Business English Through Case Studies - PRINT

Кафедра английского языка
Направление Международный бизнес
М.Л. Дьякова
Н.В. Чижевская
BUSINESS ENGLISH
THROUGH CASE STUDIES
Учебное пособие
для студентов 4 курса ФВМ,
групп 2 языка и студентов 2 курса ФМБ
Москва
ВАВТ
2021
Кафедра английского языка
Направление Международный бизнес
М.Л. Дьякова
Н.В. Чижевская
Business English
through Case Studies
для студентов 4 курса ФВМ,
групп 2 языка и студентов 2 курса ФМБ
Рекомендовано кафедрой
протокол заседания
от 26 мая 2021 года, № 9
Одобрено Редакционно-издательским Советом ВАВТ
Москва
ВАВТ
2021
УДК 811.111
ББК 81.2 Англ.
Д 931
Рецензенты:
- доцент кафедры английского языка МБ, Аверьянова С.В.;
- старший преподаватель кафедры английского языка МБ, Яковлева Н.Ю.
- старший преподаватель кафедры английского языка МБ, Нилова Н.И.
- преподаватель кафедры английского языка МБ, Вавилова Т.А.
Дьякова М.Л., Чижевская Н.В.

Д 931 Business English through Case Studies: Учебное пособие для студентов
4 курса ФВМ, групп 2 языка и студентов 2 курса ФМБ/ М.Л. Дьякова,
Н.В. Чижевская; Всероссийская академия внешней торговли
Минэкономразвития России. - М.: ВАВТ, 2021. - 85 c.
Данное пособие составлено на основе Portfolio: Case Studies for

Business English (автор Brian Howe) и Making Business Decisions, Real
Cases from Real Companies (автор Frances Boyd, Columbia Univesity,
1998) и соответствует курсу кафедры английского языка
международного бизнеса, направленному на совершенствование
кейсовой методики при изучении делового английского языка.
В пособие включены шесть кейсов (Yamacom, Our Man in Nam Doa,
Stew Leonard’s Dairy Store, Airbus Industrie and the Boeing Company,
Adventure Holidays International, Kentucky Fried Chicken
Corporation), отражающие различные сферы деловой активности и
предлагающие учащимся поиск решения деловых конфликтов.
Выполненное по стандартам кейсовой методики, данное пособие
может быть полезно студентам старших курсов факультета
внешнеторгового менеджмента, а также слушателям вечернего
отделения факультета международного бизнеса.
© ВАВТ Минэкономразвития России, 2021.

© Дьякова М.Л., Чижевская Н.В., 2021.
Business English Through Case Studies 3
CONTENTS
Yamacom ………………………………………………………… 4
Our Man in Nam Doa ………………………………………………………… 15
Airbus Industrie and the

Boeing Company ………………………………………………………… 25
Adventure Holidays ……………………………………………………….. 39

International
Kentucky Fried Chicken

Corporation ………………………………………………………… 53
Stew Leonard’s Dairy Store

………………………………………………………… 69
4 Дьякова М.Л, Чижевская Н.В.
Yamacom
A marriage is announced
A Japanese and an American

company fail to reap benefits
from trans-Pacific cooperation.
The merger between two major names in the world of computers and
telecommunications caused a sensation when it was announced. On paper the
potential power of the new alliance was immense. In the real world, however, the
fact that one of the companies, Transcom Inc, was American and the other,
Yamahata K K, was Japanese, caused raised eyebrows on both sides of the
Pacific.
A people problem
The outside world heard little of what was happening in the new company during
the first year of the merger. There were some wry smiles from Yamacom’s
competitors when rumours began to surface about trouble in the new company’s
Far East markets. The main problem seemed to centre on Indonesia.
Stories began to emerge from the Jakarta office of breakdowns in
communication, cross-cultural rivalry and sometimes actual blocking of
progress of one department by another. Sales figures for the office were actually
down on pre-merger days. Mark Weinberg, Yamacom’s Regional Director, went
to Jakarta to investigate the sales problems.
On his return to the Central Office, Weinberg reported his feelings and
impressions to the Liaison Committee monitoring the merger. Six weeks later
Area Managers were called to a special seminar in Nagoya. At this seminar a
world authority on Japanese-American cultural differences presented a paper
which was summed up in the following handout.
Contrasts in Culture, Traditions and Behaviour between

Japanese and US citizens
United States Japan

1 Individualistic culture 1 Collective culture
2 Independent attitudes 2 Dependent attitudes
3 Authoritative decision making 3 Participative decision making
4 Competitive ethic 4 Cooperative ethic
5 Style: Confrontation 5 Style: Compromise
6 Decision making quick but 6 Decision making slow but
implementation slow implementation quick
7 Personal relationships – direct 7 Personal relationships-indirect
8 World view – short term 8 World view-long term
9 Communications are one-way 9 Communications are interactive
and secretive and open
10 Companies emphasize efficiency 10 Companies emphasize
effectiveness
11 Main management function is 11 Main management function is to
control serve the customer
12 High job mobility 12 Lifelong employment
13 Low company loyalty 13 High company loyalty
14 Incompetence is fatal 14 Shame is fatal
15 Society is heterogeneous 15 Society is homogeneous
16 Attitudes are relaxed and casual 16 Attitudes are tense and formal
17 The specialist is valued highly 17 The generalist is valued highly
18 Freedom and equality are valued 18 Order and hierarchy are valued
highly highly
A new beginning in Jakarta
After a very pleasant week at the Nagoya seminar, Weinberg had to face the real
world again when he returned to the Central Office. The Jakarta situation had
reached a new crisis. Weinberg made the decision to recall the present general
manager for the Indonesian office and to appoint another person. Two days later
an internal memo was circulated around the Yamacom system worldwide.
YAMACOM INTERNATIONAL
Applications are invited for the following position, to be filled

internally:
GENERAL MANAGER (YAMACOM INDONESIA)
This position is to be filled by an American employee of Yamacom

under the merger agreement.
Duties:
1. To report to South East Asia Divisional Director, Mr. Lee Than

Quo, in Singapore.
2. To be responsible for the overall control and administration of the

Indonesian subsidiary.
3. To be responsible for the financial performance of this subsidiary

under guidelines set by the Divisional Director.
4. To initiate new sales systems with a view to expanding new

American and Japanese multinational business in Indonesia.
5. To ensure continuing integration of staff and functions in a

subsidiary at present consisting of 19 Japanese sales staff, 5 U.S.
sales personnel, and 25 other technical and administrative personnel
of U.S., Japanese and Indonesian nationalities.
A fortnight after this a short list of candidates for the above position was drawn
up. As Weinberg began his final assessment of the candidates, he reflected that
at least the seminar and his experiences in Jakarta had given him a slightly
clearer idea of what he was looking for in the personnel files now before him.
NAME Thomas Jackson 1

DOMICILE Boston AGE 34
MARITAL STATUS Single
NUMBER OF YEARS WITH TRANSCOM/YAMACOM 5
PRESENT POSITION Senior Marketing Executive, East Coast,
corporate clients
EDUCATION Yale & Harvard
LANGUAGES Some Spanish
BACKGROUND Graduated from Yale in Economics and from Harvard with an MBA.
Spent 2 years as a fast-moving consumer goods salesman in Boston to ‘get the feel of
front-line action’. Joined Transcom 5 years ago and piloted through integrated
telecommunication packages for Realtors. Saw this side of business expand to $50 m in
2 years. Transferred to Corporate networking systems and became Senior Marketing
Executive. Has seen business expand by 15% since then.
COMMENTS Very logical and clear-thinking, has plenty of energy. Very confident and
demands maximum commitment from his staff. No overseas work experience. Originally
from South Carolina and a lay Southern Baptist Minister. Trains and coaches Boston Cubs
Football team. Jackson has expressed a lot of interest in the new position but wants to
know exactly what his reporting lines will be between the Jakarta office and Yamacom
Central Office. He’s looking for maximum freedom to develop the Indonesian territory along
the same lines he built up the East Coast corporate business. Says that an overseas
position of responsibility is probably now a pre-requisite for his advancement in the
company now that it has ‘gone international in such a big way’.
NAME Stephanie Martinez 2

DOMICILE Taipeh AGE 36
MARITAL STATUS Divorced, 1 child
PRESENT POSITION Customer Services Manager (Far East)
EDUCATION Berkeley Cal.
LANGUAGES Some Japanese
BACKGROUND After graduating from Berkeley in Comparative Literature, did a further
3-year course on MBA. Lectured in Business Studies for 2 years. She married a Japanese
student and after that moved to Japan where she worked for Transglobe Airlines as
marketing adviser for the Far East. Separated from her husband after 1 year. Left
Transglobe after 2 years and joined Transcom to help set up a Taipeh office. Currently
in Taipeh.
COMMENTS A very clever woman with interests in Eastern religions. No direct

sales experience. Very extrovert and intelligent. Likes change and applies for
different jobs in Transcom every year. She has been slightly eclipsed in her present
position by the merger putting most of the customer services department into the
hands of the old Yamahata Office in Tokyo. This is not her fault and she has done
her best to get the two integrated (but has met with resistance from Tokyo since
her role was not included in the original merger agreement). This was a structural
oversight during the merger and the Taipeh position will be terminated next month.
NAME Lee Miller 3

DOMICILE Frankfurt, Germany AGE 45
MARITAL STATUS Divorced, no children
PRESENT POSITION Software Support Manager, Europe
EDUCATION Delaware High School
LANGUAGES French, German, Chinese
BACKGROUND He is a naturalized Taiwanese married to an American but
recently divorced. Served in the U.S. forces in Japan and Indonesia (military
bases). Joined Transcom 14 years ago but had a one year leave after a car
accident. Trained as computer programmer with us and specialises in Business
expert systems. Has experience in both software sales and support. Excellent
record in Europe.
COMMENTS Very softly-spoken man who gets on well with Europeans. Has
adapted well to overseas assignments. Presently living with German girlfriend.
Miller is being recommended for this position by his General Manager, Europe. The
G.M. says his oriental background will give him a lot of credibility in the Far East.
NAME Dan Masters Jr. 4

DOMICILE Bogota, Colombia AGE 41
MARITAL STATUS Married, 4 children
PRESENT POSITION Regional Sales Manager for Latin America
EDUCATION UCLA
LANGUAGES Spanish, Quechua (ancient Peruvian Language), Russian,
French
BACKGROUND Graduated from UCLA in Modern Languages and was drafted
into army as intelligence officer. Spent some years in the US army (military base
in Japan) but then became a conscientious objector and spent several years
outside the U.S. until the amnesty. Lived in Peru and met his wife there. After
joining Transcom headed Sales Office in Peru for 3 years. Upgraded to Regional
Sales Manager.
COMMENTS A good leader with an excellent sales record. He is an amateur artist

and plays chess at an international level. Holds a private pilot’s license. Knows
Japan well from his US army days. Masters is a very quiet man and not given to
displays of emotion. Has been criticized by some staff for not giving credit where
it’s due. Yet praised by others for loyalty and judgment in very difficult situations.
As he’s his own man, many people react badly when they first know him.
Eventually however, they accept that his judgment is excellent. Has occasionally
upset superiors by applying same standards of conduct to them as he does to his
staff. Has survived so far though!
READING & WRITING
Task 1 [21]
Look at all information given on the first two pages of the Case Study when
answering these questions.
1 What companies merged? 1

.
2 Why was the newly merged company Yamacom called a global name in 3
. IT?
3 Why did the merger cause raised eyebrows? 2

.
4 Were the problems seen right after the merger? 1
.
5 When did the first rumours start to surface? 1
.
6 What problems became evident in the Jakarta office? 3
.
7 What was the financial outcome of the cross-cultural 2
. misunderstanding?
8 What practical step did the Liaison Committee take after Weinberg’s 2
. report?
9 Study the handout on ‘Contrasts in Culture, Traditions and Behaviour 6

. between Japanese and U.S. citizens’. Identify the main difference
between the two nations and justify your choice.
Task 2 [11]
Look at the memo circulated in Yamacom when answering these questions.
1. Who can apply for the position of General Manager (Indonesia office) 1
2. Identify the four major duties of the GM (Indonesia office). 4
3. What skills/ education should an applicant have to fulfil these 4

duties?
4. What helped Weinberg make his final assessment of the candidates? 2

Task 3 [16 + 3]
a) Look through the personnel files of the applicants and fill in the grid.
Jackson Martinez Miller Masters

Education
Sales
and
Marketing
Experience
Cross-
cultural
sensitivity
Organizational
abilities
b) 1. Who made comments given in each applicant’s file? 1
2. Why is such information collected? 2

Task 4 [25]
Look at the personnel files of the applicants and Task 3 (the summarizing grid).
Write a memo to the Yamacom Board of Directors. Inform them about the
candidate you would choose for the position of General Manager (Yamacom
Indonesia). Justify your choice in terms of the necessity to overcome the present
crisis.
Memorandum
To:
From:
Date:
Subject:
Task 5 [25]
Imagine that you would like to apply for the GM position in Jakarta. Write a
letter of application to the Head of Human Resources Department giving all
relevant information about yourself. Prove that the Jakarta office will be able to
overcome cross-cultural difficulties in case you fill the position.
You do not need to write the address.
Dear ………
LISTENING
Task 1 [18]
Listen to the conversation between Paul Mackowitz and Hiroshi Watanabe and
answer the following questions:
1. Did the company succeed on the contract two weeks ago? ___________ [1]
2. Why was Mr Shigeta sacked? [4]
_______________________________________________________________________
3. How did Watanabe characterize Shigeta? [2]
_______________________________________________________________________
4. According to Mackowitz, what should be done to achieve the targets? [2]
_______________________________________________________________________
5. Are the Japanese used to reporting procedures? _____________________ [1]
6. Why was Katsushi waiting for Mackowitz every day on the doorstep? [2]
_______________________________________________________________________
7. What do the Japanese like in advertising? [3]
_______________________________________________________________________
8. How does Mackowitz characterize his relations with the Japanese? [3]
__________________________________________________________________________
__________________________________________________________________________
Task 2 [22]
Listen to the expert answering questions at the seminar on cross-cultural
problems and fill in the gaps with the missing words. Sum up the advice.
1. People of different cultures have always managed to

