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Discusses the growing competition faced by U.S. producers of civil aircraft due to the success and expanding product line of Airbus Industries. Designed to foster discussion of international trade policy as it affects producers in the industry and to encourage firm managers to consider competitive strategies, given their influence over trade policy negotiations. A rewritten version of an earlier case.

Presents partial resolution of problem. Cites points still to be resolved in trade dispute between U.S. aircraft manufacturers and Airbus Industrie. To be used as a handout after discussion of the case.

If government policies are important to an industry's competitive future, then political activism deserves as much executive time and energy as other business priorities. The challenge is to create and sustain political advantage - to develop a stable, ongoing relationship that makes Washington an ally in the battle for global competitiveness. The political effectiveness of the semiconductor industry during the past five years shows what it takes to succeed, even with limited political assets.

Describes Korea's efforts to improve its technological capability and learn to produce and export high technology goods. The roles of government policy, domestic firms, and foreign firms are explored. Special attention is paid to how technology flows across borders, what impact this has on competitiveness, and how government and firms manage these flows.

Describes all of General Motors' major alliances with Asian firms. These include Toyota, Fanuc, Isuzu, Daewoo, Suzuki, Nissan, and Hitachi. Students can discuss the rationale of each alliance, their risks, their management problems, and their likely evolution. Also shows the differences between alliances based primarily on cost considerations and those aimed at learning from other organizations.

U.S. trade policy is mired in obsolete assumptions about the practices and principles of global economics. It is stuck in a time when the United States could assume sole responsibility for the world trading order. Business and government leaders must acknowledge that there are five different economic systems operating in the world today--centrally planned, mixed, developing, plan-driven, and rule-driven--only one of which corresponds to the traditional U.S. model. The United States needs to embrace "tailored trade"--negotiating with different countries differently, according to their economic systems. The result would be a more practical and flexible approach to trade--one that would not only serve U.S. interests but also correspond to the world as it really is.

In 1981, Motorola was reevaluating its strategy towards Japan. The firm had been successful in penetrating the Japanese market, and it was confronting increased Japanese competition at home. How it should respond and with what kind of organization were the central questions confronting management.

Updates Motorola and Japan (A) for 1982.

Two arguments against low trade barriers - that U.S. manufacturing is bound to lose out to places like Korea and Taiwan because they pay rock-bottom wages, and to Japan and other aggressive foreign competitors because they help favored industries with subsidies - don't stand up to the facts. The United States imports less from low-wage countries now than it did in 1960; protection levels haven't changed much since 1981, the year the United States last had a surplus in manufactured goods. What is at the bottom of our massive trade deficit? The huge gap between our production and our spending, fueled largely by the enormous federal budget deficit.

In the 1980s Japan dominated the world industry for video cassette recorders. This case looks at the evolution of the technology and competition in VCRs, the battles between VHS and Beta, and the emerging threats to Japanese dominance.

Many U.S. companies have written off the Japanese market, believing that Japan's distribution system is impenetrable or that the Japanese buy only Japanese products. U.S. companies are represented in more than 85% of Japanese industrial sectors, however, and at least 12 hold the number one market position. These companies have been both creative and tenacious in obtaining this position. Their experience teaches some important lessons.

This case illustrates the opportunities and difficulties posed in envisioning a strategy to enact and implement land reform policy in the complex political environment of a developing country. Professor Donna Lawrence, an American expert on agrarian reform, is hired as an adviser to Juan Judicio, the secretary of rural reform for the new government of Centropico, a small developing country that has recently survived a revolution. Lawrence believes she understands Judicio's goals and proceeds to examine the institutional capacity of the Department of Rural Reform (DRR) and the political environment in which a land reform policy must be implemented. Part A describes Lawrence's frustrating efforts to gather information, the disarray in DRR, the political environment, and the resources she might use in developing a strategy. Part B describes the policy she envisions and its rejection by Judicio. It also illustrates the danger and complexity of policy formulation in an impoverished developing country whose government depends on a fragile coalition of interests. The case is based on the actual experience of a developing country, although certain names and facts are disguised. HKS Case Number 762.0

