significant percentage; major changes; consumers; a multinational; consumption; primary product; vulnerable position; low purchasing power; per capita; product offerings.
3. Match the following:
1. big a. crisis
2. significant b. business
3. severe c. percentage
4. major d. position
5. reduced e. challenge
6. brisk f. changes
7. vulnerable g. tariffs
4. Say whether these statements are true or false:
1. The McDonald brothers did not realize that India represented a big challenge, otherwise they would not have entered the Indian market.
2. The McDonald brothers did their best to follow the advice “think globally and act locally”.
3. The economic and political environment in India contributed heavily to a successful operation of McDonald’s in India.
4. McDonald’s menu in India was culturally correct.
5. Discuss the following questions:
1. In your opinion, is India a good market for McDonald’s?
2. Has McDonald’s responded to the advice often given transnational companies to “think globally and act locally”?
3. Do you think McDonald’s will be a success in India? Why?
6. Give an outline of the text.
Case 2
Part I
TED & HARRY'S ICE CREAM FACTORY:
THE RUSSIAN EXPERIENCE
In 1975 Ted Cooper and Harry Greenberg began selling ice cream in a converted church in Little Rock, Arkansas. The two young men, who had recently completed a correspondence course in ice cream making, seemed an unlikely pair to eventually lead a multimillion-dollar enterprise, which would challenge corporate America's sense of social responsibility. The company began to manufacture, and sell on the retail level, a premium ice cream with unusual sounding names such as Silly Strawberry Surprise and Harry's Very Berries. The pair sold their product through retail shops, which they called Ted & Harry's Ice Cream Factory, and consumers could order ice cream by the scoop, or in packaged form for home consumption.
By 1985 Ted & Harry's was a publicly traded company with over 50 retail operations in the United States.
Gross sales were in excess of $35 million and the company had taken a very proactive stance in the area of social responsibility. The company employed disadvantaged members of society and donated 15% of its pretax profit to various charities. Ted and Harry were also actively involved in a worldwide peace movement and openly supported the bilateral disarming of the United States and the Soviet Union.
In 1989 Ted Cooper visited Russia and decided that international peace could be promoted through cooperative business ventures. Since domestic sales growth was still very strong, Ted & Harry's had not branched out into any foreign markets. In 1992 it was decided that Ted & Harry's would establish foreign direct investment in Russia. Although promotion of peace was a main objective, it was intended that the Russian venture would make a profit and provide a return on invested capital. It was hoped that profit from the operation would allow for further campaigns for peace and generate an entrepreneurial spirit in the Russian people.
Ted & Harry's developed a manufacturing and distribution capacity in Russia that included six ice cream shops. Ted & Harry's Russia sold its regular products, such as Whitewater Crunch and Kookie Chocolate, along with products unique to Russia, such as a vodka-laced ice cream, called Russian Holiday. Most of the products sold in Russia were identical to the products sold in the United States, including identical product packaging. Although Russian labels were placed over some of the packaging, the product was essentially the same product sold in the United States. The product was unique to Russian consumers, who were used to smooth ice cream as opposed to the "chunky" variety sold by Ted & Harry's.
Originally Ted and Harry planned on hiring a bilingual American to head the Russian operation. An external recruiting effort was undertaken, and recent business school graduates were interviewed from some of America's best
business schools. Ted and Harry had hoped that a bright M.B.A. who spoke Russian, possessed significant business experience, and shared the vision of the company in terms of social responsibility could be hired. It was felt that someone with good business training and a strong sense of social accountability could spark an entrepreneurial spirit in the Russian people and be a good role model for others. When no suitable candidate could be found, the search shifted to internal recruiting.
The internal search resulted in the selection of Billy Bob Whitson. Billy-Bob had been with Ted & Harry's for nine years, moving up from factory worker to production manager, Billy Bob did not speak Russian, and he had not received any business training other than on-the-job training at Ted & Harry's. He had never lived outside Arkansas; however, he did have a strong interest in Russia, and his enthusiasm impressed the selection team. He was appointed general manager of Ted & Harry's Russia, and the selection team was confident that he could handle the responsibility. There was a general
belief that experience with product quality and acceptance of corporate values were more important than experience with Russian culture. Billy Bob was technically well qualified to supervise the making of ice cream and he possessed the character Ted sought for the position.