_________________________________________________________________ [2]
2. The first precondition for success, though, is
__________________________________________________________________ [2]
3. The second is _____________________________________________________ [1]
4. The third is _______________________________ of the culture with which
you are dealing. [2]
5. The lines of ______________________________________ are so unclear. [2]
6. The first tip is _____________________________________________. [1]
Everything takes much longer in Japan.
7. It takes ________________________________________________________ [2]
to complete a deal in Japan than it is in the US.
8. They ____________________________________ on personal relationships. [2]
9. They want to make sure that their potential partners are
__________________________________________________________________ [2]
10. In Japan it’s the _______________________ that count, not big things. [2]
11. Gifts are valued for __________________ rather than actual value. [1]
12. Another thing: don’t be afraid of _________________________________ [1]
13. You’d be amazed how many ______________________________________ [2]
were made by Western businessmen to make the conversation going.
SPEAKING
Performance time: task 1 (presenting information) - 5 min;
task 2 (reaching a joint decision) - 10 min.
Candidate 1
Task 1
On behalf of Mark Weinberg, Yamacom’s Regional Director, deliver a talk to

the Board of Directors. Your presentation should include the following items:
• the analysis of the present problems in Yamacom Indonesia;

• the functions to be performed by the GM;
• your arguments to support your choice of the candidate for the post of
the GM (Indonesia).
Task 2
You are to discuss your choice of the candidate for the position of the General
Manager (Indonesia) with the Human Resources Manager of your company who
sticks to another point of view. Try to persuade your partner that your candidate
looks more appropriate.
The analysis of the candidates should include the following aspects:
● education;
● sales and marketing experience;
● cross-cultural sensitivity;
● organizational abilities;
● any other points you find important.
At the end of your discussion a joint decision should be reached.
SPEAKING
Candidate 2
Task 1
You are the Human Resources Manager of Yamacom. You have analyzed the
files of the short-listed candidates for the post of the GM (Indonesia). Deliver a
talk to the Board of Directors which should include:
• your view on the present problems in the Indonesian office;

• the enumeration of the functions to be performed by the GM;
• your arguments in favour of one of the candidates for the post of the
General Manager.
Task 2
You are to discuss your choice of the candidate for the position of the General
Manager (Indonesia) with Mark Weinberg who sticks to another point of view.
Try to persuade your partner that your candidate looks more preferable.
The analysis of the candidates should include the following aspects:
● education;
● sales and marketing experience;
● cross-cultural sensitivity;
● organizational abilities;
● any other points you find important.
At the end of your discussion a joint decision should be reached.
Our Man in Nam Doa

The email in Jan Berling’s in-tray on Monday
morning was short and to the point:
To: Jan Berling

From: Li Chao, Area Director
Date: 10 August
Subject: Nam Doa Project
Dear Mr Berling
Further to my message on your answering machine, I found it necessary to mail the
following:
Your Mr. Wikstrőm has been absent since Friday. All work at the Project has been
stopped. Our Minister of Development is informed.
We need to know your intentions concerning the replacement of Wikstrőm as soon
as possible.
Regards
Li Chao
BACKGROUND
The Nam Doa Paper Mill is a prestige The installation needed highly
project for Scanco AB, one of specialized technical personnel from
Sweden’s leading producers of Sweden under a Technical Liaison
specialized machinery for paper mills. Manager. The first man in this job
Not only is it a very profitable project, returned to Sweden after an incident
it is also Scanco’s first major overseas at an embassy party. This man’s
contract. For this reason Scanco sent replacement was Nils Wikstrőm, a
Jan Berling, one of their best much quieter and more dependable
managers, to the capital Ban Hua. person. Wikstrőm agreed to go out to
His job was to liaise with the Ministry Nam Doa as long as his family could
of Development and to oversee the join him there. It seemed a strange
supplies of plant and equipment from request to Berling but in the end he
the port at Ban Hua to the remote agreed. After all, it was most unlikely
Nam Doa site 500 miles to the north. that a family man like Wikstrőm
In the first year the project went well. would cause any problems with the
It was when the first machinery was diplomatic corps!
being installed that things began to
go wrong.
A note from Wikstrőm
Jan Berling acted quickly. He first of all contacted the hostel

where Wikstrőm’s family had been staying temporarily while he
looked for accommodation for them in Nam Doa. They were not
there. He then checked the main hotels in Ban Hua. No one had
heard of a Mr Wikstrőm. Finally he checked the airport. An SAS
flight had left for Stockholm on Sunday lunch time. As he put
down the phone his secretary came in with an envelope marked
Urgent. In the envelope was the document below with
Wikstrőm’s handwritten comments.
SCANCO AB
Conditions of employment for all staff on Far East assignments
1. Unless otherwise stated, assignments will be of three years duration.

Three weeks in this place would be too much
2. A 50% supplement of Swedish gross salary shall be paid monthly into the
employee’s bank account in Sweden.
The German site manager is on 3x my salary
3. A messing allowance of € 100 per day will be paid while the employee is living
away from his overseas home.
You call this an allowance when 20 cigs cost €5-7 and whiskey €80?
4. The employee shall initially travel to the assignment alone and will be responsible
for arranging family accommodation if his family intends to join him.
When do I get time for this?
5. Standard company accommodation will be provided for single employees.
6. A schooling allowance of 50% of school fees will be paid for children

between the ages of 4-15.
Which school? The fees in the diplomatic schools are half my salary!
7. In addition to the starting and terminating journeys, one return
air fare for the family will be paid each year to the domicile in Sweden
8. Full medical insurance will be provided for the employee and his family.
9. A terminal gratuity of 20% of gross salary over the period of the assignment will
be paid on completion of the full period of the assignment.
Is this to cover my funeral expenses???
10. The employee shall be responsible for repatriating himself and his family if for
any reason he fails to fulfil the assignment without the agreement of the company.
We’ll see about this when I reach Stockholm!
Jan Berling calls the Ministry and checks the files
Unable to clarify the situation, While Berling was on the phone to

Berling decided to take the bull by the Ministry, his secretary looked up
the horns and called his contact at the file on Nils Wikstrőm. In the file
the Ministry of Development. she found the original notification
from the Personnel Division in
Stockholm of Wikstrőm’s
appointment.
SCANCO AB
Jan Berling 15 August
Project Coordinator
Ban Hua
Dear Jan
You will be glad to hear that we have selected a replacement for Bjőrn
Jacobson as Technical Liaison Manager at Nam Doa. His name is Nils Wiksrőm
and he’s very different from Jacobson. He seems a very sensitive sort of man
and I am sure he will get on better with the locals down there, not to mention
the embassy staff! Nils is married with one kid and he is one of our top
technical people at the Norkőpping factory.
He is rather a quiet sort of guy, but once you get to know him, you’ll see how
good he is at his job. He’s a bit of a perfectionist but that’s exactly what we
need to get the standards. He is the man who solved the computerization
problem on the pulping units. One of his interests is oriental art, so he should
get on well in your part of the world. You certainly won’t have any of the bar-
room problems you had with Jacobson.
Wikstrőm has put one condition on his acceptance of the post and that is that
his wife and child can join him after the regulation 3 months. As long as you
can arrange accommodation, we see no reason why they cannot accompany
him. His wife, by the way, is a very confident lady with a big interest in Third
World development. This is one of the reasons why she wants to come out with
him. We have warned her about the hardships but she says she doesn’t mind.
Incidentally, none of them has been on an overseas assignment before, so can
you give them as much help as possible?
I look forward to seeing you on your next leave,

Johansson
Berling prepares for a very important meeting
From the files a clearer picture began to emerge of Nils Wikstrom and the
problems at Nam Doa. Even so, the immediate need was to replace Wikstrom as
soon as possible.
Here is the message which arrived before Berling could send his message to
Stockholm.
EMAIL
To: Jan Berling

From: Lars Arlbjorg, Managing Director
Subject: Nam Doa Project
Dear Mr. Berling

I found it necessary to mail you the following information:
1. Wikstrőm arrived in Stockholm yesterday in a state of severe

depression, he is under sedation now.
He indicates lack of support caused a breakdown of morale and
communication problems with local personnel.
Besides he mentions a row with his wife and wonders where she is now.
Wikstrom has offered resignation from Scanco AB.
2. I received a message from the Minister of Development concerning the

Nam Doa Project. He wants the soonest clarification on the state of the
Project and insists on the replacement of Wikstrőm. The Minister hints at
the penalties or cancellation.
3. I am flying out to Ban Hua this afternoon, the arrival time is 23.30 p.m.
A technician from Scanco is coming with me.
Yours,
Lars Arlbjorg
READING & WRITING
Task 1 [12]
Look at all information given on the first page of the Case Study when
answering these questions.
1. What line of business are Scanco AB in? [1]
2. Why is the Nam Doa Paper Mill important for Scanco AB [1]
3. What is Jan Berling’s job and where is he located? [2]
4. What are Jan Berling’s duties? [2]

_____________________________________________________________________________
5. What is Nils Wikstrőm’s position? [1]
6. What happened to Wikstrőm’s predecessor? [1]

__________________________________________________________________
7. Who sent the email? [2]
8. What was Mr Berling asked to do? [2]

_____________________________________________________________________________
Task 2 [10]
Look at the conditions of the Contract when answering these questions.
1. What is the standard period of work on Far East contracts? [1]
2. How much does the salary on the Far East projects increase and how is it
paid? [2]
3. What accommodation does the company provide for the employee [2]
and for his family?
4. How does the company help the employee after the termination [2]
of the contract?
_____________________________________________________________________________
_____________________________________________________________________________
5. When does the company pay €100 a day? [1]

_____________________________________________________________________________
_____________________________________________________________________________
6. On what condition does the company refuse to pay for the [2]
termination journey?
_____________________________________________________________________________________
Task 3 [9]
Refer to the second email when answering the following questions.
1. What reasons does Wikstrőm give for leaving Nam Doa? [3]
___________________________________________________________________________
___________________________________________________________________________
2. What information comes about Mrs. Wikstrőm? [2]

___________________________________________________________________________
___________________________________________________________________________
3. What does the Minister of Development insist on? [2]

___________________________________________________________________________
___________________________________________________________________________
4. What does the Ministry threaten to do? [2]

__________________________________________________________________________
__________________________________________________________________________
Task 4 [8]
Some expression used in the Case Study can be said in a different way. Find
another way of saying the word combinations given in bold type
is on 3 х my salary
a messing allowance
a terminal gratuity
to take the bull by

the horns
Task 5 [30]
You are Nils Wikstrőm. On your arrival back in Stockholm the Head of the
Personnel Division asked you to write a memo accounting for the reasons
which brought you back. Refer to the following:
• lack of support from the project coordinator
• communication problems with locals
• conditions of the contract.
Explain each item.
MEMORANDUM
To:
From:
Subject:
Task 6 [20]
On behalf of the Managing Director of Scanco AB write a letter of apology to

the Ministry of Development. Outline the measures you are taking to overcome
the present situation and to catch up with the backlog of work:
• improvement of coordination functions
• additional technical assistance
• special training courses for local labour force.
Listening
Task 1 [10]
Listen to the conversation between Mr. Berling and the Ministry.
Note whether the following sentences are true or false.
True / False
1.The Ministry officer learns from Berling about the trouble
in Nam Doa.
2. Berling got to know the details from Wikstrőm .
3. Wikstrőm hit one of the foremen.
4. Safety measures in Nam Doa caused that dispute.
5. Language training is part of the contract.
6. Mrs Wikstrőm left the capital a week ago.
7. Mrs Wikstrőm found accommodation in Nam Doa.
8. At present Mrs Wikstrőm is at the police station.
9. Mrs Wikstrőm started linguistic courses for Nam Doa

citizens
10. The project is two months behind the schedule.
Task 2 [12]
Listen to the dialogue again and fill in the missing parts.
1.I have just heard Mr. Dong and I ______________________________________

2.Let me try and ________________________________________________________
3.He made our people __________________________________________________
4.Mrs Wikstrőm was ___________________________________________________
accommodation.
5.Apparently, she is ____________________________________________________
courses.
6.I am more interested in _______________________________________________
for Mr Wikstrőm.
Speaking
Candidate 1
Task 1 Presentation
Your talk should be no longer than 4 or 5 minutes and in this time you
should present your point of view on the measures to be taken to settle the
problem of the Nam Doa project. The following items should be touched
upon:
• necessity to resume work in Nam Doa (indicate the reasons)
• review of the duties of the Project Coordinator (give particular advice)
• problem of Wikstrőm’s resignation (take into consideration his personal
characteristics and working conditions in Nam Doa)
You may add any other points which you think may be relevant.
Task 2 Dialogue
You are Jan Berling, Scanco Project Coordinator. Discuss the problems of
the
Nam Dao project with Lars Arlbjorg, Managing Director. The situation
suggests a major career crisis for you.
The notes below will help you:
• Recruitment. The recruitment process back in Sweden seems defective
(refer to the cases of Bjorn Jacobson and Nils Wiksrőm).
• Conditions. The actual living conditions in Nam Doa are not taken into
account in the contract.
• Training. The training duties of a Technical Liaison Manager are
missing from the contract.
You may add any other points which you think may be important.
Speaking
Candidate 2
Task 1 Presentation
Your talk should be no longer than 4 or 5 minutes and in this time you
should present your point of view on the measures to be taken to settle the
problem of the Nam Doa project. The following items should be touched
upon:
• necessity to resume work in Nam Doa (indicate the reasons)
• review of the duties of the Project Coordinator (give particular advice)
• problem of Wikstrőm’s resignation (take into consideration his personal
characteristics and working conditions in Nam Doa)
You may add any other points which you think may be relevant.
Task 2 Dialogue
You are Lars Arlbjorg, Managing Director. Discuss the problems of the Nam
Doa project with Jan Berling, Scanco Project Coordinator. Your flight from
Sweden to Nam Doa suggests the urgency of measures to be taken to prevent
the situation from happening again.
These notes below will help you:
• Recruitment. Well established procedures and methods. The first
major overseas assignment. Needs adjustment.
• The role of the Project Coordinator. Acclimatization and training
courses for Scanco employees working abroad.
• Contracts. Whose responsibility is it to suggest amendments to the
contract for overseas assignments?
• Training for locals. For turn-key projects a specialist trainer may be
appointed.
You may add any other points which you think may be important.
Airbus Industrie and the Boeing Company

