Solution manual and case solutions for global marketing contemporary theory practice and cases 1st edition by alon

The immediate issues in the case is of Proton choosing to either sell off its equity stake – either fully or partly – to a foreign company or to carry on its efforts at increasing domest

CASE 1-1 TEACHING NOTE

A TORTUOUS ROAD AHEAD FOR PROTON OF MALAYSIA

a IMMEDIATE ISSUES, BASIC ISSUES AND KEY POINTS OR HIGHLIGHTS

The basic issue in the case is of a developing country’s car manufacturer retaining its national identity or yielding to the global forces and becoming a part of a multinational car manufacturer The immediate issues in the case is of Proton choosing to either sell off its equity stake – either fully or partly – to a foreign company or to carry on its efforts at increasing domestic sales and internationalization efforts

b LEVEL OF ANALYSIS FOR WHICH CASE HAS BEEN WRITTEN

The case could be used for undergraduate, graduate as well as executive class students It could also be used in executive education and training programs

c SUGGESTED STUDENT ASSIGNMENT

The students or participants in case discussion could come prepared with ideas on:

 Global automobile industry

 Automobile industry in Asia and specifically in South-East Asia

 Political and economic environment in Malaysia

d SUGGESTED ADDITIONAL READINGS OR REFERENCE

Participants could benefit from accessing additional readings and references such as:

 Textbook assigned for the course

 Websites of Proton at www.proton.com

 Website of Malaysian Automotive Association at www.maa.org.my

 Contemporary readings on global integration and internationalization of emerging market companies

e POSSIBLE DISCUSSION QUESTIONS

1 Identify the factors for and against the position that Proton needs a foreign equity

partner

2 Suggest measures that Proton could use to increase its sales in export markets

3 Should Proton give in to the temptation of becoming a part of a larger, global car

company such as Volkswagen or Citroen?

4 Should Proton aim at becoming a regional automobile manufacturer and shelve its

The case could be used for discussing topics in international business or international management such as:

 Global integration

 Internationalization of emerging market multinational

 International competitive analysis

 International strategy

 Cooperation and global partnerships

g ANALYSIS

1 Identify the factors for and against the position that Proton needs a foreign equity

partner

Factors that support foreign equity participation in Proton include: equity participation can lead to higher capacity and better economies of scale; better access to foreign technology, easier access to foreign markets; and enhanced competitive position Factors that are against the need for foreign equity participation include loss of managerial control, hurting national pride, and diverting national resources

A basic step that could be suggested for increasing sales in export markets is foreign equity participation through which several benefits could be utilized Other measures could be the typical marketing initiatives such as improving the quality of Proton cars, adopting international standards in manufacturing, following global trends in marketing, and establishing strong distribution networks As the case makes it clear, there is a big gap in technology that needs to be filled up before Proton could be able to compete in the global markets

3 Should Proton give in to the temptation of becoming a part of a larger, global car

company such as Volkswagen or Citreon?

It’s a big temptation hard to resist for Proton to become a part of a larger, global car company provided it is ready to bite the bait of losing its status as a Malaysian national car company But this may not be as difficult as it seems Physically, it still remains in Malaysia and would predominantly be Malaysian in terms of markets, consumers, and employee composition Additionally it would have all the benefits of being a part of a global network

Regionalization rather than globalization is a viable option in a situation that Proton finds itself in The global automobile industry is highly competitive and it is difficult for a small company like Proton with limited resources to stand in competition against well-established giants such as General Motors, Citreon, Mitsubishi or Hyundai Regionalization offers better, though limited, opportunities Yet, the demand for automobiles is increasing in markets such as India and China in Asia and in Indonesia and Philippines in South-East Asia