1. Find the English equivalents for the following words and expressions:
бросить вызов чему-либо, превышать, руководить предприятием, работать в компании, получать прибыль, обеспечить прибыль на инвестированный капитал, развивать производственную мощность, контролировать производство мороженого, нанимать на работу, продавать в розницу, быть назначенным на должность менеджера;
валовой объем продаж, обучение без отрыва от производства, должность, чувство социальной ответственности, потребление, прибыль до вычета налогов, рост продаж, корпоративные ценности, качество продукции, менеджер по производству.
2. Translate into Russian:
to lead an enterprise (to head the operation); to challenge something; to sell on the retail level; to be in excess of; to employ (to recruit); to make a profit; to provide a return on invested capital; to develop a manufacturing capacity; to be with a company; to be appointed manager; to supervise the making of ice cream;
a sense of social responsibility; consumption; gross sales; pretax profit; sales growth; production manager; on-the-job training; corporate values; position; product quality.
3. Match the following:
1. gross a. profit
2. social b. spirit
3. manufacturing c. capital
4. corporate d. capacity
5. entrepreneurial e. values
6. pretax f. responsibility
7. invested g. training
8. on-the-job h. sales
4. Say whether these statements are true or false:
1. Ted & Harry's had taken a very proactive stance in the area of social responsibility and that is why the company employed disadvantaged members of society.
2. The only objective of Ted & Harry's in Russia was promotion of peace.
3. It was felt that having good business training and a strong sense of social accountability was enough to spark an entrepreneurial spirit in the Russian people.
4. Billy Bob was thought to be quite the man to act as general manager, because he possessed the character Ted sought for the position.
5. Put some questions to the text and answer them
Case 2
Part II
TED & HARRY'S ICE CREAM FACTORY:
THE RUSSIAN EXPERIENCE
The Russian operation was established as a joint venture between Ted & Harry's and three Russian partners. Although the local partners had originally presented themselves as active members of the Russian business community, they were in fact very inexperienced and lacked connections. The three men impressed Ted Cooper with their intelligence, friendliness, and entrepreneurial spirit. Ted also found them appealing in that they represented the average Russian citizen.
The arrangement established an equal partnership between the two parties, with Billy Bob Whitson acting as general manager. It was agreed, however, that decisions would be made jointly between Billy Bob and the Russian partners. Ted & Harry's provided almost all of the capital required to establish the venture, and the Russian partners agreed to provide the necessary experience and effort required to establish the new business.
The Russian partners flew to Arkansas to learn how to make ice cream and Billy Bob moved his family to Russia to begin building the business. While the Russian partners learned the science of ice cream making, Billy Bob was learning how to conduct business in Russia. From the start Billy Bob experienced numerous problems with permits, construction crews, supplier agreements and employee recruitment. The Russian business environment was more difficult than expected, and it appeared at times that it would be impossible to ever establish Ted & Harry's Russia. Billy Bob discovered that it was quite common for bribes to be paid to Russian officials to expedite the needed permits, and that the Russian mafia was deeply involved in the transportation and construction industries.
Since it was against Ted & Harry's corporate culture (and illegal under the Foreign Corrupt Practices Act) to pay bribes or engage in other questionable
business practices, Billy Bob felt very frustrated with his inability to quickly get the business up and running. With the help of a Russian attorney and much
patience, Ted & Harry's Russia finally began operation in 1996. Although it had taken much longer than anticipated, Billy Bob was content in the knowledge that the business had been established without the use of bribes or other forms of payoff.
Ted & Harry's entered the Russian market at a very difficult time. As the political and economic environment rapidly changed, the firm constantly experienced difficulties. Supplier relationships were unreliable, product quality was inconsistent, transportation was a nightmare, and it was often unclear who was really in charge of many government functions. Russia was also becoming a dangerous place to do business, and it was not uncommon for foreign expatriates to hire bodyguards for personal protection.
