oligarchs;MegaFon; Alfa Group; Telecom policy;Political risk; Business risk; Riskmanagement; Business and politics; Yokos.

Google.com to Google.cn:Google’s Business Dilemma in

ChinaWith China emerging as the largest Internetmarket of over 100 million users surpassingthe US, top US Internet companies likeYahoo! and Google forayed into the Chinesemarket. However, stringent regulations onthe use of the Internet forced manycompanies to censor the information thatwere in conflict with the policies of theChinese government. Google alsocompromised on its motto “Don’t be evil”and agreed to censor search results linkedto a few politically sensitive terms like‘democracy’ and ‘freedom’. The USgovernment and many human rightsactivists condemned Google for suppressingthe basic freedom of expression andspeech.


• To highlight the censorship on mediaand Internet companies in China andthe effect on the general populace as aresult of restrictions on the free flow ofinformation

• To discuss the resultant repercussions inthe event of the Internet companiescompromising on their business ethicsfor commercial gains, thus jeopardisingthe dissemination of information to all

• To debate on the role of government inthe way businesses are run.

Industry Internet Search & NavigationServices

Reference No. GBE0101Year of Pub. 2006Teaching Note AvailableStruc.Assign. Not Available

Keywords

China; US Internet companies; Google;Internet censorship in China; Media inChina; Internet freedom; Freedom ofspeech; Yahoo!; Regulations of Internet;Congressional Human Rights Caucus;Human rights and the Internet; Microsoft.

Cyberabad Police’s ISO9001:2000 Certification

Programme: A Model ofSuccess?

More than half a century afterIndependence, the Police Act of 1861 - aninstrument of British colonial rule - stillregulates the operation of the Indian Policeforce. Police in India has been criticisedfor being arbitrary, corrupt and brutal. Itshighhanded way of dealing with crime aswell as citizens has given it an image of anoppressive force. With India emerging asa global investment hub, there was a needto make policing standards in Indiacomparable to anywhere else in the world.Attempts were made by some governmentand non-governmental organizations toexpedite the process of police reforms inIndia. In this direction, one of the mostspirited initiatives to bring reforms in thepolice force has been undertaken by theCyberabad Police Commissionerate in thestate of Andhra Pradesh. To sustain theprocess of change, the CyberabadCommissionerate adopted ISOcertification. Jeedimetla Police Stationbecame the first police station in India toachieve the distinction of being an ISO9001:2000 certified police station.


• To understand the Cyberabad PoliceCommissionerate’s ISO 9001:2000Certification Programme

• To discuss whether the Cyberabad’sinitiative is a model of success?

Industry Not ApplicableReference No. GBE0100Year of Pub. 2006Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

ISO 9001:2000 certification; CyberabadPolice; Culture change management;Quality management system (QMS);Public-private partnership; 5S (sort, set inorder, shine, standardise and sustain;Kaizen; Leadership; Mission; Vision;Empowerment; Work culture; Reforms inpublic sector; Citizen-friendly initiativesof police; Leadership in public service.

China’s Banks and theOverheating Economy

China embarked on its ‘open door policy’in 1978 under the leadership of DengXiaoping. The purpose was to bring abouta transition in its centrally plannedeconomy towards a market economy. Thebanks were supposed to play a major rolein carrying out the reformist agenda of the

country. Since then the country hasachieved a phenomenal GDP (grossdomestic product) growth rate making itthe fastest growing economy of the world.


• To understand the role played by thebanking sector of China in building itseconomy

• To understand the process by which thebanks injected liquidity in the economyin the form of easy loans, whicheventually led to the overheating of theChinese economy

• To discuss the possible measures that thegovernment can take to tackle theproblem.


Keywords

China’s overheating economy; Chinesebanks; People’s Bank of China; State-owned enterprises; Gross domestic product(GDP); Private domestic savings; Liquidityand easy credit; Non-performing loans(NPLs); Guanxi; Inflation rate and interestrates; Monetary policy; Agricultural Bankof China; People’s Construction Bank ofChina; Industrial and Commercial Bank ofChina; Bank of China.

Managing Olympics 2004:TheRun-up to the Games

In August 2004, Athens was due to hostthe Olympics. But even in July 2004 whenthe International Olympic Committee(IOC) Review Commission went for thefinal appraisal, there were still doubts as towhether Greece would be ready on time tohost the Olympics. The stadiums wereincomplete, transportation andaccommodation problems hovered around,and security concerns had not beenaddressed to the full satisfaction of theorganising committee. Questions werebeing raised as to whether the IOC shouldever allot the games to smaller countries.


• To discuss the following areas: (1) theproject management in large scale sportsevent like the Olympics; (2) the planningthat goes into the games and the flawsthat accompany it and also theorganisational issues involved; (3) theinfrastructure needed, the transportationrequired and the scale of accommodationthat is to be provided while hosting suchmega events; (4) the role of thegovernment and politics and their





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impact on such events; (5) theeconomics of hosting such events andparticularly the implications for smallernations like Greece; and (6) how IOCcould avoid such occurrences in thefuture.

Industry Professional Sports Teams &Organisations

Reference No. GBE0098Year of Pub. 2004Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

The economics of the Olympics;Infrastructure requirements to host theOlympics; Bidding for the Olympics;Problems of hosting the Olympics;Transportation problems in Athens;Accommodation problems in Athens;Environmental concerns over theOlympics; Security concerns over theAthens Olympics; Budget for the Olympicgames; 2008 IOC (International OlympicCommittee) technical evaluation criteria.

Mohamed Rachid: Egypt’sMinister of Modernization

In its quest to transform the economyfrom a controlled economy to a liberaleconomy, the Egyptian governmentappointed Mohamed Rachid, a seniorexecutive at Unilever, as its Minister ofForeign Trade and Industry. Afterassuming the office in 2004, MohamedRachid has taken bold steps to rejuvenatethe neglected industries, which have thepotential to become major industries ofEgypt. The modus operandi thatMohamed Rachid adopted was to forgetrade relations with countries includingIsrael, a diehard foe of Egypt, which wasexpected to trigger political unrest in thestate. On the contrary it has receivedsupport from all quarters. MohamedRachid, has also revived trade ties withthe US, which have shown instant results.While sceptics say that the reforms areaffecting the Egyptian economynegatively, Mohamed Rachid isundeterred.


• To discuss the validity of MohamedRachid’s reform policies and thedrawbacks of the Egyptian economy.


Keywords

Egypt under the British rule; Egyptianeconomy; Modernisation of Egyptian

economy; Egypt?s furniture industry;Automobile industry in Egypt; Qualifyingindustrial zones; Egypt?s textile exports;Economic reforms in Egypt; Investmentsin Egypt; A brief history of Egypt.

Airbus vs Boeing: The SubsidyWars

The competition between Airbus andBoeing has taken a new course in 2005,when both have taken centre stage at theWorld Trade Organisation (WTO) over thesubsidies. The European Union (EU) andthe US filed suits with the WTO accusingeach other of the subsidies that they havegiven to Airbus and Boeing respectively.The Airbus-Boeing dispute, pending at theWTO, is a unique trade dispute as neithersay that they have not subsidised, insteadboth parties question the amount the otherhas provided. Both defend the chargessaying that the aeroplane manufacturingis exorbitantly expensive and highly risky,while The Economist maintains that bothparties are at fault, as neither of thecompanies requires subsidies in the firstplace and capital markets finance far morerisky projects.


• To discuss the various challenges facedby European economy in the wake ofageing population.


Keywords

Airbus-Boeing dispute; Internationalsubsidies, subsidy; GATT (GeneralAgreement on Tariffs or Trade) and WTO(World Trade Organisation); Subsidies inlarge civil aircraft industry; Boeing andAirbus subsidy; Subsidies in US and EU(European Union); Prohibited subsidies atWTO; Government aid to airplanemanufacturers; Boeing and Airbusallegations at WTO; Global civil aircraftindustry; Subsidies and world trade; Suits atWTO.

Macau: Asia’s Answer to Vegas?The tiny island of Macau was the numberone destination for gamblers from Asia.Local billionaire, Stanley Ho monopolisedthe gambling industry in Macau for 40 years.In 2002, the local government of Macauopened up the gambling sector. With theopening up of the gambling sector, Macau’spopularity as a gambling destination wasexpected to compete with Las Vegas.


• To discuss the scope of gambling industryin Macau.

Industry GamblingReference No. GBE0095Year of Pub. 2006Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Macau; Gambling industry; Stanley Ho;Gaming monopoly rights; Sub-concessions;Tourism; MICE (meetings, incentives,conventions, exhibitions); Real estatemarket; Gambling revenues; Over andunder investments.

Azerbaijan’s Dependence onthe Energy Sector: Prospects and

PerilsAzerbaijan is an energy-rich country andoil is the primary driver of the country’seconomy. After becoming independent in1991, a shortage of funds compelled theGovernment of Azerbaijan to invite foreigncompanies to develop its oil resourcesthrough production sharing agreements.British Petroleum, one of the earlyentrants, is the largest foreign investor inAzerbaijan. Oil and oil products accountfor over 80% of the country’s exports andcontribute to more than 50% of the budget.


• To discuss the scope of oil industry inAzerbaijan

• To discuss the implications of thedependence of an economy on only onesector.

Industry EnergyReference No. GBE0094Year of Pub. 2005Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Emerging economy; Dutch disease;Production sharing agreement (PSA);British Petroleum Amoco ExxonMobil; Oiland gas sector; World Bank IDA(International Development Association);State Oil Company of Azerbaijan (SOCAR);Azerbaijan International OperatingCompany (AIOC); Communist to market-oriented economy; State Oil Fund ofAzerbaijan (SOFAZ); Azerbaijan’seconomic driver; Ilham Aliyev; HeydarAliyev; David Woodward

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Chapter 11: Bankruptcy as aStrategic Tool?

Chapter 11 is one of the unique bankruptcycodes in the world as it is not punitive. Formany businesses, Chapter 11 is no deathsentence, but a chance to reorganise andrecover from losses. Much of the ailing USsteel industry restructured its operationswith the help of Chapter 11 in 2001, andlater the airline industry followed the trend,where four out of the seven major USairlines had resorted to Chapter 11. In2005, the auto-parts industry was adoptingthis trend .


• To discuss the importance of Bankruptcyas a strategic tool to save a firm facingtroubles of Banking.


Keywords

Bankruptcy; Chapter 11; Steel industry;Airline industry; Auto-parts industry;Insolvency; Restructuring; Legacy costs;Bethlehem Steel; United Airlines; DelphiCorp; Bankruptcy Abuse Prevention andConsumer Protection Act.

The Finnish Paper Industry:TheLockout and its Setbacks

In November 2004, the major employers’organisations of the paper and pulp industryin Finland witnessed a series of protestsand strikes by the one million workforceof the Paper Workers’ Union(Paperiliitto). In May 2005, major papermill companies like Stora Enso and UPM-Kymmene, announced a lockout and closedmills across the country, with a demandthat the paper industry should also functionduring the holidays in order to improveproductivity, which, the workers’ Unionopposed. The six-week lockout resulted ina huge loss of 1.5 billion euros in exportearnings and 40 million euros in taxrevenues. It is also estimated that loss insales per day was 40 million euros.


• To discuss the problems of industrialrelations in Finland’s paper industry

• To discuss the impact of strike on theFinnish economy.

Industry Tobacco ProductsReference No. GBE0092Year of Pub. 2005

Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Finland; Forest industry; Lockout andstrike; Finnish Paper Workers’ Union;Europe; Finland economy; NationalIncome Policy Agreement; Industrialrelations; Growth of forest industry inFinland; Productivity; Working hours;Nordic model.

Corporate China Shopping forGlobal Brands: Prospects and

PerilsWith the Chinese government’s financialand policy backing, many Chinesecompanies looking for global presence,were acquiring well-known brands. Butseveral analysts were sceptical about thestrategy being followed by the Chinesecompanies. They were of the opinion thatChinese companies, with little experiencein managing global brands and distributionchannels, were trying to build global brandsin a hurry. As a result more than 70% ofsuch acquisitions had failed. But others wereof the opinion that the Chinese companieswere following the right strategy andexpected these companies to continueacquiring global brands.


• To discuss the strategy of Chinesecompanies’ strategy of acquiring globalbrands for their growth.

Industry Financial ServicesReference No. GBE0091Year of Pub. 2005Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Global brands; Mergers and acquisitions;Global brand acquisition; Organic growth;Market saturation; Global players; Growthimperative; Global manufacturing hub;Business culture; International regulatoryenvironment; US Committee of ForeignInvestments.

Nakamura vs Nichia: TheDebate over Royalty forCorporate Innovations

Shuji Nakamura (Nakamura), an employeeof Nichia Corporation (Nichia) in Japan,invented the world’s first blue-LEDs in themid-1990s. He was paid an annual salary of$100,000. He resigned from NichiaCorporation in 1999 and joined theUniversity of California, Santa Barbara (US)as a professor in the materials department,

where he continued to work on LEDs.Prompted by this, Nichia filed a case againstNakamura in 2001 for infringing the patentson the blue LEDs. Nakamura also filed alawsuit against his former employerdemanding a fair share of profits that thecompany had made by selling his invention.After three years of legal tussle, Nichia paidNakamura US$8.1 million.


• To discuss the compensation practicesof Japanese corporations

• To discuss the effect the Nakamura vsNichia case had on Japan’s patent lawsand recognition practices.

Industry Display ComponentsReference No. GBE0090Year of Pub. 2005Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Shuji Nakamura; Nichia Corporation;Employee Invention System in Japan;Japan’s corporate culture; Amendments inJapanese Patent Law; US Patent Law; BlueLED’s (Light Emitting Diodes); Intellectualproperty rights; Nakamura’s contributionto Nichia; Nichia’s profits with blue LEDs;Patent transfer; Japan Inc.

Indian Liquor Industry’s‘Prohibited Growth’: The Legal

EnvironmentAs of 2004, Indian liquor consumption wassignificantly low (0.6 litres per head peryear) compared to other countries like Chinaand UK where the consumption was 20 and100 litres respectively. Due to the Indiangovernment’s regulations and taxes, thegrowth had been restricted. The governmenthad decided to lower the taxes in 2004.However, analysts were skeptical over thefurther growth of the industry, despite thederegulations, due to the social concerns.


• To discuss the impact of regulations andtaxation on the Indian liquor industry.

Industry Liquor IndustryReference No. GBE0089Year of Pub. 2005Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Indian liquor industry; SABMiller and UnitedBreweries; Deregulation and liberalisation;Central and state taxation policies; Legalenvironment and regulations; Regulationand prohibition; Central excise duty andvalue added tax; Purchase Power Parity(PPP); Social concerns women activists;






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Indian liquor beer spirits consumption;Indian government state governments;Indian beer industry alcohol whiskey rum;Liquor complete ban partial ban; Challengesreligious reservations; Quantitativerestrictions.

Entrepreneurship in Ghana:Government Initiatives

Ghana, a nation that remained for long asone of the poorest economies of the world,had become an emerging economy in Africaby 2005. Its gross domestic product growthrate at 4%, between 1990 and 2004, hassurpassed that of the other sub-Saharannations (2%) and rest of the world (3%).Structural transformation of the economyfrom state controls to free market underthe leadership of Jerry Rawlings, who ruledthe country from 1981 to 2000 hasushered in a new economic standing. Thistransformation has encouraged many non-resident Ghanaians to set up their ownbusiness in the country and has therebygiven a boost to the development process.The reforms were continued by thegovernment that succeeded Rawlings, whichensured stability and continuance of pro-market economic policies.


• To discuss the role of politicalestablishments in entrepreneurshipdevelopment

• To discuss the Ghanaian governmentinitiatives in making the entrepreneursa part of the country’s economicdevelopment.


Keywords

Emerging economies in Africa; Ghana’seconomy; Economic liberalisation inGhana; Services sector in Ghana; Statesupport for entrepreneurs in Ghana;Divestment of state-owned enterprises inGhana; Multilateral Investment GuaranteeAgency (MIGA); Ghana Poverty ReductionStrategy (GPRS); Ministry for PrivateSector Development (MPSD).

India as an Attractive Destinationfor Electronics Manufacturing:Competitive Advantages and

Competitive PressuresUp until 2003, India was considered as alaggard in attracting global electronicsequipment manufacturers to set up theirbase in the country. However, since 2004

the situation was fast changing with theentry of several manufacturers. Manyindustry experts attributed this change tothe competitive advantages enjoyed by thecountry. But critics discounted theprospects of India developing into a hugebase for electronics equipmentmanufacturers, owing to the competitivepressures it faced.


• To discuss the competitive advantagesand pressures faced by Indian electronicsmanufacturing industry.

Industry Electronics ManufacturingReference No. GBE0087Year of Pub. 2005Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Electronics equipments manufacturers;Competitive advantages; Competitivepressures; Mobile electronicsmanufacturers; Contract manufacturers;Component makers; Chip manufacturingfacilities; Manufacturers’ Association forInformation Technology (MAIT);Electronics manufacturing services (EMS);Special economic zones; Originalequipment manufacturers; Favourablebusiness conditions.

Electricite de France (EDF): TheFrench Electricity Giant’s

Privatization WoesElectricite de France (EDF) is the largestelectricity provider in the world and a state-owned company of France. Over the years,EDF has enjoyed a monopoly in theelectricity market of France. But the EU(European Union) directive mandated allthe member countries to open theirmarkets for outside competition. France,being a member of the EU, had to complyby the directive and deregulate somesectors including electricity. As part of thederegulation, the government has plannedthe privatisation of EDF. But theprivatisation move has been stronglyresisted by its employees, which accordingto them might lead to withdrawal of perksenjoyed by them. Despite the widespreadunrest, the government has decided tocontinue with its efforts to privatise thesector and end the monopoly of EDF.


• To discuss the French governmentinitiatives in complying with the EUdirectives to open the electricity industryfor competition, and also in dealing withthe resultant unrest among the workers,who are opposing the privatisation ofEDF.

Industry ElectricityReference No. GBE0086Year of Pub. 2005Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Electricite de France (EDF); Largestelectricity company monopoly; Frenchelectricity market; Privatisation andderegulation; European Union (EU)directive; State-owned employees; Frenchgovernment state-owned company;Workers opposition and strikes unrest; TheGeneral Confederation of Labour (CGT);Workers Union; Trade Unions; blackout;Electricity production and distribution;Structural impediments; economic progress;Improved choice for consumers; Initialpublic offering (IPO); Public sector workers.

China’s Rising Cost ofBusiness:The Human Resources

FactorChina’s enormous pool of low costmanpower had enabled it to develop as amanufacturing base for companies acrossthe globe. However, since 1998, thesituation seemed to be fast changing withChina facing a shortage in the availabilityof skilled manpower. Experts predicted thatthis would lead to an increase in the cost ofavailable manpower and thereforeincreased costs for businesses. They fearedthat this would result in China losing itscompetitive advantage as a low costmanufacturing base. However, someexperts were of the opinion that theshortage of manpower was merely atemporary phenomenon and China wouldcontinue to be a low cost manufacturingbase.


• To understand China’s competitiveadvantage as a low cost manufacturingbase

• To discuss the future of China’scompetitive advantages as a low costmanufacturing base for global companies.


Keywords

China; Comparative advantage; Low costmanufacturing base; Manpower costadvantage; US Bureau of Labour Statistics;Migration of manpower; China’s one-childpolicy; Social welfare funds; Statutorybenefits; Turnover rate; Skilled manpowershortage; Managerial level talent; Risingcost of business.

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ECO

NO

MIC

S – IIEC

ON

OM

ICS – II

ECO

NO

MIC

S – IIEC

ON

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ICS – II

ECO

NO

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S – II

Singapore’s ‘Gamble’ With theGambling Industry: The Payoffs

In April 2005, forty years after itsindependence, the Government ofSingapore permitted the establishment ofcasinos in the country. While theSingaporean government hopes to increasethe attractiveness of the island as a globaltourism hub, generate revenues and jobopportunities, it also has to deal with strongopposition from domestic religious andsocial groups. These groups believe thatintroducing casinos in Singapore wouldresult in individual bankruptcies anddegradation of moral values.


• To discuss the logic behind the Singaporegovernment’s introduction of casinos

• To discuss the ethical and moral issuesinvolved in business.

Industry Gambling IndustryReference No. GBE0084Year of Pub. 2005Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Singapore’s economic strategy; Singapore’stourism industry; Lee Kuan Yew and Asianvalues; Singapore’s marketing strategies asa tourist destination; Singapore’s integratedresort; Singapore’s economicdiversification through casino; Economicbenefits through casino; Singapore’s‘economic leakage’; Social implications ofcasino in Singapore; Macau and Hong Kongcasino; Singapore’s restrictions ongambling; Singapore Tourist PromotionBoard; Lee Hsien Loong and casino;Families Against the Casino Threat inSingapore.

Advertising Industry in China:Potential and Challenges

Since the economic reforms of 1979,China’s advertising industry had grown atan annual growth rate of 40%. With morethan 80,000 advertising agencies by 2005,this tremendous growth has come fromChina’s economic boom coupled with agrowing consumer market and increasedpenetration of television and Internet.With the ownership limitations for foreignadvertising companies to be lifted by theend of 2005 and the impending BeijingOlympics in 2008, China is expected tobecome the third largest advertising marketby 2006. Despite such potential, China’sadvertising industry has still to deal withincreasing competition from foreignadvertisement companies and culturaldiversity.


