1. Market Expansion

2. Lead-in

3. Lead-in Terms Matching
Match each of following terms to its corresponding definition.
a. the process in which several steps in the production and/or distribution of a product or service are controlled by a single company or entity.
b. controllable elements of a product’s marketing plan, commonly termed as 4Ps: product, price, place and promotion.

4. Lead-in Terms Matching
c. a systematic approach to examining the development of competitive advantage.
d. the process of establishing a mutually beneficial relationship with other business people and potential clients and/or customers.

5. Lead-in Terms Matching
Definition
Business Networking d
Marketing Mix b
Value chain c
Vertical Integration a

6. Lead-in Discussion
II. Can you think of any Chinese companies that are successfully running overseas? And discuss some of the reasons that why they achieved success.
Hair Group
China National Petroleum Corporation
Geely Holding Group
Lenovo
CITIC Group ……

7. How to Conquer New Markets with Old Skills
Text A
How to Conquer New Markets with Old Skills

8. Structural Analysis Para. Main Topics Para. 1-10
Companies from emerging economies can succeed in expanding overseas, such as some Spanish companies.
Para
What are the old skills that Spanish companies use during the market expansion process.
Para
Companies seeking overseas expansion should move quickly.

9. Part I Questions about Part I
1. According to part one, why do some Spanish firms succeed in the international expansion?
These Spanish firms used acquisitions to extend their reach but focused them on just a few industries and geographic areas. They then strengthened their positions by drawing on some old skills.

10. Part I Questions about Part I
2. What are the “old skills” mentioned in part one?
The “old skills” include networking skills, project execution knowledge, and vertical integration expertise.

11. Part I Sentence Interpretation
1. While many are every bit as savvy and profit-oriented as traditional multinationals, they’re painfully aware that they don’t have cutting-edge technologies, dominant brands, or novel products. (Line 3, Para.1)
As traditional multinationals, many companies from emerging economies are good at seizing business opportunities and are eager to make profits, however, they’re painfully aware that they don’t have the most advanced technologies, branded items that dominate the market or products that distinguish them from their competitors.

12. Part I Sentence Interpretation
2. So they remain at home, profitable but unable to live up to their full potential— and vulnerable to foreign competitors. (Line 8, Para. 1)
So they remain at home, despite making profits on domestic sales, they failed to act as best as they can and are likely to fail in competing with foreign rivals.

13. Part I Sentence Interpretation
3. If they’re smart about how and where they venture abroad, global hopefuls can succeed by harnessing mundane capabilities, such as people skills and operational know-how, that they’ve been honing at home for years.(Line 1, Para. 3)
If they’re smart about how and where they venture abroad, promising companies seeking overseas expansion can achieve success by making use of ordinary capabilities, such as communication skills and operational expertise, which have been carefully developed and improved over a long period of time in their domestic market.

14. Part I Words and Expressions
mundane (para. 3) adj. ordinary and not interesting or exciting synonyms: ordinary, usual example: Each one of these Mother Teresa quotations is a refreshing view of life's mundane problems

15. Part I Words and Expressions
bypass (para. 5) v. go around or avoid example: We manage to bypass the shopping center by taking side-streets.

16. Part I Words and Expressions
dismantle (para. 6) v. take apart into its constituent pieces；take off or remove example: We are dismantling the machine. The new government dismantled their predecessors' inefficient tax system.

17. Part I Notes Telefónica
a Spanish broadband and telecommunications provider mainly in Europe and Latin America. 西班牙电信

18. Part I Notes
Santander
the largest bank in the Eurozone and one of the largest banks in the world in terms of market capitalisation . According to Forbes Magazine Global 2000, it is the 13th largest public company in the world. 桑坦德银行

19. Part I Notes the UK’s Abbey
a UK-based bank. It became a wholly owned subsidiary of Grupo Santander of Spain in 2004, and was rebranded as Santander in January 英国阿比国 民银行

20. Part II Questions about Part II
1. What benefits does networking bring?
It helps companies penetrate foreign markets, deepen their knowledge, and gain access to competitive resources.

21. Part II Questions about Part II
2. What is the key for Telefónica’s success?
The key for its success is project execution, which is the ability to set up plants or complex facilities quickly and at low cost.

22. Part II Questions about Part II
3. Why do many Spanish companies outsource part of their production to overseas countries?
There are many reasons for outsourcing, among which reducing cost tops the list. Companies may find cheaper labor cost as well as production cost in other countries. Besides, outsourcing allows a company to focus on its core competencies by improving productivity and efficiency. And outsourcing helps companies release new products faster than if it relied exclusively on in-house talent.