PART 1
BACKGROUND
1. Examining the Products

Airbus Industrie
● Is located at 1 Rond-Point Maurice Bellonte, 31707 Blagnac Cedex, France.
● Produces aircraft for civil purposes.
● Is a consortium of airframe manufacturers from France, Germany, Great Britain, and Spain.
The Boeing Company

● Is located at 7755 East Marginal Way South Seattle, Washington 98108, USA.
● Produces aircraft for civil and military purposes.
● Is a privately owned company.
Commercial airlines are the customers for the planes made by these companies.
Boeing and Airbus have many similar products.
US airlines purchase almost half of all the aircraft sold worldwide. Most of the customers buy
from Boeing.
The airframe industry is one of the controversial trade issues between the European Union and the
United States. There have been many rounds of trade talks.
2. Gathering Data: Using a Graph
This graph will help you understand the intense international competition between Airbus, the
European consortium, and Boeing, the private US company. It also shows the limited competition
offered by three other airframe manufacturers. All these companies want to sell their planes to the
world’s airlines.
BOEING AIRBUS BRITISH FOKKER

PLANES PLANES AEROSPACE PLANES
PLANES
SHORT RANGE (up to
1,500 nautical miles)
60-135 seats BAe 146 F 100
MEDIUM RANGE
(1,500 – 3,500 nautical
miles)
Up to 175 seats 737 A320
176-225 seats 767 A321
LONG RANGE
(over 3,500 nautical
miles)
757
Up to 225 seats A 310
767
A300
226-310 seats 767
A340
747
311-475 seats A 330
767
An increasingly scrappy Airbus is going nose to nose with Boeing.
3. Gathering Data:
Reading
safety or maintenance, four to six years, for

1.AIRBUS airlines were reluctant to example, for a plane to
INDUSTRIE purchase the new aircraft. move from the design stage
Through favorable pricing, to actual production.
In 1970, four European generous maintenance During this time, the project
nations created Airbus contracts, and other yields no profits.
Industrie to offset1 a competitive offers, the Government subsidies also
decline in the airframe company was able to attract compensate for losses from
industry and challenge US a number of carriers, discount pricing, a strategy
dominance in the global including some in the Airbus officials felt was
commercial aircraft market. United States. As a result, in necessary in order to gain a
Airbus is a four-country less than twenty years, foothold on the
international consortium: Airbus was able to produce all-important US market for
Deutsche Airbus of a full family of airplanes aircraft.
Germany, with 37.9 percent and, with over 100 Airbus officials defend
ownership, makes the customers, it moved into the subsidies as a way to help
fuselage;2 British number two spot in the level the playing field4.
Aerospace of Great Britain, global aircraft industry. They are quick to point out
with 20 percent, makes the Airbus succeeded because that Boeing receives
wings; Construcciones civil aircraft manufacturers millions of dollars in
Aeronáuticas (CASA) of from four nations pooled contracts to build military
Spain, with 4.2 percent, their financial and aircraft and spacecraft for
makes the tail; and technological resources in a the US government, which
Aerospatiale of France, true multinational is clearly a form of subsidy.
with 37.9 percent, partnership. It also It is hypocritical, say Airbus
assembles the planes in a succeeded because officials executives, to argue that the
gigantic facility at in these countries believed market is or can be
Toulouse-Blagnac that European industry must completely free from
international airport. In this be supported and protected government intervention.
unusual business structure, by a strong industrial Airbus officials point out
the four partners are both policy. that the consortium is a
owners and suppliers, the For Airbus Industrie, the source of pride for the
common language of largest single industrial European Union, a model of
business is English, and all undertaking in the EU, international cooperation
sales are transacted in US support takes the form of an that can inspire future
dollars. estimated $26 billion in economic development in
In the early years, Airbus subsidies3. As a result of the area. Moreover, high
Industrie was clearly the this financial backing, quality Airbus products
underdog, lagging far Airbus has been able to provide a viable alternative
behind the US companies of recover from 70 to 100 to US airframes, assuring
Boeing and McDonnell percent of its product customers all over the world
Douglas, which had development costs, which of the benefits of industrial
dominated the industry for are enormous in the competition.
years. Since the consortium industry. It can easily take
had no track record on
Now Airbus sells more traffic are fueling Airbus’s looks forward to lasting
planes than Boeing, they are growth. The consortium is financial success in the
the leader on the airframe already anticipating the future.”
market their global market need for airplanes that are
share amounts to 54 %. But quieter, more fuel efficient,
Airbus officials are gunning and more comfortable for 1) stop
for 60 percent over the next air travelers on long trips. 2) main body of an
several years. Predictions of According to company aircraft
increasing worldwide air literature, “Airbus Industrie 3) government funds
4) let competitors
compete on a fair and
equal basis
2.THE BOEING space program. Over the continuing decline of the

COMPANY years, the company has US share in aerospace has
The Boeing Company was developed a strong sparked an intense debate in
founded by Bill Boeing, a reputation for reliable the United States on the
wealthy lumberman from products and the service of whole issue of the proper
Washington State, on the those products. It used to be relationship between
West Coast of the US The number one in worldwide government and industry.
first plane was used to take sales for a long time, Traditionally, the United
him on fishing trips to controlling over 50 percent States has maintained a
remote areas of Canada. In of the market for free-market philosophy,
1916, he set up an airplane commercial aircraft. Now which holds that
factory in Seattle, their global market share is government should not
Washington, a city which 46%. Aerospace products regulate market forces. In
now depends on the aircraft are the number one US this view, better and more
industry. Fascinated with export after agricultural efficient production occurs
the technology of flying, products. The country has a when world markets are
Bill Boeing when he long and proud tradition of open, allowing the forces of
founded the company dominating the industry competition to work freely.
promised “to let no new with technological According to Boeing and
improvement in flying and breakthroughs1 leading to other executives, this
flying equipment pass us superior products. But this philosophy has been the
by.” position is now being backbone of American
During World War II, the challenged. Airbus, a industrial power from the
Boeing Company France-based European beginning. For the health of
established its reputation as company, has bumped the civil aviation industry,
a supplier of military Boeing into the second spot the free-trade argument
aircraft. After the war, in in the industry, and it goes, the United States must
the early fifties, Boeing threatens to step up the convince the EU to stop
made the first passenger jet, competition. Boeing subsidizing Airbus.
which soon replaced all of executives argue that they However, there is less
the propeller-driven aircraft cannot compete against the agreement than there used
in the passenger market. It deep pockets2 of the four to be on the issue of
has also built a number of European governments that government’s role in
spacecraft used in the US subsidize Airbus. The industry and trade. Some
US officials and academics reject the notion of an aerospace industry has far-
point out that the free- industrial policy. At worst, reaching implications for
market philosophy no it sounds like the the way the United States
longer suits global centralized planning of a should manage its economic
economic conditions. socialist system. At best, it future.
Advocates of this emerging sounds like protectionism, a
view urge the development policy that simply uses 1)significant improvements
of a strong industrial policy government money to 2) unlimited wealth
that would develop and protect industries that 3) import taxes
support important US would fail in the market 4) limits
industries. Such a policy without it. They point to
could work through such some examples of big
protective measures as government-supported
tariffs,3 import quotas4 or research projects, like the
direct subsidies to industry, Concorde superfast
and through policies that passenger aircraft, that
encourage research in resulted in products that
certain high-tech industries. became commercial
According to this emerging failures. Yet even the free
view, a carefully traders have to admit that
constructed industrial US industry is not as
policy could help the United competitive in the global
States create jobs, increase economy as it once was and
market share, and improve that, increasingly, it must
profits, especially in high- compete against nations
tech industries. that have strong industrial
Those in favor of the policies and are unlikely to
traditional free trade and change them. So, the debate
open market philosophy at Boeing and in the
PART 2
MAKING DECISIONS –
NEGOTIATING AN INTERNATIONAL
TRADE AGREEMENT
Introduction to the Problem.
The commercial airframe industry is the subject of the

latest round of trade talks between EU and US officials.
Airbus, the European consortium, and Boeing, the US
firm, are the two biggest competitors in the aerospace
industry today.
The major problem in these trade negotiations is a
dispute over government subsidies.
Exploring Business
Culture: Relationships
between Government
and Industry
Government and Industry in Three Important Regions
Japan
The Ministry of International Trade (MITI) sets a
strong industrial policy.
● MITI identifies and directly supports key industries,
for example, high-technology industries.
● MITI helps to gradually shut down less competitive
industries.
European Union
The European Union’s (EU) role in setting the industrial
policies of its member nations is expanding.
● The EU had broad guidelines for development of
present and future industries.
● The EU finances such long-term projects as the
development of civil aircraft and high-speed trains.
United States
There is no overall industrial policy.
● The US government gives research money and
contracts to certain military, energy, and health
industries.
● The United States has a strong free-market tradition
although there is some dissatisfaction with this approach.
Reading and Writing [110]
Task 1. [4]
Look at the section of the Case Study called “Examining the products.”
1. What is the difference between the products made by Airbus and Boeing? [2]
__________________________________________________________________
__________________________________________________________________
2. If you were an Airbus official, how would you get U.S. carriers to buy your
[2]
European-made planes?
__________________________________________________________________
__________________________________________________________________
Task 2. [11]
Look at the graph in section No.2 of the Case Study

Study the graph and answer the following questions:
1. In what range categories does the graph compare airplanes? [1]

__________________________________________________________________
2. Describe the competition between Boeing and Airbus aircraft in [6]

each of the ranges?
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
3. Do the planes of other airframe companies – British Aerospace and

Fokker compete with Boeing and Airbus planes? [2]
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
4. The most intense competition occurs in the long-range plane category. [2]
Why are the 311-to 475-seat long range passenger planes so popular
with customers?
________________________________________________________________
________________________________________________________________
Task 3. [ 26 ]
Read through the two articles (Part 1) to gather background data on the two
companies, including information to answer the following questions:
1. What was the goal of creating Airbus Industrie? [1]

__________________________________________________________________
2. Why was Airbus lagging far behind the U.S. companies in the early years? [1]
__________________________________________________________________
3. How did Airbus manage to accomplish its goal and how long did it take [2]
the company?
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
4. Why do Airbus and EU officials believe subsidies for Airbus are [6]
necessary and important?
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
5. How much is the financial backing provided by the four European [1]
Governments?
__________________________________________________________________
6. By how much is Airbus planning to boost its share of the global

airframe market in the next several years? [1]
__________________________________________________________________
7. How much is Boeing’s share of the global market for commercial [1]
aircraft?
__________________________________________________________________
8. What are Boeing’s main product lines? [1]

__________________________________________________________________
9. How did US companies achieve dominance in the aircraft industry? [1]

__________________________________________________________________
10. Why are most Boeing and US officials opposed to financial backing [3]
of the airframe industry by the government?
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
11. What is the essence of the free-market philosophy? [2]

__________________________________________________________________
__________________________________________________________________
12. What are the advantages of a strong industrial policy according to [2]
its advocates?
__________________________________________________________________
__________________________________________________________________
13. What measures does a strong industrial policy involve? [2]

__________________________________________________________________
__________________________________________________________________
14. Why do some US officials and academics point out that the [2]
free market philosophy no longer suits global economic conditions?
__________________________________________________________________
__________________________________________________________________
Task 4. [3]
Look at Part 2 of the Case Study. Answer the following questions:
1. In which region is the relationship between government and

[1]
industry the closest?
__________________________________________________________________
2. In which region is it the most distant? [1]

__________________________________________________________________
3. What is the relationship between government and industry in [1]

the United States?
__________________________________________________________________
Task 5. [6]
Find a simple way to explain what the following words mean.

The first phrase has been done for you as an example
go nose to nose compete in each product category
Scrappy
guidelines
subsidize
Task 6. [10]
Reviewing Background Information and Vocabulary
Read the sentences and find the word or expression in the box that
means the same as the italicized words.
1. Since the beginning of commercial aviation, such US

a. aggressively seeking airframe manufacturers as Boeing and McDonnell Douglas
have led the industry in technological know-how and sales.
Until recently, all other companies lagged behind.
2. Airbus Industrie was formed in 1970. For several years

b. position after, the multinational partnership was clearly
an underdog in the airframe industry. Boeing was not
worried about the competition since nobody knew how long
the new enterprise would last.
3. The Europeans hoped that Airbus would both offset the

c. enormous wealth general decline in the airframe industry as well as
challenge the dominance of US companies. Even if the
plan to revitalize the industry worked, they knew it would
take years to reach their goal.
4. At first, Airbus had a hard time selling its plans to US

d. performance history carriers, who buy over 50 percent of the world’s aircraft.
Since the products had no track record, airlines did not
want to try them.
5. In order to gain a foothold in the US market, Airbus

e. a competitor that is offered special prices to US airlines. These deals were
not expected to succeed possible because the company was subsidized by the
governments of its four partners.
6. Boeing has complained about Airbus prices and the
f. developed more subsidies that make them possible. Officials say that no
slowly private company can compete against the deep pockets of
four governments.
7. Airbus officials say that subsidies have helped level the

g. stop playing field in the industry. They point out that US
companies get large contracts from the US military.
Without financial help, Airbus would not have been able to
compete.
8. In just twenty years, Airbus moved into the number two

h. begin to compete spot in the world’s airframe industry, pushing out
Mc Donnell Douglas. This represented very rapid growth.
i. let competitors 9. The airframe industry is expected to continue growing

compete on a fair and throughout the next decades. An increase in global
equal basis business activity is fueling this growth.
10. Boeing controls 46 percent of the commercial market.

j. feeding Airbus controls about 54 percent and is gunning for 60
percent. The fierce competition between these two
companies is certain to continue for many years.
Task 7. Memo. [30]
The CEO of Boeing and the Chairman of Airbus are going to take part in the
negotiations between the United States and the European Union.
In view of the forthcoming meeting between the Trade Representatives of the two
regions, the Chairman of Airbus is writing a memo to all Departmental Directors.
He focuses on the main items of negotiation and requests suggestions from his
subordinates.
Write a memo for the Chairman of Airbus, setting the deadline for submitting
suggestions and recommendations.
Your memo should include the following:

1. Boeing still has a large share of the global airframe market, Airbus’s share is
just over 50%
2. Governments’ subsidies – down from 70-100% to 45%.
3. US military contracts subsidize Boeing.
4. To be competitive on the global market a strong industrial policy is essential.
5. Without competition safety and maintenance standards will decline.
All the above statements should be explained or developed in the memo.
Task 8. Memo. (An alternative task). [30]
In view of the forthcoming meeting between the Trade Representatives of the two
regions, the CEO of Boeing is writing a memo to all Departmental Directors.
He focuses on the main items of negotiation and requests suggestions from his
subordinates.
Write the memo for the CEO of Boeing, setting the deadline for submitting
suggestions and recommendations.
Your memo should include the following:

1. US cannot increase exports due to Boeing’s fierce competition with Airbus.
2. Discount pricing – Airbus’s strategy – is provided by subsidies from EU
nations.
3. Airbus should stop accepting subsidies. In this case Boeing will refuse help
from the US government.
4. The US government may be forced to establish a strong industrial policy to
protect US aircraft manufacturers if Airbus continues to accept subsidies.
All the above statements should be explained or developed in the memo.

