Lesson 11: Final Presentations and Review
IBUS 718:
Consulting & Organizational Development
in the Multinational Corporation
Summary of this Lesson
In this Lesson, your group presented your final consulting
presentation and we discussed the strengths and weaknesses of
your analysis, recommendations, and report.
Lesson 9: Expanding the Multinational Corporation
IBUS 718:
Consulting & Organizational Development
in the Multinational Corporation
Summary of this Lesson
In this Lesson, you presented your recommendations for Walmart
expansion into a specific country and we discussed the strengths
and weaknesses of your analysis.
Lesson 12: Managing International Teams and Heuristics
IBUS 718:
Consulting & Organizational Development
in the Multinational Corporation
Heuristics Quiz
Decision Making
The process of
i. specifying a problem or opportunity;
ii. identifying alternatives & criteria;
iii. evaluating alternatives; and
iv. selecting from among the
alternatives.
Source: Mark Maltarich & Julian Dalzell
Decision Standards
Optimize
Weighted outcomes
Maximize
Find decision that meets maximum number of criteria
Satisfice
Find the first satisfactory solution
Source: Mark Maltarich & Julian Dalzell
Bounded Rationality
Economic utility models for decision-making
• Optimize – choose the option that is most valuable overall
• Full information, full prediction, unlimited computational power
Real decision-making
• Work with the information you have
Heuristics save time and effort
• Information seeking and information processing
Example: Satisficing
, cognitive limitations, and finite time
Source: Mark Maltarich & Julian Dalzell
Source: Mark Maltarich & Julian Dalzell
Source: Mark Maltarich & Julian Dalzell
Source: Mark Maltarich &
Julian Dalzell
Population of South Korea
Is it greater than or less
than 26 Million people?
How many people is it?
51.74 Million in 2021
Order Effects
The first object is used as a standard
New information is weighted more heavily
New negative information is weighted more
strongly than new positive information
Source: Mark Maltarich & Julian Dalzell
Imagine that the U.S. is preparing for the outbreak of an unusual disease,
which is expected to kill 600 people. Two alternative programs to combat the
disease have been proposed. Assume that the exact scientific estimates of
the consequences of the programs are:
Program A 200 people will be saved
Program B 1/3 probability that 600 people will be saved
2/3 probability that no people will be saved
Program A 400 people will die
Program B 1/3 probability that no people will die
2/3 probability that 600 people will die
Source: Mark Maltarich & Julian Dalzell
•
Sunk Cost
Wason Selection Task
Source: Mark Maltarich & Julian Dalzell
Judgments of Frequency
Availability Heuristic
Words in the English language that:
Start with r (“run”)
Have r as the third letter (“car”)
< 9,000
> 22,000
Source: Mark Maltarich & Julian Dalzell
Recognition
Which African nation has a
greater population?
• Malawi
• Libya
(~19.65 MM)
(~6.95 MM)
Source: Mark Maltarich & Julian Dalzell
Representativeness
Source: Mark Maltarich & Julian Dalzell
Source: Mark Maltarich & Julian Dalzell
Group Decision-Making Phenomena
Risky shift / Choice shift
Groupthink
Escalation of commitment (also individual)
Source: Mark Maltarich & Julian Dalzell
Confirmation bias: The tendency to easily accept information that confirms your point of view and reject information that does not
support it.
Anchoring bias: The tendency to place excessive weight or importance on one piece of information – often the first piece of information
you learned about a topic.
Dunning-Kruger effect: The tendency for incompetent people to overestimate their competence, and very competent people to
underestimate their competence.
Curse of Knowledge bias: When well-informed people are unable to look at an issue from the perspective of a less informed
person.
Functional Fixedness: This bias limits a person to utilizing an object or idea in only the way it is traditionally used.
Mere Exposure Effect: The tendency to like something just because you are familiar with it.
Not Invented Here bias: The tendency to discount information, ideas, standards, or products developed outside of a certain group.
