1. Case description
The primary subject matter of this case involves an international business negotiation
between a Japanese vehicle manufacturer that has developed a strategic plan to export
its product to Hawaii, Alaska and the United States west coast and a United States
transportation enterprise that owns a fleet of roll on/roll off vessels. Issues include
national cultural and foreign market penetration considerations. The case is
appropriate for senior level undergraduate and graduate students. The case is designed
to be discussed during an initial one-hour class and is set up to take an additional two,
one-hour class sessions for two negotiation sessions. One negotiation session is hosted
by the representatives of the Japanese vehicle manufacturer; and one negotiation
session is hosted by the representatives of the United States transportation enterprise.
It is expected to require substantial preparation by students outside of the class
sessions. The case is designed for use in the International Business and International
Management courses.
2. Case synopsis
Two large-scale, complex business entities are profiled. Students are asked to enter into
and reach contractual agreement for an international business negotiation. The
negotiation involves the transportation of vehicles manufactured in Japan to Hawaii,
Alaska, and the United States west coast. The specific elements of the negotiated
contract include the number of automobiles and thus vessels to be used under the
agreement as well as the identification of the destination ports. Also, the logistical
support provided by the United States transportation enterprise will be negotiated.
Finally, the shipping costs will be determined. Students are required to formulate their
negotiation strategies based upon the facts presented in the case and the national
cultural considerations that influence the business decision making process in Japan
and the United States. The case deliverables are:
.
.
a research paper presenting the influence of national cultural considerations in
the business decision making process; and
a written contract, signed by all representatives, presenting the agreements
reached by the two business entities during the two negotiation sessions.
3. The companies
This case study presents the operations of Nippon Automobile Corporation (NAC),
a Japanese vehicle manufacturer, and US Shipping Lines, Inc. (USSL), a United States
transportation enterprise. These two business entities have entered into negotiations to
discuss the possibility of transporting vehicles from Japan to Hawaii, Alaska and the
west coast of the United States. The following public information about the two
companies and their industry sectors is provided for review:
3.1 Nippon Automobile Corporation (NAC)
3.1.1 Company profile. Nippon Automobile Corporation is an emerging manufacturer of
a full range of passenger automobiles, SUVs, pick-up trucks and motorcycles. NAC has
been run by engineers since it was founded. The company is the most research and
development oriented corporation within its domestic industry; allocating R&D
spending at 5.9 per cent of corporate sales. The company prides itself on its superior
engineering efforts and the use of advanced technology in the vehicles that it produces.
NAC started producing vehicles only in the past few years. NAC’s strategic plan calls for
it to become one of the top three Japanese vehicle manufacturers within the next five
years. To achieve its strategic goal, NAC must double its manufacturing capacity and
penetrate export markets. To date, nearly all of its output has been sold domestically.
The company’s deep commitment to export its products is reflected in the recent
formation of a 200 person technical task force to design its vehicles for foreign markets
and negotiate arrangements for overseas dealer franchises as well as contracts to
transport the products to the foreign markets. NAC expects to be exporting 60 per cent of
its production within five years. The NAC profile is shown in Figure 1.