Task 9. Letter [20]
Helen Long is going to fly to Washington from London. She is sending an e-mail to
Peter Anderson, her British friend, who is studying in the US. She asks him for
advice on which plane to choose – Airbus 330 or Boeing 767. Draft the e-mail for
her, mentioning such aspects as safety, reliability and comfort.
Speaking ● Role-play
Conducting
A Business Meeting:
An International Trade
Negotiation
A. Preparing for the meeting
1. Read about the business problem
Airframe industry trade talks between the United States and the European Union
have been dragging on for years.
This latest round of talks focuses on the subsidies that Airbus receives from the
governments of its four member nations. US trade officials argue that open markets
are better for everyone; EU officials argue that open markets do not and cannot exist.
The two sides know that a trade war would be disastrous for both, so they must
negotiate an accord.
The purpose of the meeting is as follows:

to negotiate an agreement on government subsidies of Airbus Industrie.
2. Form two negotiating teams, one from the European Union and one from the
United States. Read the summary of the business problem and the role
summaries.
The Problem.
Trade talks are extremely delicate and complex. When trading partners sit down at
the negotiating table, economic, political, philosophical, and other issues are
involved. The complexity of international negotiations is illustrated in the many
rounds of talks involving the airframe industry.
Economics is the most obvious issue separating Airbus and Boeing. When Airbus
was the underdog, subsidies to launch the new enterprise were not controversial.
Few people, however, predicted that this consortium that was created to pool the
resources and know-how of four European countries would so quickly be able to
gain a foothold in the international airframe market and move into the number one
spot in the industry. Boeing now fears that its sales may lag behind forever.
Any economic discussion at a trade talk, however, is closely related to both political
and philosophical issues. In the United States, industry groups and unions often want
to be protected from foreign competition. US officials, however, come to the
negotiating table with a long history of belief in the free-market system. In their
view, open world markets benefit both producers and customers in the long run.
Many US policymakers are opposed to protectionism, whether the trade barriers take
the form of tariffs, import quotas, or direct subsidies. In contrast, in Japan and
among members of the European Union, industrial policy is viewed as a positive
and necessary part of international competition. Industries that are important to the
economy are supported. Research related to these industries is also supported. In
the case of Airbus, for example, subsidies are seen as a means of leveling the playing
field and helping the EU aerospace industry compete on a global scale.
Underlying any trade talks is also the issue of national pride. The success of Airbus
symbolizes the hope for European cooperation and economic strength in the future.
At the same time, threats to the US airframe industry have always been taken as
challenges to that nation’s dominance in world affairs.
As a result of economic, political, philosophical, and historical differences, trade
negotiations tend to drag on and on. This is true in the airframe industry. Sometimes
they break down. It is rarely to anyone’s advantage, however, to allow such a
breakdown to escalate into a trade war.
The Roles
EU Trade Representatives:
● Airbus’s share of the airframe market is just over 50 percent.
Boeing still has a large share of the global airframe market–46%.
● Subsidies from the governments are already down from 70

to 100 percent of product development to only about
45 percent. US military contracts subsidize Boeing.
● The EU must have a strong industrial policy (with

subsidies, import taxes, and so on) to be competitive
in the global market.
● If the United States kept control of the airframe

industry, customers all over the world would be hurt.
Without competition, safety and maintenance standards
would decline.
● (Add your own)
US Trade Representatives:
● Airbus is cutting into Boeing’s market. This hurts the

US effort to increase exports since airplanes are the
number one nonagricultural export.
● Subsidies from EU nations to Airbus allow the

company to sell its airplanes too cheaply.
● If Airbus stops accepting subsidies, US airframe

manufacturers will also continue to refuse help from
the U.S. government. The United States will maintain
a free-market policy.
● If Airbus continues to accept subsidies, the US

government may be forced to set up such trade barriers
as higher tariffs and lower import quotas.
● (Add your own)
Each negotiating team meets to study its position and plan its strategy.
Team members are supposed to add any notes that they consider to be important to
their role summaries.
B. Conducting the Meeting
Agenda
1. Opening the meeting.

2. Trade negotiation.
3. Summarizing the main points of agreement and disagreement.
4. Closing the meeting.
Adventure Holidays International

A Recipe for Success: The original idea was bold and simple. Make
people work for their pleasure and their pleasure, when it comes, will be that
much greater. Add some adventure and history, package it all as an inclusive
tour and you have a world beater on your hands! For Jeremy Hunter and
Rasoul Alwan, co-founders of Adventure Holidays International, that original
recipe had paid off. With 4 major itineraries in their adventure brochure and
a new sister company offering traditional holidays in the Middle East, the
future looked bright.
The advertisements for Adventure Holidays International:
Are you the kind of holidaymaker who expects to find the comforts
of home only a hundred metres from your beach? Or the night life
of a big city just a short ride from your hotel room overlooking the
sea? If you are, then our adventure holidays are not for you
At AHI we specialize in unusual holidays for unusual people. The
kind of people who come on our holidays are the kind of people who
don’t like the word ‘holiday’. They prefer the word ’experience’. Take,
for example, our CAESAR itinerary through Northern Italy. Here you
will travel on horseback in the company of Julius himself. You will
cross the Rubicon river and march on Rome, staying overnight in
ancient Italian villages. You will eat, drink, fight – yes, and play – as
the Romans did. And, when you arrive at the Baths of Caligula in
Rome, you will discover for yourself in five nights and days of
celebration why Rome rose… and fell!
Call us on Freefone 3636. We have a range of experiences to choose
from: ISOBEL in Spain, ALEXANDER in Turkey, and our most
famous itinerary of all, SALADDIN in Afaria.
Adventure Holidays International. Give us a ring. We dare you!
Saladdin
5 days in the desert with SALADDIN and his famous warriors
followed by 8 nights in the Sultan’s own palace.
Saladdin (Salah ud Din), the respected enemy of the Crusaders, is
remembered by history for his brilliance and daring. He was the founder
of a dynasty of sultans who for a century ruled most of the land which is
present day Afaria. Now you can travel with Saladdin across his desert
kingdom to his favourite palace on the edge of the Mediterranean. You
will need some courage and determination. But just look at the rewards!
Your adventure begins at the notorious Wadi Malaf oasis where Ibn
Makluk massacred his thousand slaves. You take delivery of your very
own camel and travel for 5 days along the famous northern caravan route.
En route you will visit the fabulous Kharoumi caves, sleep under canvas
for 5 Saharan nights and find out what’s like to be raided by the
Wakhoubi tribe. Then you will climb the Maraba mountains before
descending to the glittering palace of the Sultan himself. Here you will
enter the secrets of palace life, survive a palace coup, conspire with the
Sultan’s bodyguard…. and finally overthrow the Sultan himself.
AHI – the best year yet

With an advertising campaign larger than ever before now in full swing, Jeremy
Hunter and Rasoul Alwan were expecting a bumper year. Already bookings on
their established adventure itineraries and Middle East holidays were ahead of
previous years and even their new route was establishing itself.
Adventure Holidays International and Middle East Holidays:

BOOKINGS
Places available and bookings to date on all itineraries
Adventure MAY JUNE JULY AUG - DEC

Holidays Places Bookings Places Bookings Places Bookings Places Bookings
SALADDIN 120 115 250 230 300 310 500 250
CAESAR 50 30 90 75 120 90 150 90
ALEXANDER 50 10 120 30 120 45 200 30
ISOBEL 90 50 90 75 90 80 200 120
Middle East
Holidays 400 315 500 350 600 450 1000 250
Crisis!
On the day that Rasoul Alwan was due to fly out to visit some of their Middle
East holidays locations, the following newspaper article appeared.
APRIL , 29
AFARIA CLAMPS DOWN ON

CULTURAL EXPLOITATION
From our travel correspondent
The government of Afaria has introduced tough new laws to stop
what it calls cultural distortion and exploitation. Announcing the new
measures in parliament today, the Minister of Culture, Ali M. Raouf,
referred to a number of examples where his country’s long traditions
and beliefs were being exploited by profit-hungry foreign nationals and
companies.
One of the main targets of the new rules is the tourist industry which
encourages foreigners to come to Afaria to enjoy what Mr. Raouf called
a totally incorrect view of his country’s past. He gave one example of
tribespeople being asked to perform different kinds of activities to
entertain foreign tourists. In one case tribesmen had to ‘raid’ the tourist
party as if they were bandits and then allow themselves to be attacked
when the tourists had their ‘revenge’. Mr. Raouf said such activities
were degrading and humiliating and were a form of cultural
pornography. These activities had to cease immediately. Companies
guilty of such activities would be banned.
It is widely believed here that the main offender is Adventure
Holidays International, a London based operation that arranges
‘unexpected’ events during its adventure holidays in Afaria. Its Saladdin
tour contains a Bedouin ‘raid’ and a ‘Palace coup’ to entertain and
excite its clients. Local people are employed to perform such parts as
palace guards, harem attendants and brutal sultans.
Mr. Raouf also claims that much of such companies’ publicity
contains historical and cultural inaccuracies. Salah ud Din, for
example, never visited this part of the world and certainly never had a
palace there.
The government of Afaria is considering approaching neighbouring
governments with a view to boycotting the offending companies.
Last night it was reported that the local representative of Adventure
Holidays International in Afaria had been detained under the new laws.
So far Adventure Holidays International Headquarters in London have
made no comment on the affair.
The last letter from Afaria

At the meeting called to act on the crisis, Alwan produced a letter he had
received only two days before from Paul Harding, AHI’s representative in
Afaria.
The Maguire
Hotel
Afaria Town
20 April
Dear Rasoul
I just thought I’d drop you a line to let you know what’s happening
out here. We had the first three groups through two weeks ago and
everything went very well. We have two more groups in the desert at
the moment.
My main worry is about the present political situation here. Since the
assassination, the government has been playing a very clever game.
They are clearly afraid of the surge of tribal and religious sentiment and
are having to make concessions. One of these has been to give one of
the country’s main religious leaders a seat in the cabinet.
So far there have been no obvious changes in the ways things run.
The country still has serious economic difficulties and it’s my feeling
that these worries will eventually limit the powers of the religious and
ethnic parties. So don’t take what you hear at face value. There’s a lot
of posturing going on and it will take time to sort itself out. Nevertheless,
the Minister of Culture may insist on banning our activity to gain the
support of the local tribe leaders. In any case, we should also think of
possible concessions.
By the way, I recently heard that we have some competition just
across the border in Moccala. A company calling itself EXPERIENCE
UNLIMITED is running similar tours to ours. Their address is somewhere
in Kent. Perhaps, we should send in the Wakhoubi!
That’s all for now. See you at the end of the season.
Best wishes
Paul
AGENDA
1. Clarification of the situation
in Afaria
2. Possible concessions
3. Impact of ban on AHI
4. Impact of boycott
A special meeting was called 5. Long-term policy in the
to discuss the crisis and decide region
on a plan of action. 6. Action
Reading and Writing Total score - 100 marks
Task 1. The company [23]
Look at the first three pages of the case while answering the following
questions:
1. Who worked out the recipe for success? [1]

__________________________________________________________________________
2. What product did Adventure Holidays International offer? [1]
__________________________________________________________________________
3. What did the recipe for success include? Name the components. [3]
___________________________________________________________________________
___________________________________________________________________________
4. According to the company founders, who should work for the pleasure
during the trip? Tick [V] your answer. [1]
Company employees
Holidaymakers
Local population
5. Did the recipe give a good result? [1]
_____________________________________________________________________________
6. What itineraries did AHI develop and what are their locations? [4]
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
7. In what way did the product of MEH differ from that of AHI? [1]
_____________________________________________________________________________
8. Look at the advertisements for AHI. What kind of people would such
advertisements appeal to? [2]
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
9. Look at the advertisement of the Saladdin itinerary. What is Saladdin
famous for? [4]
_____________________________________________________________________________
_____________________________________________________________________________
____________________________________________________________________
10. Look at the table of bookings for AHI and MEH. Make a list of the unfilled
capacity in each itinerary for the coming three months. [5]
Saladdin:
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
Task 2. Problems [12]
Look at the last two pages of the case while answering these questions:
1. What was the reason for the introduction of the new laws in Afaria? [2]
_____________________________________________________________________________
_____________________________________________________________________________
2. What legal action could the government of Afaria take against some
companies? [1]
__________________________________________________________________________
3. Why was AHI called ‘the main offender’. Tick [V] the correct answer. [1]
a) because the events, arranged by AHI, are unexpected
b) because AHI employs the local population
c) because of the historical and cultural inaccuracies
d) because the Saladdin tour entertains and excites the clients
4. What further steps might be taken against the offending tourist
companies?
[1]
_____________________________________________________________________________
_____________________________________________________________________________
5. What was the first practical step of the government of Afaria? [1]
_____________________________________________________________________________
6. What, according to Paul Harding, was the real starting point for the
changes? [1]
_____________________________________________________________________________
7. What is the government of Afaria afraid of? [1]
_____________________________________________________________________________
_____________________________________________________________________________
8. Why is the competitor, Experience Unlimited, mentioned in the letter?
Give your reasons. [4]
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
Task 3. [10]
Explain the meaning of the following word combinations:
1. A world beater
2. To be in full swing
3. A bumper year
4. To take smth at face
value
5. To clamp down on
exploitation
Task 4. [15]
Look at the map of AHI itineraries and its table of bookings.
a) Fill in the grid given below:

Itinerary Duration Price % of bookings for May, June, July
Saladdin
Caesar
Alexander
Isobel
b) Give your assessment of the popularity of the Saladdin itinerary.