Reactance: The urge to do the opposite of what you are asked to do in order to preserve your freedom of choice.
Status Quo bias: The tendency to want things to stay relatively the same as they have always been.
System Justification bias: The tendency to try to actively maintain the status quo.
Summary of this Lesson
In this lesson:
• We discussed the challenges of managing international teams.
• You explored the use of heuristics in decision-making and and
revisited the importance of consultants to the multinational
corporation.
Lesson 10: Intellectual Property Strategy
IBUS 718:
Consulting & Organizational Development
in the Multinational Corporation
Advertising – Incumbent firms can seek to make it difficult for new competitors by spending
heavily on advertising that new firms would find more difficult to afford. This makes it hard for
new competitors to gain consumer acceptance.
Capital – need the capital to start up such as equipment, building, and raw materials
Control of resources – If a single firm has control of a resource essential for a certain
industry, then other firms are unable to compete in the industry.
Cost advantages independent of scale – Proprietary technology, know-how, favorable
access to raw materials, favorable geographic locations, learning curve cost advantages.
Customer loyalty – Large incumbent firms may have existing customers loyal to established
products. The presence of established strong brands within a market can be a barrier to entry
in this case.
Distributor agreements – Exclusive agreements with key distributors or retailers can make it
difficult for other manufacturers to enter the industry.
Barriers to Entry 1 (From Wikipedia)
Economy of scale – Large, experienced firms can generally produce goods at lower costs than small,
inexperienced firms. Cost advantages can sometimes be quickly reversed by advances in technology.
For example, the development of personal computers has allowed small companies to make use of
database and communications technology which was once extremely expensive and only available to
large corporations.
Government regulations – It may make entry more difficult or impossible. In the extreme case, a
government may make competition illegal and establish a statutory monopoly. Requirements for
licenses and permits may raise the investment needed to enter a market, creating an effective barrier to
entry.
Inelastic demand – One strategy to penetrate a market is to sell at a lower price than the incumbents.
This is ineffective with price-insensitive consumers.
Intellectual property – Potential entrant requires access to equally efficient production technology as
the combatant monopolist in order to freely enter a market. Patents, trademarks, servicemarks, trade
secrets and other IP may create a barrier to entry.
Barriers to Entry 2 (From Wikipedia)
Investment – That is especially in industries with economies of scale and/or natural monopolies.
Network effect – When a good or service has a value that depends on the number of existing
customers, then competing players may have difficulties in entering a market where an established
company has already captured a significant user base.
Predatory pricing – The practice of a dominant firm selling at a loss to make competition more
difficult for new firms that cannot suffer such losses, as a large dominant firm with large lines of
credit or cash reserves can. It is illegal in most places; however, it is difficult to prove. See
antitrust. In the context of international trade, such practices are often called dumping.
Restrictive practices, such as air transport agreements that make it difficult for new airlines to
obtain landing slots at some airports.
Research and development – Some products, such as microprocessors, require a large upfront
investment in technology which will deter potential entrants.
Barriers to Entry 3 (From Wikipedia)
Supplier agreements – Exclusive agreements with key links in the supply chain can make it
difficult for other manufacturers to enter an industry.
Sunk costs – Sunk costs cannot be recovered if a firm decides to leave a market. Sunk costs
therefore increase the risk and deter entry.
Switching barriers – At times, it may be difficult or expensive for customers to switch providers
Tariffs – Taxes on imports prevent foreign firms from entering into domestic markets.
Vertical integration – A firm’s coverage of more than one level of production, while pursuing
practices which favor its own operations at each level, is often cited as an entry barrier as it
requires competitors producing it at different steps to enter the market at once.
Zoning – Government allows certain economic activity in specified land areas but excludes
others, allowing monopoly over the land needed.
Geography
Barriers to Entry 4 (From Wikipedia)
What is Intellectual Property? (IP)
Intellectual Capital
Intellectual Assets
Intangible Assets
Intellectual
Property
Why?