• To discuss the scope of China’s advertisingindustry in the wake of Internationaladvertising companies in China.

Industry AdvertisingReference No. GBE0083Year of Pub. 2005Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

China’s consumer market; Growth ofChina’s advertising industry; China’seconomy and its advertising industry;China’s Cultural Revolution, China’sadvertising revenues; Laws for advertisingin China; Structure of China’s advertisingindustry; Asia-Pacific advertising markets;Worlds largest advertising economies;Challenge of China’s advertising industry;China’s entry in WTO (World TradeOrganisation) and China?s advertisingindustry; International advertising agenciesin China; Beijing Olympics.

The Vatican: Challenges AheadPope Benedict XVI has been elected as thenew leader of the Vatican and the followersof the Roman Catholic faith in April 2005,after the death of his predecessor PopeJohn Paul II. He has inherited severalchallenges like the weak financial healthof the Vatican and the debate on the issueof decentralisation of authority to bishops.The Catholic faith has witnessed a healthygrowth in Asia, Latin America and Africa,while its influence in Western Europeancountries and the US has been weakeningsince the 1980s.


• To discuss the various challenges facedby the new Pope in the wake of poorfinancial health of Vatican and numerousscandals and controversies of Vatican.


Keywords

Vatican (The Roman Catholic Church);Pontiff and his papacy; Womanordination; US sex-abuse lawsuits andsettlements; The Roman Curia; TheCollege of Cardinals; Conclave and theSistine Chapel; The Vatican’s diplomaticrelations; United Nations Organisation(UNO); Peter’s Pence; Financial deficit andfinancial statements; Appreciation of euroagainst the US dollar; Cannon law;Decentralisation of power; Growth rate ofCatholic population.

The End of Multi-FiberArrangement: Opportunities for

China’s Textile IndustryThe global textile and apparel industry hadbeen governed by quotas under the Multi-Fiber Arrangement (MFA) since 1974. Thedeveloped countries laid certain restrictionson the number of items that could beexported by low cost producers, such asChina and India, so as to protect their localtextile industry. After the expiry of MFAon January 1 st 2005, China was expectedto be one of the biggest winners due to itscompetitive textile industry. Chinesetextile exports had experiencedtremendous growth since its entry into theWorld Trade Organisation in 2002. Butmany competitors and importing countries,including the US textile industry, voicedconcerns that China was set to dominateand destroy the textile industry throughunfair trade practices including currencymanipulation and subsidising its textileindustry.


• To discuss the growth of Chinese textileindustry after the expiry of MFA.

Industry Textiles and ApparelReference No. GBE0081Year of Pub. 2005Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Global textile and apparel industry; Multi-Fiber Arrangement (MFA); China’s textileand apparel exports; World TradeOrganisation (WTO); Protectionistmeasures and quotas; Chinese textile andapparel industry; Quantitative exportrestrictions; Business environment;Agreement of Textile and Clothing (ATC);Cheap labour and raw material costs;Oversupply and market disruption; Globaltextile and apparel market; NationalCouncil for Textile Organisations; USInternational Trade Commission; ChinaChamber of Commerce for the Import andExport of Textiles (CCCT).

Steel Industry’s SwingingFortunes: The ‘China’ Factor

The global steel industry’s performancewas robust during the year 2004 and theindustry experts predict that such robustperformance will continue throughout2005 and 2006. On the contrary, someanalysts cautioned that the industry wouldface a downturn in the near future and anoversupply of steel into the global marketby the Chinese steel industry would be thereason for the downturn. But others wereof the opinion that other factors, like anexorbitant rise in the prices of raw






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materials, would be the real reasons behindthe projected downturn in the fortunes ofthe global steel industry.


• To discuss the factors affecting the globalsteel industry

• To discuss the affect of Chinese steelindustry on the evident change in theglobal steel industry.


Keywords

Entrepreneurship; Europe; Germany;Gerhard Schroeder; Start-up challenges;Accenture study on entrepreneurship; NeilRimer; Meisterbrief; Ich AG; Corporateventure capital; Jean-Bernard Schmidt.

Outsourcing Innovation:opportunities and Challenges

For decades, outsourcing has evolved as aneffective cost-saving strategy forcompanies and as a vital part of the globaleconomy. Over the years, outsourcing hasspawned from manufacturing toinformation technology and humanresource management. In the early 21stcentury, outsourcing innovation, a newtrend of outsourcing has emerged, which isgradually manifesting itself in diverse fieldslike electronics and mobile devices,investment research and pharmaceuticals.Research and development, which was onceconsidered to be the inherent asset of acompany is increasingly being outsourcedas an attempt to reduce costs and improvecompetency. Despite its widespreadadvantages, outsourcing innovation has itsshare of challenges threatening companieswith loss of their edge over innovationthat could cause the conglomerates toshrink.


• To discuss the importance of outsourcingand the dilemmas of companiesregarding research and development

• To discuss the prospects and challengesof outsourcing innovation.

Industry OutsourcingReference No. GBE0079Year of Pub. 2005Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Outsourcing innovation; Research anddevelopment; Original design

manufacturers (ODM); Intellectualproperty; Independent design houses;Asian contract manufacturers; Cost savingstrategy; Next step of outsourcing; A newparadigm and trend; Strategic and coreactivities; Global market challenges;Strategic drivers; Core competency; Fastertime to market cycle; Resource flexibilityreduced risk.

Google’s Trouble inFrance:English vs French?

Google has been finding it hard to establishits presence in France. It faced severeopposition when it announced its libraryproject plan in December 2004. Theproject, which aims at putting 1.5 millionbooks on-line from renowned UK and USlibraries, is being considered as an effort todominate the French language and cultureby English language and Anglo Saxon ideas.Wary of its impact on France, the Frenchgovernment has decided to launch acompetitive French search engine tocompete against Google.


• To understand the socio-politicalopposition faced by Google in France

• To discuss Google’s strategies to establishits presence in the country.

Industry Internet Searching Services &Portals


Keywords

Google; France; America; Intellectualproperty rights; AdWords; Google’s libraryplan; Googlisation; Omnigooglisation;Search engines; On-line library; Virtuallibrary; French culture; Anglo Saxon;Europe; Google’s print project.

US Bankruptcy Laws:BenefitingDebtors or Creditors?

Since its inception in 1800, the bankruptcylaw in the US has undergone severalreforms, which were always alleged to bemore in favour of the creditors. In early2005, the US Senate gave its approval tothe Bankruptcy Abuse Prevention andConsumer Protection Act, a bill that wasput on hold for eight years. Theproponents of the bill claim that it wouldcurb the abuse of the bankruptcy law as afinancial planning tool and would placepersonal responsibility on the debtors topay off their debts. However, critics ofthis bill argue that, when enacted, the billwould place an onerous task on those

debtors, who are genuinely burdened withhuge medical expenses, job losses and lowincome levels.


• To discuss the various reforms in the USBankruptcy law

• To discuss the legal implication overdebtors and creditors.


Keywords

US bankruptcy law; Debtor’s prison; Panicof 1837; US state debtor-creditor laws;National Bankruptcy Conference;Bankruptcy Reform Act 1978; US creditcard firms; Profits of credit card firms andUS personal bankruptcies; BankruptcyAbuse Prevention and ConsumerProtection Act; Chapters 7, 10, 12 and13; Means test; Asset protection trusts;Millionaire’s loophole.

The European TobaccoIndustry:Prospects and Perils

With the steady rise in tobaccoconsumption over the 20th century, thetobacco industry gained power andprominence rivalled by few other industriesin the world. Europe alone consumed morethan 26% of the total tobaccomanufactured every year, and was hometo four of the leading tobacco manufacturersin the world. In the second half of the20th century, growing tobacco-relatedhealth concerns caused Europe toimplement a series of action plans to curbthe spread of tobacco consumption. Butthe action plans were unsuccessful, and thegrowth of ‘big tobacco’ continuedunhindered along with its profits. At theturn of the century, the European Unionintroduced detailed legislation banningtobacco promotion from print andelectronic media. The display size of healthwarnings on labels was increased and thelevels of harmful additives in tobaccoproducts were reduced .


• To discuss the effect on tobacco industryin the wake of regulations and resistanceacross the world.

Industry Tobacco ProductsReference No. GBE0076Year of Pub. 2005Teaching Note Not AvailableStruc.Assign. Not Available

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US Bankruptcy Laws:Benefiting


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ECO

NO

MIC

S – IIEC

ON

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ICS – II

ECO

NO

MIC

S – IIEC

ON

OM

ICS – II

ECO

NO

MIC

S – II

Keywords

European tobacco industry; Health hazardsof tobacco; Sanctions and regulations;Tobacco consumption; World tobacco trade;British American Tobacco (BAT); ImperialTobacco Group; Gallaher Group; Tobaccocontrol policies; European Tobacco ActionPlans; World Health Organisation (WHO);European Union (EU) Tobacco ProductsDirective; EU tobacco legislation; Anti-tobacco regulations; World’s top tobaccocompanies.

European Union’s ‘ServicesDirective’: The Franco-German

ResistanceIn January 2005, the European Commissionput forward a proposal, the European Union(EU) Services Directive, to ensure free flowof services across the borders of its 25member states and transform Europe into a‘dynamic and knowledge-based economy’by 2010. The country of origin clause, whichis one of the key principles of the directive,has sparked a vigorous debate in certainpolitical groups, like the trade unions andthe EU parliament, which are stronglysupported by France and Germany as theyfear that free flow of services would lead toheavy social and fiscal dumping, which inturn would lead to dilution of social andhealth benefit standards. However, mostEast European nations view the directivefavourably as they expect to rake in profitsby doing business with the West Europeannations and leveraging on their cheap labour.


• To focus on the issues that have stirreda major controversy over the EUservices directive

• To discuss the role of the EuropeanCommissioner, and his role in shapingthe future of the services directive.


Keywords

European Union (EU) and its memberstates; The EU Services Directive; Socialand fiscal dumping; Lisbon EconomicReform Agenda; Barriers to trade;Unemployment rate; Administrative redtape and restrictions; Minimum wagestandards; Social and healthcare benefits;Annual gross domestic product (GDP)growth; Country of origin clause; Exchangerate and its role in the exports market;Welfare states; Comparative advantage andcheap labour.

China’s Retail Industry: Domesticvs Foreign Players

Retailing in China, which has traditionallybeen fragmented with large numbers of localplayers, is poised to consolidate and giverise to large regional players, whoeventually might transform into globalplayers. By the end of 2004, China wasthe third largest retail market in the worldwith 300 foreign retailers and 100 localretailers that accounted for 8% of thecountry’s retailing industry .


• To provide a landscape of the Chineseretail industry

• To study the growth avenues offered byChina to domestic as well as foreignretailers.

Industry RetailingReference No. GBE0074Year of Pub. 2005Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Chinese retailing industry; Global RetailDevelopment Index; Socialist marketeconomy with Chinese characteristics; TheProvisions on Foreign Investment inRetailing; Consumer retail spending;Foreign invested retail companies;Domestic chain retailers; Convenience;Spaciousness; Comfort of stores; Selectionand price; Free shuttle buses.

Retailing in Britain:TraditionalRetailers vs Discounters

The British Retailing industry, at $443billion a year, is the second largest inEurope and contributes 20% to the nation’sGDP. However, by the dawn of the newmillennium, iconic department stores,which have defined the course of theindustry in Britain for decades, werebecoming takeover targets. They hadbecome victims of their own successes andwere encountered by a threefoldcompetition from foreign specialityretailers, discounters and supermarketsentering all segments, right from massmerchandising to specialty retailing.


• To discuss the growth of British retailingindustry

• To discuss the threats British traditionalretailers are facing from new retailingfirms.

Industry Retailing IndustryReference No. GBE0073Year of Pub. 2005

Teaching Note AvailableStruc.Assign. Available

Keywords

Retailing industry; British retailing;Retailing landscape in Britain; WH Smith;Harrods of London; Maypole Dairy Co;Meadow & Pearks Dairy Co; Tesco; Marks& Spencer; Chain store retailing;Department stores; Supermarkets;Shopping malls; Hennes & Mauritz; Gap;H&M; Zara.

Indian BPOs: The ReverseMigration

Since the mid-1990s, companies fromEurope and the US had been rushing tooutsource their operations to India, whilethe public and politicians in those regionshad been raising a hue and cry over the lossof money and jobs to India. But since 2002,Indian companies had been doing all thoseactivities in the West, that traditionallycompanies from the West had done in India– acquisitions, takeovers, mergers, jointventures, new operation setups, businessbuilding guidance to existing companies,and above all creating jobs in those regions.But the American public and politicianshave failed to realise these newdevelopments were taking place. And theuproar over Indian business processoutsourcing (BPO) continued to gainmomentum with the US Presidentialelections in 2004. While the politiciansstrongly vowed to stall the outsourcing toIndia, economists and industry expertsdefended the process as a necessity for therevival of the US economy from recession.


• To discuss the various implications ofoutsourcing in India

• To discuss the impact of off shoring inthe US and India economies.

Industry BPOReference No. GBE0072Year of Pub. 2005Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Business process outsourcing (BPO);Offshoring; Outsourcing; US economicrecession; Backlash; Cost savings;Acquisitions; Indian BPO industry;Competitive advantage; Growth drivers;Reverse migration; US Presidentialelections 2004; Information technologyenabled services (ITES); Back-officeoperations; Core competencies.





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British Chocolate Market: Up fora Fairtrade -Organic Makeover?The British chocolate market had been oneof the top five chocolate markets in theworld, both in terms of size andconsumption per head. But since 2000 themarket had been experiencing a decline involume despite growth in revenues. Whilethe three leading firms, Nestle Rowntree,Cadbury Trebor Bassett and Masterfoods,were in trouble due to the market status,two relatively new niche segments –organic chocolates and fairtrade chocolates– had been experiencing impressive growthin their sales.


• To discuss the competitive strategiesemployed by the British chocolateindustry in the wake of decline of thechocolate market.

Industry ChocolateReference No. GBE0071Year of Pub. 2005Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

British chocolate market; Fairtradechocolates; Organic chocolates; Green &Black’s; Nestle Rowntree; Cadbury TreborBassett; Masterfoods; Chocolateconsumption; Biscuit, Cake, Chocolate andConfectionary Association (BCCCA) UK;Oligopolistic market; The InternationalSweets and Biscuits Fair; Competitivestrategies; Chocolate consumption volume;Per head consumption of chocolate;British chocolate industry.

Ageing Population in Europe:TheEconomic Challenges

Due to a rise in life expectancy and a declinein the birth rate, the proportion of theageing population in Europe has been onthe rise. But this ageing population has hada negative effect on European economyand corporations. Though several Europeangovernments have initiated measures toaddress the problem, there were economicchallenges to be dealt with.


• To discuss the subsidizing of Airbus andBoeing - the aeroplane manufacturers

• The role of WTO in resolving the issuebetween Airbus and Boeing.

Industry Not ApplicableReference No. GBE0070Year of Pub. 2006Teaching Note AvailableStruc.Assign. Available

Keywords

Ageing population; Replacement fertility;Dependency ratio; Pension sector reforms;Replacement migration; Agenda 2010;Birth rate; Life expectancy; Health careexpenditures; Adverse effects of ageingpopulation; Working population; Europeaneconomic output; Labour market reforms;Labour shortfall; Retirement benefits.

Private Equity in China: The‘Cautious’ Gold Rush

Over the years, China has emerged as apreferred destination for global privateequity investors. During the early 1980s,the Chinese government had made effortsto nurture this concept but failed owing topitfalls in policies and scarcity of resources.The China New Technology Start-upInvestment Company, the earliest privateequity firm in China, was founded in 1986and functioned as a central governmentagency to give a boost to ‘private equity’in China. However, this venture wentbankrupt in 1997. Such failures led to theformulation of the tentative regulationson venture capital in China in 2001. Theserules were however modified in 2003 inorder to improve the sluggish flow of globalcapital. Private equity capital wasadministered in sectors like informationtechnology, the semiconductor industry,biotechnology and even in banking afterthe relaxation of banking norms in 2003.However, global private equity playerstook a cautious approach due to the lackof transparency in the accounting practicesof companies, underdeveloped stockexchanges and stringent regulatory normsfor foreign listing.


• To discuss the scope of private equityinvestment in China in different sectors

• To discuss the plans and strategiesadopted by global private equity playersin different sectors.


Keywords

Private equity; Market-oriented businesssystem; China New Technology Start-upInvestment Company; Stock exchanges;New regulations; MOFTEC (Ministry ofForeign Trade and Economic Co-operation); Changing investmentenvironment; Goldman Sachs; ShandaNetworking; The investment boom; ChinaSecurities Regulatory Commission;Shanghai Technology Stock Exchange;

Startup Enterprise Development Scheme(SEEDS); Major foreign firms.

Mergers and Acquisitions inRussian Oil Sector: The FDI FactorRussia was the leading oil exporter in theerstwhile USSR. The collapse of the SovietUnion in the early 1990s led to a suddendecline in Russia’s oil productivity. However,after a brief spell of oil and financial crises,there was revival in oil production from1999. Russian oil soon became the cynosurefor foreign investments. Many Europeanand American oil giants renewed theirinterests in the Russian oil sector. This wasdespite the Yukos Oil controversy that hadfor a while, shocked western oil companies.The arrival of British Petroleum in 2003,Total of France and Conocophilips of theUnited States in 2004 further underlinedRussia’s oil potential.


• To discuss the evolution and growth ofoil sector in Russia and the role playedby Foreign Direct Investment in Russia’sgrowing oil potential

• To discuss the effects of Russian oil sectoron other oil producing countries in theworld

• To discuss the reasons why Russiacontinues to resist joining OPEC.

Industry OilReference No. GBE0068Year of Pub. 2005Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Oil production; Soviet Union break;Reforms; Administrative policies; Verticalintegration; BP-TNK merger; Yukos issue;Creation of largest companies in Russia;Total’s move; Conocophilips venture;Lukoil merger; Gazprom merger;Government regulations; Oil exports;OPEC.

Japan: The World’s Next CulturalTrendsetter?

From the beginning of the post-World WarII era to the late nineties, Japan wasestablishing itself as a leading exporter ofhigh-tech products. But increasedcompetition from countries like the USand Korea coupled with a decade-longstagnation led the Japanese governmentto seek alternate revenue streams,especially cultural exports. Anime andManga are considered the most prominentof Japanese cultural exports. Thetremendous rise in popularity of Animeand Manga and widespread Japanese

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ECO

NO

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ON

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ECO

NO

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S – IIEC

ON

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ECO

NO

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S – II

cultural influence on food, architecture andfashion have led experts to study Japan’sincreasing ‘soft power’.


• To discuss the impact of Japan’s culturalexports on Japan’s economy in the longrun.


Keywords

Japanese cultural exports; Gross nationalcool; Soft power; Anime; Manga; Fansubcommunities; Scanlation; Value of culturalimports; Changing Japanese work culture.

Reforms in US Patent Law:Business Implications

With the number of patent applicationsincreasing exponentially the USPTO (USPatents and Trademarks Office) found itincreasingly difficult to cope with theworkload. This resulted in a situationwhere many patents were awarded to vagueideas without scrupulous review. Also therewere many instances where the approvedpatents stifled further innovation, thanencourage it and patents were used morelike a weapon against competition. Manywere apprehensive about the suitabilityof the patent system of the industrial ageto the information age and suggestedrevamping not just the patent system, butalso the entire system of intellectualproperty law.


• To discuss the conditions that led to thetroubles for USPTO, the relevance ofbusiness method patents and the viabilityof the Patent Law in protectinginnovators in the information age

• To analyse the potential benefits thatthe reforms could bring to the USeconomy, which drives a considerablepart of worldwide industrial growth.


Keywords

US patent law; US Patents and TrademarksOffice (USPTO); Federal TradeCommission; Business method patents;Intellectual property; Prior art; Softwarepatents; Patent monopoly; Antitrust andpatent law; Competition and monopoly;Utility patents.

Medical Tourism: India’sCompetitive Advantage

By upgrading its technology, gaininggreater familiarity with western medicalpractices and improving its image in termsof quality and cost, the Indian healthcareindustry began to emerge as a primedestination for medical tourists. Most ofthe medical tourists to India were Indiansliving in the US and Britain; residents ofneighbouring countries like Pakistan,Nepal, Bangladesh, Mauritius and theMaldives; and citizens of African and WestAsian countries. Though the quality ofhealthcare in developing countries like Indiawas low, private hospitals offered advancedtechnologies and procedures on par withfacilities in developed countries. By allaccounts, the high cost of medical careand long waiting periods for treatment andsurgery in the western countries were majorreasons for the rise in medical tourism toIndia.


• To discuss the initiatives taken by theIndian government along with the stategovernments, travel agencies and touroperators to promote India as a “globalhealthcare destination” and thechallenges in sustaining the growth levels

• To understand how India builtcompetencies in offering medical tourism.