Compare it with the least popular itinerary.
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
Task 5. [20]
You are Jeremy Hunter. Write a MEMO to the staff of AHI. Analyze the impact
of a possible ban on AHI activities in Afaria, refer your analysis to the table of
bookings given in the text. Explain the necessity of concessions to the Afaria
government. Enumerate first step concessions (changes in publicity material,
omission of offensive activities from the itinerary, etc.) Express your hope of
peaceful settlement of the problem.
Task 6. [20]
On behalf of Rasoul Alwan write a formal EMAIL (LETTER) to the General

Manager of Experience Unlimited. Outline the present situation in Afaria,
express your concern about the new rules in the tourist industry and a possible
ban on AHI activity. Enquire about a possibility of making a deal with Experience
Unlimited and transferring customers across the border.
You do not need to write the address. Start with the salutation:
Dear Sir or Madam

SPEAKING ♦ AHI MANAGEMENT MEETING

CANDIDATE A
TASK 1. Presentation
You are Jeremy Hunter, the co-founder of AHI. You are in a meeting with Rasoul
Alwan and other top managers. You are making a presentation devoted to the
situation in Afaria and problems with your Saladdin itinerary. Briefly outline
the situation and speak about possible concessions (changes) AHI can make in
the content of its Saladdin itinerary without losing the customer appeal (e.g.
change the ads, take out the raid and palace coup elements).
TASK 2. Dialogue
Together with Rasoul Alwan work out a set of measures in the present-day
situation. You should prepare the arguments which will prove the economic,
cross-cultural and educational benefits of your business for Afaria.
CANDIDATE B
You are Rasoul Alwan, the co-founder of AHI. You are making a presentation in
a meeting devoted to the situation in Afaria and problems with your Saladdin
Itinerary. According to your analysis of the situation you suppose that a ban
cannot be avoided. Say how AHI could minimize the damage to its business (e.g.,
switch customers to the other adventure itineraries or to the MEH locations, deal
with Experience Unlimited, etc.)
TASK 2. Dialogue
Together with Jeremy Hunter work out a set of measures in the present-day
situation. You should prepare a plan the arguments which will prove the
economic, cross-cultural and educational benefits of your business for Afaria.
SPEAKING ♦ THE MINISTRY OF CULTURE MEETING

CANDIDATE A
You are the Minister of Culture Mr. Ali M. Raouf. Make a presentation on the
situation in the tourist business in your country and the new laws introduced
by the Government. You would like to ban the activity of Adventure Holidays
International as you think it can be regarded as a form of cultural distortion and
exploitation of the local population. You are sure that AHI itinerary Saladdin is
offensive to the people of Afaria (e.g. raids or palace coups). You insist that AHI
activities are of no importance to the Afarian economy. You would like to
approach the governments of the neighbouring countries with the view to
boycotting the activity of this company.
TASK 2. Dialogue
Together with the Deputy Minister work out a set of measures you would like
to take in respect of Adventure Holidays International. You would insist on these
measures during your negotiations with AHI.
CANDIDATE B
You are the Deputy Minister of Culture, Faruh ibn Said. Make a short
presentation on the situation in the tourist business in your country. Though
you agree with the Minister that AHI activities are offensive to the people of
Afaria, you believe that AHI should not be banned as this company’s itinerary
Saladdin attracts tourists and brings good income to the country. Still you expect
some concessions from AHI. They could be: changes in the name of the itinerary,
omission of any offensive actions from the itinerary, new jobs for the local people
and higher pay, etc.
TASK 2. Dialogue
Together with the Minister work out a set of measures you would like to take
in respect of AHI. You would insist on these measures during your talks with
AHI.
SPEAKING ♦ ROLE PLAY
Conducting negotiations between the Government of Afaria and

AHI Management

The activities of Adventure Holidays International which offers holidays
combining history, culture and adventure started to offend the Government
of Afaria, a North African country. Having recently come to power, the newly
formed government changed the laws in the tourist business and qualified
tourist activities of AHI in Afaria as cultural distortion and exploitation of the
local population. The Minister of Culture, Ali M. Raouf insists that these
activities are degrading, humiliating and are a form of cultural pornography.
He insists that the activities of AHI should be banned immediately and
threatens to approach the neighbouring governments with the view to
boycotting the activities of AHI.
AHI are in trouble now. Their local representative in Afaria Paul Harding was
recently detained under the new laws. Moreover, two groups of tourists that
are in the desert in Afaria should be rescued as soon as possible. The
unexpected changes in the policy of the Government could ruin the business.
Firstly, the situation may lead to the cancellation of all bookings in Saladdin
itinerary or switching the tourists to other itineraries. Secondly, the conflict
could have bad publicity in the press and lead to the loss of the image. And
finally, a possible boycott of their activities in that area could be a catastrophe
for AHI.
2. Form two negotiating teams, the Government of Afaria and AHI
management.
The purpose of the meeting is to negotiate an agreement on AHI’s
activity in Afaria.
THE ROLES:
The government of Afaria ♦ Claims
1. The lack of importance of AHI to the Afarian economy
2. The offensiveness of AHI activities to the people of Afaria, e.g. raids,
palace coups, etc.
3. The willingness to ban AHI immediately.
4. The possibility of a wider regional boycott.
5. Appropriate concessions from AHI:
a) Cancellation of the Saladdin itinerary
b) Introduction of another itinerary, approved by the Government
c) Switching to traditional holidays
6. The release of Paul Harding and rescue of the groups that are now in
the desert in case an agreement is reached.
7. The government’s long-term policy in the sphere of tourism.
8. (Add your own).
AHI management ♦ Arguments

1. The contribution of AHI to the Afarian economy (employment, cross-
cultural contacts, educational changes).
2. AHI offer adventure holidays, but not visits to historical places.
3. AHI activity in Afaria is licensed, unreasonable banning is impossible.
4. The government has no right to appeal to neighbouring countries.
5. Possible concessions to be made:
a) Change the name of the Saladdin itinerary.
b) Omit any offensive activities from the itinerary (raids, palace coups,
etc).
c) Introduce changes in the publicity materials and stress non-historical
background.
6. Invite any helpful suggestions on the Saladdin itinerary from the
government of Afaria.
7. Excellent prospects for adventure tourism in Afaria.
8. (Add your own).
Teams should search for further steps aimed at mutually beneficial

cooperation.
B. Conducting the meeting.
Procedure
1. Opening the meeting

2. Making presentations
a) Ali M. Raouf, the Minister of Culture, Faruh ibn Said, the Deputy
Minister of Culture (and another team member) make a Power Point
presentation on the situation in the tourist business in the country
and the development of this industry in future.
b) Jeremy Hunter, Rasoul Alwan, the co-founders of AHI (and another
company member) make a Power Point presentation on their activity
in the Mediterranean area.
3. Negotiation.
4. Summarizing the main points of agreement and explaining the
reasons for disagreement.
5. Closing the meeting

Kentucky Fried Chicken Corporation

Adapting to the Japanese Market
PART 1
BACKGROUND
1. Examining the Products
Kentucky Fried Chicken Corporation
● Has its headquarters at 1441 Gardiner Lane, Louisville, Kentucky 40232.
● Was founded in 1930.
● Every day the KFC network serves 12,000,000 customers. It has 22,621 restaurants and
operates in 150 countries and territories (2019).
A typical KFC outlet occupies its own building and has a standard size and design. Colonel
Sanders, whose picture appears in all of the restaurants, is the founder of KFC.
A “finger lickin’ good” meal from a KFC restaurant in the United States includes chicken,
coleslaw, mashed potatoes with gravy, soda and a biscuit.
2. Gathering Data: Reading
Now Kentucky Fried Chicken is the world’s second-largest restaurant chain after
McDonald’s. Among KFC’s most successful business plans was its decision to enter the
Japanese market.
1. JAPAN AS A FAST-FOOD MARKET

Fast food was not common in Japan when Kentucky Fried Chicken decided to enter the
market. The company saw a promising business opportunity and found ways to
overcome potential obstacles.
In the 1970s Japan was a rich, populous country of some 120 million, 90 percent of who
considered themselves middle class. It was thus the second largest consumer economy
in the world, outranked only by the United States itself. The Japanese were well disposed
toward1 U.S. citizens and their products; Western models and celebrities, for example,
appeared frequently in Japanese advertising.
Japan was the restaurant capital of the world, with one eating establishment for every
eighty one people. In the 1970s, with income rising and leisure time more plentiful, the
industry boomed. Fast food in particular had proved inordinately popular, growing by a
factor of six2 in the last few years.
Kentucky Fried Chicken began its Japanese operation with two test operations, one at
Expo in Osaka, the other in a Tokyo department store. The company had a good product
to offer: chicken was popular in Japan anyway, and KFC’s chicken tasted a little like
yakitori, the broiled chicken on a stick that is one of Japan’s most popular dishes. Still,
the experiments were successful beyond all expectations. The Expo outlet broke
records3: sales there reached $100,000 a month.
Shortly thereafter KFC set up a fifty-fifty joint venture with Mitsubishi, the giant
Japanese trading company. Mitsubishi could guide KFC through the Japanese
bureaucracy, making sure it complied with4 applicable laws and followed appropriate
customs. In addition, a year before, Mitsubishi had bought heavily into the chicken feed
and farm business. Now, it gave KFC access to well-developed sources of supply. And
it had an interest of its own. It could sell its chickens to KFC, which would be only too
delighted to have a reliable supply.
SOURCE: Enterprise, Eric Sevareid
McGraw-Hill, N.Y. Used by permission
1. tend to like
2. six times its original size
3. did better than before
4. obeyed
2. KFC-JAPAN MARKETING STRATEGY

Kentucky Fried Chicken enjoyed a great deal of success in the Japanese market. Loy
Weston, who was in charge of KFC-Japan, hired Shin Okuhara, his Japanese executive
vice president, to help him tune in to the Japanese way of doing business. Their strategy
worked well: within eleven years, 324 KFC outlets opened in Japan. Of these, 125 were
directly run by the company and 199 were franchises, owned by individuals who had
bought a license from KFC.
Kentucky Fried Chicken muscled1 its way into the number-one spot in Japanese fast
food. Its success, however, probably had less to do with luck than with good management
and astute marketing.
One step in the marketing strategy is determining store location. Where a typical KFC
outlet in the United States is freestanding – and thus built to the same size and
specifications everywhere – the typical Japanese store is located in an existing building.
Many are smaller than KFC’s standard size. “What we do is design a store appropriate
for Japan”, explained Weston. “Every time we find a little space, we design, a way to fit
our store in. We shrink equipment, redesigning it, making it taller instead of longer.”
Kentucky Fried Chicken’s outlets may be only one-third the size of U.S. prototypes, but
they do twice the business an average of $620,000 a year.
Because the rent is high in Japan, sites have to be selected with particular care. To qualify
for consideration a district must have at least 50,000 people using its train station every
day.
The number of people fifteen minutes away by bus or on foot is computed, and the
number of passers-by per hour is multiplied by store frontage, to produce something
called the location factor. Then all these figures are fed into a formula designed to
estimate sales.
As in other countries, KFC varied the menu to accommodate local tastes. “The Japanese
aren’t thrilled about mashed potatoes and gravy, which are common in both the United
States and Australia,” Weston said, “so we switched to french fries.” When Japanese
consumers found the coleslaw (cabbage salad) too sweet, KFC cut the sugar in half.
The company catered to Japanese preferences in other ways, too. Smoked chicken,
yogurt, and fish and chips, for example, all adorn KFC’s Japanese menus.
1. aggressively pushed
3. KFC-JAPAN MARKETING STRATEGY
Loy Weston, head of KFC–Japan, and Shin Okuhara, his Japanese executive vice
president, planned the company’s entry into the market with great care. As restaurants
were added, they continued to run some, but many were run by Japanese franchisees,
people who had bought licenses from KFC.
From the central office, Weston and Okuhara directed efforts in advertising, training,
and adapting to local traditions.
Two devices - one dictated by Japanese custom, the other a brainchild of Weston’s –
marked KFC’s on-site promotional strategy. Every restaurant in Japan displays models
of the food it serves in glass display cases near the door. Factories specializing in
manufacturing the models provided KFC with a thirteen-piece set of chicken for eighty-
five dollars each. Every store had to have one. Every store also got a life-size statue of
Colonel Sanders himself to put on the sidewalk outside the door. These were Weston’s
idea. Respected brand names and authenticity are highly valued in Japan, and the move
made KFC outlets instantly recognizable.
Kentucky Fried Chicken in Japan spent $10 million a year on television commercials
alone. The account was handled by a joint venture, that one between a Japanese
advertising firm and the McCann-Erickson agency1.
Another aspect of the company’s marketing effort is still its extensive training of
employees. When they start, they get nine days of basic operation training and four days
of on-the-job training. The purpose of the training is not only to develop skills but also
to create company loyalty. Every morning KFC employees all over Japan repeat the
company pledge. The franchisees, who pay KFC a $50,000 licensing fee plus 4 percent
of their yearly gross, are similarly imbued with company spirit, though in a more relaxed
atmosphere. In addition, they must contribute 1.5% of gross sales to a company fund for
advertising and use 3% of their gross sales for local promotion.
Every year they are invited to an elegant restaurant, at company expense, the night of the
annual KFC convention. The $40,000 this event costs is considered a worthwhile
expense.
Before opening a restaurant, the Japanese pursue a well-established strategy of personal
selling. Capitalizing on the social nature of much of Japanese business, KFC
representatives pay calls on local merchants in the neighborhood around an outlet. The
store’s managers introduce themselves to the other businessmen, offering gifts of
smoked chicken and discount coupons for opening day.
Beyond its marketing expertise KFC had one more asset2 apparently working for it: local
superstition. “KFC’s buildings are shaped like pagodas”3, Weston explains, “and our
company colors are red and white, Japan’s national colors that stand for happiness. And
we usually try to open our new stores on one of the twelve lucky days in the Japanese
calendar. Once, because three is a lucky number, we opened three stores on March 3, the
third day of the third month”.
1. a well-known U.S. advertising agency

