University of Business Studies: International Business Strategy Report

This report analyzes the international business strategies of Microsoft and Domino's. Microsoft's case focuses on its foreign cash holdings, particularly the implications of its Skype acquisition, tax avoidance strategies, and the ethical considerations of holding cash overseas. It examines the motivations behind these practices, including transactional and agency motives, and the potential impact on economic growth. The Domino's section explores its global marketing strategies, including market expansion into countries like Japan and India, and the adaptation of its product offerings to suit local preferences. The report highlights the importance of understanding cultural expectations and the benefits of being a first mover or a strong follower in international markets. It also includes a bibliography of the sources used for research.

INTERNATIONAL BUSINESS STRATEGY
NAME
INSTITUTION

Microsoft and its Foreign Cash Holdings
• Due to its acquisition of Skype, Microsoft became one of the organizations holding
monetary instruments and foreign cash. The foreign cash in Microsoft case
represents the assembled net earnings from external sales.
• Question 1
• The shareholders would benefit from using the cash held overseas to to make
oversees acquisition, absorb a huge tax hit, as well as develop Microsoft’s
business offshores because these does not attract any tax burdens.

Question 2
• Microsoft company utilized foreign profits to acquire skype enabling it to evade
making tax payments to the united states corporate tax of 35% on the profits it
earned.
• Also, the organization calculated that the cost of tax that will be involved in
repatriating those earnings to the us would amount to $9.2 billion, which is same
as making a tax payment of 31%. The 4% that is missing would originate from
external tax credits (Murray-Morris, 2019).

Question 3
• Microsoft continues to hold more cash outside the US because of several motives
such as the transactional motive and the agency motive.
• The opportunity cost of holding billions of dollars in foreign nations is as a result
of pessimism over the impact of repatriated cash.
• If the money is brought back it may benefit the shareholders through buying of
divides and share buybacks.

Question 4
• I believe it is unethical for Microsoft and other US companies to hold cash
overseas in the name of tax avoidance.
• The huge amount of money that companies have held overseas has in a way
reduced the economic growth of the united states.
• If repatriated, the money will earn the US government a total of $280 billion tax
revenue which can be used to upgrade infrastructures such as hospitals and
highways (Jilani, 2019).

Domino’s Global Marketing
• As a result of the saturation of the fast-food market in the United States,
Domino’s has targeted to grow its business overseas in countries such as Japan
and India.
• Question 1
• I think that domino's should try the sit-down restaurant experience in at least one
foreign country where it is valued to see how it would affect the company’s sales
(Whitten, 2019).
• Considering that Domino’s has already proven to be a successful business with a
presence foreign countries, I believe they are in a good spot to take a risk in
changing their business model in one country to see what happens.

Question 2
• I think domino's does a great job in altering their toppings to the countries which
they market their products.
• Since the variables of pizza delivery are common among several countries, the
challenge left for domino’s is to understand the culture of each market it enters
(Gasparro, 2019). Market research into each country ties directly to their success.
• The company knows that it wants to offer pizza and despite the ingredients
varying, the pizza is basically the same. Domino's does an excellent job of
knowing its customers (culture).

Question 3
• Domino’s ensures that it adheres to the pressures from local responsiveness by
altering their toppings according to what that target market likes to eat.
• In the US, the pizza toppings contain more meats such as pepperoni and sausage
whereas in japan it is more concentrated around fish as this is the diet of the
Japanese. In India, Domino's adds more spice to their toppings.

Question 4
• One of the lessons that we can learn from domino’s is that it pays to either be a
first mover or a strong follower.
• Also, it is important to understand cultural expectations about your product. In
this sense, it is very crucial fro organizations to make sure that they understand how
their product will be perceived when they enter a new market.

BIBLIOGRAPHY
•Gasparro, a. (2019). Domino's sticks to its ways abroad. [Online] WSJ. Available at:
https://www.Wsj.Com/articles/SB10001424052702304818404577347580071944246 [accessed 23
may 2019].
•Jilani, z. (2019). Microsoft structured acquisition of skype to avoid U.S. Taxes. [Online]
thinkprogress.Org. Available at: https://thinkprogress.Org/microsoft-structured-acquisition-of-
skype-to-avoid-u-s-taxes-b92d79395b36/ [accessed 23 may 2019].
•Murray-morris, s. (2019). Apple and microsoft have bigger cash holdings than UK. [Online]
telegraph.Co.Uk. Available at:
https://www.Telegraph.Co.Uk/finance/businesslatestnews/10760392/apple-and-microsoft-have-
bigger-cash-holdings-than-uk.Html [accessed 23 may 2019].
•Whitten, s. (2019). Domino's says rapid store expansion means more money for its delivery
drivers. [Online] CNBC. Available at: https://www.Cnbc.Com/2018/10/16/dominos-rapid-store-
expansion-means-more-money-for-delivery-drivers.Html [accessed 23 may 2019].