INTB 3302 International Management Assignment

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Reference no: EM133034284

INTB 3302 International Management - Benedictine University

Task 1: OPENING CASE: Boeing and Airbus Are in a Dogfight over Illegal Subsidies

Summary

The opening case explores the ongoing battle between aircraft makers Airbus and Boeing. Both companies have accused the other of receiving unfair government subsidies designed to give them a competitive advantage, and both the United States and the European Union have taken their complaints to the World Trade Organization (WTO). In response to a 2006 complaint from the United States regarding perceived assistance to Airbus, the WTO issued a ruling indicating that the Europe-based Airbus had indeed received unfair subsidies. After Airbus failed to comply with WTO orders to remove the subsidies, the WTO issued another warning to Airbus. Ironically, the United States is unlikely to pursue Europe's noncompliance with the WTO rulings as Boeing recently found itself under fire for accepting tax breaks from the state of Washington.

QUESTION 1: According to WTO rulings, both Airbus and Boeing have been recipients of government assistance at one point or another. Discuss the nature of aircraft manufacturing and why subsidies are seemingly part of the industry practice.

QUESTION 2: In its early years, Airbus received subsidies for 100 percent of its development costs. Discuss this situation. Is there a time when subsidies should be considered acceptable? Why or why not?

QUESTION 3: Boeing is expected to benefit from some $5.7 billion in tax breaks from the state of Washington. Why is the state of Washington willing to provide these tax breaks to Boeing?

Summarize your answers in 2 pages.

Task 2:CLOSING CASE: Alibaba's Record Setting IPO

Summary

The closing case explores the $231 billion initial public offering of Chinese e-commerce company Alibaba. Initially, Alibaba considered making an IPO in Hong Kong, but concerns over a rule that would cause founder Jack Ma and his colleagues to lose ownership control of the company caused them to turn to the New York Stock Exchange. The decision proved to be beneficial for Alibaba, and the IPO drew enormous interest from investors. When it launched on September 18, 2014, Alibaba's IPO was the largest in history.

QUESTION 1: Why did Jack Ma decide it was time to take Alibaba public?

QUESTION 2: Why do you think the management of Alibaba decided against doing the IPO in China's main stock market, Shanghai? Why did they ultimately decide against Hong Kong?

QUESTION 3: What were the legal, financial, and strategic advantages to Alibaba of undertaking its IPO in New York?

QUESTION 4: Since the IPO was undertaken in New York, does this make Alibaba an American enterprise?

Summarize your answers in 2 pages.

APA Format

Reference no: EM133034284

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