Industry Health CareReference No. GBE0065Year of Pub. 2005Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Medical tourism; Medical tourism in India;India’s advantages in medical tourism;Indian Healthcare Federation; NationalHealth Service; Apollo group of hospitals;‘Tele-medicine’ booths; Escorts HeartInstitute and Research Centre; MedicalTourism Council of Maharashtra;Bangalore International Health CityCorporation; Low cost of treatment inIndia; State-of-the-art healthcare facilitiesin India; Talented pool of medicalprofessionals; Diverse tourism options inIndia; Medical tourists.

Irish Economy: A Model ofSuccess?

In 1988, The Economist described Irelandas ‘The poorest of the rich’, whilecomparing the island republic with itsEuropean counterparts. Barely a decadelater the magazine called it ‘Europe’sshining light’. Ireland changed the globalperception about its economy when, in1999, its per capita GDP of •23,410

surpassed that of Britain’s •22,760. Irelandalso ranked ninth in per capita output,among the industrial nations, up from 22ndin 1993 .


• To discuss the factors responsible for“Irish Economic Miracle” and thechallenges that questions thesustainability of this miracle.


Keywords

Irish economy; Celtic Tiger; Ireland;Emigration; Foreign direct investments;European Economic Community (EEC);Zero corporate tax; European ExchangeRate Mechanism (ERM); EuropeanMonetary System (EMS); Golden rule;Tallaght strategy and social partnerships;National Development Plans; GDP andGNP.

Thailand: Detroit of South-EastAsia?

Thailand is the fifteenth largest automobileproducer in the world. It is the largestamong the Association of South-East AsianNations (ASEAN), manufacturing morethan one million vehicles per year.Thailand is the world’s second-largestproducer of pick-up trucks after the US.The Thai government’s policies and FreeTrade Agreements have led to favourableconditions for accelerated growth in theindustry.


• To discuss the promotional efforts ofthe government of Thailand leading tothe growth of the auto industry

• To understand the country’s tariffstructure and infrastructure supportextended to the auto investors

• To discuss how Free Trade Agreementsand incentives have helped to exportthe vehicle manufacturers and attractedthem to invest more in Thailand.

Industry Automobile ManufacturingReference No. GBE0063Year of Pub. 2004Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Thailand; Detroit of south-east Asia; Autoindustry; Tariff structure; Investmentpromotions; AFTA (ASEAN [Associationof South-East Asian Nations) Free Trade





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Agreement); Free Trade Agreement; Pick-up trucks; Thailand’s economy; Corporatetaxes; ASEAN countries; FDI (foreigndirect investment); Exports in ASEANcountries; Zone system; Liberalisationpolicies.

China’s Health Care System: ThePrice for Economic Progress

The Chinese population achieved goodhealth and longevity under the ChineseCommunist Party’s authoritarian rule.After the opening up of China’s economyin 1978, GDP (gross domestic product)increased, but the health sector declinedinstead of keeping pace with economicgrowth. Privatisation of the health sectorled to variances in the availability ofhealthcare facilities. The social welfaresystem was unsatisfactory, and people didnot trust the government enough toparticipate in voluntarily financed ‘Co-operative Medical Systems’ (CMS). In theabsence of centrally planned financing,appropriate government control andaccountability, public healthcare facilitieshave been mismanaged.


• To discuss the appropriate degree ofgovernment finance, and control, in theprovision of basic healthcare and theneed for a satisfactory social welfaresystem, which people can trust

• To discuss the problem that thecommunist government was facing,which has left the health of its 1.2 billionpeople to market forces, and the lack ofinternational concern about the situationuntil SARS was ‘exported’ to othercountries

• To discuss whether GDP growth isappropriate as a sole measure of acountry’s progress.

Industry Health CareReference No. GBE0062Year of Pub. 2004Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Health economics; Welfare State;Economic growth; Privatisation; SocialSecurity; Gini coefficient; Publicaccountability; Co-operative financing;Health care.

Telecom Industry in China:TheMetamorphosis

China’s tryst with telecommunications hadbeen chronicled time and again due to thecountry’s vast potential and a

comparatively nascent industry. After DengXiaoping’s regime ushered the country onthe path of economic progress, thetelecommunications industry was subjectedto a series of reforms and regulations. Whilemany of the policies were aimed to increasecompetition by breaking monopolies, theregulations barred the entry of private andforeign telecom operators. However,China’s WTO (World Trade Organisation)accession came as a positive signal toprivate and foreign operators.


• To discuss how the telecom industry inChina evolved over the years, thoughbeing under the state control

• To discuss the regulatory environmentthat prevails in China.

Industry TelecommunicationsReference No. GBE0061Year of Pub. 2004Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Telecom industry in China; Fixed-line andmobile operators; China Telecom; ChinaMobile; China Unicom; China Netcom;Ministry of Posts and Telecommunications(MPT); Ministry of Information Industry(MII); Regulation and competition; Themonopoly and the split; TD-SCDMA (timedivision synchronous code divisionmultiple access) and 3G; 3G licensing andinfrastructure costs; The WTO (WorldTrade Organisation) implications; Personalhandyphone system; Price wars and ARPU(average revenue per user).

Putin vs the Oligarchs: The Futureof Russian Business

During the Russian privatisationprogramme of the 1990s, Russia’s naturalresources were transferred into the handsof a few politically well-connected oligarchswhich were widely considered to beunderhanded deals. Russian President,Vladimir Putin, who took over from Yeltsinhas targeted the oligarchs, most recentlyMikhail Khodorkovsky in 2003. Thisalarmed foreign investors and had anegative impact on foreign investmentsin Russia. But many investors have beenunable to resist the appeal of Russia’sabundant natural resources including oil.


• To discuss the Russian privatisationprogramme of the 1990s

• To discuss whether the actions initiatedby Putin against the oligarchs would havea long-term detrimental impact onRussian business

• To discuss the attractiveness of Russiaas an investment destination.


Keywords

Vladimir Putin; Oligarchs; Privatisationprogramme; Loan-for-shares; MikhailKhodorkovsky; Boris Berezovsky;Vladimir Gusinsky; Vladimir Potanin;Yukos; Sibneft; Norilsk Nickel; AnatolyChubais; Foreign investment; Capitalflight; Credit rating agencies.

Rigid German Labour Laws: TheBusiness Migration

Due to Germany’s rigid labour laws, hightaxes and diminished local demand, manycompanies are considering moving theiroperations out of Germany. The industryis now demanding that unions should limittheir demands for higher wages, and beprepared to work for longer hours if theywant to retain their jobs. Companies likeSiemens AG and DaimlerChrysler AG havesuccessfully negotiated agreements that willallow employees to work for more thanthe previously sacrosanct 35 hours perweek. In order to encourage companies toinvest and hire in Germany, which is facedwith a falling GDP (gross domestic product)and rising unemployment, the governmentis attempting to decrease the non-wagecosts of labour and make dismissal lawsmore flexible.


• To discuss the strong stance taken by theindustry to combat militant unions andthe government’s attempts to improvethe business environment in spite ofgrowing opposition to its policies

• To discuss how inflexible labour laws leadto a vicious cycle of increasingunemployment, a decrease in businessinvestment and consumer spending.


Keywords

Germany; Unemployment; GDP (grossdomestic product) growth; Labour unions;Labour laws; Worker participation; Socialmarket economy; Lump of labour fallacy;Dismissal protection; Co-determination;Welfare state.

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ECO

NO

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ON

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ECO

NO

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ON

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ECO

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Microsoft in China: BusinessDiplomacy

Although Microsoft Corporation was anearly entrant into the Chinese softwaremarket, it is still struggling to make profitsin the mainland. Despite the fact that mostChinese used Microsoft’s software, thecompany earned very little, as 95% of usersused illegally copied software. And everytime the company pressurised thegovernment to crack down on the pirates,the government made moves to supportLinux, the rival of Windows. The founderand chairman of the company, Bill Gatesfrequently visited China to meet Chinesetop government officials, business leaders,experts and senior managers to sensitisethem to the colossal loss in business.


• To discuss the initiatives taken byMicrosoft in China to strengthen itsposition in the huge Chinese softwaremarket and the measures taken by thecompany to develop strong relationshipswith the Chinese government.

Industry ITReference No. GBE0058Year of Pub. 2004Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Microsoft; Microsoft in China; Bill Gates;Jiang Zemin; Piracy; Red Flag Linux;Timothy Chen; Zhongguancun SoftwareCo; Great Wall plan; Steve Ballmer; Venusproject; Chinese software companies;Microsoft’s government securityprogrammes; Windows source code; HopenSoftware Engineering.

Indian Oil Companies’ Race forSelf-Reliance: Risks And RewardsDespite being the single most importantsource of energy in India, oil is importedin huge quantities from countries like SaudiArabia, Kuwait, Iran, UAE (United ArabEmirates) and Malaysia. Being the seventhlargest consumer of oil in the world coupledwith its inability to produce sufficientquantities to meet its domestic needs, makesIndia highly vulnerable to the fluctuationsof the international oil prices. Moreover,the huge amount of money that is spenton importing the precious oil hasprompted India to strive and achieve somelevel of self-sufficiency in this sector .


• To discuss the initiatives of the Indiangovernment to become self-reliant inoil amidst several potential problems and

risks in the backdrop of over dependenceof the Indian economy on imported oil.

Industry Oil and Gas Refining,Marketing and Distribution


Keywords

India’s total energy consumption; Oilimports of India; Fluctuations in global oilprices; Factors affecting global oil prices;India’s oil reserves; Oil companies in India;India’s dependence on imported oil; NewExploration Licensing Policy (NELP);Deregulation of the Indian oil sector; Risksand problems of India in foreign oilexplorations; India-Total Primary EnergySupply; Oil explorations in India; Bhopalgas tragedy, 1984; India’s energy profilebetween 1999-2020.

India vs Argentina as GlobalOutsourcing Destinations

The collapse of Argentina’s currency inJanuary 2002 helped it become a very cost-effective global outsourcing destination.By 2004, Argentina emerged as acompetitor to the Indian IT firms in theglobal outsourcing market, capitalising ona wide pool of educated, multilingualpopulation, good telecom infrastructureand low wages. Buenos Aires began tocompete with Bangalore for the ‘mostpreferred outsourcing destination’ tag.


• To compare and contrast the inherentcapabilities of India and Argentina asglobal outsourcing destinations.


Keywords

Global outsourcing destinations; Low costoutsourcing destination; Off-shoring;Outsourcing; Indian outsourcing industry;Outsourcing to Argentina; Outsourcing toIndia; Buenos Aires; Bangalore; Argentinaas an outsourcing destination; The currencycrisis of Argentina; BPO (business processoutsourcing) in India; Argentina’seconomic phases; The Karnatakagovernment’s millennium BPO policy2000; Comparative SWOT (strengths,weaknesses, opportunities and threats)analysis of India and its competitors asoutsourcing destinations.

Destination Dubai: Building aBrand

Dubai has evolved from an entrepôt-trading centre to a leading tourismdestination and transhipment hub. TheDubai International airport, Dubai DutyFree and Emirates Airline, which are allowned by the government, focus onpromoting Dubai through extensiveadvertising and innovative promotions.Substantial investments have been made,in creating attractions such as, the tallesthotel, the richest horse race, the largestmanmade archipelago. Using various meansto reach its target audiences, includingevents that bring in celebrities and theinternational media, Dubai is able to attractan increasing number of visitors. Tax freezones have been created to attract foreigncompanies and investors to Dubai. Thesuccess in the tourism sector is beingleveraged to diversify into technology,finance and commerce, and Dubai is nowalso being promoted as an exceptional placeto live and do business.


• To discuss the integrated promotionstrategies used to create the globalawareness of Dubai as an outstandingtourist destination, and the success inspite of Arabic cultural restrictions andthe conflicts in the region

• To discuss the creation of an umbrellabrand, Dubai, driven by two major subbrands, Dubai Duty Free and Emirates,and a brand portfolio spread acrosstourism, sports and the retail sector

• To discuss the application of similarstrategies to establish Dubai as a moderncommercial hub.

Industry TourismReference No. GBE0055Year of Pub. 2004Teaching Note AvailableStruc.Assign. Available

Keywords

Branding strategy; Promotion;Sponsorship; Positioning; Marketing;Umbrella brand; Sub brand; Brand portfolio;Brand associations; Brand experience;Dubai Duty Free; Emirates Airlines.

China’s Credentials as a MarketEconomy

China’s commodity trade, prior to the late1970s was determined almost entirely byeconomic planning. The State PlanningCommission’s import plan covered morethan 90% of all imports. The economicreforms that started in 1978 graduallyreduced the interference of the state into






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the trade activities. China’s accession intothe World Trade Organisation (WTO) in1991 further hastened the process ofreform. However, China always hadconflicts with its trading partners ondifferent issues, the key ones beingundervaluing its currency and the dumpingof goods. Even by 2004, most of thesubstantial trading partners of China,including the United States and theEuropean Union (EU), were not willing torecognise the country as a ‘marketeconomy’.


• To discuss the factors that held back theUS and the EU from granting a marketeconomy status to China

• To discuss China’s stance on the issueand how it was trying to leverage itsstrong economic position to becomerecognised as a market economy.


Keywords

China’s market economy status; WorldTrade Organisation (WTO); Economicplanning; State-owned enterprises (SOE);Foreign Trade Corporation (FTC);Township and village enterprises (TVE);Special economic zones (SEZ); ChinaCentre for Economic Research (CCER);General Agreement on Trade and Tariffs(GATT); Foreign direct investment (FDI);Non-market economy (NME); Free TradeAgreements (FTA); Yuan, renminbi; Anti-dumping, protectionism; Gross domesticproduct.

China’s CosmeticsIndustry:Opportunities and

ThreatsChina’s beauty and cosmetics industry hasbeen experiencing growing demand sincethe mid-1990s. China’s vast populationand consumer profile presented a world ofopportunities to cosmetic and beautyfirms. Experts attributed the boom in thecosmetics industry to the country’s one-child policy, which increased the disposableincome of the average urban Chinesefamily. But with foreign cosmetic giantsventuring into China, competitionintensified among the foreign and domesticfirms.


• To discuss the strategies adopted by thecosmetic firms to capture market shareand tackle competition

• To discuss how consumer spending oncosmetics evolved over the years

• To discuss the role played by foreigncosmetic firms in the growth of theindustry.

Industry Personal CareReference No. GBE0053Year of Pub. 2004Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

China’s cosmetics industry; Consumerspending on cosmetics; Foreign investmentand economic reform; State-ownedcosmetic companies; Growth drivers of theindustry; China’s one-child policy; Foreign-invested cosmetic firms; Ban on directselling; Beauty boutiques; L’Oreal; MaryKay; Avon; WTO (World TradeOrganisation) commitments.

Bangalore: On the Verge ofbeing ‘Bangalored’

Since the early 1990s, Bangalore has beenthe preferred outsourcing destination formultinational corporations like TexasInstruments, Intel, IBM, Cisco, Accentureand Microsoft apart from the Indian giantslike TCS, Infosys and Wipro. Despiteoccupying a predominant position in theglobal outsourcing industry, a deterioratinginfrastructure, high employee attritionrates and apathy of the regionalgovernment, many IT (informationtechnology) companies are planning torelocate to other destinations.


• To discuss the rapid growth of Bangaloreas the ‘Silicon Valley’ of India

• To discuss the factors that deglamoriseBangalore as a preferred outsourcingdestination.


Keywords

Outsourcing; Global outsourcingdestination; Bangalore; IT (informationtechnology) capital of India; Silicon Valleyof India; Bangalore’s growth; ‘Bangalored’;Outsourcing backlash; US offshoringbacklash; Relocation; The growth of STP(Software technology parks) units inBangalore; Software parks in Bangalore;IT industry composition in Bangalore;Software exports from Bangalore;Upcoming outsourcing destinations inIndia.

Ageing Japan: Growing Problems

An ageing population and a decliningbirthrate was one of the top priority issuesfor the Japanese government. By 2030,30% of the population would be above theage of 65 years. The demographic trendhad great economic implications. TheJapanese government’s study showed thatit would face an additional deficit of 4.5trillion yen by 2010 because of the increasein pension recipients. Moreover, with fewerworkers to support the retirees, the taxburden on the working population wouldincrease. Japan would face a critical capitalshortage as funds are diverted fromfinancing productive investments tofinancing pension deficits.


• To discuss the various economicproblems faced by Japan because of anageing population and the variousremedial options.


Keywords

Ageing Japan’s growing problems; Pensionreform; Social security; Gross domesticproduct; Fiscal deficits; Baby boomgeneration; Population growth rate;Japanese economy; Health benefits;Retirement benefit bill; Negativedemographic trends; Defined benefit,defined contribution.

Sarbanes Oxley and the Travailsof being a Small Cap Public

CompanyAccording to a survey of 32 mid-sizedcompanies, conducted by law firm Foley& Lardner, the average cost of being apublic company with annual revenues under$1 billion increased by 130%. The falloutof corporate scandals had seen a rash oflegislations including the Sarbanes OxleyAct and the new Securities and ExchangeCommission rules. The costs of going andstaying public increased. An analystcommented that many entrepreneurs nolonger even dreamt of going public becausethey saw the hassles outweighing thepotential benefits.


• To discuss the costs of going public andthe travails of staying as a publiccompany

• To discuss the possible and viablemeasures to reduce the cost of going

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ON

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ECO

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ON

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ECO

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S – II

public and staying public, for smallcompanies.


Keywords

Sarbanes Oxley Act; Initial public offerings;Webhire; Gristede’s Foods Inc; Corporategovernance; Costs of going public;Regulation 14D tender offer; Dutch auctionsystem; Small cap companies; Public toprivate; Profit maximisation; Leveragedbuyouts; Employee stock option plan;Productivity; Financial audit.

Consolidation in the EuropeanInsurance Industry: AXA as an

ExampleThe 1990s were the ‘golden era’ for theEuropean insurance industry with majorinsurance groups clocking average growthrates of up to 30%. One of the salientfeatures of this decade was its consolidationat both intra company and inter companylevels. One of the most notable playerswas AXA Group of France, whichmetamorphosed from a local insurer intoa global financial service giant.


• To discuss the reasons behind theconsolidation wave in the Europeaninsurance industry

• To discuss the strategies of AXA to growthrough acquisitions.


Keywords

AXA; Claude Bebear; Mergers andacquisitions; Equitable; Union desAssurances de Paris (UAP); Consolidationin European insurance; Third insurancedirectives; European Union; Market valueof European insurance companies; 10largest insurance mergers and acquisitions;Royale Belge; Guardian Royal Exchange;Mutual of New York (MONY); AXAFinancial; Henri De Castries.

China’s Credit Tightening:Impacton Small & Medium Enterprises

China maintained a remarkable averageannual GDP (gross domestic product)growth rate of more than 9% for morethan a decade. By late 2003, its economy

started showing signs of overheating. Inorder to prevent a bubble burst of theeconomy and to ensure a soft landing, theChinese government took various steps tocurb the unsustainable growth rates. Manydirect and indirect actions initiated by thegovernment forced the local banks to holdback loans for new projects. This directiveof the government hit the privately-ownedsmall and medium enterprises (SMEs) thehardest, leaving them with very littleavenues to raise funds.


• To discuss the state of SMEs during thecredit squeeze phase

• To discuss the alternative measures thatthese enterprises were planning in orderto raise funds.


Keywords

China’s credit tightening; Small andmedium enterprises; Overheating Chineseeconomy; Gross domestic product; WorldTrade Organisation; Credit squeeze; Excessliquidity; State-owned enterprises; ChinaCouncil for Promotion of PrivateEconomy; China Banking and RegulatoryCommission; Interest rate flexibility; Overinvestment, fixed asset investments; Non-performing assets, loans; Real asset prices;Unemployment.

Proton: The Malaysian CarMaker’sTroubles and ChallengesProton, the brainchild of the erstwhilePrime Minister of Malaysia, Dr. MahathirMohammed, has enjoyed preferentialtreatment from the Malaysian governmentsince its inception. After two decades ofits genesis, when time is running out forMalaysia to liberalise its auto industry,Proton still seems to remain a child, nothaving grown with the market realities.With limited time at its disposal, Proton’sfuture looks uncertain.


• To discuss the role of the protectionistpolicies in the decline of the Malaysianpride, ‘Proton’ and the strategies it hasadopted to survive beyond 2005.


Keywords

Malaysian national car; Mitsubishi Motors;Protectionism in Malaysian automobilesector; Import tariffs in Malaysia; Japanesecars in Malaysia; Malaysian automobilesector; Asean free trade area (AFTA);Common effective preferential tariff(CEPT) scheme; Group Lotus Limited;Proton City; Proton ‘Gen 2’.

Brazil’s Dilemma: Forests orForeign Exchange?

The Amazon forests of Brazil are theworld’s largest rainforests. But in the lastthree decades huge areas of the Amazonbasin have been deforested. During the1970s and the 1980s, the governmentintroduced policies, like provision ofsubsidised loans, providing easy credit andcutting of import duties, which encouragedcattle ranchers to settle in the Amazonregion. As the number of cattle ranchersincreased, the areas of deforestation alsorose in the Amazon basin. After thedevaluation of the real in 1999, theinternational demand for Brazilian beefgrew. Increasing exports of cattle beefhelped Brazil to accumulate comfortablelevels of foreign reserve and to maintainthe exchange rate of the real.


• To discuss the situation faced by theBrazilian government, wherein it has todecide between preserving the Amazonforests and increasing its foreign reserve.