2. advantage
3. religious building of the Far East
Introduction to the problem. Competition in the fast-food chicken business is increasing

all over the world. The real problem is to find new KFC countries and new locations within
existing KFC countries.
PART 2
ADAPTING TO INTERNATIONAL MARKETS: FRANCHISING

Franchising is a form of business ownership that is used by KFC and is becoming more
common in many industries and countries.
Most KFC restaurants are franchises: they are owned by independent operators
(franchisees) who buy a license from the company (franchisor) to open a restaurant at a
specific location. With the license, franchisees purchase the right to use a corporate identity
and corporate design: the image of KFC as well as the particular packaging, store design
and way of preparing chicken associated with the company. KFC franchisees are required
to pay the parent company an initial fee of about $50,000 and monthly fees of about 4% of
their gross (pretax) sales. In addition, they must contribute 1.5% of gross sales to a
company fund for advertising and use 3% of their gross sales for local promotion.
The popularity of franchising stems largely from the fact that it combines the advantages
of small and large businesses. In the traditional form of franchising, a manufacturer relies
on franchisees to distribute its product. This form still accounts for three quarters of all
franchising. Auto dealers, service stations, and soft-drink bottlers are prominent examples.
Recently another type of franchise arrangement, known as business format franchising, has
become popular. In this kind of franchise, the franchisor supplies not only the product and
trademark but a complete business plan, including a marketing strategy, operating manuals,
quality control, and two-way contact. Restaurants, convenience stores, auto parts stores,
real estate agencies, car rental agencies, cleaning services and exercise studios are just a
few of the areas in which business format franchising is found.
From the franchisor’s point of view, the advantages of this way of doing business
include the following:
Raising capital
Franchising is a way of raising capital to expand the business. Some capital comes to the
parent company through fees paid to acquire the franchise in the first place. More
important, franchisees bear the costs of setting up their operations.
Economies of scale
Franchising makes it possible to achieve economies of scale in producing the supplies that
the franchisor provides to franchisees. The franchisor can also get discounts from its own
suppliers by buying in large volumes.
Motivation
Owners of local franchises often work harder and are more highly motivated than managers
of branch outlets.
Responsiveness
Franchises may be more responsive to local conditions and may be able to bring in business
through contacts with people in the local area.
Labour relations
Because franchisees are not employees of the franchisor, problems of labour relations are
avoided.
Among the disadvantages, from the franchisor’s point of view, are these:
Credit demands
The franchisor often has to provide credit to franchisees. This cuts into the power of this
business form as a means of raising capital.
Costs of control
Quality standards cannot be maintained without the high cost of training franchisees and a
staff of travelling supervisors.
Disputes
Disputes with franchisees can arise over purchasing requirements, franchise terminations,
exclusive territories and so on.
For entrepreneurs without a lot of money or business experience, franchises offer many
advantages. The US Small Business Administration estimates that 65% of new businesses
in the US fail within five years, whereas fewer than 5% of franchise-owned outlets fail.
Besides lower risk, franchises offer the potential for high earnings. People with little
knowledge of business can buy into a good company and take advantage of established
products and successful business practices.
The major advantages to the franchisee of this form of business include the following:
Management aid
Weak management is by far the most common reason for small-business failure.
Franchisees of a strong parent firm get help with all phases of management. First, they buy
a pretested business concept – all they have to do is turn the key. Second, they often get
special training. Third, they get detailed instructions and support in every aspect of day-to-
day operation, from menu planning to local advertising.
National marketing
The marketing efforts of franchisors include not only advertising but also market research,
development of new products, and so on.
Financial help
Many franchisors finance part of the start-up costs of a franchise. Others provide short-
term credit on purchased supplies. In many cases, training for franchisees includes tips on
dealing with local banks and other financial institutions.
Among the disadvantages, from the franchisee’s point of view, are the following:
Sharing of profits
The franchisees, unlike an independent proprietor, must share profits with the parent firm.
The payments to the franchisor may take the form of a purchase price or a percentage of
sales.
Reduced independence
The franchisee has nowhere near the independence of other proprietors. The parent
company often insists on very detailed standards. This can be especially frustrating when
it keeps the franchisee from cutting costs or adding to the product line in ways that would
improve the operation.
Disputes with the franchisor

Many franchisees often get into serious disputes with their franchisors. Nonrenewal of the
franchise agreement for reasons that the franchisee considers unfair is one major source of
dispute.
When the pros and cons of franchising are weighed, it is easy to see why this business has
become so popular. Most of the disadvantages can be minimized with proper foresight.
There are franchises in many different industries. All of them function through the sale of
licenses, though the fees vary from 1.5% to 12% of gross sales.
Franchising is becoming more common in many countries because it suits decentralized,
service-oriented economies.
International franchising can be an extremely effective way of getting established on a

foreign market. There are, of course, problems. One difficulty is the need for a high degree
of standardization. However, this cannot translate into rigid uniformity. Fast-food
franchises, for example, vary products and product lines to suit local conditions and tastes.
Rapid expansion is certainly a key objective in building a franchise system abroad. But the
expansion goal must be balanced against the need to maintain standards. By all means the
local franchisee knows the market best and is better qualified to make decisions about
serving the local market than the franchisor. But special attention should be paid to the
problems of selecting and training franchisees in the foreign country, otherwise the
company image may be tarnished.
Reading and Writing [146]

Task 1 [4]
Look at the section of the Case Study called “Examining the products” and answer the
questions below.
1 Why are KFC restaurants popular? Consider, for example, service, image, 3
quality, taste, price and convenience.
2 Are there KFC or other fast-food chicken restaurants in Moscow or your 1

hometown?
Task 2 [16]
The questionnaire that follows asks for the kind of information KFC executives could use
to determine promising locations for new restaurants.
1 Use the questionnaire to find out about your classmates’ eating habits and 12
attitudes toward restaurants. Answer the questions; then work in pairs. Ask your
partner the questions and take notes on the responses.
Eating Habits and Consumer Attitudes:

Fast-Food and Other Restaurants
1 How often do you eat restaurant food rather than You Your Partner
home cooking? Have your habits changed recently?
Why?
2 Do you eat in fast-food restaurants (for example,

KFC or McDonald’s)? If so, how often? If not, why?
3 Do you eat breakfast, lunch, dinner, or snack in fast-

food restaurants?
4 Do you think that fast-food is junk food (high-
calorie, low-nutrition food) or healthy food?
5 When you travel, do you patronize fast-food

restaurants?
Why or why not?
6 Do you order take-out food? If so, how often? If not,

why?
2 Summarize the information from the responses and write around 8 sentences 4
about consumer eating habits.
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
Task 3 [36]
Read through the three articles (Part 1) to gather background data on the KFC expansion
into Japan, including the information to answer the following questions:
1 What were the opportunities for KFC to penetrate the Japanese Fast Food 8
Market? The first one has been done for you.
1. Population – 120 million
2. ____________________
3. ____________________
4. ____________________
5. ____________________
2 How did the joint venture with Mitsubishi help KFC to overcome 4
obstacles in the market?
3 What did Mitsubishi, which had bought into some large chicken farms, 1
hope to gain from the deal?
4 What percentage of KFC outlets opened in Japan was directly run by the 2
company and what was the percentage of franchises?
5 In what type of building is a KFC outlet located in Japan unlike a typical 1

KFC outlet in the US?
6 How may the outlets in the US and Japan differ in size? What is usually 2
done for it?
7 Why is site selection particularly important in Japan? 1
8 How did KFC try to cater to the Japanese taste in food? 3
9 What on-site promotional strategy was adopted by KFC in Japan? Why 4

was it effective?
10 Do you think the joint venture with the Japanese ad agency helped KFC 1
too? What information did it give the company access to?
11 What for do you think every morning KFC employees all over Japan 1
repeat the company pledge?
12 What strategy does KFC develop to encourage their franchisees in Japan? 2

How much does it cost?
13 What promotional tool do KFC representatives use before opening a 2

restaurant? What does it include?
14 Do you think that KFC’s success was mostly a question of good timing or 4
of adaptation? How important were KFC’s efforts to tune in to the
Japanese style of doing business?
Task 4 [20]
Look at Part 2 of the Case Study. Answer the following questions:
1 What is the business relationship between KFC and its franchisees? 4
2 What are the benefits of franchise ownership for franchisees? (Enumerate 7

them).
3 What are the risks of acquiring franchise ownership? (Enumerate them). 3
4 Are there particular advantages for such entrepreneurs as young people? 2
5 Why might franchising be an effective way for a company to expand 3

internationally?
6 What kinds of goods and services are sold through franchises? 5
Task 5 [10]
Find a simple way to explain what the following words mean. The first phrase has been
done for you as an example.
are well disposed toward tend to like
a fifty – fifty joint venture
to tune in to their way of doing business
prototypes
pledge
capitalizing on the social nature

Task 6 [10]
Reviewing Background Information and Vocabulary. Read the sentences and find the
word or expression in the box that means the same as the italicized words.
a 1 The Japanese economy has grown dramatically over

retail stores the last generation. It now outranks the
economies of many nations in the world.
b 2 Kentucky Fried Chicken saw a big opportunity in
aggressively pushed the Japanese market: The economy was booming
and chicken was a favorite food already.
c did better than before 3 .Loy Weston, head of KFC-Japan, thought he might
get Japanese consumers to switch from chicken
yakitori, broiled chicken on a stick, to crispy
Kentucky Fried Chicken.
d 4 Weston hired Shin Okuhara, a Japanese printing and
be customers of paper executive who had hoped to do business with
KFC. Okuhara helped the U.S. executive design
Japanese KFC outlets that would appeal to the local
customers.
e 5 Kentucky Fried Chicken also cooperated with
restaurant food Mitsubishi, a large trading company that owned many
packaged to take chicken farms. Mitsubishi executives helped Weston
home to eat comply with Japanese laws.
f 6 To get local people to patronize KFC, Weston decided
change that the restaurants should include such familiar
sights as models of food in the window.
g 7 Although the original KFC restaurants in the United
six times larger States had sold mostly take-out, the ones in Japan
were designed mainly as eat-in restaurants.
h 8 The Weston-Okuhara marketing strategy was a
growing rapidly success. Several of the restaurants attracted huge
numbers of customers and broke records.
i 9 Kentucky Fried Chicken was part of a general
obey Growth in fast-food restaurants in Japan. During
KFC’s early years, the fast-food business there grew by
a factor of six.
j 10 Kentucky Fried Chicken muscled its way to the top
is larger than of the Japanese fast-food industry by adapting its
marketing to the Japanese business environment,
hiring Japanese executives, and setting up joint
ventures with Japanese firms.
Task 7 Memo [20]
Write a memo on behalf of Loy Weston, KFC’s Marketing Director (he was promoted to
the Head Office after his successful activity in Japan), to his subordinates.
Inform them about the forthcoming meeting devoted to further expansion of the company.
Appoint the date and time of the meeting. You want your subordinates to submit their ideas
and proposals on the subject prior to the meeting.
Task 8 Letter [30]
Write an e-mail to your friend, a well-qualified legal adviser, who is on holiday at present.
Tell him that you are going to become a KFC franchisee and open a restaurant in your city.
Give a few arguments to explain your intention but also mention the risks of franchising.
As you are in doubt, ask your friend for advice.
Speaking
Task 1 ∙ Presentation
Imagine you are a Marketing Manager working for a small British company that has been
unsuccessful on the fast-food market. You think it would be good for your company to
merge with another firm and buy a franchise from KFC. Prepare a presentation for the
Board of Directors. The aim of your presentation should be to propose a new KFC
restaurant location and create marketing strategies adapted to it.
Use the notes below when preparing your presentation.
The Fast Food Market in __________________________

(select a city, country)
Opportunities
(Summarize the reasons why the place you have suggested is a good location for a
new KFC outlet. You may want to mention, for example, population, wealth, attitudes
toward American products, and the popularity of chicken there.)
Obstacles
(Describe one or two possible disadvantages to the suggested location. You may want
to consider, for example, local laws and sources of supply.)
A Marketing Strategy for _____________________________

(select a city, country)
Store Location
(Explain the kind of street and building you suggest for the restaurant, and why.)
Menu
(Describe any menu changes or additions to adapt to local taste preferences.)
Advertising
(Describe who the most likely restaurant patrons would be and how to advertise to
them. Consider both on-site and TV advertising strategies.)
Local Traditions
(Explain a local tradition that could help increase sales at the new KFC location.
For example, you may want to mention how to take advantage of holidays.)
Speaking
Task 2 ∙ Dialogue
Candidate 1
Imagine you have decided to start a business – you would like to open a restaurant.
You are in favour of becoming a franchisee because of the following:
- Lower risk of failure;

