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Spreadsheet supplement for case 703-050.

From March to May 2003, Hong Kong's tourism industry underwent a serious downturn during the outbreak of SARS in the territory, which caused 1,755 cases in Hong Kong before July. There was practically no inbound tourism between April 2 and May 23, during which the World Health Organization advised the public to consider postponing all but essential travel to Hong Kong. Then, in a dramatic twist, the industry received a significant boost in late July, when residents of four nearby mainland Chinese cities were allowed to apply to visit Hong Kong on an individual basis as part of the mainland and Hong Kong Closer Economic Partnership Arrangement. Formerly, mainland Chinese tourists could visit Hong Kong only with tour groups. By September, tourists from the major cities of Beijing, Shanghai, Guangzhou, and Shenzhen could also visit Hong Kong on an individual basis. Mainland tourists literally began to flood in as a result, bringing up total visitor arrival figures to a level that even surpassed pre-SARS statistics. Greater easing of travel restrictions was expected in the first half of 2004. How could Hong Kong's SMEs, much battered by the economic woes in recent years that were capped by the SARS attack, capitalize on the new opportunities offered by the liberalization of mainland travel?

Provides an opportunity to analyze the Argentine financial crisis of 2001/2002, which culminated in the abandonment of the convertibility plan introduced by Domingo Cavallo in 1991. Focusses on the role of the financial system.

Describes how Siemens Medical Solutions (MED) accomplished a remarkable turnaround from a money-losing operation to one of Siemens' most profitable divisions. By late 1996, a challenging market environment in the health care industry as well as inefficiencies in the company's manufacturing, logistics, and sales/service processes had a negative impact on MED's profitability. Reacting to these challenges, CEO Reinhardt defined and implemented a comprehensive turnaround program centered around people, processes, and products. The case highlights the most important aspects of the company's turnaround and later expansion and provides an outlook for the company's future challenges and opportunities.

Supplements (9-701-076).

Articulates a simple supply-demand framework to understand why people immigrate and focuses attention on the specialized cross-border intermediaries that facilitate such movement. Analyzes a series of important effects, primarily economic, of the diaspora communities that result from immigration over time and, again, focuses attention on the cross-border intermediaries that facilitate the realization of these economic effects.

Explores the causes and consequences of transforming Germany's bank-oriented financial system into one more oriented to capital markets. The economics of globalization, international accords such as Basel II, EU financial policies, and Germany's own regulatory reforms struck to the heart of its traditional, relationship-banking model. The outcry against these reforms grew so great that the German chancellor, Gerhard Schroder, announced that Basel II was not acceptable for Germany, especially because it affected the financing of Mittelstand (small and medium-size firms), the backbone of the German economy. With the economy stagnating, unemployment rising, job creation stalling, bankruptcies reaching record rates, the budget deficit rising, and German banks increasingly suffering from a simultaneous structural and earnings crisis, German banks and businesses wondered what the future had in store for them.

Describes the emergence of the European Union (EU). Focuses on a critical stage in European integration--the period in the early 1990s when member states negotiated the terms of the Maastricht Treaty. This agreement set in motion the project that would eventually lead to the formation of a single currency. Considers the political and economic conditions that led France, Germany, and Britain to undertake this common project.

Recent decades have witnessed the proliferation of nongovernmental organizations (NGOs) and the emergence of activism across a wide variety of issue areas. On topics ranging from human rights to labor conditions, NGOs and activists represent an increasingly important constituency in a firm's nonmarket environment. Explores the different ways in which firms manage NGO pressure, noting instances of preemption, capitulation, and resistance. Considers three case studies--Unocal, Nike, and Novartis--and evaluates a series of hypotheses about the economic and noneconomic factors that drive the varying firm responses to NGO activism.

In the years since independence, tiny, landlocked Botswana has gone from being one of the world's poorest nations to becoming a stable, prosperous state, blessed with the highest sustained growth rate in the world. This case highlights the role that foreign direct investment (FDI) has played in this success, as well as how strong local institutions have helped to harness the benefits that the foreign investor--here, the giant De Beers company--has brought. Also, examines how Botswana was able to avoid the natural resource curse that has haunted so many other resource-abundant countries.