Keywords

Brazil’s forests, foreign exchange; Cattlebeef, cattle ranchers; Agricultural products;Domestic demand; Environmentalorganisations; Deforestation; Brazilexports and imports; Tax cut programmes;World Resources Institute; Amazon forests;Brazilian Agency for Forestry andEnvironmental Affairs; Devaluation of theMexican peso; Centre for InternationalForestry Research; Brazil’s economy,balance of payments; Fernando HenriqueCardoso.

Japan: Why not in China?Japan and China are two of the largesteconomies in Asia, together accounting fornearly 85% of Asia’s gross domestic product.However, political misgivings and a bitterhistory between the two neighbours haveprevented a widespread economicpartnership between them. Top-class






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Japanese firms like Toyota, Nissan, andHonda (automotives), Sony and Hitachi(electronics) have struggled to make a markin China. Japanese electronics firms have amere 5% share in the Chinese market.


• To discuss the possible reasons for whichJapan could have stayed away fromentering China in a big way

• To understand how the existing Chinesecomplemental business and marketconditions, with its low cost labour anda growing domestic market, could serveas a major production base for Japanesefirms, which are looking to become morecompetitive globally

• To discuss whether Japan should be willingto forge an extensive partnership withChina to achieve mutual benefits.


Keywords

Japan-China relations; Open door policy;Bilateral trade between Japan and China;China’s accession to the World TradeOrganisation (WTO); Japan-Chinapolitical relation; Japanese directinvestment in China; Foreign directinvestments (FDIs); Toyota MotorCompany; Free Trade Agreements;Japanese, Chinese economy; JapanExternal Trade Organisation (JETRO);Recessionary economy; Gross domesticproduct (GDP); World Trade Organisation;Three Pillar Free Trade Policy.

Indian BPO Industry: A ChangingLandscape

In a development that promised to changethe face of the Indian business processoutsourcing (BPO) industry, global giantIBM announced in April 2004, its plan toacquire Daksh e-Services, one of India’slargest BPO companies. Within a week ofthis announcement, Citigroup alsoannounced its plans to increase its stake inits Indian BPO subsidiary to 100%. Whilesome saw these developments asvindication of India’s emerging status as aservices superpower, others believed thatthese acquisitions could be reflective of alacuna in the management of these BPOcompanies.


• To discuss the strengths and weaknessesof the Indian BPO industry as it wentthrough a period of consolidation.

Industry Indian BPO IndustryReference No. GBE0044Year of Pub. 2004Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Indian business process outsourcing (BPO)industry; Business process outsourcing;Daksh e-Services; Comparative costadvantage theory; Information technologyenabled services (ITES); e-ServeInternational; Customer relationshipmanagement; Unemployment; Mergersand acquisitions; Productivity; Low costdestination; NASSCOM (NationalAssociation of Software and ServiceCompanies); International trade; free trade;Citigroup; Off-shoring hotspot.

Dotcoms in IndiaThe success of Hotmail, eBay and Yahoo!inspired many young Indian entrepreneursto launch their own websites. Dotcomsflourished in India and abroad in the late1990s, fuelled by venture capitalists thatinvested millions of dollars in dotcoms withuntried business models. The year 2001brought an end to many a dotcom dreamin India, as most of them failed to survive.But dotcoms with sound business plansbacked by well-defined revenue modelsbecame profitable.


• To discuss the factors that contributedto the success of some of the dotcoms,and the collapse of numerous others

• To understand the misgivings thatcontributed to the collapse of dotcomsin India.


Keywords

Dotcoms in India; Dotcom failures;Indiabulls.com; On-line stock trading;Career and job websites in India;Naukri.com; Contest2win.com; Indian ITindustry; Baazee.com; Horizontal portal;Indya; Home Trade; Revenue models;Business models; Venture capitalists.

Comparative Cost Advantageand the American Outsourcing

BacklashOffshoring had become a contentious issueduring the American Presidential elections.The roots of the controversy sprang fromthe disparaging growth of jobs in the US

despite economic recovery. Proponents ofoffshoring derived their arguments fromthe theory of comparative advantage.They believed that it was in America’s bestinterest to take advantage of low cost,skilled labour in countries like India. Studiesshowed that the net benefit of offshoringwas greater to the US and that it helpedcreate rather than destroy jobs in the parentcountry. Research also pointed out thatthe major cause of anemic job growth wasthe productivity gains by Americancompanies and that newer and betterpaying jobs would soon be created, albeitwith some short run friction. Detractors,however, believed that export of servicejobs, or offshoring, was the major reasonfor job losses. They rejected theapplication of the theory of comparativeadvantage, as its assumptions of theimmobility of labour and capital were notbeing satisfied in the case of outsourcing.


• To discuss whether the Americanbacklash against outsourcing is justified

• To gain a deeper understanding of thebenefits of outsourcing to America andhow it creates jobs rather thandestroying them.


Keywords

Comparative cost advantage theory;American outsourcing backlash; Absoluteadvantage; Low cost countries; Inflationand interest rates; High real wages; US grossdomestic product (GDP); Unemployment;Expertise and efficiency of labour;Productivity; John Kerry; InformationTechnology Association of America;International trade; Free trade; Offshoring.

Chinese State-ownedEnterprises:The Challenges

China has long dominated the worldmanufacturing sector by virtue of its lowcost labour and China’s state-ownedenterprises (SOEs) have been the principaldrivers of the industry by providing theessential raw material-dominating thecapital-intensive sectors such as power,steel, chemicals, machinery, and providingemployment. Post 1978, China has beenmaking a concerted effort to transform its‘planned economy’ into a ‘socialist marketeconomy’ by restructuring its problemridden state-owned enterprises and makingthem profitable global players.

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ECO

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ON

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• To discuss the problems faced by thestate-owned enterprises in China

• To discuss the importance of theseinstitutions to the Chinese economy.


Keywords

State-owned enterprises (SOE); Iron-ricebowl; Soft-budget constraints;Governmental subsidies; Non-performingloans (NPLs); Zhuade Fangxiao; Corporategovernance; State Assets Supervision andAdministration Commission; Gaizhi;Shanghai Boasteel Group Corporation;China National Offshore Oil Corporation(CNOOC); Haier Group; Productivity;Bankruptcy; SOE reforms.

Business Environment in ChinaBy 1990, China had become a populardestination for foreign direct investment(FDI). There was an unprecedented boomin the FDI inflows into the country. Manycompanies made China their preferredmanufacturing base. However, a numberof them had a different and unpleasantexperience. With examples of five well-known companies including Pepsi, Amway,Asian Strategic Investments Corporation(ASIMCO), Yamaha and McDonnellDouglas, this case helps the reader tounderstand the experiences of some ofthese earlier entrants that had investedheavily in China.


• To discuss the factors affecting thefunctioning of foreign companies in thelight of tough business environmentexisting in the country.


Keywords

Business environment in China; Specialeconomic zones; Sichuan Pepsi; Amway(China) Company Limited; Asian StrategicInvestments Corporation (ASIMCO);Yamaha; McDonnell Douglas; Bank ofEngland; Foreign direct investment;Guanxi; Joint ventures; Intellectualproperty rights; Deng xiaoping; Low costdestination; cheap labour; Protectionism.

Entertainment and MediaOutsourcing in India

In the past decade India emerged as a majoroutsourcing hub for the American andEuropean companies, for their variousbusiness processes ranging from callcentres to internal processes. In the lastfew years, a new opportunity in the formof low costs and high expertise hasbeaconed the who’s who of theentertainment and media business acrossthe world to source their requirementsfrom India. International marketingresearch houses, top publishingconglomerates and media companiesstarted outsourcing a range of works andprocesses to India. The foreigners viewedIndia as an ideal destination because ofthe country’s technical expertise and lowcost factor.


• To discuss the rise of entertainment andmedia outsourcing in India

• To discuss India’s cost effectiveness vis-à-vis US, Canada, Korea, Taiwan andPhilippines.


Keywords

Entertainment outsourcing in India; Mediaoutsourcing in India; Outsourcing in India;Pentamedia graphics; India’s costadvantage; Competition from othercountries; Outsourcing in animation.

Silicon Fen: The CambridgeClusters

Silicon Fen, the cluster of hi-tech companiesin and around Cambridge University, has toits credit a host of high-tech companiesthat are spin-offs of the research that takesplace at the university. Ever since itsfoundation in the 12th century, CambridgeUniversity has been associated with majorscientific discoveries that have beentranslated into a commercial success. Thehi-tech cluster around the university hasbeen instrumental in creating much wealthfor the regional and national economies.


• To discuss the factors that helped thedevelopment of the cluster

• To discuss the challenges ahead and howvarious players associated with SiliconFen are trying to address the challenges.


Keywords

Cambridge; Silicon Fen; Clusters; Hi-techcompanies; Venture capital; Start-ups; Arm;Silicon Valley; Cambridge science park.

Japan: Employing theUnemployed

After World War II, Japan focused all itsefforts on its economy. The country’s grossdomestic product grew by stunning rates inthe 1950s and 1960s, and continued as theworld’s second largest through the 1980s.In the ‘lost decade’ that followed, it seemedas though the ‘Japanese miracle’ was beingdismantled by the long-lasting recession inthe economy. As downturns in theeconomy reflected surges in theunemployment rates, measures to createemployment had become a key issue ingovernment policy, especially in the wakeof increasing corporate restructuring.


• To discuss the measures employed bythe Japanese government in tackling theunemployment problem

• To discuss the need for alternative sourcesof labour in a predicament of country’sageing population, declining birth rate,and decreasing human resources.


Keywords

Japan; Economic recession;Unemployment; Employment measures;Lost decade; Structural reforms; Corporaterestructuring; Deregulation; Ageingpopulation; Outplacement firms; Labour;International Monetary Fund (IMF);Human resources.

SMEs in Thailand: TheGovernmental Initiatives

For a long time small and mediumenterprises (SMEs) had been the staplesector of the Thai economy. Contributing39% to the country’s gross domesticproduct (GDP) in 2003, SMEs constituted99% of the total establishments in thecountry employing 69% of the country’swork force. Apart from this, the Thai SMEsalso processed raw materials for export.






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• To discuss the governmental supportenjoyed by the SMEs in Thailand andthe measures taken by the governmentwith an objective of increasing SMEs’GDP contribution to 50% by 2006.


Keywords

Thai economy; Small and mediumenterprises (SMEs); Small Industry CreditGuarantee Corporation Act (SICGC),Thailand; Thai industrial sector;Government support for SMEs; Institutefor SME Development (ISMED); Small andmedium enterprises; Office of small andmedium enterprises promotion;Development of SMEs; Asian currencycrisis; 10 August package; Small IndustryFinance Corporation (SIFC); Small IndustryCredit Guarantee Corporation Act (SICGC);Financial Advisory Centre (SAFC).

America’s BPO Backlash:TheHighs and Lows

America has increased exponentially overthe last six months. The corporate topbrass and experts however, have staunchlydefended their decision to outsource, statingthat the job shifting to developing nationswith well-qualified human resources isnecessary for the American companies toretain their competitiveness. While thepain is real for the people who have beenrendered jobless, some politicians havechosen the issue to play on the minds ofthe populace, accusing outsourcing as apotential source for recession and joblessgrowth.


• To discuss the free trade versusprotectionism debate and whether acountry can survive by sticking to oneof the two views.


Keywords

Outsourcing; Business process outsourcing(BPO); American backlash; Free trade;Unemployment; Job churning;Protectionism.

Canada: A Hotbed ofTelemarketing Frauds

Telemarketing had its roots in the US inthe 1950s and 1960s, when it was mainlyused by insurance companies to increasetheir prospective customer base. With thederegulation in the telecommunicationsector, cross-border telemarketingincreased rapidly due to a fall ininternational call rates. However, cross-border telemarketing also gave rise totelemarketing frauds as the fraudsters foundit convenient to dupe gullible customersacross the border for huge sums withnominal investments. By the 1990s,Canada gained prominence as a major hubfor telemarketing frauds as Canadianfraudsters started fleecing US customersapart from their domestic victims. Despiteco-ordinated efforts by the lawenforcement agencies of the two countries,fraud operations still persisted.


• To discuss how Canada became a majorcentre for telemarketing frauds and theinitiatives taken by the US and theCanadian law enforcers to curb theproblem.

Industry TelemarketingReference No. GBE0034Year of Pub. 2004Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

USA; Canada; Telemarketing;Telemarketing frauds; Phone busters;Ontario Provincial Police; Royal CanadianMounted Police (RCMP); Project colt;Federal Bureau of Investigation (FBI);Federal Telephone Consumer ProtectionAct; Federal Trade Commission;Telemarketing sales rule; Deceptive MailPrevention and Enforcement Act; FederalCommunications Commissions; VerizonCommunications.

Halliburton: Costly Connections?Halliburton, the US-based oil and gasexploration services provider, for a longtime was known for the gloriousachievements that placed it in the leagueof the world’s best in the industry. Thecompany was in the news recently,although for the wrong reasons. It wasalleged that Halliburton was a beneficiaryof its connections in the government andthat it had overcharged the governmentfor the services it provided. While thecritics felt that the company benefitedbecause Dick Cheney, Vice President of theUnited States, was the former CEO ofHalliburton, the company defended itself

saying that they got the contract notbecause of ‘who they know’ but because of‘what they know’ .


• To discuss the controversies thecompany is mired in

• To discuss whether negative publicityharms companies’ performance in themarket and if so to what extent.

Industry Oil and Gas ExplorationServices


Keywords

Halliburton; Political connections; DickCheney; Asbestos liability; Iraqcontroversy; Rebuilding Iraq; Scandal inNigeria.

Doctoral Blues in the US B-schools

Since the 1990s, the US has beenwitnessing a declining trend in theproduction of business doctorates thattotaled only 1,071 in 1999-2000. With40% of the doctorates heading straight forthe corporates, the US business schools arerunning short of qualified doctoral faculty.


• To discuss the reasons for and theimplications of the declining trend inthe production of business doctorates inthe US.

Industry EducationReference No. GBE0032Year of Pub. 2004Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Sloan School of Management; BusinessPhDs; National Opinion Research Center;Association to Advance Collegiate Schoolsof Business; Doctoral FacultyCommission; Doctoral faculty shortage;B-schools; Executive programmes;National Science Foundation; Funds forPhD programme; Recommendations;Clinical faculty.

Thailand’s Land Energy BridgeProject:Costs and Benefits

In 2003, Singapore was the hub of theSoutheast Asian oil trade. The Governmentof Thailand, as part of a strategic plan to

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become the ‘Regional Energy Centre’,planned to construct a ‘land energy bridge’.This project was estimated to cut downthe shipping route between the Middle Eastand Southeast Asian nations, saving thefreight costs. Some oil-analysts wereskeptical about the commercial viabilityof the project. However, the governmentwas keen to develop the project andchallenge the monopoly of Singapore inthe Southeast Asian oil trade .


• To discuss the costs and benefits of theproject for Thailand and the implicationsof the new projects on the SoutheastAsian economy.

Industry Shipping and TransportationReference No. GBE0031Year of Pub. 2004Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Thailand land energy bridge project;Regional Energy Centre; Deep-water oilproject; Sriracha Oil trading hub; Strait-of-Malacca; Kra Canal; Isthamus;Thailand’s strategic plan; ThaksinShinawatra; Thailand petroleum trading;Tax free zones; Crude transportationpipeline project; Single point mooring;Supachi Panitchpakdee; PromminLertsuridej; Shipping logistics.

Startups in Europe: A New Leaseof Life?

Europe’s performance in theentrepreneurial arena had been lacklustrefor the past twenty years. Low economicgrowth, nascent venture capitalcommunities, inflexible labour laws andbureaucratic interventions were consideredto be the reasons. Apart from theperipheral countries like Ireland, Finlandand Iceland, the number of start-ups in thecore Euro-zone had witnessed a decline.However, things started looking up after2002, especially in Germany, thanks tobold regulatory reforms ushered in byChancellor Gerhard Schroeder. There hadbeen a substantial increase in venture capitalfunding, especially in early-stageinvestments.


• To discuss the causes of low performanceof Europe in entrepreneurship and thechallenges faced by Europeanentrepreneurs

• To discuss the sustainability of the spurtin the number of start-ups and how thebigger nations can benchmarkthemselves with countries like Finlandand Ireland.


Keywords

Entrepreneurship; Europe; Germany;Gerhard Schroeder; Start-up challenges;Accenture study on entrepreneurship; NeilRimer; Meisterbrief; Ich AG; Corporateventure capital; Jean-Bernard Schmidt.

Life Insurance Industry in ChinaChina’s life insurance market was at afledgling stage and had a tremendousgrowth potential because of the hugepopulation of 1.3 billion. In fact, with thesetting up of the China InsuranceRegulatory Commission (CIRC) in 1998,the industry witnessed a transition from astraggled state of affairs to a methodicalone. Till 2001 the industry had resistedfree foreign entry and thus had veryminimal foreign participation. With Chinagetting accession to the World TradeOrganisation (WTO), experts envisaged adepletion in the market domination of thelocal players. Foreign majors had lined upfor the market entry, hoping for a majorchunk of the ‘big cake’.


• To discuss the evolution of the Chineselife insurance industry, its present statusand challenges ahead for both domesticand foreign insurers.

Industry Life InsuranceReference No. GBE0029Year of Pub. 2004Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Life insurance industry in China; Industrybackground; WTO (World TradeOrganisation) accession; Entry of foreigninsurers; Market growth; Economic growthand implications; Regulations; ChinaInsurance Regulatory Commission;Insurance depth; Insurance density;Market share of the industry.

Drug Advertising in the US: Issuesand Implications

Ever since the Food and DrugAdministration (FDA) deregulated drugadvertising in 1997, American televisions,newspapers and magazines were inundatedwith numerous direct-to-consumeradvertisements. Advertising of prescriptiondrugs suddenly became the fourth largestadvertising category in the US; surpassedonly by automobiles, restaurants and

movies. In 2002, American consumersspent nearly $150 billion on drugs andmedication and the figure was projected totouch $254 billion by 2005. Critics, rangingfrom non-profit organisations toconsumers, argued that the deregulationboosted consumer spending on drugs. As aresult, the FDA found itself in a difficultposition to defend its policy on advertisingof drugs. But in February 2004, the FDAtook a stricter stance and issued a new setof guidelines to make the drug adverts moreconsumer-friendly.


• To discuss the interplay of direct-to-consumer advertising and consumer drugspending

• To discuss the impact of the FDA’sguidelines on the concerned groups.


Keywords

Drug advertising in the USA; Prescriptiondrugs; Advertising practices; Direct-to-consumer drug advertising; Federal TradeCommission; Patient package insert;Vioxx; National Institute for Health CareManagement; Top DTC (Direct-to-consumer) spenders; Food and DrugAdministration (FDA); Deregulation ofdrug advertising.

‘Clinical Trials’: Outsourcing toIndia

With escalating operational costs, patentexpiries and high research and development(R&D) expenditure, global pharmaceuticalcompanies have been looking to outsourcetheir manufacturing and R&Ddevelopment to ‘low cost’ countries suchas India and China. The Tufts Center forDrug Development established that the costof bringing a new drug into the market wasbetween $802 and $880 million and tookabout 15 to 17 years. Clinical trials (CTs)are a major part of these costs. Many globalcompanies outsource this job to ContractResearch Organisations (CROs). Analystsestimated that the CRO market would beworth $20 billion by 2010. India, with itsnimble chemistry skills, vast population,ethnic diversity, uninformed patients, easeof patient registration and low costadvantages both in research andmanufacturing, caught the attention ofglobal companies to conduct CTs.


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outsource and conduct CTs in thebooming CTs market in India.


Keywords

Clinical trials (CTs) outsourcing; Indianpharmaceutical industry; ContractResearch Organisation (CRO) market;Good clinical practices; Research anddevelopment (R&D); Contractmanufacturing; Quintiles Transnational;Ethics committee; IndependentInstitutional Review Boards; Phase I, PhaseII, Phase III trials; Drug Controller Generalof India; Indian Clinical ResearchLaboratories; Post 2005 product patentregime; United States Food and DrugAdministration; Clinigene Clinpharm SiroLotus Labs.

Eurotunnel: In Troubled WatersThe Channel tunnel is a 50.4 km longtunnel rail link under the English Channelbetween UK and France. The Channeltunnel is considered to be one of thegreatest civil engineering projects ofEurope. Both British and Frenchgovernments decided against using publicmoney and the contract was awarded toEurotunnel Group, a major player in theEuropean railroad industry. The projecttook eight years to complete and becameoperational on May 6 th 1994. However,with most projections about the traffic toutilize the Channel tunnel not materialising,Eurotunnel ran into losses and by 2003,and was submerged in a debt of £6.4 billion.With the situation deteriorating, a groupof shareholders approached the court for achange in the management of Eurotunnel.


• To understand the financial andoperational problems faced byEurotunnel and how it is restructuringits operations and financials to tide overthe crisis

• To discuss whether the change in themanagement would solve the problemfor Eurotunnel by increasing the trafficthrough the Channel tunnel or will thetunnel end up being an engineeringwonder that people would like to admirebut not use.

