- •International Management
- •Doing the business
- •Entering a foreign market
- •5 International mergers
- •6 Business in the 21st century
- •International management development
- •15 Thinking global, acting local
- •Industrialist honed by French polish
- •Many people are learn foreign languages because it takes a long time.
- •Vocabulary tasks Ai accompanying partner
- •2 A) appointments, assignment, placements в l a) to cite b) to site 2 a) effective b) efficient
Entering a foreign market
Before you read
Discuss these questions.
What are the main reasons for manufacturing a product in the country or region where you want to sell it?
A lot of products are increasingly being ordered by phone or through the Internet, assembled to order and delivered from the factory directly to the customer. This is especially the case in the US and Europe. Do you think this approach would work well in South America?
Reading tasks
A Understanding main points
Read the text on the opposite page about Dell's plans to assemble PCs in South America and answer these questions.
Is the writer generally positive about Dell's chances of success in its South American venture?
Why has Dell decided to attack the South American market?
Based on the information in the text, which country is the odd one out, and why? a) Colombia b) Argentina c) Brazil d) Paraguay e) Uruguay
l\ Why has Dell chosen to locate its manufacturing plant in Brazil? 5 Which of the following 'challenges' facing Dell are mentioned in the article?
unreliable transport networks / e) large distances
poor productivity f) high import tariffs
political instability g) terrorism
high inflation h) well-established competitors
В Understanding details
Mark these statements T (true) or F (false) according to the information in the text Find the part of the text that gives the correct information.
Dell will sell only in the big cities. F
Dell already sells computers in South America.
The company also produces PCs in Mexico.
It plans to import all the components it needs.
Ford and Volkswagen have been operating in South America for some years.
Considering South America as a single market is not an easy strategy.
To meet 'local content criteria' Dell must use a certain percentage of components produced locally.
Dell hopes to sell its computers duty-free in many countries.
Delivery systems in Brazil are better than in other parts of South America.
INFORMATION TECHNOLOGY LOGISTICS
Dell tries to crack South America
John Barham examines the US computermaker's strategy for expansion using a Brazillian base
Dell Computers, the Texas-based computer-maker that was among the pioneers of online ordering, is preparing to attack the difficult 5 Latin American market.
Soon, Dell will start making computers at a new factory in the small, southern Brazilian city of Eldorado in its first manufactur- ming venture in. South America. Within a few hours' flying time of Eldorado lie four of the continent's main metropolitan regions - Buenos Aires, Rio de Janeiro, Sao 15 Paulo and Santiago - which generate about half the region's wealth and where most of the computer- using populace is concentrated. Dell hopes to serve all these mar-
regions in northern Brazil and the Andean countries - from Eldorado.
According to Dell's plan, air- 25 craft from Miami will land at a nearby international airport carrying computer components that will be sent straight to Dell's factory. Together with parts delivered
be assembled to order, packed and delivered to consumers across the continent. The challenge for Dell is not 35 only to mount an effective marketing campaign to educate customers about online ordering, it must also manage a complex logistics system and deal with the problems of unreliable road and air transport networks. And it must operate in half a dozen volatile Latin countries, with unpredictable governments and con- •Ш sumers as well as well-established competitors.
20kets
- including more distant 55 year bought 5 million PCs and 90 and
automatically gain duty-free
countries such as Mexico and Colombia, but has never sold to markets in Argentina or Brazil. Latin American consumers last
demand is growing at 15 per cent a year. Growth is likely to remain strong for some time to come: in Brazil, the region's largest market.
owns a PC.
30
from suppliers in Brazil, they will 65 Volkswagen and many other
100
Argentina, Dell may still find it is
multinational companies have operated in the region's main countries as if they formed one integrated market. That was a nat- 70 ural reaction to falling import tariffs and consolidation of the Mercosur customs union linking Argentina, Brazil. Paraguay and Uruguay. However, the distances. 75 the red tape and the animosities between national governments often make fulfilment of this strategy difficult.
50
puters to a few Latin American 85 technology industries. If Dell
meets Brazilian local content criteria and attains agreed production volumes, its products are considered to be 100 per cent locally made
access to Mercosur countries.
)
only 3-4 per cent of the population 95 cracy in neighbouring
countries.
struggling
to co-ordinate operations and sales over a vast region.
FINANCIAL
TIMES
World
business newspaper.
Although roads, air transport and delivery systems are tolerably efficient in south eastern Brazil and parts of Uruguay, Chile and
С Understanding details
Complete the sequence of steps in the planned assembly and delivery of Dell's PCs. (para 3)
D How the text is organised
These phrases summarise the main idea of each paragraph. Match each phrase to the correct paragraph.
the challenge for Dell
reason for choosing Brazil
an overview of Dell's intentions paragraph I
reason to enter the South American market.
how Dell's plan will work
other companies'experiences
problems Dell may Face in Brazil and elsewhere
advantages of Eldorado's location
Vocabulary tasks
A Word search
Find a word or phrase in the text that has a similar meaning.
one of the first to do something (para 1) p .ionepr
buying something through the Internet (para 1) о о
business activity with some element of risk (para 2)
general population in a country (para 2) P
a difficult task which needs skill and determination (para 4)
6 describes something or someone that can change quickly and suddenly (para 4)
7 lots of rules and regulations, which often seem to have no purpose (para 6)
r t "»
: 8 strong dislike between people or groups (рзга 6)
a \mt»\M rv. ••••Hi еодедод
9 reach or achieve an objective (para 7) ,
10 trying very hard to do something under difficult conditions (para 8) s
В Collocations
l Match these nouns as they occut together in the text
tax
manufacturing
import
customs
production
logistics
venture
incentives
system
tariffs
volumes
union
2 Match these verbs and nouns as they occur in the text
mount
serve
generate
gain
meet
access
criteria a campaign a market wealth
С Complete the sentence
Use an appropriate phrase from Exercise В to complete each sentence.
Many countries offer companies to encourage inward investment.
When we launch our new Internet service we will need to a big marketing
In order to be successful, the new manufacturing plant will have to reach target
within six months.
Assembling to order and delivering direct to each customer means managing a complex
When importing is expensive due to high the alternative is to manufacture locally.
In order to have free access to the EU market, Japanese car manufacturers in the UK need to minimum content
In some countries the only way to well is to have local production.
Most countries in Europe are now part of a which allows free movement of goods.
IS;: 'J1^ ' ' :• buir.v i-
Imagine you work tn the marketing department of a European truck manufacturer. Prepare a presentation giving arguments for setting up production in South America.
You are a consultant specialising in economic and political fields. You have been asked by a client, a European computer manufacturer, to summarise in a report the difficulties and challenges of setting up a production operation in one of the following countries: Colombia, Russia or Indonesia. Choose one and write a report.