MSE608A Spring 2009 Case Study II

You are the CEO of a pharmaceutical company based in the US. Your company has been in business for 10 years in the US and you feel that this is the time to break into a global market. After careful considerations you have decided that your new product “Sun Guard with a twist” should be the next product to be going globally

You decide that your target market should be the Middle East.

  1. You assign your chief marketing officer, David Levin to start the investigation and figure out what will be the best Marketing plan.
  2. Your COO is Nancy Dru. You have tasked her with going to Saudi Arabia and set up to organization and take David Levin with her to lay the ground works for opening the offices all over the Middle East.
  3. You are trying to figure out where manufacturing should take place. Some of the more lucrative options are China, Amman Jordan, and Be’er Sheva, Israel.

Some of the issues with the optional countries are:

  1. China – Low unskilled labor
  2. Jordan – Low cost unskilled labor but more expensive the China. However, Jordan is geographically closer to the target market.
  3. Israel – High skill labor but more expensive than either Jordan or China. Israel also has close proximity to the target market.
  1. You have high costs of R&D and you are trying to figure out if you should keep R&D in the US or move it to China.

Please answer the following questions:

  1. What is the best entry strategy and Organizational design into the Middle Eastern Market? (CH 8, 9 ,10)
  2. Define the market, what countries are involved and what some of the issues in the region are.
  3. Provide a cultural analysis (Hofsteed’s 4 indices) for 3 of your major target countries.
  4. Review the selection of the the Chief Marketing Officer and the COO for setting up the ground works in the target countries. What are some of the issues that exist or do not exist with the selection? What will you do differently?
  5. Which country will you select to set up manufacturing in? Why?
  6. The Saudi Minister of the Interior promised you that if you give him a small sum of about $1,000,000 US, he will make sure the licensing issues in his country will disappear. Considering that this is a $500,000,000 deal, will you pay? Why or why not?
  7. How would you control such operation? Provide arguments that support your position.