Industry RailroadReference No. GBE0026Year of Pub. 2004Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Eurotunnel; Channel tunnel; Construction;Raising finance; UK; France; Financialproblems; Losses; Debt restructuring;Passenger services; Freight services;Channel tunnel railway link; Trafficvolumes; Toll tariffs; Shoring up the balancesheet.

Business Confidence for FDI inIndia

India, with the second largest populationin the world, offers huge businessopportunities for investors. The‘protectionist’ government policies heldback the pace of economic growth of thecountry until the true economic reformsstarted in 1991. Although Indian foreigndirect investment (FDI) increased from$129 million in 1991-1992 to $3,449million in 2001-2002, it did not matchthe FDI growth rate of other developingnations, especially China.


• To discuss the major factors affectingFDI inflows into India until 2003

• To discuss how the policy reforms inIndia had started to build up confidenceamong foreign investors.


Keywords

Foreign direct investment (FDI) in India;Gross domestic product (GDP) of India;Balance of payments; Foreign investmentpromotion board; Foreign currencyreserves; FDI inflows; Exports and imports;AT Kearney FDI confidence index;Developing nations; Special economiczones; Federation of Chambers ofCommerce and Industry; Reforms;External commercial borrowings; IncomeTax Act; Reserve Bank of India.

Indian Tourism Industry Over theDecades

In spite of having a competitive advantagein terms of geographical diversity andcultural richness, India could not harnessits real potential as a global touristdestination. Ever since India’sindependence in 1947, the Indian tourismindustry had suffered from politicalindifference and poor infrastructure. In the1990s, when other South Asian countrieslike Singapore, Thailand and Malaysia, wereoutsmarting India by preparing top class

infrastructure suitable for high-end tourismexperiences, the Indian government stillconsidered the tourism sector as a luxurysegment benefiting only a few. However,by the turn of the 21st century, the Indiangovernment recognised the industry’spotential as an employment generator andforeign exchange earner and started givingit a more appropriate policy focus.


• To discuss the importance of the tourismindustry to the Indian economy and howIndia failed to leverage on it to generatesubstantial revenues.

Industry Tourism IndustryReference No. GBE0024Year of Pub. 2004Teaching Note Not AvailableStruc.Assign. Available

Keywords

Indian tourism industry; Global tourism;Asian tourism; Destination branding;Indian five-year plans; Budgetaryallocations to tourism; Tourism and grossdomestic product (GDP); Tourism andemployment; Tourism and infrastructure;Incredible India campaign; Domestictourism; Indian Tourism Ministry; Tourismand aviation industry; Tourism andhospitality industry; Tourism andgovernment policy.

European Drug Pricing and itsImplications

Due to lower drug prices in the EuropeanUnion (EU), by the turn of the 21st centurythe per capita spending on drugs in Europehad been much less when compared to thatin the US. Lower drug prices in Europe hadresulted in cumulative savings of $1 trillionsince 1992. Although such huge savingswere apparently lucrative, it was opinedthat Europe would be losing out to the USin the long run as higher drug prices in theUS made it a more lucrative market forthe drug makers. It was also opined thatdue to a higher probability of realising themoney invested in the research anddevelopment of new drugs in the US, moreand more drug manufacturers would shifttheir research centres to the US resultingin research and development job losses inEurope.


• To discuss the underlying causes for pricedistortions between the EU and US

• To discuss how the European drug pricingregulations can be detrimental to thelong-term health of the European drugindustry.

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Industry PharmaceuticalReference No. GBE0023Year of Pub. 2004Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

European Union; Lipitor; Drug priceregulations in Europe; Health care systemsin Europe; National Health Services inEurope; Reference pricing; Profitregulation; Product price controls; Newmolecular entities (NMEs); Research anddevelopment (R&D) investments inEuropean drug industry; Pfizer Inc;Tamoxifen; Novartis; Monopsonist pricesetter; Drug price distortions.

Private Schools in ChinaThe post-Mao China has seenunprecedented changes in Chineseeconomy and governance. Though criticshave rebuked China for its conservativeideologue, the country has been on thewatch list of many businesses. In the contextof education, the Chinese have long suffereddue to the lack of quality education. Thedormant private schools in China couldnot do much to meet the education needsof the common man. Even thegovernment showed laxity in its approachto improving the education system.China’s growing demand for schoolscoupled with the weak education systemwas proving detrimental to the progress ofthe new generation .


• To discuss the reasons behind theunderdevelopment of private schools inChina

• To discuss the reform process that thegovernment has adopted as a means toliberalise the education sector. Ofparticular importance are the issues onthe law of compulsory education and thegovernment’s reluctance to accept‘profit-making’ as the objective ofprivate schools .


Keywords

Post-Mao economic reforms; Sishu; Reformprocess; Draft decision on reforming theeducation system; Law of compulsoryeducation; China’s education system; Eliteschools; Outline of the Chinese educationreform and development; State EducationCommission; Profit making objectives;Principals’ responsibility scheme; Confucius.

Japanese Universities: TheChallenges Ahead

Since the 1990s, the Japanese educationsystem had been in a reform phase, tryingto improve its efficiency and meet the globalstandards of education. In the early 1990s,Japan experienced a decline in the populationof students less than 18 years of age, theprospective age of applicants for variouscourses in universities. There was an increasein the competition among the universities,and too many of them (national, public andprivate universities) were competing for toofew students. With the changing situation,Japanese universities faced many newchallenges, which played a key role increating a globally competent Japan for the21st Century.


• To discuss the challenges that lie aheadof the Japanese universities

• To discuss Japanese education system .


Keywords

Higher education in Japan; Japaneseuniversities system; National universities;Private universities; Public universities;Structural reforms; Adult educationprogrammes; Corporate and university co-operation; Demographic problems; The USeconomy; Beef exports and imports; UNFood and Agricultural Organisation;National Cattlemen’s Beef Association;Ann Veneman; Meiji System.

New Work-Time Regulations: IsBritain Ready?

The Working Time Directive adopted bythe European Union’s (EU) Social AffairsCouncil in 1993 governs working timeregulations in the EU member states. It seta maximum limit of 48 hours per workingweek. Following the adoption, Britainnegotiated for an ‘opt-out’ provision thatallowed individual employees to waive theirrights to the 48 hour limit. But recently,many have started questioning therelevance and operational veracity of theopt-out.


• To discuss the impact of long workinghours on Britain’s work force. Itexamines the relationship betweenworking hours and productivity

• To discuss the views of the trade unionsand the Confederation of BritishIndustry on the opt-out.


Keywords

Work-time regulations; Working TimeDirective (1993); European Commission;Anna Diamantapoulou; John Cridland; Theopt-out; Productivity in Britain;Protirement; European Union SocialAffairs Council; Confederation of BritishIndustry; Woking hours in Europe; SiMAP;Flexible working hours.

Thaksin Shinawatra and The ThaiEconomy

Thailand was one among the four countriesthat was badly affected by the East AsianCrisis in 1997. During the post-1997period, Thailand undertook a series ofmeasures to restore the economy. In 2001,Thaksin Shinawatra was elected as thePrime Minister of Thailand. Heimplemented strategies such as ‘Dual-Track’ and formulated a five-year plan ina bid to steer and accelerate the economy.


• To discuss the events that led to theEast Asian crisis, the strategies adoptedby Mr Shinawatra in the revival of theThai economy and the Challenges thatlie ahead of Mr Shinawatra.


Keywords

Thaksin Shinawatra; Thailand economy;Thai baht devaluation; Dual track plus;Thaksinomics; Economic stimuluspackages; Bangkok international bankingfacilities; Thai public debt; South EastAsian financial crisis; Thailandinfrastructure investments; NationalAsset Management Corporation;National Economic and SocialDevelopment Board; Non-performingloans; Baht peg to the dollar; Thai realestate industry.

India as an OutsourcingDestination: CompetitiveAdvantages and Core

CompetenciesSince the late 20th century, BusinessProcess Outsourcing (BPO) to thedeveloping countries by the companies ofthe developed nations, had become more a






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necessity than an option. Outsourcing wasviewed as an effective business strategy asit offered much more than just a costadvantage. By 2003, India had become amajor global outsourcing destinationbecause of its high intellectual capital, ahuge population of English-speakinggraduates, lower compensation costs,strong information technologyinfrastructure and a sustained governmentsupport. In the early 21st century, althoughIndia witnessed a rapid growth of BPOcompanies, it was facing competition fromother potential BPO destinations likeChina, Ireland, Russia and Mexico. Tostrengthen its competitive edge, and furthermaintain and develop its corecompetencies, India was required to quicklymove up the value chain and providetailored services suited for differentcustomer needs.


• To discuss the evolution and growth ofBPO in India

• To discuss the core competencies andcompetitive advantages of India as anoutsourcing destination

• To discuss the challenges faced by Indiafrom other countries including China andIreland.

Industry BPO IndustryReference No. GBE0018Year of Pub. 2004Teaching Note AvailableStruc.Assign. Available

Keywords

Business process outsourcing (BPO); India;NASSCOM; Bangalore; Indian BPOmarket; BPO evolution; GE CapitalInternational Services (GECIS); Captiveoutsourcing; Strategic alliance; Outsourcemodel; ITES-BPO; Videsh Sanchar NigamLimited (VSNL); InternationalDevelopment Corporation; Softwaretechnology parks of India; IT Act, 2000.

China’s Retailing ChallengesSince the opening-up of the retail sectorin 1992, China had transformed itself intoa new haven for retailing by the turn ofthe 21st century. With China’s signing ofthe World Trade Organisation Accession,it was envisaged that by 2005, the Chineseretail markets would be rapidly opened tothe foreign players, which would make itdifficult for the domestic retailers tosurvive. However, foreign retailers alsofaced certain unique challenges in theChinese market.


• To discuss the challenges faced by foreignand domestic retailers in China againstthe backdrop of the Chinese retailinglandscape.

Industry RetailingReference No. GBE0017Year of Pub. 2004Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

China; Retailing since the 1990s; WorldTrade Organisation (WTO); Domesticretailers in China; Wal-Mart; Carrefour;Characteristics of the Chinese market;Government regulations; Distributionsystem in China; Hypermarkets;Consumption pattern; Joint ventures;Wholly-owned enterprises (WOEs);Shanghai Lianhua Supermarket; ShanghaiHaulian Supermarket.

Outsourcing Trends in the GlobalAutomobile Industry

From the early 20th century, theautomobile industry grew rapidly into aglobal industry with the introduction ofnew technologies and trendier car models.Although the US dominated the global automanufacturing till the mid 20th century,by the 1980s, Japan had become the world’slargest producer of low cost high volumeautomobiles with 28.5% market share ofthe global auto market. As a result, majorautomobile companies in the US and inEurope witnessed severe competition andwere forced to curtail costs and maintainprofitability. To sustain costs, manycompanies started outsourcing or sub-contracting manufacturing processes tocontract manufacturers. Soon, thecompanies started outsourcing the designand development of particular models tothe sub-contractors. In the late 1990s,outsourcing in the automobile industry sawa major change when companies startedoffering contracts for manufacturing entirecars, from design to assembly, to the sub-contractors. With competition heating upin the niche segment of built-to-order cars,outsourcing seemed to be the mosteconomically viable option to survive theprice wars in the global automobile market,albeit with some of its inherent risks forboth the manufacturers and the contractors.


• To understand how the rise of Japanesecarmakers hit the profits of theAmerican and European carmakers

• The steps being taken by the Americancarmakers to cut costs especiallythrough outsourcing right from designto assembly

• To understand the potential risks andbenefits of outsourcing to carmakers.


Keywords

Automobile industry; Outsourcing; Sub-contracting; BMW; Magna Steyr;Mercedes-Benz; Lean production; GeneralMotors; Japan; Mass production; Risks ofoutsourcing; Built-to-order; Jeep; Systemintegrators; Craft production.

Indian Railways: The Cost ofPublic Service

Celebrating its 150th anniversary in early2003, Indian Railways (IR) is yet to seepositive figures on its financial papers.Being India’s biggest public sectorundertaking with 1.5 million employeesand a capital investment of $10 billion, IRfinds itself mired in bureaucracy andideological constraints that has strangledits growth. With an extremely highoperating ratio, it is neither able to coverits depreciation nor support itsmaintenance and expansion activities.


• To discuss the options before IndianRailways -whether to continue as a publicutility service or restructure itself into acommercial enterprise.

Industry RailwaysReference No. GBE0015Year of Pub. 2004Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Indian Railways; Rakesh MohanCommittee; Railway budget; Rail IndiaTechnical and Economy Services Ltd(RITES); Indian Railway ConstructionCorporation (IRCON); Indian RailwayCentral Organisation for Telecom(IRCTC); Prakash Tandon Committee;Commercialisation of Indian Railways; IR(Indian Railways); Views on privatisationof Indian Railways; Railway finances;Partition of India; Pension liability ofIndian Railways; Railway zones.

Russia: Taming the Oligarch?The fall of Soviet Union in 1991symbolised the victory of democracy overcommunism. In the rush to consolidatedemocratic forces, president Boris Yeltsininitiated several reforms in governance andeconomy. But the common man of Russia

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was far from enjoying the fruits ofdemocracy. Yeltsin’s privatisation agendaof the 1990s, though acclaimed to be asuccess at that time, later posed serioushurdles to modern Russia. One of theoffshoots of the privatisation programmewas the emergence of Oligarchs, whoseproximity to the Kremlin won them covertpolitical favours and business deals. WhenVladimir Putin came to power in 2000,the nexus of politics and Oligarchs startedfalling out. Though Putin partiallysucceeded in keeping a tab on Oligarchs’political activities, he could not sufficientlyconvince the world about the Kremlin’sintegrity. This has cost Russia dearly interms of foreign investment andinternational diplomacy.


• To discuss the reasons that led to thepersecution and the eventual exile ofOligarchs

• To discuss the process of the infamousprivatisation of the 1990s, which manyobserved was the root cause for Russia’spresent-day problems.


Keywords

Oligarch; Mikhail Khodorkovsky; BankMenatep; Yukos; Privatisation; VladimirPutin; Anatoly Chubais; Boris Yeltsin;Boris Berezovsky; Vladimir Gusinsky;Vladimir Pontanin; Sibneft; Exxon-Mobil;Tax evasion; Communism.

Mahatir Mohammad and theMalaysian Economy

Under Mahatir Mohammad, Malaysia grewinto a formidable South East Asia economywithin 46 years of its independence. Inspite of its small size and limited resourcesit became one of the most suitable placesfor investment in the world. As the primeminister of Malaysia for 22 years, Dr.Mahatir had to deal with many crises onthe economic frontier.


• To discuss the issues related to DrMahatir ’s policies to control theMalaysian economy during his term inoffice

• To discuss how Mahatir steered Malaysiathrough the Asian financial crisis of1998.


Keywords

Malaysian economy; Mahatir Mohammad;South East Asian financial crisis; Peggingof ringgit; Capital control policy; Malaysia;Foreign direct investment; Fiscal stimulus;Infrastructure projects in Malaysia; UnitedMalay National Organisation; Malaysia’sgross domestic product; Organisation forEconomic Co-operation andDevelopment; Post and pre-liberalisationperiod; Bank Negara Malaysia (CentralBank of Malaysia);; Abdullah AhmedBadawi.

Funding Crisis in Britain’sUniversities

In the UK, the tradition of the governmentfunding university education is beingquestioned. The long held belief was thatthe responsibility of financing the highereducation lies with the government.Typically while the universities incurred£8,000, they were charging only £1,125.The notion seemed to hold good when therewere fewer students aspiring for highereducation. But the steady increase in thenumber of students taking to highereducation left a chasm between the fundingand the costs universities incurred. As aresult the universities are experiencing afunding crisis and are losing out theircompetitiveness. To tide over the crisisthe Tony Blair government proposed tointroduce a new system called ‘Top-up’fees wherein the universities can chargehigher fees (up to £3,000) and therebycover costs.


• To discuss how the existing fundingsystem is hampering the universities’progress and whether the proposed newsystem would be able to address theproblem.


Keywords

Britain’s universities; Funding crisis; Top-up fees; Low government funding; OxfordUniversity; Cambridge University;Endowments; Revenues from foreignstudents; Course costs; Repayments;Funding crisis in Britain’s universities.

Labour Unions in South KoreaSouth Korea, under the authoritarianregime of Park Chung Hee, made amazingprogress to become one of the powerfuleconomies in the world. But the labourunions felt left out and oppressed duringthe regime. The transition to democracyresulted in powerful unions that frequentlytook to the streets to demonstrate theirmight. South Korean labour, which wasonce the engine of the economy, became amenace that endangered the economicprogress.


• To discuss the finer points of the Koreaneconomy and the role played by labourunions in Korea’s claim to fame

• To discuss the growth of unionism underthe authoritarian regime of Park ChungHee and the eventual transition todemocracy

• To discuss how the unions turned out tobe a menace for the economy.


Keywords

Labour unions; Korean Council of TradeUnion Representatives (KCTU);Federation of Korean Trade Unions(FKTU); Ulsan Typhoon; Chaebol;Organised labour; Layoffs; Coup d’etat;General Park Chung Hee; Hyundai;Reforms; Multiple unionism; Repressiverule; Transition.

Mario Monti vs MicrosoftThough antitrust suits were not new toMicrosoft, the company’s bitter battle withthe European Commission of Competitionattracted much attention and speculation.The Commission, headed by Mario Monti,alleged that Microsoft was leveraging itsmonopoly in the operating system marketto dictate the server software and the mediaplayer market. The case was crucial toMicrosoft as it was squaring off againstone of the most powerful persons in Europe– Mario Monti, who rose to fame after heblocked the high-profile GE-Honeywellmerger.


• To discuss Microsoft’s antitrust battlesin the US and Europe

• To discuss about Mario Monti’s sternactions against companies that violatedEuropean antitrust laws.





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Industry Professional Sports Teams &Organisations


Keywords

Microsoft; Mario Monti; Microsoft’santitrust battles; European Commission ofCompetition; US antitrust laws; Europeanantitrust laws; Microsoft’s antitrust casein the US; Microsoft’s antitrust case inEurope; Powers of the EuropeanCommission; GE-Honeywell mergerdebacle; Monopoly; Microsoft’s bundlingtactics; Statement of objections; SunMicrosystems’ complaint.

The French 35-hour WorkweekIn 1997, French government passed alegislation bringing down the officialworkweek from 39 to 35 hours. Thelegislation was driven by the government’sbelief that reduced work time and a cap onovertime would allow them to distributejobs over the populace and thereby reduceunemployment levels. Though the initialresults were encouraging, there were certainindustries that started to feel that thelegislation was against their interests.Voices of dissent began to escalate whenunemployment levels shot up between2002 and 2003. Intense debates over theusefulness of the 35-hour workweek raiseddoubts about its continuation.


• To understand the historical andgeographic perspective ofunemployment in France

• To discuss how the 35-hour workweekwas conceived to address theunemployment problem

• To discuss the initial results and theongoing debate about the usefulness ofthe law.


Keywords

35-hour workweek; Unemployment;Recession; Geographical bias; Layoffs;Overtime; Economic development;Productivity; Job creation.

The US Steel Industry and theTariff Policy of Bush

The US steel industry has been facing manyproblems such as price instability,

overcapacity, high legacy costs etc. In June2001, President George W Bush requestedthe US International Trade Commission(USITC) to conduct a Sec 201investigation. In response to the findingsof USITC in March 2003, the Presidentordered a three-year ‘safeguard’ measureon many steel imports. The EuropeanUnion and other Asian countriescomplained to the World TradeOrganisation (WTO) that the tariffsimposed by the US broke the internationaltrade rules. They also threatened to imposeretaliatory tariffs on US-made products, ifthe US did not take back the safeguardmeasures. On the one hand, the US steelproducers wanted the tariffs to exist, andon the other hand, the steel consumersand the foreign countries wanted Bush tolift the tariffs. In either case, Bush willhave to pay the political cost for hisdecision, since the Presidential electionsare to take place in 2004. In November2003, the WTO decided that the tariffsimposed by the US broke the internationaltrade rules and that they were illegal. Finallyon December 4th 2003, Bush took thedecision to lift the steel tariffs, 16 monthsearlier than originally planned.


• To understand how tariffs could be usedas a means to protect domestic industryand the implications thereof in the lightof international trade rules.

Industry SteelReference No. GBE0008Year of Pub. 2004Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

US steel industry; Steel tariffs; America’sprotectionism; United SteelworkersAssociation; Sec 201 investigation;Safeguard measures; International SteelGroup; US steel imports; President Bush’ssteel policy; World Trade Organisation;European Union; Trade barriers; Europeansteel; Trade promotion authority; Freetrade policy.

South Korea’s ChaebolSouth Korea’s Chaebol, or the family-owned conglomerates, played aninstrumental role in the post-war revivalof the economy. The Korean governmentprovided special incentives to Chaebol torealise their plans for economicdevelopment. But when the Asian financialcrisis hit Korea, it had a disastrous effecton the economy and the overt nexusbetween the government and Chaebol wasquestioned, as some of the Chaebol wentbankrupt, throwing light on thecomplexities involved in the Chaebol

system. Economists started blaming theChaebol for reckless expansion and requiredthem to restructure to become moretransparent.