- Potential for high earnings;
- Dealing with an established product;
- Special training;
- Support in everyday operation;
- Financial help.
Your colleague suggests that you should become a sole proprietor. You oppose it due to
the following:
- High risk of failure;

- Full responsibility for the company operation;
- Starting an absolutely new deal in a new sphere;
- No management aid;
- No financial help.
Candidate 2
Imagine your colleague has decided to start a business – he/she would like to open a
restaurant.
You are not in favour of his/her decision to become a franchisee due to the following:
- Paying an initial fee for setting up the operation;

- Sharing profits with the franchisor;
- Reduced independence;
- Disputes with the parent company.
You suggest that he/she should become a sole proprietor because of the following:
- Accumulating the company profit;

- Complete independence;
- No disputes with the parent company.
Speaking ∙ Role-play
Conducting a Business Meeting
Negotiations between Representatives of Two British Companies

Two small British companies have been unsuccessful on the fast-food market. They
decide to merge and buy a franchise from KFC. Each of the companies has their own
suggestion about the new KFC restaurant location. The problem is as follows: which
of the two suggested locations to choose to open a franchise restaurant.
The purpose of the meeting is to come to an agreement and choose the most
appropriate location for the new KFC restaurant. The parties should also work out
an effective marketing strategy.
2. Form two negotiating teams, each of them will represent the

management of a small British company.
During the negotiations the following list of items may be discussed:
1) Opportunities for a KFC franchise in the chosen country in terms of the

following:
- population
- wealth
- attitudes toward US products
- restaurant industry
- popularity of chicken
2) Obstacles for a KFC franchise to overcome:

- laws
- customs
- source of supply
3) Store location:
- type of building
- size of store
- site selection
4) Menu adaptations.
5) Advertising:
- on-site strategies
- TV advertising
6) Local traditions.
3. Options:
1) Compromise
The teams come to a compromise. One of the teams changes their opinion and
accepts the choice of the other team. In this case the latter team is the winner,
but the first team also deserves praise.
2) Failure
The teams fail to manage diversity and are unable to come to an agreement. They
admit failure and give up the idea of merger.
3) Supplementary Option: New alternative

The teams are unable to come to a compromise and consider a possibility of
starting a business and opening a jointly owned restaurant. They discuss the
advantages of opening their own business rather than buying a franchise and
discuss what kind of restaurant it should be.
B. Conducting the Meeting
Agenda
1. Opening the meeting. (5 min.)

2. Making presentations. (15 min. + 15 min.)
The representatives of the two teams make presentations about the new KFC
restaurant locations and the marketing strategies adapted to them.
3. Negotiation. (30 min. – 40 min.)

4. Summarizing the main points of agreement and disagreement. (10min.)
5. Closing the meeting. (5min.)

How a small dairy store became world famous
Stew Leonard’s is a chain of five supermarkets in Connecticut and New York and
Fortune magazine listed Stew Leonard’s as one of the “100 Best Companies to Work
for”.
From its humble beginnings as a small dairy store founded in 1969 with seven
employees, Stew Leonard’s has grown to become not only the World’s Largest Dairy
Store, but one of the most renowned grocery stores, with annual sales of almost
$400 million and almost 2,000 Team Members. In addition to the headquarters store
in Norwalk, Connecticut, Stew Leonard’s has stores in Danbury and Newington,
Connecticut, Yonkers and Farmingdale, New York, and has plans for new locations.
PART 1
BACKGROUND ∙ Examining the Products

(The headquarters store)
• is located at 100 Westport Avenue Norwalk, Connecticut 06851;
• was established in 1969;
• has 650 employees;
• has annual sales of $ 100 million.
The store is 32,323 square metres in area. It has four large departments, they are
as follows:
- the Dairy Department;
- the Bakery Department;
- the Fish Department;
- the Produce Department.
Stew Leonard’s Dairy Store is open from 7 a.m. to 11 p.m. every day except
December 25, Christmas.
Stew Leonard has been very successful in the competitive U.S. supermarket business.
In addition to high profits, he has won high praise, including the Presidential Award
for Entrepreneurial Achievement and an Honorary Doctorate of Business from the
University of Bridgeport (Connecticut). He approaches the often dull but necessary
business of buying and selling groceries with creativity and fun.
1. BEGINNING THE BUSINESS

In Connecticut, a northeastern state near New York, Stew Leonard’s father was the
owner of a small dairy. He used to take Stew along when he delivered milk to families
in the morning. From childhood, Stew Leonard remembers wanting to be somebody,

wanting to be noticed and appreciated. Perhaps it had something to do with being
the sixth out of seven children. After studying dairy manufacturing at the University
of Connecticut, Stew Leonard assumed he would go into a partnership with his father.
But his father died suddenly, and Stew found himself taking over the family business
with his brother. Fifteen years later, unexpected circumstances caused another
change: the state put a highway right through the land where the dairy was located.
Stew surveyed customers to see what they wanted, and he visited other small dairies
to find out how they were doing. The farmer who was bottling and selling his milk on
the premises, rather than selling it to a middleman was doing well, while many of the
old-fashioned dairies were going under. Stew Leonard decided to redesign his dairy
business to suit the changing times and his personality.
More than door-to-door service, Stew Leonard found out that customers wanted good
milk prices. So, he ended deliveries and instead created a factory-outlet dairy store.
He bought raw milk from farmers in huge quantities, processed it in a glass-enclosed
plant in the middle of the store and sold it in standard half-gallon (1,8 liter) cartons
with his name and a picture of a cow on them. His slogan was, “You’d have to own a
cow to get fresher milk.”
As the business grew, he created more and more of a Disneyland Dairy Store where
customers might come and bring their children to be entertained. As Leonard
remarks, “Where children go, their mothers will follow.” Not long after, he began
adding to his original list of eight products and enlarging the building until it became,
as proclaimed on the building, “the world’s largest dairy store.”
2. BUSINESS PRINCIPLE: SUPERMARKET SHOPPING

SHOULD BE FUN
To Stew Leonard, the distinction between a supermarket and an amusement park is
slight, and not necessarily useful. “Everyone feels supermarket shopping is
drudgery”, Mr. Leonard said in an interview in his office overlooking the selling floor.
“I try to make it fun.” Mr. Leonard clearly has the most fun greeting customers, and
most are delighted to see him. As he made his way through the produce section
during the interview, Dr. Shelley Dreisman of Westport, Connecticut, happily shook
his hand, but her daughter, Emily, age six, shyly turned away. “She only wants to
shake hands with the cow,” Dr. Dreisman explained. That cow, it turns out, is often
Mr. Leonard, too. When the burdens of running a $100 million business seem too
great, he puts on a cow suit he keeps in his office closet and goes out and hugs
customers…
Outside the store, in the parking lot, there is a petting zoo, a collection of live
barnyard animals including geese, calves, baby goats, and sheep. Even the petting
zoo serves several purposes. Mr. Leonard talks of it as an afterthought. When he
sought to buy the property twenty years ago, the elderly woman who owned it
insisted on keeping her farm animals on it. Now, farmers lend him baby animals,
which he periodically exchanges for younger models. The farmers like the
arrangement, he said, because the animals come back well fed. Mr. Leonard pays for
part of their diet, but the animals also get food from shoppers, who buy it in the
store.
3. BUSINESS PRINCIPLE: LISTEN TO THE CUSTOMER

Stew Leonard elicits opinions from his supermarket customers through monthly
customer interviews, called focus groups, and a suggestion box. Every day over 100
suggestions are received, typed up, and distributed to the appropriate departments.
He tries out many of these suggestions, even if they seem unlikely.
According to Mr. Leonard, two recent successes came from customer ideas put into
the suggestion box. One was to sell strawberries loose, like tomatoes, in the big flat
trays from the farm, not in plastic one-pint (0,551 liter) baskets.
The produce manager said that if the strawberries were set out loose, people would
eat them and the leftovers would never sell. He turned out to be right, but customers
who can choose strawberries individually will drop them into plastic bags without
watching the total, Mr. Leonard discovered, and some will buy twelve dollars worth.
Sales tripled.
Then there were the turkey dinners. Mr. Leonard was selling them with vegetable
and stuffing, fresh but refrigerated, at $5.95 each, and roasting just three turkeys a
day in the store’s kitchens to keep up with demand. A customer suggested selling
them at the hot-food bar, a growing part of the business; so he did, and demand
jumped to twenty-one turkeys a day.
But some customers said they did not like paying $2.99 a pound for the gravy mixed
in, or that the gravy had too many calories. Others said there was not enough gravy.
So he started putting the gravy on the side, and demand rose to more than fifty
turkeys a day.
PART 2
MAKING DECISIONS – SATISFYING THE

SUPERMARKET CUSTOMER
Introduction to the Problem. Stew Leonard has created an exceptionally profitable
supermarket by generating high-volume sales of quality food at good prices. His
success is also built on a policy of satisfying the customer, which creates a high
degree of customer loyalty. But some customers are clearly not happy. Is it
possible to satisfy all of them?
Stew Leonard has managed to make extraordinary profits in the highly competitive
U.S. supermarket industry by redesigning the business in significant ways. Executives
of the company summarize their approach to business in the name of its founder: S-
T-E-W. S stands for Satisfy the Customer, T for Teamwork, E for Excellence
and Quality, and W for Wow!
S is for Satisfy the Customer. Stew Leonard’s approach to customer service is
distinctive. One customer, after complaining that the steak was tough, was given not
only a new steak but a bouquet of roses.
As the rock commitment at the store entrance says, “The customer is always right”.
T is for teamwork. The first team is the family. The Leonard family has over twenty
of its members working for the company, and over half of the employees have a
relative working for the company. Teamwork goes beyond family, though, to become
a way of working with the customer and with other employees. In fact, nobody talks
about “employees” at Stew Leonard’s; everyone is a “team member”. E is for
Excellence and Quality. Instead of the typical 30,000-item supermarket, Stew
Leonard’s Dairy Store inventory includes only about 2,200 top-selling items. With a
state-of-the-art computer system, executives can track individual items and then
make adjustments in order to increase sales. Besides reducing the number of
products he sells, Stew Leonard has brought a factory-outlet model to the
supermarket. Produce is purchased directly from the growers. Such items as milk
and bread are produced and packaged right on the premises. Both of these practices
eliminate costly handling by middlemen and distributors. The store makes money
because it sells a high volume of each high-quality product at a competitive price.
W is for Wow! Stew Leonard is the first to tell you that he has learned a lot about
business from Disneyland. The founder of this store is a showman at heart whose
motto is “Show and Sell”. From the beginning, he wanted to blend entertainment
with shopping and eliminate the drudgery. There is Wow! in the huge displays, the
entertainment, and in the crowds of happy customers.
Despite its success, few supermarkets have imitated the S-T-E-W model so far. The
factory-outlet specializing in one type of merchandise is transforming other
industries, however. Toys “R” Us, for example, has overtaken a big share of the toy
market with this approach. If you ask Stew Leonard why so few supermarkets imitate
his, he will say that running this kind of business takes a lot of hard work.
READING & WRITING
Time allowed: 2hr.15 min.

Maximum marks: 120
Task 1. [2]
Look at the first page of the case study and answer the questions.
1. How much is the company annual turnover? 1
2. Why has Stew Leonard been very successful in the competitive U.S. 1
supermarket business?
Task 2. [24]
Read through the three articles (Part 1) to gather background data on the
company, including information to answer the following questions. (Full
sentences are not required).
1. Why do you think Stew Leonard went to university to study dairy 2
manufacturing?
2. How did he redesign his dairy business after fifteen years of operation? 2
3. What were the two main advantages of creating a factory-outlet dairy store? 2
4. How did entertainment help Stew Leonard to increase sales? 2
5. What role does Stew Leonard play when trying to make supermarket 2
shopping fun?
6. Why does Mr Leonard talk of his petting zoo as an afterthought? 2
7. What business purposes does the petting zoo serve? 2
8. How does Stew Leonard elicit opinions and suggestions from his customers? 2
9. Why does Mr Leonard try out many of the suggestions they receive? 2
10. What was the essence of the strawberry suggestion? 1
11. What was the advantage of that suggestion? 2
12. What was its effect on sales? 1
13. How did demand change after putting into effect the turkey suggestions? 2
Task 3. [14]
Find a simple way to explain what the following words and phrases mean.
The first one has been done for you as an example:
on the premises in the building

(a) middleman
(a) factory-outlet
produce (n)
try out a suggestion
stuffing (n)
(a) hot-food bar
put the gravy on the side
Task 4. [10]
Reviewing Background Information and Vocabulary. Read the sentences

and find the word or expression that means the same as the italicized words.
a rise 1 When Stew Leonard was a child, he had a strong desire to be

somebody. He wanted to do important work in the
community.
b brought into the store 2 Stew Leonard’s father owned a dairy and had a milk route.
and immediately sold He delivered bottles of milk door-to-door.
c supposing 3 As a young man growing up, Stew admired his father. Stew
studied dairy manufacturing, assuming that he would go into
the family business with his father.
d unpleasant work 4 When the state built a highway through his property, Stew
looked around at other small dairies in the area. He noticed
that many of them were going under, so he decided to make
some changes.
e be respected by 5 Stew decided to build a dairy that could become a tourist
others attraction. He would bottle milk, sell it and entertain people
right on the premises.
f in the building 6 Little by little, the dairy store grew into a supermarket with
entertainment. Stew Leonard wanted customers and their
children to think of grocery shopping as fun, not drudgery.
g to individual houses 7 He planned many of the entertaining features of the store,
but the petting zoo came as an afterthought. It is now one of
the most popular attractions for children.
h regularly offers for 8 Stew Leonard’s store stocks only about 700 items, while the
sale typical U.S. grocery store may have 15,000. The idea is to
sell a lot of each item. This keeps the prices down and builds
customer loyalty.
i a later and less 9 To keep prices low and quality high, Stew buys truckloads of
important idea produce directly from farmers. These items are turned over
quickly.
j going bankrupt 10 Customers urged him to let them choose their own
strawberries, instead of buying them in prepacked baskets.
This change caused sales to jump dramatically.
a b c d e f g h i g
Task 5. [20]
Stew Leonard’s Dairy Store, owes a great deal of its success to customers’ suggestions.
The idea that “the customer is always right” is an essential business policy. Soon Stew
Leonard is going to hold one of his monthly focus group meetings with customers and
managers to determine what they do not like.
In view of the meeting he is writing a memo to all his managers reminding them about
the company’s basic principles in the supermarket business. He also explains the
principles and comments on them to encourage the managers to find ways of answering
some difficult suggestions from loyal customers.
Write the memo on Stew Leonard’s behalf.
Stew Leonard’s basic principles are as follows:
1. Our mission is to create happy customers.

