The Effect of Political Relations between Nations on Firms' International Management Strategies

Description:

The case revolves around RayTech’s entry into the Turkish market and its international management strategies while operating under political animosity between the home and host countries. The case narrates the entry of the private Israeli high-tech firm that produces, distributes and markets its patented products globally, in two episodes. The first episode focuses on RayTech’s strategy and roadmap related to the entry into Turkey in mid-2005. The decisions entail the mode and the timing of entry as well as the related choices and tradeoffs with regard to marketing and management of international activities. Given that RayTech chose to invest in Turkey through the acquisition of its distributor, the second episode depicts the developments at the Turkish subsidiary following a major crisis between Israel and Turkey on May 31, 2010 (aka “Mavi Marmara”) – a crisis that led to the mutual severing of diplomatic relations.3 The case analyzes the aftermath of the crisis and its adverse impact on the Turkish subsidiary with an emphasis on how this international endeavor could have been managed to control the effects of political animosity. The main decision lens in this case is the nature of international relations between home and host countries, i.e. Israel and Turkey, which continuously oscillate between collaboration and animosity.