Why
?“Congress shall have the power to promote the progress of science and useful arts, by securing for
limited times to inventors the exclusive rights to their discoveries.”
United States Constitution
Art. 1, Sec. 8, clause 8
Article 27.
1) Everyone has the right freely to participate in the
cultural life of the community, to enjoy the arts and to
share in scientific advancement and its benefits.
2) Everyone has the right to the protection of the moral
and material interests resulting from any scientific,
literary or artistic production of which he is the
author.
Do not leave IP strategy to the lawyers.
Business Model
ROI
Enterprise Objectives
Business
Objectives
Intellectual
Property
Optimize ROI
Value vs. Cost
Business
Objectives
Intellectual
Property
What IP is and how to protect it
How to determine IP value within an
enterprise
How to use IP strategically and tactically
• Increase margins
• Grow market share
• Structure joint ventures
• Licensing deals
• Litigation strategies
• Etc.
How to develop and execute an IP strategy
• Patents
•
Trademarks
&
Trade Dress
•
Copyrights
• Trade Secrets
•
Industrial Designs
•
Mask Works
• Geographical Indications
• Know How
• URL
Intellectual Property Rights
TM
C
What is a Patent?
Conveys to its owner
the right to prevent
others from
• Making
• Using
• Selling
• Offering for sale
• Importing
Exclusive right
Does not convey rights to its owner to exercise the invention
Patentable Subject Matter
Useful
Novel
Non-Obvious
New Applications for Existing Device or Material
Where is a Patent
Enforceable?
Geographically limited: Granted by a state (national government)
à International reciprocal filing rights: Patent Cooperation
Treaty (PCT)
How Long Does a Patent Last?
Time limited: 20 Years from original application filing date
à Term extended for delays in US PTO Examination Process
(PTO = Patent & Trademark Office)
Who Has Invention Priority?
First to file gets the priority date
• Patents
• Trademarks & Trade Dress
• Copyrights
• Trade Secrets
• Industrial Designs
• Mask Works
• Geographical Indications
• Know How
• URL
Intellectual Property Rights
TM
C
Consumer’s Right To Identify Source Of Product Or Service
• Logos, Symbols, Words, Colors, Sounds & Combinations
Trademarks
Consumer’s Right To Identify Source Of Product Or Service
• Logos, Symbols, Words, Colors, Sounds & Combinations
• Not confusingly similar to existing marks
Trademarks
Famous Trademarks
Famous Trademarks
Famous Trademarks
Consumer’s Right To Identify Source Of Product Or Service
• Logos, Symbols, Words, Colors, Sounds & Combinations
• Not confusingly similar to existing marks
• Damages, injunction and criminal sanctions for counterfeiting
• First To Use vs. First To Register
• International reciprocal rights
• Perpetual if used correctly
Trademarks
• Aspirin – originally a trademark of Bayer AG
• Butterscotch – originally a trademark of Parkinson’s
• Escalator – originally a trademark of Otis Elevator Company
• Heroin – originally a trademark of Bayer AG
• Kerosene – originally a trademark of Abraham Gesner
• Phillips-head screw – named after Henry F. Phillips
• Pogo – for the toy Pogo stick
• Thermos – originally a trademark of Thermos GmbH
• Yo-yo – originally a trademark of Duncan Yo-Yo Company
• Zipper – originally a trademark of B.F. Goodrich
Lost Trademarks
Total Image
• Distinctive
• Non-Functional Feature
• Distinguishes Goods Or Services
Trade Dress
Trade Dress Example: Restaurant Design
• Layout, Color & Menus etc.
• Two Pesos v. Taco Cabana
Trade Dress Example: Dr. Pepper v. Coca-Cola
• Judge told jury to decide if design was “identical or nearly identical”
à Jury ruled in favor of Abercrombie
• San Francisco Appeals Court sent the case back to trial because the
judge gave the jury the wrong standards
• Judge told jury to decide if design was “identical or nearly
identical”
à Jury ruled in favor of Abercrombie
• What happened next and why?