• To discuss the governmental supportenjoyed by the SMEs in Thailand andthe measures taken by the governmentwith an objective of increasing SMEs’GDP contribution to 50% by 2006

• To discuss how the Asian financial crisisand Chaebol’s expansion brought thecountry to its knees and how Daewoo,the biggest of the Chaebol, wentbankrupt. This case can be used inconjunction with the case ‘ChaebolReforms’.


Keywords

Chaebol; Reforms; Asian financial crisis;Kim Dae Jung; Kim Woo Choong; Cross-holding; Economic development; IMFbailout; Daewoo bankruptcy; Chaebolrestructuring; Daewoo; Origin of Chaebol;Park Chung Hee; South Korean economy;Chaebol bankruptcy.

Chaebol ReformsThis case can be used in conjunction with‘South Korea’s Chaebol’ (203-032-1). Thecases concern Chaebol, or the family-owned conglomerates of South Korea.While ‘South Korea’s Chaebol’ talks aboutthe origin of Chaebol and the role ofgovernment in their development, this casediscusses the restructuring initiatives ofChaebol. There is also detailed discussionon what steps the government took to pushChaebol reforms and how LG grouprestructured into a holding company,marking the beginning of a new era in SouthKorea’s big businesses.


• To discuss the government initiativesto reform Chaebol

• To understand the restructuring initiativesat LG, one of the five big Cheabol.


Keywords

Chaebol; Reforms; Asian financial crisis;Kim Dae Jung; Samsung; Cross-holding;Economic development; IMF bailout; BigDeal; Chaebol restructuring; LG’s

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restructuring; Holding company; LGCorporation; Hyundai and LG electronicsswap; Chaebol bankruptcy.

Music Industry: Battling OnlinePiracy

The advent of Napster in 1999 took themusic industry to a new battlefield – theInternet. In just two years of its operations,Napster exemplified the power of theInternet and the craze for music. On-linemusic piracy posed a more serious threatthan was conceived. The industry,represented by the Recording IndustryAssociation of America and InternationalFederation of the Phonographic Industry,took concerted steps to tackle the illegaldownloading of music. Though theysucceeded in Napster’s fall, they could notcontain other Napster-like services, whichbecame popular after Napster.


• To discuss the series of steps taken bythe industry to stop the ‘Napsterisation’of music

• To discuss the advent of legal on-linemusic sites and their success as paidservice providers.

Industry EntertainmentReference No. GBE0005Year of Pub. 2003Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

iTunes; Music piracy; Napster; IFPI(International Federation of thePhonographic Industry) commercial piracyreport; Music sales; World IntellectualProperty Organisation; EMI; Sony;Universal; BMG; CD-ROM piracy; MP3;Kazaa; Pirated music market; Music piracyand organised crime.

Credit Card Debt in BritainIn 2003, Britain accumulated a lot of credit.According to a Bank of England report,credit card lending formed 7.16% of thetotal lending to individuals of the UK forthe month of September 2003. Along withthe increase in credit card lending, creditcard debts also increased. The Bank ofEngland revised its interest rate to keep acheck on the increasing amounts of debtand inflation. The credit card lenders aredealing aggressively with their customersby going to the courts and also engagingbailiffs. They are also selling the debts tothe debt collection agencies.


• To discuss how the problem ofaccumulating credit card debt iscontributing to the increase in the non-performing assets of banks and creatinga vicious cycle in the economy

• To discuss what steps the Bank ofEngland can take to deal with theproblem.


Keywords

Credit card debt; Interest rate; Debt; Bankof England; Bailiff; Debt recovery; Netborrowing; Debtor; Creditor; Britisheconomy; Cardholders; Debit card;Banking; Lending; Debt repayments.

The Indian PharmaceuticalIndustry:Opportunities and

ChallengesTo become part of the World TradeOrganisation, India signed the GeneralAgreement on Tariffs and Trade (GATT)in December 1994, packaged with it thetrade related aspects of intellectual propertyrights. By virtue of signing the GATT, Indiawas bound to relinquish the ‘processpatent’ policy and recognise only ‘productpatents’. Protected by the 1970 PatentsAct, Indian pharmaceutical companiessurvived solely on drugs that were reverseengineered. The growth of the industry wasdependent on the generics market only.The blueprint for the future howeverdepended on where the Indianpharmaceutical industry fit in the valuechain and what steps were needed to moveup in the chain. With many drugs goingoff patent, a huge opportunity in the globalgenerics market is set to emerge. But thequestion is whether that alone is sufficientfor the Indian companies to survive. Canthe Indian pharma companies be globalplayers post 2005?


• To discuss the steps that the Indianpharmaceutical industry can take tomove up the value-chain in the light ofthe GATT agreement

• To discuss the possible future growthopportunities for the Indianpharmaceutical industry and how theIndian pharma companies can preparethemselves to meet the challenges ofthe product patent era.

Industry PharmaceuticalReference No. GBE0003Year of Pub. 2003Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Indian pharmaceutical industry; Pharmavalue chain; Research and development;Drug Price Control Order; DPCO; Genericdrugs and patented drugs; GeneralAgreement on Tariffs and Trade; GATT;Product patents and process patents; Traderelated intellectual property rights; WorldTrade Organisation; Generics market;Pharma industry challenges; Pharmaopportunities and challenges; Formulationsand bulk drugs.

French Bailouts

As a member of the European Union,France had to follow EuropeanCompetition Commission (ECC) rules andregulations regarding state aid. However,France has been violating those provisions,sometimes openly and sometimes covertly.While the politicians seem to believe infree trade and competition, they resort toprotectionist policies when their ownindustries are involved. These protectionistpolicies and state aid do not seem to servethe very purpose they are intended for.


• To discuss the causes, which led to thebankruptcy of France Telecom, CreditLyonnais, Bull and Alstom

• To discuss how the French governmenttried to save these companies and howECC rules were violated

• To discuss whether the bailout by thegovernment is justified.

Industry TelecommunicationsEquipment


Keywords

French bailouts; Bailout; State aid;European Competition Commission;European Union; France Telecom; CreditLyonnais; Groupe Bull; Alstom; Enterprisede Recherches et d’Activities Petrolieres;Bankruptcy; Antitrust; Competition; Stategrants; European Commission.





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Motorola in ChinaSince the 1990s, China has emerged as thelargest market for mobile handsets,attracting major handset manufacturers inthe world. However, despite being an earlyentrant, Motorola was not able to maintainits lead in China as competitors, especiallythe local players, were giving a tough timeto the company.


• To discuss the importance of China as amarket for Motorola and what Motorolais doing to counter competition andmaintain its leadership in the market.

Industry Telecommunications IndustryReference No. GBE0001Year of Pub. 2003Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Motorola; China handset market; Mobilephones; Technology; China; Personalcommunications products; Repositioning;Motorola in China; Nokia;Telecommunications equipment;Competition in China handset market;Motorola and Chinese companies;Motorola’s new products in China;Motorola and Eastcom; Motorola andNokia.

Global Food Crisis (B): A PerfectStorm of Supply Crunch?

This case study, sequel to Global Food Crisis(A): A Silent Tsunami of New Demands?,is an attempt to vigorously bring to thefore of the deep seated malaise underneaththe world wide food crisis of 2008. It showshow short term knee-jerk responses tobanish food crisis get merely as temporarypalliatives and long-term reliance thensimply spawns boomerang effects. Variousfeatures behind food productivity havebeen explored and the trade offs faced inthe food front discussed. The case studydebates over globalisation vs foodsovereignty, mechanisation of agriculturevs loss of crop land to urbanisation, GMseeds vs farmers' seed autonomy,agrochemical inputs vs soil fertility,irrigation vs environmental preservationwhile stressing the importance of researchin food production. The case examines thecost-benefit aspects of rocket food.Whether global food crisis is to be imputedto adverse climate change coupled withrising population or it is an offshoot ofpurchasing powers in the lands of

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marginalised is the point worth one'spondering.


• To analyse the factors augmenting thesupply side of food economics

• To explore the trade-offs in the questfor higher food production

• To discuss the new possibilities inexpanding global food production

• To debate over the management ofdemand side and supply side to over comethe world food crisis.

Industry Not ApplicableReference ITW0026Year of Pub. 2009Teaching Note AvailableStruct.Assign. Available

Keywords

Global Food Crisis, GM seeds, Trades-offsin Food Front, Seed Dependency Syndrome,Malthusian Law, Globalisation, TradeLiberalisation, Ricardian Theory ofComperative Advantage, Impact ofClimate Change on Food Production,Rocket Food, Kmznet‘s Curve

Global Food Crisis (A): A SilentTsunami of New Demands?

First in the sequel, this case study takes thereaders down the lane of economic logicand factoids covering the relationshipbetween GDP and meat consumption,between oil prices and food prices, betweenbio-fuels and climatic benefits, betweenmoney growth rate and inflation, betweentrade liberalisation and food prices. Whilethe case navigates through the criss-crossing debates on food crisis, the icing ofthe cake comes in the form of a paradoxthat proclaims food price inflation is not aproblem but a solution to the food crisis.

The global food crisis of 2008 thatmanifested itself in ugly riots and irrationalexport restrictions have threatened todestibilise both politics and economics ofthe world. While the unprecedented spikein food prices have the spooling potentialof pushing 100 million additional peopletowards starvation, analysts and expertsincluding politicians and bureaucrats havestarted playing the blame game of pinningdown the factors accountable for this silenttsunami. In the process two catch-all leadshave been recognsied and powerful debateshave been raised on the relativesignificance between the factors reducingfood supply and the factors raising thedemand for it. Whether the world wide fuelcrisis has its roots in the US policy ofdiverting land from food grains to bio-fuelproduction or in the shift in dietary habitsof the bulging middle class of the emerging

economies to animal protein-rich food, hasbecome an epic issue.


• To analyse the two categories of factors– demand-pull and cost-push – that causeinflation

• To examine the unique role of fuel infood price inflation

• To explain the impact of inflation ondifferent categories of people

• To suggest solutions for food crisis bydebating upon whether food crisis alwaysmeans food price inflation.


Keywords

World Wide Food Crisis, Demand PullFactors, Cost Push Factors, Food PriceInflation, Inflation vs Deflation, Bio-fuelproduction, Trade Liberalisation, FoodProtectionism, Food Soverenity, EmergingEconomies and Meat Consumption

WTO and Doha Round 2008: APause or Breakdown?

Since the formation of the GeneralAgreement on Tariffs and Trade (GATT)in 1947, its main objective has been topromote international trade betweennations by reducing agricultural tariffs,export subsidies and domestic support, themajor barriers to trade. To achieve itsobjective, GATT monitored eight roundsof negotiations starting with Geneva roundin 1947 to the Uruguay round that lastedfor 9 years. However, except the Uruguayround that succeeded in setting targetsregarding reduction in tariffs, domesticsupport and subsidies by both developedand developing countries none of therounds was successful. What were thereasons for the continuous failure of therounds, when the objective of all themember countries has been the same?

In 1995, World Trade Organization(WTO) replaced GATT to carry forwardthe same noble objective – remove barriersand uplift the developing nations. Themajor negotiating round post WTO'sformation was 'The Doha DevelopmentRound' in July 2008. However, notsurprisingly, this round also collapsed onthe 9th day on the issue of usage of 'SpecialSafeguard Mechanism' by developingcountries. Interestingly, Regional TradeAgreements (RTAs) between two or threeneighbouring countries have had a higherrate of success than Multilateral TradeAgreements (MTAs). When RTAs could


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be successful, why couldn't developing anddeveloped countries meet on a consensuswith regard to MTAs? In spite of benefitsfrom trade liberalisation, why do these tradenegotiations continuously fail? Who shouldbe blamed for the failure of the DohaRound? The case delves into the sameissues.

On November 15th 2008, few of the membercountries decided to conclude the Doharound and meet in December 2008 for thesame. Will this round be successful? Thecase also explores into the measures thatneed to be taken to make all the membercountries think and act alike.


• To understand the historical relevanceof formation of WTO (and GATT) andother MTAs

• To understand the difficulties in reachingconsensus in MTAs and implementingthose policies

• To analyse the reasons for the failure ofDoha round of trade negotiations

• To debate on the way forward for thisimpasse and reflect on the relevance ofMTAs in the light of increasingglobalisation and bilateral trade in theworld.


Keywords

GATT, Export subsidies, tariffs,Negotiations, international trade, regionaltrade agreements, G20, WTO, Domesticsupport, Uruguay Round, developedcountries, developing countries

Trade Blocs, Free TradeAgreements and PreferentialTrade Agreements: The New

Drivers of World TradeWorld War II left devastated a lot manyindustrialised economies then. One way torecoup was to mutually trade with thosecloser to home. Regional Trade Agreements(RTAs) were the norm in Europe, leadingthe way in 1950s with the initiation ofEuropean Coal and Steel Community(ECSC). Since then, the increasing numberof regional trade blocs reflected an urge tointegrate economies – for the potentialbenefits of scale, competition and location,offered by free trade. Though criticised –as motivated by political intentions ratherthan business objectives – the RTAs helpedup global trade. However, as globalisationushered in the new global trade order, whichis believed to be based on business acumen,

RTAs are said to have lost their relevance.This case helps debate if RTAs have outlivedtheir purpose and to discuss the factorsthat guide international trade in the 21st

century. The case can be used to analysethe importance of new trends in cross-border trade for Multinational (MNCs) andTransnational Companies (TNCs).


• To understand the need and relevanceof trade blocs

• To appreciate the enablers behindglobalisation and their impact on MNCs

• To highlight growing volumes of worldtrade and minimised politicalintervention in trade agreements.


Keywords

Trade Blocs; Free Trade Agreements;Preferential Trade Agreements; Absolutecost advantage; International Trade andWorld Economy Case Study; ComparativeCost Advantage; Foreign trade and tradebarriers, Trade pacts and trade blocs;Globalisation; Phases of Globalisation;Regional Trade Agreements; Imports andexports; Foreign trade; Global inflationarypressures

NAFTA at Ten: UnfulfilledPromises in Mexico

On Jan 1st, 2004, the U.S.A, Canada andMexico celebrated the completion of 10years of one of the most controversial tradeagreements, NAFTA. The free tradeagreement, NAFTA, was to herald a newera of economic growth for the threeNAFTA countries, especially Mexico.NAFTA did bring in enormous growth notonly to U.S.A and Canada, but also toMexico by increasing exports and FDI.NAFTA’s appraisal, after a decade, revealsa lot of shortcomings, as against what thefree trade supporters claimed. It is arguedthat Mexico’s economic growth isdependent on the growth of the U.S.economy. A slowdown in the U.S. wouldresult in a subsequent decline in theeconomic growth of Mexico, as witnessedduring 2001. At the same time, many farmlivelihoods in Mexico have been destroyed,real wages have decreased and there hasbeen environmental degradation near theU.S.-Mexico border. Analysts feel thateconomic liberalization because of NAFTAhas been incomplete in Mexico. It is feltthat Mexcio requires significant policy andinstitutional reforms to make NAFTAmore effective. Critics feel that NAFTA is

an experiment in globalization, that wentwrong and caused irreversible damage toMexico.


• To understand the working of a free tradeagreement, with special reference toNAFTA

• To understand the industrial backgroundand economic structure of Mexico

• To analyze whether the objectives ofNAFTA have been achieved

• To analyze the gains and losses forMexico due to NAFTA

• To understand the implications of thecomplete removal of agricultural tariffsby 2008 on Mexico’s economy.

Industry Economics, Politics andBusiness Enviroment

Reference No. ITW0022BYear of Pub. 2006Teaching Note AvailableStruc.Assign. Not Available

Keywords

NAFTA; Mexico; International; Trade;Maquiladora; Exports; FDI; Stability;Agriculture; Local Partnerships; Northamerican; Free Trade Agreement; TequilaPeso; Natural Resources.

US Europe Trade Wars: The Caseof Boeing vs. Airbus

Boeing and Airbus, for long, had dominatedthe market for large passenger aircraft. Thebattle often took acrimonious turns witheven the governments pitching in for thecompanies. One such issue cropped up inlate 2004. In late 2004, the US accusedthe European governments of subsidizingAirbus, giving it an unfair edge over Boeing.They filed a complaint before the WorldTrade Organization (WTO) in this regard.European Union (EU) too filed a counter-complaint alleging indirect subsidization ofBoeing through offer of military and spacecontracts. The three month time to resolvethe issue mutually expired on April 6,2005. Now, analysts were wondering whatturn the issue would take.


• Trade disputes between countries

• Resolution of such disputes

• Subsidies by governments to theirindustries

• Business competition and the role ofgovernment

• Infant industry argument.

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Industry AircraftReference No. ITW0021BYear of Pub. 2005Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Aircraft Industry; Boeing vs. Airbus; InfantIndustry; Government Subsidies; TradeWars; International Economics;Competition; World Trade Organization(WTO); Dispute Resolution;Duopoly;Politics and Business; ManagerialEconomics; Market structure.

WTO vs USA: The ByrdAmendment

The US Continued Dumping andSubsidisation Offset Act, known as the ByrdAmendment, was passed in October 2000.It was globally condemned for its non-compliance with the US’ obligation tointernational trade laws. The ByrdAmendment gave rise to the largest tradedispute case in the history of the WorldTrade Organisation (WTO) with 17countries contesting its legality. The WTOruled against the US, but even after theimposition of trade sanctions the USrefused to repeal the Byrd Amendment.


• To discuss the position of the WTO asan authoritative trade regulatory bodyin the face of the US’ stand

• To discuss the US’ policies, itsinternational obligations and itscommitment to the WTO.

Industry Not ApplicableReference No. ITW0020Year of Pub. 2004Teaching Note AvailableStruc.Assign. Available

Keywords

World Trade Organisation (WTO); USAsanti-dumping laws; Continued Dumpingand Subsidies Offset Act; Byrd Amendment;Subsidies; Agriculture appropriations bill;WTO Dispute Settlement Body; GeneralAgreement on Tariffs and Trade (GATT);Anti-dumping Agreement; Agreement onSubsidies and Countervailing Measures(ASCM); Trade sanctions; Internationaltrade laws; Trade barriers; Taxes and duties.

US Anti-Dumping Duties onShrimp Imports: Irrational

Protectionism?The imposition of the preliminary anti-dumping duty on shrimp imports had onceagain focused the world’s attention on theanti-dumping practices of America. The

US Commerce Department imposed dutieson shrimp imports from third worldcountries including China and India. Themeasure was severely criticised by theaffected countries and they decided to fightagainst the irrational protectionist policiesof the US.


• To discuss the impact of the anti-dumping duties on shrimp exportingcountries.

Industry Not ApplicableReference No. ITW0019Year of Pub. 2004Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Anti-dumping; protectionism; Shrimpindustry; Developing nations; SouthernShrimp Alliance; US International TradeCommission (USITC); Byrd Agreement; USCommerce Department; American SeafoodDistributors Association (ASDA); Tariffs;export barriers; Free Trade Agreements(FTA); World Trade Organisation (WTO);Fair market value; Unfair trade practices.

Saudi Arabia and Oil Prices: TheSultans of Swing

Crude prices hit all time highs in May 2004.As threats of oil induced – global economicrecession built up, Saudi Arabian oilminister, Ali Naimi, proposed to increaseOPEC (Organisation of PetroleumExporting Countries) production by 2million barrels per day, in an effort to coolthe over-heated oil markets. However, asmost other members were alreadyproducing above their quota limits, it fellupon Saudi Arabia, in its capacity as a swingproducer, to ease supply pressures. TheSaudi’s, as controllers of a quarter of theworld’s crude reserves have a direct say incrude prices. But, some economists argue,Saudi Arabia’s ability to swing prices mightbe dwindling.


• To discuss the role of Saudi Arabia ininfluencing the oil prices and theproduction quantity of OPEC, inwakeof the threat of an oil-induced globaleconomic recession.


Keywords

Saudi Arabia and oil prices; Western TexasIntermediate; Oil economics; BrentInternational; Arabian American Oil

Company (ARAMCO); Oil shocks; Yom-Kippur war; OPEC (Organisation ofPetroleum Exporting Countries); Oilsupply and demand; Commodity exchange;Basrah oil terminal; Price swings; Oilreserves; Crude oil production.

Poland and the EUPoland was one of the ten countries thatjoined the European Union (EU) on May1st 2004. As the largest of the newmembers, with a rapidly developingeconomy, Poland is expected to leverageits membership to develop its economyand reduce unemployment. Critics havecautioned that the European Union’sstringent fiscal policy requirements mightcurtail Poland’s growth.


• To discuss the potential benefits andlikely repercussions of Poland’s EUmembership.


Keywords

Poland and the European Union; Polishgross domestic product; Handlowy WWarszawie Bank; European Treaty ofAssociation; Central Bank of Poland;Corporate taxes; European CompetitionCommission; Growth and stability pact;Eurozone; Polish economic and monetarypolicy; Maastricht Treaty; Developingeconomy; Outsourcing; Unemploymentrate; Foreign direct investment.

NAFTA: Achievements andChallenges

The North American Free TradeAgreement (NAFTA), that was signed bythe US, Canada and Mexico in December1992, came into effect from January 1994.Within six years of the implementationof the free trade agreement, the tradebetween the three countries had increasedfrom $109 billion (1994) to $622 billionby 2000. NAFTA also had a significantimpact on the three economies in termsof rapid growth in job opportunities andforeign direct investments. However, it wasopined that NAFTA still had to confrontcertain challenges to achieve its objectiveof lifting all the trade barriers between theUS, Canada and Mexico.


