Page 69 - DMGT547_INTERNATIONAL_MARKETING

International Marketing

Notes (ii) expropriation (iii) war and civil disturbances and (iv) breach of contract. Premiums depend
on the type of project, type of coverage and project specific conditions. Annual premium for each
coverage is in the range of 0.50%-1.52% of the amount insured.
Freeport’s McMoran Copper wanted to spend $500 million to expand his copper, gold and silver
mining project in Indonesia. The US-German-Indonesian owners of the firm wanted to borrow
75% of the capital from commercial banks in the form of “non-recourse financing”. This type of
financing relies on cash flow of the project and non-project assets are not pledged because the
financing requires a complex problem of the risks and rewards among the leaders, suppliers,
buyers and owners. MIGA played a critical role by providing the initial $15 million coverage.

Self Assessment

Fill in the blanks:
12. The ......................... was established in 1960 to provide long-term funds at concessional
rates to the poorest member countries of the Bank.

13. ......................... was established in 1988 to help its more than hundred member states to
create an attractive investment climate.

14. The IFC was established in ......................... with the objective of promoting the development
of private enterprises in member countries.

15. The ......................... makes equity investments and extends loans to private enterprises in
developing countries.

Case Study Agenda: The Need for Strategic Planning

Lalit Desai: Good evening, ladies and gentlemen. Let me begin by welcoming our guest
speaker for today, Vinod Abhayankar, the CEO of Auto Components, which manufactures
the Zebra brand of shock absorbers. Founded by his father, Dhanvantri Abhayankar, in
1984, Auto Components now enjoys the status of being a preferred supplier to many of the
Original Equipment Manufacturers (OEMS) in the Indian automobile sector. Vinod will
speak about the problems he faced while implementing a strategy-planning process in the
company. Vinod…
Vinod Abhayankar: Thanks, Lalit. I always look forward to these meetings of the YPO,
which, apart from being the country’s only association of young CEOs, provides me with
an opportunity to discuss the problems of managing a business. I wish to correct Lalit at
the very outset. We haven’t implemented strategic planning at Auto Components; we are
in the process of doing so. We are still grappling with two questions. First, do we need
strategic planning at all? That’s surprising since strategy is supposed to be high on every
CEO’s list of priorities. Second, how should the company formulate a strategy? Should it
be based on Auto Components’ present position in the industry? Or should we factor in
the emergence of new forces in the future – such as technology, scale, and costs – and draw
up a strategy in the light of their impact on our operations? I thought I could use this
platform as a sounding board, and fine-tune my own approach to strategic planning.
Please feel free to interrupt me…

Contd...

64 LOVELY PROFESSIONAL UNIVERSITY