23. Part II Sentence Interpretation
Founded in Barcelona in 1922, the company languished until the 1960s, when the success of its first prêt-àporter wedding collections encouraged it to position itself as a global player. (Line 2, Para. 22)
Founded in Barcelona in 1922, the company gradually lost vitality. However, this unpleasant situation has changed since the 1960s. Due to the success of its first ready-to-wear wedding collections, the company began to engage itself in global expansion.

24. Part II Words and Expressions
languish (para. 22) v. to fail to be successful or to improve, lack or lose vitality example: Since the war the industry has gradually languished. The shares are languishing at just 46p after yesterday’s fall.

25. Part II Words and Expressions
factor in (para. 22) vp.to include a particular amount or factor when you calculate something example: Labor issues must be factored in when the government carry out the reform.

26. Part II Words and Expressions
optimal (para. 25)
adj. the best or most suitable
example: But the optimal level of investment depends on a country's stage of development.

27. Part II Words and Expressions
intricacy (para. 25)
n. a complicated and detailed form or pattern
example: It takes time to understand the intricacies of private banking.

28. Part III Questions about Part III
1. What are the respective benefits of entering developing countries and developed countries?
Entering developing countries helps a company gain size and operational experience and generate profits, while expansion in developed markets contributes primarily to its capability-upgrading process.

29. Part III Questions about Part III
2. Compared with other multinationals, what are the characteristics of Spanish companies’ global expansion?
When Spanish companies go global, most of them resort to alliances, joint ventures, and acquisitions rather than open their own facilities abroad. And their acquisitions are focused on just a few industries and geographic areas. During the expansion process, they used their homegrown skills, such as networking, project execution, vertical integration etc. to capture new markets. Last but not least, Spanish companies move quickly in the expansion process.

30. Part III Words and Expressions
denounce (para. 26)
v.to express strong disapproval of someone or something, especially in public
synonym: disapprove
examples: Amnesty International denounced the failure by the authorities to take action.

31. Part III Words and Expressions
upgrade (para. 27)
v. to improve something and make it more modern, especially in order to provide a better service
examples:The hotel has recently been refurbished and upgraded.

32. The Rise of Emerging Market Multinationals
Text B
The Rise of Emerging Market Multinationals

33. Structural Analysis Para. Main Topics Para. 1-20
MNCs from emerging economies are expanding quickly.
Para
The expansion features of MNCs from emerging economies.
Para
What established MNCs can learn from emerging market MNCs.

34. Part I Questions about Part I
1. Why are emerging market MNCs rising fast?
First, emerging economies’ higher growth rates see them amassing large trade surpluses, which encourages asset acquisition in foreign countries.
Second, emerging economies are developing robust internal consumption markets, making local firms bigger and savvier at marketing themselves on a global scale.

35. Part I Questions about Part I
2. What way do the emerging markets’ MNCs use in their expansion？
They use multiple modes ranging from alliances and joint ventures to wholly owned subsidiaries.

36. Part II Questions about Part II
What are the features of the expansion of emerging markets’ MNCs?
First, they expand in at a fast speed. Second, they enter developed and developing countries simultaneously right at the beginning of their international expansion efforts. Thirdly, their preference for entry modes is based on external growth. They use global alliances and acquisitions. Finally, they enjoy more freedom in implementing organizational innovations.

37. Part III Questions about Part III
What should the managers of emerging markets’ MNCs do to increase their competitiveness?
Managers should know the ideal organizational combinations that will extract the most value, yield the most learning and grant the most access to vital resources. They also need to become nimbler and more flexible in order to take full advantage of new technology. They have to think about sources of competitive strength other than technology and brands, especially in the areas of execution and political skills.

38. Speaking Exercise-Discussion
Any company that aspires to industry leadership in the 21st century must think in terms of expansion into new markets. Discuss the following questions in groups and write down the key points:
1. Why do companies expand into new markets?
2. What are the potential challenges in this process?
3. What are the major ways of international expansion?

39. Speaking Exercise-Discussion
Suggested answers
1. Companies expand into new markets for a variety of reasons. For example,
a. to gain access to new customers
b. to increase revenues, profits, and long-term growth
c. to lower cost of manufacturing and find alternative sources of labor
d. to seek for technology assistance
e. to spread its business risk across a wider market base

40. Speaking Exercise-Discussion
2. Companies may face any of the following challenges:
cultural differences
tariffs and other trade barriers
laws and regulation
labor availability
competition from domestic players

41. Speaking Exercise-Discussion
3. The major ways of international expansion are as follows:
Export
Licensing
Franchising
Foreign Direct Investment