This case illustrates the opportunities and difficulties posed in envisioning a strategy to enact and implement land reform policy in the complex political environment of a developing country. Professor Donna Lawrence, an American expert on agrarian reform, is hired as an adviser to Juan Judicio, the secretary of rural reform for the new government of Centropico, a small developing country that has recently survived a revolution. Lawrence believes she understands Judicio's goals and proceeds to examine the institutional capacity of the Department of Rural Reform (DRR) and the political environment in which a land reform policy must be implemented. Part A describes Lawrence's frustrating efforts to gather information, the disarray in DRR, the political environment, and the resources she might use in developing a strategy. Part B describes the policy she envisions and its rejection by Judicio. It also illustrates the danger and complexity of policy formulation in an impoverished developing country whose government depends on a fragile coalition of interests. The case is based on the actual experience of a developing country, although certain names and facts are disguised. HKS Case Number 761.0

The ability of commercial airlines to fly their planes means little without a space in which to land them. In some congested US airports, the times and spots for landing are known as "landing slots" and have been assigned to airlines at the nation's four busiest airports since 1969. For the first decade of this slot system, assignments were made with little controversy by the airline industry committee. Airline deregulation, however, increased demand for slots in the 1980s and vastly increased pressure on the committees apportioning the slots. An idea emerged to resolve competing demands: the FAA could create a market for landing slots and allow demand to set the price and ration the resource. This case tells the story of Secretary of Transportation Elizabeth Dole's deliberations over whether to create a landing slot market. It describes options ranging from auction to "grandfathering," allowing airlines that had based investment decisions on a stockpile of slots to avoid corporate disruption. The case raises issues concerning the appropriateness of a market for allocating resources where concerns other than sheer efficiency are important. It illustrates, too, the difficulties in designing a policy that will allow for transition from one system to another. It has been used in an intermediate microeconomics curriculum to illustrate market operations issues. There is an epilogue for this case. HKS Case Number 781.0.

The ability of commercial airlines to fly their planes means little without a space in which to land them. In some congested US airports, the times and spots for landing are known as "landing slots" and have been assigned to airlines at the nation's four busiest airports since 1969. For the first decade of this slot system, assignments were made with little controversy by the airline industry committee. Airline deregulation, however, increased demand for slots in the 1980s and vastly increased pressure on the committees apportioning the slots. An idea emerged to resolve competing demands: the FAA could create a market for landing slots and allow demand to set the price and ration the resource. This case tells the story of Secretary of Transportation Elizabeth Dole's deliberations over whether to create a landing slot market. It describes options ranging from auction to "grandfathering," allowing airlines that had based investment decisions on a stockpile of slots to avoid corporate disruption. The case raises issues concerning the appropriateness of a market for allocating resources where concerns other than sheer efficiency are important. It illustrates, too, the difficulties in designing a policy that will allow for transition from one system to another. It has been used in an intermediate microeconomics curriculum to illustrate market operations issues. This is the epilogue to case HKS818. HKS Case Number 781.1.

As import penetration into the American footwear market reached 81% in 1986, B-W Footwear, along with all of its American competitors, was struggling. Supply lines were deteriorating, retailers and importers were gaining power, and the government had rejected two consecutive petitions for protection. Like all industries faced with comparative cost disadvantages in international competition, footwear firms such as B-W have to find new ways to compete. This case explores different survival strategies for managing comparative disadvantage.

What does international competition mean for competitive strategy? While there is ample literature on the problems of becoming a multinational, the specific strategic needs of established multinationals require closer examination in light of the increasingly competitive international environment. We need to distinguish between multidomestic industries and global industries. If American firms are to catch up with the Japanese, they must strive to achieve global platforms rather than engage in competition on a country-by-country basis. A global strategy requires that a firm rebalance the configuration and coordination of its activities so that comparative as well as competitive advantage is achieved. The increasing globalization of international competition requires strategic responses that overcome country parochialism.

Our blind allegiance to free trade threatens our national standard of living and economic future. Free trade puts us in direct competition with low-wage nations - countries that have a lower standard of living than the United States. By allowing these nations to take over big sectors of our market, we permit the permanent interruption of the relationship between demand and supply that has been the main force behind economic growth in U.S. history.

Lotus 1-2-3 exploded on the American market in the spring of 1983. Nine months later Jim Manzi, vice president of marketing, hired Chuck Digate to develop an international strategy for Lotus. Case explores Lotus' rapid rise to the top of the software market in the United States and looks at the considerations surrounding its initial efforts to sell abroad. Can be taught with Note on Comparative Advantage.

Discusses David Ricardo's theory of comparative advantage and the refinement of his model developed by Eli Heckscher and Bertil Ohlin. Presents several criticisms of the Heckscher-Ohlin theory, including Wassily Leontief's empirical demonstration that the nature of U.S. imports and exports were exactly contrary to the predictions of the theory.