2. The customer who complains is our friend.
3. It’s five times harder to find a new customer than it is to keep an old one.
4. Lower the price and sell the best. Word of mouth will do the rest.
5. Management by appreciation: appreciate your customers, employees and
suppliers.
Memorandum
To:
From:
Date:
Subject:
Task 6. [30]
Your name is John White and you are in charge of the Dairy Department at Stew
Leonard’s Dairy Store. Recently you received an email from your regular customer Mr
Michael Thomas, including a suggestion about your milk sales.
It was the following: “I live in the senior citizen housing next door and like to shop here.
Your milk is very good, but I need smaller cartons. Half-gallons are too big for me.”
You are very proud of the quantity and quality of items you sell and you believe in
satisfying the customer. But you also have some limitations. Use the information on the
next page to help you respond to the customer’s suggestion.
Dairy Department
• Bottles milk on the premises in a glass-enclosed milk processing plant.
• Packages by machine 9,000 standard half-gallons of milk per hour (1/2 gallon = 1.9
liter).
• Sells weekly 96,000 half-gallons of milk and 4.8 tons of butter (1 ton = 0.9 metric
ton).
Draft an email to your loyal customer. Explain what action will be taken as a result of
his suggestion. If no action is taken, explain why.
Task 7. [20]
Read carefully through Part 2 of the case.

Imagine that Stew Leonard has decided to open a number of multiples despite severe
competition. They will have to develop their policy of satisfying the customer in order to
attract as many new shoppers as possible.
You know that the name of the company’s founder S-T-E-W summarizes his creative
approach to business. Give an alternative interpretation of this name to help them reach
new customers and meet competition.
Send an email to Stew Leonard on your own behalf.

SPEAKING
Candidate 1
Task 1.
You now have a few minutes to prepare a talk using the notes below and anything that
you remember from the case. Your talk should be no longer than five minutes. You
should make a presentation of Stew Leonard’s Dairy Store analyzing the store policies on
dealing with customers, marketing the products, and managing employees.
Stew Leonard’s Approach to Supermarket Sales
Dealing with Customers

1. “Our mission is to create happy customers.”
2. “The customer who complains is our friend”.
3. “It’s five times harder to find a new customer than it
is to keep an old one”.
Marketing the Product

4. “Lower the price and sell the best. Word of mouth
(personal recommendations) will do the rest.
5. “Pile it (the product) high and watch them buy”.
6.“If you wouldn’t take it home to your mother, don’t
put it out for our customers”
Managing Employees
7. “Hire people more for their
attitudes than for their skills or
intelligence.”
8. “Management by appreciation:
appreciate your customers,
employees, and suppliers”.
Task 2.
Imagine you are Stew Leonard, President of the company. You believe that your business
depends on satisfying as many customers as possible.
• Your competition is ninety-three other food stores within a ten-mile circle around the
store.
• You have about 100,000 customers per week parking their 50,000 automobiles in your
parking lot.
• You think it is five times harder to find a new customer than it is to keep an old one.
Recently one of your top managers received the following suggestions from your loyal
customers.
Suggestion 1.”The fish bothers me. You say it’s fresh, but you sell it in plastic
supermarket packages. It doesn’t look fresh.”
Suggestion 2. “The strawberries trucked in from California just don’t have any taste.
They look good, but I’m always disappointed.”
Suggestion 3. “I’ve been a customer for fifteen years. Last month my car was dented by
a shopping cart in your overcrowded parking lot. I think you should pay the $2,000 repair
bill.”
During the session you will be asked to discuss the suggestions with your top manager
and find appropriate responses.
Use the information below to help you respond to customers’ suggestions.
Fish Department
• Packages fish on the premises, and fills some individual orders.
• Brings fresh fish from New York and Boston fish markets daily.
• Sells weekly 3,000 pounds of fillet of sole and 6,000 pounds of shrimp (1lb=45kilo).
Produce Department
• Creates huge, attractive displays of fresh fruit and vegetables in the store.
• Brings truckloads of fresh produce directly from California and local farmers.
• Sells weekly such quantities as 150,000 ears of corn and 36,000 pounds of bananas.
SPEAKING
Candidate 2
Task 1.
You now have a few minutes to prepare a talk using the notes below and anything that
you remember from the case. Your talk should be no longer than five minutes. You
should make a presentation of Stew Leonard’s Dairy Store analyzing the store policies on
dealing with customers, marketing the products, and managing employees.
Stew Leonard’s Approach to Supermarket Sales
Dealing with Customers

1. “Our mission is to create happy customers.”
2. “The customer who complains is our friend”.
3. “It’s five times harder to find a new customer than it
is to keep an old one“.
Marketing the Product

4. “Lower the price and sell the best. Word of mouth
(personal recommendations) will do the rest.
5. “Pile it (the product) high and watch them buy”.
6.“If you wouldn’t take it home to your mother, don’t
put it out for our customers”
Managing Employees
7. “Hire people more for their
attitudes than for their skills or
intelligence.”
8. “Management by appreciation:
appreciate your customers,
employees, and suppliers”.
Task 2.
Imagine you are one of the top managers at Stew Leonard’s. Recently you received the
following suggestions from your loyal customers.
Suggestion 1. “The fish bothers me. You say it’s fresh, but you sell it in plastic
supermarket packages. It doesn’t look fresh.”
Suggestion 2. “The strawberries trucked in from California just don’t have any taste.
They look good, but I’m always disappointed.”
Suggestion 3. “I’ve been a customer for fifteen years. Last month my car was dented by
a shopping cart in your overcrowded parking lot. I think you should pay the $2,000 repair
bill.”
During the session you will be asked to discuss the suggestions with Stew Leonard,
President of the company, and find appropriate responses.
Use the information below to help you respond to customers’ suggestions.
Fish Department
• Packages fish on the premises, and fills some individual orders.
• Brings fresh fish from New York and Boston fish markets daily.
• Sells weekly 3,000 pounds of fillet of sole and 6,000 pounds of shrimp (1 lb.= 45 kilo).
Produce Department
• Creates huge, attractive displays of fresh fruit and vegetables in the store.
• Brings truckloads of fresh produce directly from California and local farmers.
• Sells weekly such quantities as 150,000 ears of corn and 36,000 pounds of bananas.
VIDEO TASKS
Video 1 ∙ Stew Leonard’s Adventure (by Will Pemble)

Time: 10 min
Part A
Watch the video twice and answer the questions:
Useful words and expressions:
Apple cider (AmE) – a non-alcoholic drink made from apples
1) How big is the store Will is talking about?

_____________________________________________________________________________
2) Where is it located?
_____________________________________________________________________________
3) What does Will like about the entrance to Stew Leonard’s? Why?
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
4) What section and product does Will show us first?

_____________________________________________________________________________
5) What’s special about that product?

_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
6) If you come hungry to Stew Leonard’s, do you think you will stay hungry long when
shopping?
_____________________________________________________________________________
_____________________________________________________________________________
Part B
Watch the video once and answer the questions:
Make sth on site = make sth on the premises

Animatronics – the method of using moving models that look like real animals or people in films
Moo (v) – a cow moos
Quack (v) – a duck quacks
Duckling = a young duck

Do a flip = jump up and turn over in the air
7) Is the shop attractive to coffee lovers? Why?

_____________________________________________________________________________
8) What can you buy in their bakery section?

_____________________________________________________________________________
9) What cheese does Will demonstrate and what does he say about it?
_____________________________________________________________________________
10) How do they encourage customers to buy bananas?

_____________________________________________________________________________
_____________________________________________________________________________
11) What do they sell near the meat section?

_____________________________________________________________________________
12) What other moving models can we see on the screen?

_____________________________________________________________________________
_____________________________________________________________________________
Part C
13) What draws our attention in the fish section?

_____________________________________________________________________________
_____________________________________________________________________________
14) Why does the potato chips section attract customers?
_____________________________________________________________________________
_____________________________________________________________________________
15) What food from other countries can you buy at Stew Leonard’s?
_____________________________________________________________________________
16) What other goods do they offer at Stew’s?

_____________________________________________________________________________
17) What does Will say about Stew Leonard’s at the end of the video?
_____________________________________________________________________________
_____________________________________________________________________________
Video 2 ∙ Stew Leonard’s Grand Opening in Farmingdale

Time: 5 min
Part A
In the making = in the process of being created or produced

Expedite smth = to make smth happen quickly or easily
1) Where did Stew Leonard open his new store?

_____________________________________________________________________________
2) How long did it take Stew Leonard to come to Long Island?

_____________________________________________________________________________
3) How did shoppers expedite their plans for opening the store?
_____________________________________________________________________________
4) When did the first couple arrive?

_____________________________________________________________________________
5) What officials came to the opening ceremony?

_____________________________________________________________________________
_____________________________________________________________________________
6) Why are locals happy about opening the new store?

_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
Part B
1) Why are most supermarkets closing?

_____________________________________________________________________________
2) What’s Stew Leonard’s strong point?

_____________________________________________________________________________
_____________________________________________________________________________
3) How many people work for the store?

_____________________________________________________________________________
4) How many people overall do they have at Stew Leonard’s?

_____________________________________________________________________________
5) What do the large crowds of shoppers mean?

_____________________________________________________________________________
6) Why is Stew so happy to say that they are a family business? What do his words imply?
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
VIDEO 3 ∙ Stew Leonard’s Grocery Store, Newington, CT.

Time: 2.5 min

Ground beef = mince (BE) – meat that has been cut into very small pieces using a special
machine
Cluck (v) – a chicken clucks
1) What sections and products can we see on the screen?

_____________________________________________________________________________
_____________________________________________________________________________
2) What for do they use moving models?

_____________________________________________________________________________
_____________________________________________________________________________
3) Why do you think they have a cow that moos, chickens that cluck and ducks that
quack?
a)
_____________________________________________________________________________
_____________________________________________________________________________
b)
_____________________________________________________________________________
_____________________________________________________________________________
4) Would you like to go shopping there? Why (not)?

_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
Учебное издание
Дьякова Марина Львовна

Чижевская Наталья Владимировна
Business English through Case Studies
для студентов 4 курса ФВМ, групп 2 языка и студентов 2 курса ФМБ
Подписано в печать 11.06.21. Формат бумаги 60X90 1/8

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Минэкономразвития России. 119285, г. Москва, Воробьевское шоссе, 6А
Тел. (499) 143-1235,

e-mail : info@vavt.ru,
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Business English Through Case Studies - PRINT

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Кафедра английского языка

Направление Международный бизнес

Одобрено Редакционно-издательским Советом ВАВТ

Дьякова М.Л., Чижевская Н.В.

Данное пособие составлено на основе Portfolio: Case Studies for

© ВАВТ Минэкономразвития России, 2021.

Our Man in Nam Doa ………………………………………………………… 15

Airbus Industrie and the

Adventure Holidays ……………………………………………………….. 39

Kentucky Fried Chicken

Stew Leonard’s Dairy Store

A Japanese and an American

Contrasts in Culture, Traditions and Behaviour between

United States Japan

A new beginning in Jakarta

Applications are invited for the following position, to be filled

GENERAL MANAGER (YAMACOM INDONESIA)

This position is to be filled by an American employee of Yamacom

1. To report to South East Asia Divisional Director, Mr. Lee Than

2. To be responsible for the overall control and administration of the

3. To be responsible for the financial performance of this subsidiary

4. To initiate new sales systems with a view to expanding new

5. To ensure continuing integration of staff and functions in a

NAME Thomas Jackson 1

NAME Stephanie Martinez 2

COMMENTS A very clever woman with interests in Eastern religions. No direct

NAME Lee Miller 3

NAME Dan Masters Jr. 4

COMMENTS A good leader with an excellent sales record. He is an amateur artist

READING & WRITING

1 What companies merged? 1

3 Why did the merger cause raised eyebrows? 2

9 Study the handout on ‘Contrasts in Culture, Traditions and Behaviour 6

Look at the memo circulated in Yamacom when answering these questions.

2. Identify the four major duties of the GM (Indonesia office). 4

3. What skills/ education should an applicant have to fulfil these 4

4. What helped Weinberg make his final assessment of the candidates? 2

Jackson Martinez Miller Masters

b) 1. Who made comments given in each applicant’s file? 1

2. Why is such information collected? 2

1. People of different cultures have always managed to

On behalf of Mark Weinberg, Yamacom’s Regional Director, deliver a talk to

• the analysis of the present problems in Yamacom Indonesia;

• your view on the present problems in the Indonesian office;

Our Man in Nam Doa

To: Jan Berling

A note from Wikstrőm

Jan Berling acted quickly. He first of all contacted the hostel

1. Unless otherwise stated, assignments will be of three years duration.

6. A schooling allowance of 50% of school fees will be paid for children

Jan Berling calls the Ministry and checks the files

Unable to clarify the situation, While Berling was on the phone to

I look forward to seeing you on your next leave,

Berling prepares for a very important meeting

To: Jan Berling

Dear Mr. Berling

1. Wikstrőm arrived in Stockholm yesterday in a state of severe

2. I received a message from the Minister of Development concerning the

READING & WRITING

1. What line of business are Scanco AB in? [1]

3. What is Jan Berling’s job and where is he located? [2]

4. What are Jan Berling’s duties? [2]

5. What is Nils Wikstrőm’s position? [1]