What is the role of government business linkages in creating emerging market challengers? Do you think that emerging and transition economies can move to a more hands-off approach with time?

please help me answer the 3rd and 5th question.

i dont understand it. I need to have a detailed answer and it must involve ethical consideration.

So i have to read this case study and answer questions 3 and 5. Please help me.

needs and generate profits. For example, establishing chains of low-cost clinics is helping ad- nt's medical dress Africa's health care needs. 46 The application of business models such as local entrepreneurship, microfinance, targeted marketing, and MNE direct investing holds enormous potential for addressing poverty in Africa. However, critics charge that MNEs do much harm in Africa, such as exploiting local resources, operating sweatshops, and generating pollution. Where do you stand? Can MNEs successfully address poverty and other problems in Africa, or do such firms do more harm than good? CLOSING CASE Prowling for Success: The Revival of Jaguar Land Rover Transforming TATA into an emerging market challenger amid the well as resilience. TATA motors continued to invest money in Jaguar opening up of the Indian economy in 1991 and steering it to a Land Rover amid a global downturn in the sales of luxury car brands. $100 billion global company operating in over 80 countries is con- It finally succeeded in transforming the acquisition into a business sidered to be Ratan Tata's crowning success. He stepped down in that generated over $ 5.82 billion in 2012, with profits of over $533 2012. million. The TATA group's growth had come from spending over $20 bil- lion in acquisitions. But it was the $2.3 billion takeover of the UK's Background of Jaguar Land Rover loss-making car manufacturer, Jaguar Land Rover (JLR) Group, from Historically separate car brands, Jaguar and Land Rover were part Ford in 2008 that created history for the group. of Ford's premier automotive group (PAG) and acquired together by Analysts had argued that TATA motors overpaid for Jaguar Land TATA motors . Rover in 2008. True enough, JLR needed more cash injection from Jaguar was founded by William Lyons to build motorcycle side- the TATAs and continued to lose money for another 2 years. Sales cars in 1922 as Swallow Sidecars. The name Jaguar was created dropped to just under 72,000 units in 2009. The company, already in 1935, to reflect speed, sleekness, and raw power according to saddled with a $3 billion debt, suffered losses of almost $468 million Jaguar Heritage Trust. A succession of mergers followed until in in 2009, with Jaguar Land Rover contributing to over $100 million 1989, the Ford Motor Company acquired Jaguar Cars for $2.5 bil- of this loss. lion. Ford was forced to sell Jaguar Land Rover in 2008 amid contin- Newspaper reports indicated that JLR would need to close at ued losses and to concentrate on its core U.S. business least one of its plants in the UK. But as we saw in this chapter, chal- Today, Jaguar sells over 55,000 cars across 4 models; the XF, XI, lengers from emerging markets demonstrate an appetite for risk as XK, and the R series. Sixty-six percent of total sales comes from the282 0208 CHAPTER 8 . UNDERSTANDING EMERGING MARKETS 253 XF series followed by 11% from the XK series. Its main markets are on fully imported cars-which can be as high as 100%. In 2013, JLR in the UK, China, North America, and the rest of Europe. India announced the opening of a production factory to make the The Land Rover was created in 1948 by the Rover Company. Jaguar XF saloon at its facility in Pune. The Indian market had seen A series of takeovers and mergers followed through the next three a growth of 22 per cent in 2013 with 2913 cars sold in the market. decades, culminating in the formation of the Rover Group in 1986 JLR is expected to have a similar entry strategy for Brazil, where and the takeover of both brands by BMW in 1984. Ford acquired high tariffs have discouraged sales of its cars. Brazil is widely ex- Land Rover in 2000 for $2.96 billion and added both Jaguar and pected to surpass Japan in automobile sales. Land Rover Brands to its Premier Automotive Group until the 2008 Another success factor with firms like JLR has been in its man- sale to TATA motors. agement of the Government-Industry linkage, so vital in transition Land Rover sells over 157,000 units across 7 models; The Range and emerging economies. The TATA group is known to have govern- Rover Evoque is the top seller (36% of total sales), followed by Range ment support and has leveraged this in acquiring JLR. In its entry into Rover Sport (19%), Freelander 2 (17%), Discovery (15%), Range China, JLR had tried several JVs before getting government approval Rover (9%), and the Defender (5%). Sales are predominantly from for the JV with Cherry. China (22%) and Europe (21%), the UK (17%), North America (15%). Governments in developed and emerging regions have vested Declining sales of both brands continued until the Jaguar XK coupe interests in attracting FDI into industries to sustain a large labor launched in 2006 (while still owned by Ford), began reviving interest in force. The restructuring of the UK automobile industry with both Jaguar cars. The model built on an aluminium chassis had a new design nationalization and de-nationalization strategies at various stages and styling that delivered on performance too! A two-door coupe was of JLR's history has shown a clear intervention to boost growth soon added and by 2008, the new successful XF model had arrived. in vital sectors. The success of Nissan's Sunderland plant owes as The launch of the Range Rover Evoque in July 2011, a compact sport much to local government incentives as it does to manufacturing utility vehicle, redefined Jaguar Land Rover as a luxury brand that could competence. In the case of JLR, a clear case of inward FDI from an compete