Product sales were lower, and costs were higher, than expected. Additional capital had to be supplied by Ted & Harry's in order to keep the operation functioning. The relationship between Ted & Harry's and the Russian partners was becoming strained as the local partners pushed for more growth. The Russian partners had envisioned becoming wealthy in a short period of time, and were becoming dissatisfied with the progress of Billy Bob and the management team back in Arkansas. Lacking any signs of near-term profitability, Ted & Harry were not inclined to entertain any suggestions of a growth strategy. Billy Bob felt that he could not manage any further expansion at this time, and he began to question the integrity of the local partners.
By 1998 the business had lost so much money, and the relationship between the joint venture partners had deteriorated to such an extent that it was decided to end the partnership. Ted & Harry's would pull out of Russia, leaving the investment and equity interest to the local partners. Ted Cooper stated in a press release that the decision was made jointly, and that a mutual agreement had been reached to end the Russian venture. Both parties had "parted on good terms and the experiment had been a success." Cooper stated that the objective of the joint venture was to bring entrepreneurship to Russia, and that by turning over the operations to the Russians "that objective had been accomplished." The business would continue with Russian ownership and the name of Ted & Harry's would not be used by the local partners. While admitting that some unexpected problems had occurred, Ted continued to defend the operation as an experiment and proclaim it a success.
1. Find the English equivalents for the following words and expressions:
практика деловых отношений, краткосрочная рентабельность, взаимное соглашение, команда управленцев, стратегия роста, экономическая обстановка, бизнес сообщество, наем работника,
совместное предприятие, связи с поставщиками, бизнес среда, предпринимательство, корпоративная культура;
вести дело, отвечать за что-либо, сталкиваться с проблемами, прекратить деятельность, принимать решения, предоставить капитал, создать предприятие, заключать соглашение, подкупать, иметь успех.
2. Translate into Russian:
to establish an operation (to build a business); to make decisions; to provide the capital; to conduct business; to experience problems; to pay bribes; to be in charge of something; to end the partnership (the venture); to reach an agreement; to be a success;
joint venture; business community; equal partnership; employee recruitment; business environment; corporate culture; business practices; economic environment; supplier relationships; management team; near-term profitability; growth strategy; mutual agreement; entrepreneurship.
3. Match the following:
1. joint a. partnership
2. near-term b. spirit
3. growth c. environment
4. business d. agreement
5. mutual e. profitability
6. supplier f. venture
7. entrepreneurial g. relationships
8. equal h. strategy
4. Say whether these statements are true or false:
1. Billy Bob expected the Russian business environment to be the same as in his home country and that’s why he felt very frustrated with his inability to quickly get the business up and running.
2. As Billy Bob constantly experienced numerous problems he made up his mind to give up the idea of establishing Ted & Harry's Russia.
3. Billy Bob questioned the integrity of the local partners partly because they lacked a sense of social responsibility.
4. The decision to end the partnership was made jointly because the objective of the joint venture “had been accomplished”.
5. Discuss the following questions:
1. Do you think Ted & Harry’s Russia was a success?
2. Do you think that Ted & Harry’s made any mistakes in either country, partner or management selection?
3. What could Ted & Harry’s have done more effectively?
CASE 3
THE TOLEDO BICYCLE COMPANY:
PEDDLING INTO EASTERN EUROPE
Hans Kohl immigrated to the United States in 1892 and shortly thereafter began to manufacture and sell bicycles out of his Toledo, Ohio, home. The company became an overnight success because of the strong demand for bicycles at the time and the exceptional quality of the bike produced by Kohl. The business was later named the Toledo Bicycle Company (TBC) and the company has remained in the hands of the Kohl family up to the present day. By 1950 the company was selling over 700,000 bicycles a year and commanded a 25% share of the market. By 1985, market share had dropped to just a little over 5%, and the company was desperately seeking ways to reduce costs and increase sales. The brand name was still strongly associated with quality bikes by consumers; however, the product was considered stogy.
Unable to reduce labor costs significantly in the Toledo plant, the company began to look internationally for a low-cost production site. In 1989 the company entered into a joint venture agreement with a Hungarian bicycle manufacturer. The Hungarian Bike Company (HBC) had a good reputation for quality in Hungary and its labor costs were only a fraction of the current labor costs of TBC. Compared to other Eastern European workers, it was felt that Hungarian workers were less militant and strike prone.