I need help with the attached assignment. I am including the relevant
I need help with the attached assignment. I am including the relevant
textbook chapters in PDF form. Thank you for your help.
Saylor URL:http://www.saylor.org/booksSaylor.org206Chapter 7Competing in International MarketsLEARNING OBJECTIVESAfter reading this chapter, you should be able to understand and articulate answers to the followingquestions:1.What are the main benefits and risks of competing in international markets?2.What is the “diamond model,” and how does it help explain why some firms compete better ininternational markets than others?3.What are the various global strategies that firms can adopt?4.What forms of involvement are available to firms that seek to compete in international markets?Kia Picks Up SpeedKia is enjoying accelerated growth within the global automobile industry.On June 2, 2011, South Korean automaker Kia announced plans for a major expansion of its Americanproduction facility. Capacity at Kia Motors Manufacturing Georgia Inc. (KMMG) was slated to expand 20percent from 300,000 to 360,000 vehicles per year. In addition to the crossover utility vehicle Sorento,the plant would begin making a sedan named the Optima in September 2011. The expansion of the plantwas estimated to cost $100 million and was expected to create 1,000 new jobs.[1]This ambitious growth was made possible by Kia’s superb performance in the US market. KMMG hadstarted building vehicles less than two years earlier after being constructed for a cost of $1 billion. In2010, yearly sales in the United States climbed above 350,000 vehicles. Kia’s overall share of the USmarket increased in 2010 for the sixteenth consecutive year. In May 2011, Kia sold more than 48,000 carsand trucks in United States, an increase of more than 53 percent from May 2010 sales levels. The Optimaled the way with a whopping 210 percent increase in sales.Kia was not the only beneficiary of its success. KMMG’s location of West Point, Georgia, had beeneconomically devastated when its homegrown textile company, WestPoint Home, shut down its local
Saylor URL:http://www.saylor.org/booksSaylor.org207factories to take advantage of lower labor prices overseas. Following a fierce competition with towns inMississippi, Kentucky, and other states, West Point was selected in 2006 as the site of Kia’s first USmanufacturing facility. To win the plant, state and local authorities offered Kia more than $400 millionworth of incentives, including tax breaks, free land, and infrastructure creation.Georgia’s return on this investment included two thousand new jobs at the plant as well as hundreds ofjobs at suppliers that set up shop to support KMMG. The neighboring state of Alabama benefited fromKMMG’s success too. As of June 2011, nearly sixty companies spread across twenty-three Alabamacounties supplied parts or services to KMMG.[2]The name “Kia” means to arise or come up out of Asia.[3]This name is very appropriate; Kia rose fromhumble beginnings as a maker of bicycle parts in 1944 to become a global player in the automobileindustry. As of 2011, Kia was producing more than 2.1 million vehicles per year in eight countries. Kiaswere sold in 172 countries. Kia employed more than 44,000 people and enjoyed annual revenues in excessof $20 billion. Fellow South Korean automaker Hyundai owned just over 33 percent of Kia, and the twofirms strengthened each other through collaboration. When taking all of these facts into consideration,Kia’s slogan—The Power to Surprise—had to make its rivals wonder what surprises the Korean upstartmight have in store for them next.Workers in Georgia build Sorentos for South Korea–based Kia.
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