Trade Dress Example: Levi’s Jeans vs.
Abercrombie & Fitch Clothing
Professor Dirk Brown
Source: GSMArena
Source: GSMArena
Professor Dirk Brown
• Patents
• Trademarks & Trade Dress
• Copyrights
• Trade Secrets
• Industrial Designs
• Mask Works
• Geographical Indications
• Know How
• URL
Intellectual Property Rights
TM
C
Protect Original Works of Authorship
• Literary Works
• Musical Works, Including Accompanying Words
• Dramatic Works, Including Any Accompanying
Music
• Pantomimes And Choreographic Works
• Pictorial, Graphic And Sculptural Works
• Motion Pictures And Other Audio Visual Works
• Sound Recordin
gs
• Architectural Works
• Computer Code
Copyrights
• International Rights
• Copying Occurs When
• Access To Copyright Protected Work
• Substantially Similar Reproduction
• Enforcement: Damages and Injunction, Criminal
• Registration
• Required to Enforce ©
• Statutory Damages & Attorney’s Fees
• Rights Accrue upon Creation of the Work
• US different from other countries
• Duration ?
Copyrights
• Patents
• Trademarks & Trade Dress
• Copyrights
• Trade Secrets
• Industrial Designs
• Mask Works
• Geographical Indications
• Know How
• URL
Intellectual Property Rights
TM
C
• Confidential
• Confers A Competitive Advantage
• Perpetual
• No Registration Required
• Civil and Criminal Enforcement Under State and Federal Law
• Similar Laws In Most Countries
Trades Secrets
• Patents
• Trademarks & Trade Dress
• Copyrights
• Trade Secrets
• Industrial Designs
• Mask Works
• Geographical Indications
• Know How
• URL
Intellectual Property Rights
TM
C
• Original design of a useful article that makes the article attractive or
distinctive
• Vessel Hulls
• Not utilitarian, commonplace, or insignificant variations of
commonplace designs
• Term Is 10 Years If Registered With the Copyright Office Within 1
Year of Public Use
• Comparable Laws In Most Industrial Countries
Industrial Designs
Design Patents
• Original pattern etched in semiconductor materials
• Term is 2 years or 10 years if registered with the Copyright
Office
• Comparable laws In most
industrial countries
Mask Works
Geographic Indications
• Patents
• Trademarks & Trade Dress
• Copyrights
• Trade Secrets
• Industrial Designs
• Mask Works
• Geographical Indications
• Know How
• URL
Intellectual Property Rights
TM
C
• Standards
• Product Specifications
• Federally Funded Research
• Biz Models
• Collaboration
• Internet Access (WIKI)
• Open Source, Free
Public Domain
Wizard of Oz
Written in 1899 by Frank L. Baum
First performed as an on-stage musical in 1902-3
MGM film from 1939
Are these characters in
the public domain?
Source: Prof. Henry Chesbrough, UC Berkeley, Open Innovation: renewing Growth
from Industrial R&D, 10th Annual Innovation Convergence, Minneapolis, Sept 27, 2004
Patent Valuation Summary
• Time Matters
• Context Matters
• Enforcement and other issues matter
• Best to use multiple methods
• Replacement Cost
• Market Value
• Residual Enterprise Value
• Income and Cash Flow Methods
(Including Relief From Royalty)
IP Value =*
CFx
(1 + i)x
𝑛
𝑥=1
ß Best approaches
à e.g. Infringement timing? Duration?
à e.g. License? Litigation? Sale?
