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Foreign or Domestic? You Be the International Management Consultant w ww. Connie Haticy is a very successful businesswoman who around the world. “If I don't receive scheduled deliveries, has holdings in a wide variety of industries. Hatley whom do I call?” she asked one of her vice presidents. recently was approached by one of the Big Three auto- “Also, we don't speak their language. If there is a major makers and offered a multidealership arrangement. In problem, how are we going to really communicate with return for investing $50 million in facilities, the auto each other? I like the proposal, and I'd take it if I were manufacturer would be willing to give her five dealerships sure that we wouldn't have communication problems. spread throughout the United States. These locations, for However, $50 million is a lot of money to invest. If a the most part, are in rural areas, but over the next decade, mistake is made, I'm going to lose a fortune. They did these locales likely will become much more populated. In experience some probleras last year, and their sales were addition, the company pointed out that a large percentage off that year. Of course, if the South Koreans are right in new cars are purchased by individuals who prefer to their long-range forecasts and I have no major problems buy in rural locations, because prices at these dealerships dealing with them, my return on investment is going to tend to be lower. Hatley has been seriously considering be almost 50 percent higher than it will be with the U.S. the offer, although she now has a competitive alternative manufacturer.” A South Korean auto manufacturer has approached Hatley and offered her the same basic deal. Hatley indi- cated that she was wary of doing business with a foreign firm so far away, but the Korean manufacturer presented her with some interesting auto, sales data: (1) Between 1981 and 2001, the South Korean share of the U.S. auto market went from 0 to over 3 percent. (2) South Korean automakers are capturing Inarket share in the United States at a faster rate than any other competitor. (3) New technol- ogy is being incorporated into these Korean-built cars at ac unprecedented rate, and the quality is among the high- est in the industry. (4) Although the Big Three (GM, Ford, and DaimlerChrysler) hold a large share of the U.S. auto . market, their inarket share among those 45 years of age or younger is declining and being captured by foreign com- petitors. (5) The South Korean firm intends to increase its share of the U.S. market by 20 percent annually. Hatley is very impressed with these data and forecasts. Recently, however, the Korean aulo company's sales and market share have been declining, and she remains uneasy about having to deal with someone located halfway

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