QUESTIONS
Q1.
In class we talked about Wal-Mart expanding into Canada and into Costa-Rica. In both cases, the company chose to use wholly-owned subsidiary. In the case of Canada, they did a greenfield expansion. In the case of Costa-Rica, they chose to acquire existing firms in the country.
a) Why do you think they chose to do wholly-owned subsidiaries instead of something like simple exporting or licensing?
b) In comparing Canada and US, why do you think they decided to do a greenfield expansion and just build their own stores there?
c) In contrast with what they did in Canada, Wal-Mart decided to acquire existing grocery chains in Costa-Rica when entering the market. Give two reasons for buying out existing companies when expanding into a new geographic market.
Q2.
In business, there are strategic actions and there are tactical actions:
a) What is the difference between strategic and tactical actions?
b) Which type of action is likely to win?
c) Explain why price is not enough to generate a sustainable competitive advantage.
Q3.
When setting up an effective board of directors, a company is trying to choose between paying a large annual salary and a smaller salary with a significant amount of stock in the company. Based on what you know of agency theory. Which of the two methods do you think would be most likely to produce an effective board and why? Be specific.
Q4.
Of the four requirements for sustainable competitive advantage according to the Resource-Based View.
a) Which are responsible for determining competitive advantage?
b) Which are responsible for determining the sustainability of the avantage?