THE COOPER UNION FOR THE ADVANCEMENT OF SCIENCE AND ART

ALBERT NERKEN SCHOOL OF ENGINEERING

AND

THE GATEWAY COALITION:

THE GLOBETECH SIMULATION

FALL SEMESTER 1995

SCENARIO

SUBJECT:

THE AUTOMOBILE INDUSTRY OF CHINA, INDIA, MALAYSIA AND THAILAND: COMPETITIVE AND TECHNOLOGY MANAGEMENT ISSUES.

GLOBETECH SCENARIO:

As discussed in the simulation Background Information, this project is designed to increase the students' awareness of the complex issues surrounding international technology management - based on the business dealings in the automobile industry. The si mulation also aims to increase the students' know how in conducting successful international negotiations, and the skills in using computers for learning.

To accomplish this the following scenario is proposed:

A) OCTOBER 23-31, '95:

TEAMS GET ACQUAINTED; BACKGROUND DISCUSSIONS; ISSUE INVITATIONS TO BID:

CHINA:
a) The Chinese Government Delegation: issue an international invitation to bid for the production of a small passenger car (compact), starting in 1997. The bid should outline at least the following:

b) NEWCHIN, a Chinese auto parts manufacturing company, recently privatized, will represent the local partner. It should be actively involved in the draft of the invitation to bid. Newchin's representatives should research the actual Chinese comp anies in this field and be familiar with their size, capabilities, policies, etc. They should also be familiar with government policies.

INDIA:
The TATA GROUP, one of the biggest private corporations in India, seeking a joint-venture partner, should also issue an international invitation to bid. Similar elements with those discussed in the Chinese case above, should be outlined. The type of car sought should be a medium size sedan. In developing the invitation to bid, Tata should be thoroughly familiar with their company's capabilities and the industrial policies of the Indian government. Those policy aspects that would give the jo int-venture best chances for approval (i.e: technology transfer, workers' training, alternative fuels, pollution control, reinvestment in India, barter options, export quotas, etc.) should be emphasized.

MALAYSIA:
UNOMALY, a government-owned company, issue an international invitation to bid for a medium-sized sport-utility vehicle. The pattern should be similar with those followed by China and India in their invitations to bid. Same time frame.

THAILAND:
The same goes for AUTOTHAI, a private corporation, seeking a joint-venture partner to manufacture minivans in Thailand.

NOTE: BID ISSUANCE DEADLINE: OCTOBER 31, 1995, 10.00 p.m. E.S.T.

B) BY NOVEMBER 9 '95:

INTERNATIONAL AUTO COMPANIES ANSWER INVITATIONS TO BID (ISSUE PROJECT PROPOSALS):

The various car manufacturers from the United States, Japan, Europe, Korea, etc. should submit detailed bids in one or several countries, as they wish.

NOTE: PROPOSAL SUBMITTAL DEADLINE: NOVEMBER 9, 1995,

10.00 p.m. E.S.T.

In order to ensure best chances to be selected as partners, PROPOSALS should address the specific developmental needs of the project country, outline company strengths and particular qualifications for the project, make a strong case for why they shoul d win the project.

Some of the main items to be covered in the proposals, for a period of five years after production start-up:

NOTE: Alliances between international car manufacturers could be formed in order to answer one or several bids.

C) SATURDAY, NOVEMBER 11, 1995, 10 A.M. - 12.30 P.M., E.S.T.:

PRELIMINARY NEGOTIATION SIMULATION CONFERENCE:

The purpose of this initial 'on-line" conference would be for the various country representatives and the interested car manufacturers to formally touch base and clarify any questions regarding the various bids, additional required information, conduct preliminary negotiations, etc.

D) WEEK OF NOVEMBER 13, 1995:

Discussions will continue between the car manufacturers and country representatives, in order to clarify and improve the proposals as much as possible.

E) SATURDAY, NOVEMBER 18, 1995, 10 A.M. - 12.30 P.M., E.S.T.:

SECOND NEGOTIATION SIMULATION CONFERENCE:

This is the final negotiation determining which car manufacturers will be chosen for each project. Both the various country representatives and international car manufacturers should be well prepared to present persuasively their main interests and suc cessfully negotiate in order to finalize the best possible contracts.

F) BY NOVEMBER 21, 1995, 10.00 E.S.T.:

The contracts will be awarded by the country companies and the simulation will end.

G) WEEK OF NOVEMBER 27, 1995 - FEEDBACK:

Students and faculty complete the post simulation questionnaires, the data will be collected and the debriefing process will take place. The participants could find out at that time why certain companies were awarded the contracts, what were the high an d low points of their team's negotiation strategy, what teams were the best prepared, etc.

THE SIMULATION WILL END ON DECEMBER 1, 1995.

NOTES:

1) During the simulation, the Simulation Control Team (SCT) will issue various press releases. The teams should carefully consider how these press releases will influence their negotiating strategy and tactics, and adjust them accordingly.<

2) The feedback process is a vital component in the success of this international negotiation simulation and future ones. It will represent a rewarding learning experience for all participants; everybody's full participation is essential.