with Mercedes, BMW, and Audi. The Range Rover Evoque or emerging region (India) was used to stop decline within a region and the "new Land Rover," as customers would now refer it, was designed create new jobs in an advanced economy. This we see, how global- to appeal to young, female, and new customers and sold 81,000 units ization is at play here! in just 9 months contributing heavily to the profitability of JLR. Seventy- five percent of total sales are exports to 170 countries earning over $2 Challenges to Sustained Growth billion in revenue, with over 36,451 units sold in China alone. In 2014, new models and stronger sales (particularly in emerging The Lure of Emerging Markets for Automobile markets), saw JLR announce record profits of $3.855 billion. It was the newly launched two- seater Evoque and the F-Type sports car that drove Manufacturers sales up nearly 16 per cent to 434,311 vehicles. Revenue grew 22.8per As indicated in earlier in this chapter, one of the key advantages cent to 29.9billion. The profits were up 49.4 per cent. To put this into that emerging regions possess is access to resources including fi- perspective, global car sales in 2014 were 85 million. It is estimated that nancial reserves and this was clear in the TATA group's next move. this figure will reach 100 million by 2018. The important US market Cost competiveness was improved, production was streamlined, is forecast to peak at 17 million in 2017. Most continued growth will and over 3000 jobs were cut in the company by 2009. Over $2 bil- come from emerging markets.Although Jaguar Land Rover is self-suf- lion was invested in into research and development activities and ficient in generating cash, most of its profits are going into building of by 2010 a $12 billion investment project over the next five years competences that are present with many its competitors. It is also a late was announced. One of the main issues that dogged Jaguar Land mover into many emerging regions where competitors have entrenched Rover was a lack of new models and new engines that could appeal positions. A possible shift of manufacturing into India and China could to a broader segment. To solve this, it turned to low cost centers in cause resentment and labor disruption in the UK, where most of its sup- emerging regions like India and China. These regions would provide ply chain cluster and technology cluster are located. manufacturers with a unique proposition that we see in this chapter. Conclusions Emerging Markets as Target Markets that Possess For Jaguar Land Rover, the future looks stable if new models gener- Low-Cost Manufacturing Bases and Competitive ate the same levels of interest as the Evoque and new XK sportster in Sourcing Destinations emerging markets. . After six years of declining car sales, sales were Most emerging markets have large population segments seeking up in 2014. The important Chinese market saw sales of 21.7 million luxury products, as seen in the case of China that saw a threefold up 13 per cent. Robust growth in China is vital for Tata and JLR. In growth in sales of Jaguar Cars. Linking the rise in per capita income 2015 sales grew by some 10 per cent to 23.8 million cars and light in recent years to a greater demand, one envisages these markets trucks. Tata motors currently depends on the company to provide as a vast opportunity for Jaguar cars to sell within a rising luxury more than 70 percent of its total global revenue and almost 90 per- car segment. No wonder Jaguar ropes in celebrities like Victoria cent of its profits. The continued dependence on emerging markets Beckham to sell $128,000 limited editions of the Evoque to affluent might turn out to be a risky proposition when these economies slow Chinese customers. The company has also announced a joint ven- down. In addition, the continued recession in its traditional home ture agreement with the Chinese manufacturer Cherry Automobile markets of the Euro Zone and North America would dampen sales. to build vehicles for the Chinese market and an engine manufacture The rising cost of rubber and steel and other critical raw materials is ing plant for new models. expected to cut into the profitability of the company as it prepares to In India, JLR has opened an assembly plant in Pune, India where compete on price in many segments in the market. But we may see completely knocked down Freelander2 models are manufactured. the development of new models and entry into newer markets or This is expected to be the hub for sourcing low cost components for segments extending Jaguar Land Rover's success for years to come. JLR's global supply chain. It is also an attempt to lower Indian tariffs The diversification into speed boats, a recent exercise, could be an interesting proposition in this direction.254 PART 2 . THE ENVIRONMENT OF INTERNATIONAL BUSINESS Case Questions AACSB: Reflective Thinking Skills, Ethical Understanding and Reasoning Abilities Summ 8-4. Describe how Jaguar Land Rover leverages the advantages with time ? transition economies can move to a more hands-off approach In this cl of its parent company in seeking new markets. Can this be a source of disadvantages as well? 8-7. Discuss if Jaguar could be spun back into an independent 8-5. How do you think the shift of economic activity to emerging brand once again. What are the limitations of such a move? . Adva emerg regions affects growth in advanced economies? Discuss if a 8-8. Discuss Jaguar Land Rover's shift into other developing regions reverse shift of activity is possible. in Africa. What will be the implications of these on its sourcing Advan ized b 8-6. What is the role of Government Business linkages in creating and supply chain economies? emerging market challengers? Do you think that emerging and and we mainl the U devel not ye resou mies END OF CHAPTER REVIEW MyManagementLab Go to mymanagementlab.com to complete the problems marked with this icon