FI NS

FI NS

FOREIGN INVESTMENT NEGOTIATION SIMULATION

BRIEFING AGENDA Overview of FINS project Key issues Potential negotiation relationships Assignment / discussion of roles Negotiation process Graded assignments FINS Schedule

TEAM ASSIGNMENTS MNCs Local Firms Megatronics EuroData Tanaka East Tropicalia West Tropicalia Paradiso Governments Tropimatics Systrop ElectroParadys ParaInfo

MNCs: Megatronics, Tanaka, EuroData Invest in emerging markets? International strategy Entry mode: Risk, resource, control tradeoffs Type of plant, finished product vs. components Bargaining power vs. local firms, govt.

LOCAL FIRMS: ParaInfo, SysTrop, TropiMatics, ElectroParadys Enter industry? Industry entry mode: alone, JV, SOE? How to facilitate MNCs entry into country Access to technology Government support Bargaining power vs. MNCs, govt.

GOVERNMENTs: Paradiso, East Tropicalia, West Tropicalia Policies for industry structure, access Economic integration Favorable aspects of FDI Labor High technology Taxes Imports vs. exports Unfavorable aspects of FDI Dependence Low technology

FINS Intl. Strategy and Entry Mode Tanaka North America Country of Paradiso Country of Tropicalia ElectroParadys SysTrop ParaInfo TropiMatics Europe

Strategic Importance of Country Entry Mode Decision Matrix Hi Lo Hi Lo Hi Stand-alone Attractiveness of Country , s e c r o L u l, o s Re ontro C isk R

Entry Mode Decision Framework Control Resources Licensing Risk Dissem. Low Low Low High High High High Low Exporting Intermediaries Direct Joint Venture Wholly-owned Subsidiary

Potential Negotiation Relationships MNC1 Local Firma GovernmentY MNC2 Local Firmb GovernmentX

INITIAL CONTACT Get Yahoo! or Hotmail e-mail account Public Statements (required via MGT 610 LISTSERV) 1. 2. 3. 4. e.g., [email protected] Send e-mail address to [email protected] ASAP Team Name/Role Team Members Contact Information Advertisements/RFP’s (optional) Private RFP’s and Solicitations (optional) Direct contact between players

Written Reports and Briefs Pre-Negotiation Strategy Report Due Mon., APR 4 Post-Negotiation Reports 1. 2. 3. Entry Mode & Strategy Report Transaction (Non-transaction) Report Negotiation Process and Outcomes Report Due Monday, APR 11

Pre-Negotiation Strategy Report Intended End-Game Position ( 2-3 pages) Negotiation Game Plan ( 1-2 pages) Key parties Issue priorities Process strategies/tactics Internal Decision Process ( 1/2 page) Details about desired entry mode and international strategy – or policy/economic objectives and policy specifics Authority, information processing, decisionmaking Key Contingencies ( 1/2 page) Alternatives, fall-backs, last resort, etc.

Post-Negotiation Reports Entry Mode & Strategy Report Transaction (Non-transaction) Report(s) Negotiation Process and Outcome Report

Post-Nego Strategy/Entry Report (5 pages of text MAX unlimited appendix items) Details of current/future situation and actions regarding: Entry mode International strategy and operations Organizational structure (Government: Future policies package) Make explicit use of these frameworks

Post-Negotiation Transaction Report(s) Agreements/Contracts Each multi-party “agreement” ( 1-3 pages) Type and purpose of project Partners, ownership, structure, control, etc. Agreements on other key issues Non-Agreement Briefing ( 2-3 pages) Why no agreement? Process and substantive barriers to agreement Future process and/or substantive alternatives

Post-Negotiation Process Report 2-3 pages of text MAX unlimited supporting documentation Negotiation Process Which parties? Timeline Negotiation Issues/Points What were they? Link to entry mode and/or international strategy Negotiation strengths vs. weaknesses Negotiation issues won vs. lost

Post-Negotiation Process Report (cont.) Negotiation Contact Mode, frequency, and substance Bilateral vs. multilateral Documentation Agenda, progress, commitments, unresolved issues, process, etc. Use of Media/Press Individual press releases, joint communiqués, etc.

Negotiation Outcome Conclusions (1 page) Governments Influence of policy package on entry mode and strategy? MNCs ‘Intended’ versus ‘realized’ entry mode/strategy? Local Firms ‘Intended’ versus ‘realized’ role in facilitating MNCs local entry mode and their overall international strategy?

FINS CALENDAR Date: Task: MAR 31 (Thurs.) Negotiations Begin 8:00 a.m. APR 4 (Mon.) Pre-Negotiation Reports Due by 5:00 p.m. APR 11 (Mon.) Negotiations End Post-game In-class Debriefing Post-Negotiation Reports Due