• To discuss the impact of NAFTA on thetrade between US, Canada and Mexico

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• To discuss the various trade challengesNAFTA faced.


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North American Free Trade Agreement(NAFTA); North American economies;Free trade agreements; Regional tradeblocks; Foreign trade; Association ofSoutheast Asian Nations (ASEAN);European Union; MERCOSUR; 1998 US-Canada free trade agreement; Globalisation;GATT; CARRICOM; Growth of grossdomestic product in North America;Challenges of NAFTA; Worth TradeOrganisation (WTO).

Mexican Experiences withNAFTA

The North American Free TradeAgreement (NAFTA) was signed in 1992by the then Mexican President, CarlosSalinas, along with the Canadian PrimeMinister, Brian Mulroney, and the USPresident, George Bush Sr. Since then,NAFTA had considerably influenced theMexican political and economicenvironment, reinforcing the economicreforms in Mexico that began in the 1980s.By 2003, Mexico had graduated to be theninth largest economy in the world fromits 15th position in the early 1990s.However, NAFTA also posed certainchallenges for Mexico that had to beanswered for an overall development ofthe nation.


• To discuss the various positive andnegative implications of NAFTA onMexico.


Keywords

Mexico; North American Free TradeAgreement (NAFTA); Mexican economy;1988 US-Canada Free Trade Agreement;Regional trade blocks; Andean Pact;European Union; Association ofSoutheastern Asian Nations (ASEAN);Treaty of Asuncion; Political reforms inMexico; National Action Party;Institutional Revolutionary Party;Common external tariff; Group of three;Real wages in Mexico.

M&A Favorites: Cross BorderDeals or Domestic Deals?

Mergers and acquisitions, both cross-borderand domestic, are influenced by variousstrategic, financial and operationalintentions. However, the underlying factorsthat determine their successes widely varyacross the world. Research has shown thatwhile in the UK, companies gain morefrom cross-border deals, in the US, domesticdeals have been found to be more profitablethan cross-border deals, mainly inoperational performance.


• To discuss the global M&A trends andthe dilemmas faced by corporates.


Keywords

Mergers and acquisitions; Domesticmergers and acquisitions; Cross border vsdomestic mergers and acquisitions; Globalmergers and acquisitions trends; Mergersand acquisitions in Asia; Mergers andacquisitions in America; Mergers andacquisitions in Europe; Challenges inmergers and acquisitions; Mergers andacquisitions in global pharmaceuticalindustry; Mergers and acquisitions in globalfinancial industry.

Limiting China’s Textile Exports:The Us’s And Eu’s Divergent

ApproachesOn January 1st 2005, the abolition of thetextile quotas by the World TradeOrganisation (WTO) opened the door forenormous opportunities for the developingcountries to increase their textile exportsin the lucrative European Union and USmarkets. By March 2005, due to massiveexport of textile and apparel items fromChina, textile industries in many developedcountries started witnessing rapid job losses.Under pressure from their domestic textiletrade associations, both the US and EU re-imposed quotas on Chinese textile imports.This resulted in a bitter trade disputebetween the US, EU and China.


• To discuss the effect of abolition of MFAon European and American textilemarkets

• To discuss the restrictive trade practicesin a free global market.


Keywords

Multi-Fibre Agreement; World TradeOrganisation?s (WTO) agreement ontextile and clothing; Textile quota;Increasing US trade deficit with China;China?s textile exports to the US and EU;Growth of China?s textile industry;Paragraph 242 of WTO agreement withChina; China?s textile industry clusters; Joblosses in the US and EU textile sector;Sino-EU textile deal; China?s currencyvaluation; Importance of China to the USeconomy; Importance of China to the EUeconomy; Textile quota imposed by US onChina.

Global Oil Prices: Demand Sidevs Supply Side Factors

The heat of oil prices was strongly felt asthe oil prices reached $50 per barrel inearly 2005 from $10 per barrel in 1998.The prices were driven by the surge indemand in countries that included US, Indiaand China and also the supply factors thathad failed to meet the rise in demand.Although people expected the high priceof oil to be sustainable for a longer term,some analysts were sceptical about thefurther increase in oil price and estimatedthe prices to fall, as in any other businesscycle.


• To discuss the role of OPEC incontrolling the global oil prices

• To discuss the demand and supply factorsaffecting the oil prices and the challengesfaced by the oil industry.


Keywords

Organisation of Petroleum ExportingCountries (OPEC); Oil price; Demand andsupply; Peak oil; Economics; China; USA;Oil reserve; Oil crisis; Yukos; Global oilproduction; Oil demand; Oil supply; Oilconsumption; Saudi Arabia.





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Formation of Central AmericanFree Trade Agreement (CAFTA):

The Business LogicWith a trade volume of $31.9 billionbetween them in 2003, the US and the sixCentral American countries had a lot atstake in the formation of CAFTA (CentralAmerican Free Trade Agreement). Afterthe agreement was signed on May 28 th2004, CAFTA’s probable impact on globaltrade had been debated all over the world.On June 30 th 2005, despite concerns overthe disagreement between Republicans andDemocrats, CAFTA was passed by a 54 to45 vote in the US senate. On July 28 th2005, CAFTA, backed by President GeorgeW. Bush and Vice President Dick Cheney,was passed by the US House ofRepresentatives by a two-vote margin of217 votes to 215.


• To discuss the main features of CAFTAand the business logic behind itsformation

• To discuss the various shortcomings inCAFTA, anticipated by trade experts.


Keywords

Central American Free Trade Agreement(CAFTA) – Dominican Republic (DR);Trade between US and Central America;Caribbean Basin Initiative (CBI); Tradeblocs; Free Trade Area; Regional tradeagreements; Tariff liberalisation; Duty freemarket access; Conditional cash transfers;Decoupled income support payments; FreeTrade Area of Americas (FTAA); NorthAmerican Free Trade Agreement(NAFTA); Rules of Origin; Apparel tradein Central American countries.

FIFA and Terrorism InsuranceInsurance and reinsurance firms providefinancial protection against naturalcatastrophes like earthquakes, fire,hailstorms, tornados, floods, ice storms;and also man-made catastrophes liketerrorist attacks. The increasing magnitudeof catastrophe losses led to many insuranceand reinsurance firms going bankrupt. Forexample, the terrorist attack on the WorldTrade Center (WTC) led to the bankruptcyof many firms. AXA, a French insurancefirm backed out of its contract with FIFA,after the WTC incident. As a result, FIFAturned to capital markets for insuringagainst a risk of cancellation of 2006 World

Cup matches. This was the first instancewhen the terrorism risk was transferred tothe capital markets through catastrophebonds. What are ‘catastrophe bonds’ allabout? Can the capital markets do a betterjob than insurance industry?


• To discuss the implications of FIFA’stapping of the capital markets throughcatastrophe bonds and the implicationstherefore for the Insurance companies.


Keywords

Catastrophe bonds (CAT); Terrorisminsurance; Risk linked securities; Riskmanagement solutions (RMS); Contingentsurplus notes; Catastrophe options;Federation Internationale de FootballAssociation; Zero beta; Equity puts;Securitisation; Contingent security; Rishsharing, shafting and shifting; Credit SuisseFirst Boston; Bankruptcy; Kenneth J Arrow.

European Trade with China In 1975, when Europe re-establisheddiplomatic relations with China, thebilateral trade was just $2.4 billion. By2002, the bilateral trade had grown to $142billion, making China the second largesttrading partner of the European Union(EU) after the US. However, the tradedeficit of Europe with China, which was amere 0.1 billion euros in 1980 had surgedto a colossus 47.3 billion euros by 2002.


• To discuss the factors that helped therapid growth in trade between Europeand China and the factors responsiblefor the European trade deficits

• To discuss the nuances of sustainabilityof trade deficits.


Keywords

European Union (EU); China; Foreigntrade; Bilateral agreements between Europeand China; World Trade Organisation(WTO); China's economic reforms; Tradeconstraints in China; Tariff and non-tariffbarriers in China; EU and China traderelations; Euro and European foreign trade;European community; China's WTOmembership; Trade between Europe and

Asia; European Union's trade deficits;China's balance of payments.

EU and the Chinese TextileQuotas

The Shanghai Agreement signed betweenthe European Union (EU) and China inJune 2005, imposed restrictions on 10categories of the Chinese textile exports.Prior to the agreement, the textile-manufacturing industries of the Europeancountries (France, Spain, Portugal andItaly) faced competition from the low costChinese textile exports. The Shanghai dealhelped to protect these Europeanindustries. However, the European textileretailers who had placed huge orders withthe Chinese manufacturers before thesigning of the agreement, were now facedwith a shortage of stock supply. Soon afterthe agreement was signed, the textileimports from China exceeded theprescribed quota levels and Europeanauthorities would not allow the excessChinese goods to cross the Europeanboundaries. By the end of August 2005,more than 75 million Chinese garmentswere piled up at the EU ports. Thegovernments of the Northern Europeancountries like; Germany, Denmark andSweden, that were home to some of thebiggest European textile retailers, suggestedthe European Commission make changesto the textile agreement. In September2005, amendments were made to theagreement and the quota levels of theimports from China were revised.However, the European retailers and theChinese manufacturers felt that both thecountries needed to come up with a betterand permanent solution to maintain along-term trade relationship.


• To discuss how the restrictions onChinese textiles exports, imposed asresult of the Shanghai Agreement signedbetween the EU and china resulted inlosses both to the Chinese exporters aswell as the European textile retailers,leading to its revision in September2005.


Keywords

European Union (EU); China; Quotas;Tariffs; Textile industry; Multi-FibreAgreement (MFA); Exports and imports;World Trade Organisation (WTO);European Commission; Trade; Textile-Specific Safeguard Clause (TSSC).

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End of MFA: Impact onDeveloping Countries

The Multi-Fibre Agreement (MFA), whichgoverned the world textile and apparelindustry for over thirty years, came to anend on January 1st 2005. The end of theMFA was expected to herald the end ofprotectionism in the textile industry andusher in tremendous opportunities anduncertainties for the textile industries indeveloping countries.


• To discuss the impact of the end of MFAon the textile industries in variouscountries.


Keywords

Multi-Fibre Agreement (MFA); Globaltextile and apparel industry; Developedcountries; Developing countries; Textilequotas; Agreement on Textile and Clothing(ATC); Impact on developing countries;World Trade Organisation (WTO);Elimination of quota system; IstanbulDeclaration.

Drug Price Distortions: US andCanada

In recent times, the high prices of brandedprescription drugs in the US have beencontrary to its commitments towards thewelfare of its citizens, especially the elderly.This can be attributed to a misplaced patentregulatory mechanism, which on one handlimits the entry of cheaper generics andon the other, inflates costs as a result of adelayed drug approval process. This hasled to a thriving illegal importation ofprescription drugs from overseas,especially Canada. In such a scenario, theUS faces an unenviable task of not onlyrestricting the inflow of these drugs intothe US markets but also giving impetus tothe consumer access to cheaper drugswithin the US.


• To understand the reasons for drug pricedistortions between US and Canada andhow US can curb the growingimportation of prescription drugs fromother countries.


Keywords

US pharmaceutical industry and Canadianhealth care industry; Drug price distortions;Prescription drugs; Internet pharmacy; Re-importation; United States Food and DrugAdministration; USFDA; Public healthmaintenance schemes; Private insuranceschemes; Intellectual property protection;Patents; Hatach-Waxman Act; Genericdrugs; Medicare; Health maintenanceorganisation.

De Beers vs Lev Leviev: The‘Decartelisation’ of the Diamond

Industry?De Beers held monopoly power in theinternational diamond market, for morethan a century, by controlling supply,managing demand, and maintaining theprices of diamonds. The 1990s, however,witnessed certain changes in the industry,along with the geopolitical changes, whichendangered De Beers’ dominance in themarket. Notably, the competition fromnew entrants such as the Lev Leviev Groupraised doubts if the cartel could last.


• To discuss the challenges faced by DeBeers

• To discuss vertical integration, entrybarriers, and make a political, economic,social, and technological (PEST)factors-analysis of the diamondinduustry

• To discuss how De Beers planned tosustain its dominant position in thediamond industry in the early 21stcentury.


Keywords

De Beers vs Lev Leviev; Decartelisationof diamond industry; The diamondsyndicate; cartel; The Kimberley process;Forevermark; The Diamond TradingCompany (DTC); Supplier of choice;Monopoly; Conflict diamonds; The Anglo-American Corporation; Ascorp; Alrosa;Namco; Debswana; Namdeb.

Credit Cards and BusinessGrowth

Credit cards have been one of the mostimportant revolutions in the way peoplepay for goods and services through the ages.Credit cards were first employed in the

1950s in the US and within half-a-centurythey were used in almost every country inthe world. Despite high consumer debts,credit cards were encouraged in mostcountries as it was believed to spurconsumer demand and boost economicgrowth. However, with the increase in theuse of credit cards across the world, creditcard thefts and personal bankruptcies alsoincreased at a rapid rate. By the early 21stcentury, a new method of payment servicecalled ‘pay by touch’ was conceptualisedthat could completely eliminate the needto carry cash and cards.


• To discuss the impact of credit cards onglobal business growth and the inherentrisks underlying the rampant usage ofcredit cards.


Keywords

Credit cards; Frank X McNamara; DinersClub; BankAmericard; MasterCard; Visacard; Fresno drop; Credit card debt; Creditcard delinquents; Credit cards andbankruptcy; Pay by touch; Credit cards inUSA; Risks involved in credit cards; Creditcards usage; Credit cards as a mode ofpayment.

Cancun RevisitedThe success of the World TradeOrganisation (WTO) trade talks held inCancun, Mexico in September 2003, wasvery important. It could have reshaped theworld’s trading system by reducing barriersto trade. Such reshaping would have raisedglobal incomes by $2.8 trillion over thenext decade. But hopes were dashed asCancun fizzled out due to the deepdifferences between the developed and thedeveloping nations.


• To discuss the issues at Cancun meet ofthe WTO.


Keywords

Cancun Mexico Summit; World TradeOrganisation; Ministerial conference;Agreement on agriculture; Tariffs andsubsidies; Special and differential treatment;General agreement on trade and tariffs;Least developed countries; Mike Moore;






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European Union; Protectionism; G-21;Like-minded group of countries; DohaDeclaration; Trade related intellectualproperty rights.

Cancun Ministerial Conference:An Impasse

Following the successful global trade talksat the Fourth World Trade Organisation(WTO) Ministerial Conference held inDoha in 2001, the Fifth WTO MinisterialConference was held at Cancun in Mexicoin 2003. The conference, which openedwith the aim of reducing trade barriers andstrengthening the international tradingsystem, was stalled due to major differencesbetween the developing countries and thedeveloped countries on several issues,ending the conference in deadlock. Whiledeveloped and developing countries blamedeach other for the failure of the conference,others blamed the WTO. And for the nextconference, to be held in Hong Kong in2005, to be successful, both the developedand the developing countries have tocontribute their share of the effort.


• To discuss the implications of CancunMinisterial conference in theinternational trade.

Industry Not ApplicableReference No. ITW0002Year of Pub. 2005Teaching Note AvailableStruc.Assign. Available

Keywords

World Trade Organisation (WTO); WTOCancun Ministerial Conference; G-23nations; Doha development agenda;Developing countries; Developed countries;International trading system; Global tradetalks; Non-Agricultural Marketing Access(NAMA) issues; Agricultural issues; WTOprocedural issues; multilateral and bilateraltrading system; Hong Kong MinisterialConference; Trade distorting subsidies;Import duties and tariffs.

Bangladesh and the MultiFibreAgreement

Globalisation and the introduction of theMultiFibre Agreement (MFA) in 1974 hadchanged the Ready Made Garment (RMG)industry of Bangladesh. Within a very shortperiod of time the RMG sector ofBangladesh attained prominence in termsof its contribution to Bangladesh’s grossdomestic product, foreign exchangeearnings and employment. On January 1st 1995, the World Trade Organisationreplaced the MFA with the Agreement onTextiles and Clothing (ATC). According

to the ATC, by 2005, the RMG sector hadto be fully integrated into GATT rules andthe existing quotas had to come to an end.The removal of quotas threatened toincrease competition in the global garmentindustry and limit Bangladesh’s growth. ButBangladesh could receive benefits under theGeneralised System of Preferences and gainaccess to the EU and US markets, if it metthe International Labour Organisationstandards.


• To discuss the threats and opportunitiesfor Bangladesh’s RMG industry after thephasing out of the MFA.


Keywords

Bangladesh textiles industry; MultiFibreagreement and arrangement; Ready madegarments; Agreement on textiles andclothing; Generalised System ofPreferences; World Trade Organisation;Bangladesh gross domestic product;Bangladesh Garment Manufacturers andExporters Association; European Union;Least developed countries; Backwardlinkages; Everything But Arms Initiative;Export processing zone; Core labourstandards; Export quotas for LDC (leastdeveloped countries) garments.

US Water Resource Utility andManagement: Should it be

Privatized?The Water Industry is one of the threelargest industries in the world (along withOil & Gas and Electricity) in terms ofassets deployed. It has been said by somethat the global water industry todayresembles the world petroleum industry in1920. The supply of fresh water on ourplanet is no larger today than when humansfirst walked the Earth. However, there arenow more than six billion people globallycompeting for this finite resource, whichis becoming increasingly scarce by meansof pollution. Available fresh water is lessthan 1% of all water on earth with theactual usable/accessible water supply lessthan 1/100th of this. A third of all nationsare suffering from water stress. Since 1950world population doubled, but water usetripled. When compared to any otherindustry, water has a more obvious andcompelling business model with the mostpersistent demand and probably the most

predictable future. This is mainly because,there is no substitute for water and userscannot postpone purchases, there is a price-inelastic demand. Conveyance system tothe end user creates a natural monopolywith huge barriers to entry and demand isunaffected by inflation, recession, interestrates, changing preferences, or inventoryloss.

It is believed, that the water industry hasmore wind in its sails than any other globalindustry. To reduce municipal burdens watersystems to privatise are encouraged, mostoften through investor owned companies.This trend saw tremendous momentum inthe new millennium, more so in developedcountries. Privatisation favors the buyer.

The privatisation of water combines anunderlying business model with aninexorable demand and this is in perpetuity.


• To discuss whether the US water utilitiesneed to be privatised

• To understand the adversities andadvantages of water privatization in adeveloped country like the US.

Industry Public UtilityReference PPP0005BYear of Pub. 2007Teaching Note Not AvailableStruct.Assign. Not Available

Keywords

Water; Commoditization; WaterConsumption; Water Privatisation; PublicPrivate Partnerships; Investor; Design,Build and Operate (DBO); Operations andMaintenance contracts (O&M); Socialresponsibility; Corporate; US Federal

Telstra: The telecom giant introuble

By 2006, Telstra Corporation Ltd.(Telstra), an Australiantelecommunications and informationservices company under the joint public-private ownership held a dominant positionin the industry. Despite some setbacksduring the dot.com bust, it had remained aprofitable company. The Australian FederalGovernment, which held 50.8% stake inTelstra, announced its intention to sell itsremaining share in 2006.

The giant faced many regulatory andcompetitive scenarios, which ultimatelyimpacted its bottom line. The first trancheof Telstra shares, comprising 33 per centof the company, was sold in 1997 at $3.40.Thousands of investors made huge losseson the second-tranche privatization ofTelstra. While the second-tranche Telstra(T2) shares were sold for a value of $7.50,they dropped below that level in 2000.



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Many Telstra shareholders were wonderingwhy their investment in Australia’s biggesttelecom had gone haywire while the sharemarket hit record levels. The Australianshare market reached 5000 in March 2006.In contrast, Telstra share lost about 9% oftheir value in the same period. In March2006, Telstra’s share fell to an all-timelow on the Australian Stock Exchange,falling as far as AD$3.65. Telstra’s shareswere trading near the lowest level sincethe government’s initial public offering in1997.

The case captures the telecom industryscenario in Australia, the competition facedby Telstra and the regulatory hurdles itfaces. The investors’ point of view hasalso been inculcated.


• To understand the nature and structureof telecom industry in Australia

• To discuss the strategy followed by themarket leader Telstra

• To discuss the political, legal andeconomic environmental impact on thefunctioning of Telstra

• To discuss public-private partnership andits probability of success in the givensector

• To analyze the goal duality ofprofitability vs. social responsibility

• To discuss shareholder’s point of viewfor investing in Telstra.

Industry TelecomReference No. PPP0004AYear of Pub. 2006Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Privatization; Public-Private Partnership;Growth Strategy; Telecom sector;Australia; Investment decisions;Competition Globalization; Divestment;Market leader.

Bono’s ‘Red Brand’: Targeting‘Conscience Consumers’

For many years, governments and manynon-governmental organizations havebeen providing financial assistance for theeradication of AIDS epidemic in Africa.However, initiatives to fight AIDS in Africahave always suffered from inadequacy offunds. On January 26th 2006, Bono, thelead singer of the Rock Band U2,announced a new brand called ‘Red’ to ropein the private sector for the first time inthe fight against AIDS in Africa. American

Express, Gap Inc, Converse and GiorgioArmani are the four private companies,which have already pledged contributionsderived from the sale of their Red brandedproducts to help Africa’s AIDS victims.