Examines the political and economic dimensions of the campaign to improve workers' rights around the world through the inclusion of labor standards in international trade agreements. The U.S.-Cambodia Textile Trade Agreement was the first agreement of its kind to link increased access to U.S. markets to improved working conditions in an exporting country. Some argue that labor standards are becoming a new form of protectionism. Others see them as necessary to preserve open markets and fair trade. How this debate is resolved will undoubtedly have great implications for investors in developing countries and ultimately for the economic development of the poorer countries themselves.

By the mid-1990s, a few years into Vietnam's tentative market-oriented reforms, Vietnam's newborn private sector was at a crucial point. The government had gradually loosened its communist-era prohibitions on market activities, but had left in place most of the machinery of the old planned economy and had done little to build the institutions needed to underpin a market-oriented economy. Interestingly, facing impediments such as the lack of commercial law and contracts, entrepreneurship flourished. The protagonists in the case, owner-managers of three relatively young firms, discuss their initial success in such an unreceptive setting.

Examines the federal financial response to September 11, 2001: the airline bailout, the victim compensation fund, emergency aid to New York and Washington, and terrorism reinsurance. Less than two weeks after the attacks, the government had committed almost $40 billion to relieving the victims and safeguarding the economy. A little over a year later, these measures were joined by the creation of a federal terrorism reinsurance program, originally proposed by the White House in October 2001. On the surface, the federal financial response to September 11 was puzzling. Did the enormity of the attacks weaken the country's commitment to laissez-faire principles? Or is the traditional attitude toward government economic intervention in the United States more complicated than the phrase "laissez-faire" (or "free market") implies? Explores the appropriate role of government in managing risk and responding to disasters and then asks students to consider whether each of the various initiatives--and indeed the program as a whole--was a success or a failure.

Describes the success and rapid growth of a real estate entrepreneurial firm, SOHO China. As the firm enters into a new stage, its founders, Xin Zhang and Shiyi Pan, consider their next big strategic move.

The National Parks Conservation Association seeks to help the U.S. National Park Service increase its efficiency by incorporating principles of business management so that American national parks will be better managed. Its efforts raise fundamental questions about the roles of government, firms, and nonprofits in a mixed capitalist economy as well as the appropriate differences in managerial practices across sectors.

In early 2003, Prime Minister Goh Chok Tong is assessing Singapore's development strategy--tax cutting combined with an industrial policy focused on six "clusters," including biomedical sciences. After 36 years of stupendous growth, Singapore has slowed down and faces intense competition in exports and foreign direct investment, especially from China. Is its new strategy the right choice? This case examines several key aspects of Singapore's growth, including organizational/cultural arrangements, the savings/investment balance, and total factor productivity growth.

In less than a decade, Bombardier had grown from a medium-size Canadian company to a highly profitable global player largely on the strength of the introduction of a new generation of regional jet and successfully marketing its product to airlines around the world. Events taking place on the other side of the globe, however, threatened Bombardier's hard-earned success. A nasty trade dispute with Brazilian rival Embraer was dragging on into its fifth year with no end in sight. Recent developments in the dispute at the WTO were forcing CEO Robert Brown and his team to decide on a strategy for what could very well turn out to be the most critical year in the company's history.

If your company operates in a developing country, AIDS is your business. Although Africa has received the most attention, AIDS is also spreading swiftly in other parts of the world. Why should executives be concerned about AIDS? Because it is destroying the twin rationales of globalization strategy--cheap labor and fast-growing markets--in countries where people are heavily affected by the epidemic. Fortunately, investments in programs that prevent infection and provide treatment for employees who have HIV/AIDS are profitable for many businesses--that is, they lead to savings that outweigh the programs' costs. Due to the long latency period between HIV infection and the onset of AIDS symptoms, a company is not likely to see any of the costs of HIV/AIDS until five to ten years after an employee is infected. But executives can calculate the present value of epidemic-related costs by using the discount rate to weigh each cost according to its expected timing. That allows companies to think about expenses on HIV/AIDS prevention and treatment programs as investments rather than merely as costs. Fighting AIDS not only helps those infected; it also makes good business sense.

Describes the founding of a fair trade coffee company. Asks participants to develop a business plan for the introduction of fairly traded Mexican coffee into the Dutch market.

Studies the impact of tariffs, subsidies, and quotas on the U.S. steel market. Focuses on "winners" and "losers" from different policies. Applications to the events in the U.S. steel market in 2001 illustrate the impact of these policies.