Source: Alexander Osterwaldes & Yves
Pigneur, Business Model Generation
Professor Dirk Brown
Technology
Platform Chip-to-board
Flex-to-board
Board-to-board
Embedded
Source: Alexander Osterwaldes & Yves
Pigneur, Business Model Generation
Professor Dirk Brown
#1. E.D. TX – 80%
pantentee win rate*
#2. N.D. CA – 66%
pantentee win rate*
#10. N.D. TX – 33%
pantentee win rate*
* Post summary judgement
U.S. District Court Forum-Shopping: 7 Data Metrics
Best U.S. district courts in which to
initiate patent litigation as patentee:
1. High patentee trial win rate:
ED Tex, MD Fla, ND Tex
2. Fast time to trial:
ED Va, WD Wis, MD Fla
3. High damage awards:
SD Tex, ED Va,
D Del
4. Low rate of
granting summary
judgment:
ED Tex
5. Low rate of granting
stay pending post-grant
proceeding
ED Tex
6. High chance case
filed will go to trial:
D Del
7. High chance of
granting preliminary
injunction:
D Del
ED Tex,
D Del
1. Low patentee trial win rate:
ND Cal, SD Tex, SD Fla
2. Slow time to trial:
ND Ill, D Mass, SD NY
3. Low damage awards:
MD Fla, SD Fla, D Minn
4. High rate of granting
summary judgment:
CD Cal, WD Wash
5. High rate of granting stay
pending post-grant proceeding
SD Cal, ND Ga, D NJ
6. Low chance case filed
will go to trial:
CD Cal
7. Low chance of granting
preliminary injunction:
ND Ga, MD Fla, D Mass
CD Cal
D Mass
SD Fla
Best U.S. district courts in which to initiate
patent litigation as alleged infringer:
Source: Michael Elmer, Finnegan Law Firm
Map: Worldatlasbook.com
Win rate favors alleged infringer
à ~12% patentee win rate
Expensive
Win rate favors patentee
Costs paid by losing side
Win rate favors alleged infringer
à ~23% patentee win rate
Slow time to trial (>2 years)
Expensive (>$1M)
Win rates complicated
Fastest time to trial
Lowest cost
Unlikely to be stayed for validity challenge
Low damages
0
100000
200000
300000
400000
500000
600000
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
United States of America
Source: WIPO
Pa
te
nt
F
ilin
gs
Source: WIPO
0
100000
200000
300000
400000
500000
600000
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
China United States of America
Pa
te
nt
F
ilin
gs
Source: WIPO
0
100000
200000
300000
400000
500000
600000
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
China
India
United States of America
Pa
te
nt
F
ilin
gs
Source: WIPO
0
100000
200000
300000
400000
500000
600000
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
China
European Patent Office
India
Republic of Korea
United States of America
Pa
te
nt
F
ilin
gs
0
100,000
200,000
300,000
400,000
500,000
600,000
1787 1837 1887 1937 1987 2037
U.S. Patent Applications China
Mozart
Pa
te
nt
F
ilin
gs
Michael Jackson
Source: WIPO
0
100000
200000
300000
400000
500000
600000
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
China
India
United States of America
Pa
te
nt
F
ilin
gs
Source: WIPO
0
100000
200000
300000
400000
500000
600000
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
China
India
United States of America
Pa
te
nt
F
ilin
gs
Source: WIPO
0
100000
200000
300000
400000
500000
600000
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
China India United States of America
Pa
te
nt
F
ilin
gs
Source: WIPO
Pa
te
nt
F
ilin
gs
0
100000
200000
300000
400000
500000
600000
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
China
India
United States of America
–
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
1960 1970 1980 1990 2000 2010 2020
U.S. Trademark Registrations
–
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
1960 1970 1980 1990 2000 2010 2020
U.S. Trademark Registrations
OHIM (E.U.)
–
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
1960 1970 1980 1990 2000 2010 2020
U.S. Trademark Registrations
China
OHIM (E.U.)
–
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1960 1970 1980 1990 2000 2010 2020
U.S. Trademark Registrations
China
OHIM (E.U.)
Professor Dirk Brown
Summary of this Lesson
In this lesson:
• We discussed the importance of barriers to entry, and particularly
intellectual property, as a key strategic asset of the multinational
corporation.
• You explored how intellectual property might be leveraged for the
multinational corporation for which you are preparing the
consulting presentation.
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