• To help understand how public-private-partnerships can be modeled to supporta social cause

• To highlight how the private companiesinvolved in this initiative are going tobe benefited

• To offer scope to discuss the viability ofthe initiative, which although beinghumanitarian in nature has a profitmotive at its core.

Industry Not ApplicableReference No. PPP0003Year of Pub. 2006Teaching Note AvailableStruc.Assign. Not Available

Keywords

Corporate social responsibility; GiorgioArmani; Gap Inc; Brand image; AmericanExpress; Business ethics; Converse;Marketing strategy; Advertising; Word-of-mouth advertising; Brand building.

Public Private Partnership inRajasthan’s Health Sector:

Outsourcing Diagnostic ServicesThe health care sector in India has beenwitnessing a huge demand-supply gap in itsservice delivery, as public health careservices are found to be inadequate inserving the huge population. To bridge thisgap and improve the efficiency of services,health care reforms, especially in the formof private partnerships in public sector arebeing encouraged. The government ofRajasthan, India, has taken up an initiativein this direction. Sawai Man Singh (SMS)Hospital, a public sector hospital in Jaipur,the capital city of Rajasthan, has been ableto successfully implement a Public PrivatePartnership initiative. As part of theinitiative, the hospital has invited privatediagnostic centres to set up diagnosticequipment, CT (computerisedtomography) and MRI (magneticresonance imaging) scan in the hospitalpremises. As a result, the hospital is able tooffer high quality services at affordableprices to the poor. While the cost ofservices has come down drastically, thewaiting time for patients has also reduced.At the same time, private partners are beingbenefited from the volume of patients whovisit government hospital and are able toachieve economies of scale.


• To discuss the impact of public privatepartnership in the health sector.

Industry Health SectorReference No. PPP0002Year of Pub. 2005Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Public private partnership; Health caresector in India; Outsourcing; Public sectorexpenditure on health care; Demand supplygap; Below poverty line (BPL); SMSHospital; Licence-based model; Marketcompetition; Diagnostic investigationservices; India health report; NationalHealth Policy; Medicare relief societies;Private health care sector.

City Academies in BritainBy the end of the 20th century, the Britishgovernment was facing a big challenge torevive the government-run secondaryschools. In spite of spending millions ofpounds on school reforms since 1998, mostof the state schools had ‘worryingly low’educational standards. The number ofchildren opting out of the state schoolshad also risen by a third. Consequently,more and more parents were forced to sendtheir children to high priced private schoolsthat offered better educational standards.To overcome the appalling differencesbetween the state schools and the privateschools, the ‘City Academy’ policy wasannounced in 2000.


• To discuss how the British government,through the ‘City Academy’ policy, triedto create a new type of ‘state-fundedindependent school’ for bridging the gulfbetween private and state schools bybreaking the monopoly of the LocalEducation Authorities over secondaryeducation in Britain

• To discuss the challenge faced by BritishGovernment due to low educationalstandards in the state schools.

Industry EducationReference No. PPP0001Year of Pub. 2003Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Government and state secondary schoolsin Britain; Problems of state schools inBritain; Private schools in Britain; Fees ofprivate schools in Britain; School reformsin Britain; City academies in Britain;

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American Charter schools; GeneralCertificate of Secondary Education; GCSE;Institute of Public Policy Research; IPPR;Types of city academies; Opposition tocity academies; Problems andspecialisations of city academies; Co-operation of private and state schools inBritain.

Israel: Technological Prowessand Entrepreneurial Dilemmas

In a span of just 15 years (1985–2000),Israel has become the world’s second mostimportant high-tech cluster after SiliconValley. It stands next only to America andCanada, in the number of companies listedon NASDAQ. Peril paralleled Israel’sformation. Adverse conditions – such asthe early Arab boycott, impending highinflation, perennial dearth of naturalresources and a diminishing domesticmarket – did not deter Israel. Many factorshelped it endure hardships: the mass exodusof Jewish immigrants and massive defenceexpenditure, mainly. Yet peace eluded Israelisociety. But hope was reignited when itwas mooted that Jews and Arabs can partnerin tech-businesses. Along with such hopefulinsights, this case spotlights on what factorshelped Israel shine in the global technologysector and how it altered its adversities intoadvantages.


• Israel’s technological and economicresurgence

• Israel’s unique cultural characteristicsthat helped its economic revival

• The role of networking amonggovernment, academia and industry

• The factors that helped Israel attractlarge venture capital

• The role of economics in promotingpeace.

Industry Internet RetailingReference TEM0015Year of Pub. 2007Teaching Note AvailableStruct.Assign. Available

Keywords

Venture Capital Industry; TechnologicalIncubators; Israel’s Technology Industry;Yozma and Inbal; TechnologyManagement Case Study’ New GenerationTechnology (NGT); TechnologyManagement Case Study;Entrepreneurship; Competitive Advantageof a Nation; Converting Adversities into

Advantages; Impact of Intifada; Israel’sDefence sector; Technion University;Military - Industrial - Civilian Network;Tel Aviv

Indian Film Industry: GoingDigital

The Indian Film Industry was the world’slargest producer of movies with an average1,000 movies a year. Despite numerousinnovations in the global film industry,nothing much had changed in India; theway movies were produced or screened. Astime passed, movie goers began losinginterest in going to theatres to watch ananalogue film. To draw them back to thebig screen, the film industry beganinvesting in advanced technologies. Apartfrom the film industry, large corporategroups planned major investments in digitalcinema. The potential of digitalentertainment in India attracted telecomcompanies also.

The case talks about the introduction ofdigital technology in Hollywood andBollywood. The case discusses how digitaltechnology is gaining recognition in IndianFilm Industry. Bollywood lost almost $30million on an average due to piracy everyyear. It needs to be seen how the Indianfilm industry plans to overcome thesehurdles, and reap the benefits of the digitalrevolution. Would digital cinema be a boonor a bane?


• To discuss the scope of digitaltechnology in Indian film industry basedon its success in Hollywood

• To discuss the pros and cons of digitalcinema in Indian film industry.

Industry Entertainment industryReference No. TEM0014AYear of Pub. 2006Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Indian Film Industry; Bollywood;Entertainment Industry; Hollywood;Digital Technology; Analogue; FilmProduction; Film Distribution; FilmExhibition; Piracy; BroadbandTechnology; Fibre Optic Solution; NationalAssociation of Theatre Owners (NATO);Motion Picture Association of America(MPAA).

The Advent of the Internet andthe Bargaining Power of the

CustomerThe adage ‘the customer is the king’ hasalways been true for marketers across

different industries. However it is believedthat the customer has realized his powerof being a ‘king’ only with the advent ofthe Internet in the 1990s. The Internethas enabled customers to have access tomore information and a wider choice ofproducts and services, which in turn hasled to more ‘customer power’. Cuttingacross industries, companies today face thechallenge of price competition, reducedbrand loyalty and the difficulty ofconnecting with the customer, which iscompelling them to change their marketingstrategies.


• To discuss the role of Internet in theincrease in the bargaining power ofcustomers

• To discuss the changes in the marketingstrategies that Internet brought about

• To discuss the affect of customerempowerment on different businesssegments.

Industry InternetReference No. TEM0013Year of Pub. 2005Teaching Note Not AvailableStruc.Assign. Available

Keywords

Internet and customer power; Internet andPorter ’s Five Forces Model; Internetmarketing; e-Commerce; Consumer buyingbehaviour process; Customer power in airtravel industry; Factors affecting customerpower; Customer power in auto industry;Behavioural marketing; Bargaining powerof customer; Brand building; Brand loyalty;Consumer behaviour.

Mobile Telecoms:The Lessons of 3G

Even 30 years after the first Mobile Phonewas demonstrated by Marty Cooper inManhattan, the Mobile phone industry isstill in its evolutionary process. Almostevery decade a cutting edge technology,promising much better services, hits thedeck and cannibalises the investment thathas gone into its predecessor. The latestbuzzword 3G – representing thirdgeneration telecommunications – offers aplethora of services on a mobile phone,and is expected to make the mobile phoneas common a commodity as a wallet orpurse, making wired telephony a thing ofthe past. In a hurry to grab the commercialadvantage the operators worldwide haveinvested hundreds of millions of dollars,while the academic grey heads are scepticalabout the economic viability of the newtechnology.

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• To discuss the rationale behind the hugeinvestments in 3G and the future of thetelecommunications industry.

Industry Mobile TelecommunicationsReference No. TEM0012Year of Pub. 2004Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Mobile telecommunications; Thirdgeneration; 3G; Spectrum licensing;Information technology; Time divisionmultiple access (TDMA); Code divisionmultiple access (CDMA); Global systemfor mobile communications (GSM);General packet radio service (GPRS);Enhanced data rate for GSM evolution(EDGE); Wideband code division multipleaccess (W-CDMA); Universal mobiletelecommunications system (UMTS);Radio frequency distribution; Technologylife cycle.

Broadband: South Korea vs USSouth Korea was leading the broadbandrevolution with its high-speed broadbandnetworks. The initiatives by thegovernment, its policy on competition,the PC bang culture and above all, othersocial and demographic factors had equallycontributed to the broadband penetrationin the country. With the high-speedbroadband networks, South Korea wasembarking on new applications ofbroadband that would improve the lives ofthe people apart from contributing to thecountry’s GDP (gross domestic product).On the other hand, the US, which is said tohave pioneered Internet technology in theworld, is far behind in the broadband race.The government policy on competitionhad been hindering competition in thecountry, and had encouraged Bell Inc. toenjoy a monopoly for several years.


• To discuss the factors that had facilitatedthe growth of broadband in South Koreaand the causes that had been impedingthe growth of broadband services in theUS

• To analyse the broadband penetrationin South Korea and the US.

Industry Not ApplicableReference No. TEM0011Year of Pub. 2004Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Broadband penetration; Competitionpolicy; Bell’s monopoly; PC bang culture;

Service-based competition; Facilities-basedcompetition; Dial-up networking;Broadband policy; Telecommunicationspolicy; Federal CommunicationsCommission (FCC); Korea Telecom (KT);Cyber homes; Telemedicine; US FederalTelecom Act 1996.

Original Design Manufacturers:Mobile Phone Industry’s

Changing Paradigms

Since its evolution in the early 1990s, themobile handset industry was marked withchallenges such as globalisation, shortproduct life cycles, short time-to-market,shrinking margins and customisation. Theerstwhile approach of staying verticallyintegrated seemed obsolete, forcing thehandset manufacturers to rely on ‘outside’firms for design and manufacturingrequirements. As a result, the original designmanufacturers (ODM) found a place in thesupply chain, thus changing the entiregamut of the handset business.


• To discuss how ODMs have become athreat to the handset manufacturers.The case study can be anchored aroundMichael E Porter’s Five Forces model.

Industry Mobile PhoneReference No. TEM0010Year of Pub. 2004Teaching Note AvailableStruc.Assign. Available

Keywords

Mobile handset manufacturing; Originaldesign manufacturers (ODM); Electronicmanufacturing services; ODMs in Taiwan;Vertically integrated firms; Barriers ofentry; Branding; Operator-specifichandsets; Time-to-market; Mobilegenerations; Reference platforms; Nokia;Smartphones; Symbian; Sony Ericsson.

Rein in Spam

The alarming growth of spam threatenedthe viability of e-mail services. Onaverage, 30% of the e-mails processed byInternet service providers were spams. Byblocking sites and jamming servers, spamwas playing havoc with the global business.


• To discuss the emergence of spam, andthe measures taken by software firmsand the governments, throughlegislation, to curb it.

Industry Internet TechnologiesReference No. TEM0009

Year of Pub. 2004Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Spam; Internet; Internet service provider;E-mail; Junk mails; Types of spam;Fighting spam; Coalition against unsolicitedcommercial e-mails; Legislation; CAN-SPAM Act of 2003; Goodmail; E-mailstamps; Types of filters; Penny blacksystem; Iron port system.

From KaZaA to SkypeNiklas Zennström and Janus Friis, thecreators of KaZaA, the on-line file-sharingprogramme, entered the voice overInternet protocol (VOIP) market with theirnew service, Skype – a PC to PC telephonysoftware. Launched in August 2003, Skypeused the same peer-to-peer (P2P)infrastructure that was the basis of KaZaAand which did not require expensive centralservers for its maintenance. The creatorsoffered the basic service for free andplanned to generate revenues by offeringpremium, paid-for services in the future.


• To discuss the potential of Skype toemerge as a niche player in the VOIPmarket

• To discuss the current status of the VOIPservice provider market and itscompetitive makeup

• To discuss the Skype’s business model,legal issues, its position in the marketand the challenges it faces.

Industry MusicReference No. TEM0008Year of Pub. 2004Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Skype; KaZaA; Voice over Internetprotocol (VolP); Niklas Zennstr÷m; JanusFriis; AT&T; Peer-to-peer (P2P); Internettelephony; Napster; Vonage; Voice overInternet protocol (VoIP);; Fastrack;Network address translation.

China on the i-wayThe Internet revolution in China wasstarted in 1987 with the setting up of the‘China academic network’ (CANET).Initially being used for academic purposes,the Internet in China was commercialisedwith the Ministry of Post andTelecommunications (MPT) setting up the‘ChinaNET(C)’ in May 1995. Chinawitnessed a rapid growth in Internet users






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since then, which totalled 79.5 million usersby the end of 2003. However, with manysurfers getting access to information thatwas previously censored by thegovernment, the Chinese governmentstarted tightening its regulations,specifically on the kind of content thatwas available on-line. This resulted in theblocking of several pernicious and anti-governmental websites.


• To discuss the effect of increasingpenetration of the Internet in China andthe growing government regulations tocurb its misuse.

Industry ITReference No. TEM0007Year of Pub. 2004Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

China; Internet; Network; China academicnetwork (CANET); Ministry of Post andTelecommunications (MPT); Goldenprojects; Internet users; Blocked sites inChina; Internet cafe; Severe acuterespiratory syndrome (SARS); On-linetrading; On-line games; Regulations; WorldTrade Organisation (WTO); Culture.

South Korea: Making of aGaming Industry

For many years of industrialisation, SouthKorea was known for handholding theChaebol, that gave a thrust to the country’seconomy through their gloriousachievements. But in recent years, theSouth Korean government has found a newengine of growth in the gaming industry. Ithas left no stone unturned in developingthe country’s gaming industry as a leaderin exports. The government wants thegaming industry to become what Hollywoodis to the US.


• To discuss the role-played by thegovernment in the development ofbroadband connections and, thereby, thegaming industry

• To discuss the characteristics that makethe South Korean on-line games unique

• To discuss how the companies in SouthKorea are making their presence felt inoverseas market.

Industry GamingReference No. TEM0006Year of Pub. 2004Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

On-line gaming industry; Console-basedgames; Massively multi-player on-linerole-playing games (MMORPG); PCBAANG; Broadband penetration;Government support; Korean gamesexports; NCsoft’s lineage; Microsoft XBoxin South Korea; Blizzard’s Starcraft; KoreanGame Development Council; Arcadegames; Sony PlayStation in South Korea.

Biotechnology in CubaAfter the Cuban revolution in 1959, Cubachose science and technology to fostereconomic development. In line with FidelCastro’s vision to provide free health careto his people, apart from developing anintellectual capital that could be finallyconverted into future tangible monetarybenefits through trade and aid, Cuba pursuedbiotechnology to etch out a path for itselftowards scientific excellence. Thoughhaunted by the US’ trade embargo, Cubawas committed to usher in an economicresurrection.


• To discuss the role of science andtechnology in the economicdevelopment of Cuba.

Industry BiotechnologyReference No. TEM0005Year of Pub. 2004Teaching Note AvailableStruc.Assign. Not Available

Keywords

Cuba; Biotechnology; Cuban revolution;Fidel Castro; Bay of Pigs invasion; CIGB;US embargo; Soviet (dis) connection;Helms-Burton Bill; Recombinant DNA;Interferon; Meningitis; Hepatitis B; HeberBiotech SA; York Medical.

Taiwan as an R&D HubA tough election battle lies ahead ofTaiwan’s President Chen Shui-bian inMarch 2004. No doubt, his island nation,noted for its PC and semiconductorfacilities, remains a manufacturing meccaof the computer industry. The countrymakes two-thirds of the world’s notebookPCs and desktop PC components. By 2003,many multinational corporations (MNCs)had either set up their research anddevelopment (R&D) facilities in Taiwanor planned to do so in the near future. Yet,all was not well in Taiwan. Taiwanesecompanies based in China made most ofthe machines and parts. The country facedcompetition in R&D from Korea and

China. MNCs could bypass Taiwan andmake China their R&D base. Taiwan’s ownchipmakers were moving out more andmore of their chip design and customersupport processes to China. In 2003,Taiwan faced a shortage of 10,000engineers. MNCs in Taiwan either had topay more and hire available local talent orelse scout overseas for the same. The USand British labour unions were concernedover losing jobs to low cost destinationssuch as Taiwan. However, the Chenadministration was working with Taiwan’sbusiness and industry to promote thecountry as an R&D hub through initiativessuch as science-based industrial parks, taxincentives, innovative alliances,innovation incubators, financial supportvia venture capital companies etc.


• To discuss the rise of Taiwan as an R&Dhub and the reasons for losing itsposition to other countries like Chinaand South Korea

• To discuss possible steps that thegovernment can take to regain the lostposition.

Industry Not ApplicableReference No. TEM0004Year of Pub. 2004Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Research and development (R&D); Taiwanas an R&D hub; Taiwan; China’s R&D;Labour cost; Lean production;Manufacturing overheads; Original designmanufacturer; Industrial park; Industrialupgrading; Venture capital; Small andmedium enterprises; Industrial automationand innovation; Intel.

Technology and the ChangingShapes of Music

Since its inception in the 1880s, the musicindustry has always relied on technologicalinnovations for its growth and survival.Throughout the 20th century,advancements in audio technology enabledthe evolution of music into a globalindustry. However, by the end of the1990s, digital technology that enabled freeaccess to music on the Internet gave riseto rampant music piracy. In the first halfof 2003, the worldwide music industrywitnessed a drop in sales of 10.9% ascompared to the corresponding period inthe previous year (2002). The advent ofthe ‘iTunes On-line Music Store’ by theend of 2003, was hailed as an innovationthat could turn the industry’s fortunesaround.

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• To discuss the impact of rise of peer-to-peer network on the music industry andhow the industry can tackle the menace

• To understand the opportunity thatdigitisation of music offers and thebusiness model of Apple’s iTunes.

Industry MusicReference No. TEM0003Year of Pub. 2004Teaching Note Not AvailableStruc.Assign. Available

Keywords

Music industry; Recording technology;Piracy report 2001; Piracy report 2002;Piracy report 2003; Music industry sales;iTunes; iTunes and the music industry;iTunes and the future of music; Sony;Technology and the music industry; On-line music piracy; EMI; BMG; Universal.

Concorde and Supersonic CivilAviation

For about 25 years Concorde had made theworld a smaller place by flying double thespeed of sound and clocking just three andhalf hours to reach New York from Parisor London. Although Concorde wastroubled throughout its history by itsprohibitive costs, the thrill of ‘flying fasterthan a rifle bullet’ had made it a dreamaircraft for many flying enthusiasts. Thesupersonic passenger aviation technologystill being in its infancy, Concorde couldnever get the technological support that itrequired to become economically viable andenvironmentally acceptable. Air Francesuspended Concorde services in May 2003.When British Airways withdrew Concordeon October 23rd 2003, it was the onlysupersonic passenger aircraft in the worldand there was no other design on board.


• To discuss how Concorde, as a part of anongoing development process insupersonic aviation, failed due toinadequate technological advancements.

Industry Civil AviationReference No. TEM0002Year of Pub. 2003Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Concorde; Supersonic aviation; Civilaviation; Specifications of Concorde; Airroutes of Concorde; Operating costs ofConcorde; Development of supersonicaviation; Sonic boom; Problems ofConcorde; Concorde’s crash; Initial routesof Concorde; Supersonic aviationunderdevelopment; Supersonic aviation and

Concorde; Supersonic aviation afterConcorde; Commercial supersonictechnology.

Dangdang.comIn 1997, Peggy Yu (Yu), a business graduatefrom USA, returned to China with a dreamto dominate the Chinese electronicretailing market on the lines ofAmazon.com of the US. In 1999, Yuestablished Dangdang.com as an on-linebook retailer.


• To discuss how Dangdang, despite varioushurdles in conducting electronicbusinesses in China, witnessed a growthfrom 70,000 visitors and 1,000 ordersper day in 2000 to 800,000 visitors andmore than 4,000 orders per day in 2003to become one of the top three on-lineretailers in China

• To understand the challenges of onlineretailing in China

• To debate on the critical success factorsof online retailing.

Industry Internet RetailingReference No. TEM0001Year of Pub. 2003Teaching Note Not AvailableStruc.Assign. Not Available

Keywords

Dangdang; Dangdang.com; Peggy Yu; On-line retailing in China; Selling books on-line in China; Internet in China; Bookstoresin China; On-line Chinese languagebookstores; Competitors of Dangdang;On-line bookstores in China; e-tailing inChina; On-line database of Chineselanguage books; Largest on-line retailersin China; e-commerce in China; e-payments in China.



Case Studies on Economics - II - IBSCDC's

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