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Globalization Exam
You MUST complete the questions INDEPENDENTLY and submit your responses on Blackboard. Work must be original, and any work taken from other sources will not receive a grade.
Questions
1. Discuss the meaning of the term “globalization.” Approximate length 1 paragraph (5 points)
2. Answer either a OR b. Approximate length 3 paragraphs (10 points)
a.
Imagine that you were on of Milton’s Friedman’s students, known as the Chicago Boys, in 1957. Explain your economic perspective, and how your viewpoint influences your position on globalization.
OR
b. Imagine that you are Sir Edward Malet, the British representative to the Berlin Conference in 1884-85. Describe the conference, then discuss your political perspective on the partitioning of Africa, and your strategy for obtaining land in Africa. Finally, briefly list the results of the conference.
3. Identify the key components of the Human Development Index (HDI). Imagine that you were recently hired by the United Nations to critique the value of the HDI in assessing the development of countries. Provide an outline of your critique that includes both the strengths and weaknesses of the HDI. Can be written in a table, or point form.
4. Complete the Sally Jones Case that is attached. (25 points)
5. Discuss social stratification and/or debt based on information from ONE of the following images on the next page. Approximate length 1 paragraph. (5 points)
SALLYJONES AND THE HUMMUS DECISION
Sally Jones leaned back in her chair and gazed out at the Washington Monument. The monument always helped her to refocus her thoughts and remember why she had taken a position with TAG Consulting.
When she was a student in her business degree program, Sally thought she would end up in banking or in the finance department of a multinational corporation (MNC). However, elective courses in globalization and sustainability had provided another lense through which to few the role of business and its impact on society. She understood that while there were certainly many organizations that were doing their best to behave responsibly, there were many organizations that were not doing their best. In the end, she decided she would rather be part of the solution than part of the problem.
TAG (Thinking about the Globe) Consulting was committed to taking on big business and fighting what it perceived to be the negative effects of globalization. In her time at TAG, Sally had taken on pharmaceutical companies, oil companies, and even banks. For Sally, issues like the cost of drugs in Africa or the impact of pipeline developments on First Nations communities in Canada had very clear sides to them. She always knew where she stood. She didn’t always win, but she slept well at night and felt she was making a difference in the world.
The File
The file on her desk today was anything but clear.
TAG was beginning to see opposition to a major marketing thrust by Pepsico, Kraft and others that would put hummus in the refrigerators and on the snack trays in American homes.
Small farmers in the Southeastern United States were concerned that if demand materialized as anticipated, many farms would switch from conventional crops to the cultivation of chickpeas (the primary ingredient in hummus). By itself, this might not be a bad thing. However, some farmers were concerned about their ability to compete with offshore producers (the United States was a net importer of chickpeas), while others were concerned about switching from crops like tobacco – which had been a staple of the regional economy for generations – to the new and unfamiliar chickpea. What would the impact be on small communities? What about the impact on the supporting infrastructure that had been developed over literally hundreds of years for crops like tobacco?
Some global activists were concerned about Pepsico’s activities in Africa. Pepsico had recently signed an MOU with the Government of Ethiopia’s (GoE) Ministries of Health and Agriculture and Agriculture Transformation Agency, the United States Agency for International Development (USAID), and the UN World Food Program (WFP) to accelerate Ethiopia’s into a major producer of chickpeas. It was expected that Pepsico would be the major buyer of the crop (for use in its Sabra hummus brand). Was it a good thing they wondered, for a profit-seeking MNC to be so closely tied to the food supply in an underdeveloped country?
Other activists were concerned about the integrity of the Pepsico effort more generally. While there is no denying the nutritional benefits of hummus – the chickpea is an excellent source of high-quality protein and essential amino acids, as well as being high in dietary fibre, low in fat and a source of phosphorus, magnesium, iron and zinc – they found it difficult to reconcile Pepsico as a purveyor of a product with such benefits with Pepsico as a purveyor of such other products as Cheetos and Mountain Dew.
Similarly, while Kraft Foods runs the Athenos hummus brand, it also runs such nutritionally questionable brands as Cheez Whiz and Kool Aid.
The Decision
While the issue was more complicated than others she’d dealt with, Sally still had to make a decision. In fact, her boss was looking for a decision by the end of the day. Specifically, her boss wanted to know whether TAG should mobilize its resources to oppose the marketing effort to drive demand for hummus in the United States, to educate consumers on the issues, or to support the effort.
YOUR TASK
Assume the role of Sally. Review the readings in the file, and prepare a brief (no more than 500 words) response on your recommendations and rationale. Please, use one relevant framework (e.g., Porter’s Diamond, or CAGE, or weighted decision-making models) that we discussed in class to support your response.
PEPSICO BETS HUMMUS CAN BE THE NEXT SALSA
For most guys looking for a quick bite, salted snacks reign supreme. But Ronen Zohar wants man caves everywhere to give hummus a place of honour, right up there with salsa and beer.
The chief executive officer of PepsiCo’s Sabra Dipping venture recently launched its first national television commercials. One instructs consumers to “dip life to the fullest” by dunking all-American staples—think chicken wings and potato chips—into the mashed chickpea paste. And Sabra soon will kick off as the National Football League’s official dips sponsor, putting the brand squarely in the sights of male fans for whom snacking is also a national pastime.
While the goal is to make the Middle Eastern dip accessible to Middle America, Zohar faces a lot of work to make it a fixture at Super Bowl parties. Annual U.S. salsa sales are about $1.1 billion, more than twice those of flavoured spreads like hummus. Still, the spreads are growing at a 14 percent pace as Sabra and its main rivals, Nestlé’s part-owned Tribe and Kraft Foods Group’s Athenos, appeal to Americans’ desire to eat healthier. “Most of the people in the U.S. never tasted hummus,” the Israeli-born Zohar says. “You have to change their mind-set that even if the name is strange and the brown color of the hummus is not as appetizing, it tastes wonderful.”
Hummus is made by blending steamed chickpeas with a paste called tahini made from shelled sesame seeds. The mixture is generally flavoured with olive oil, lemon juice, and garlic. New flavours such as roasted red pepper and wasabi edamame have helped drive demand, says Sarah Schmansky, director of retail programs for researcher Nielsen Perishables Group.
Zohar figures that expanding the hummus category will come in three stages. First, get people to dip it. Next, get them to spread it, like on toast. (Recent TV spots show it as a mayo substitute on a cold-cut sandwich.) The final step: hummus as side dish, the way it’s eaten in the Middle East. “We are only now at the first stage,” Zohar says. “It’s only an issue of time.”
About 18 percent of U.S. households have bought hummus, according to Nielsen. Sales of Sabra are concentrated in the Northeast, which is dipping in earnest and will be ready to spread within a few years, Zohar predicts. The western U.S., however, is only now turning on to hummus, with weekly supermarket sales just half those of stores in the Northeast, says Nielsen.
Sabra has refashioned the grainy hummus found in the Middle East to a smoother version Americans seem to like better. They also favour a less nutty flavour, so Tribe keeps the percentage of tahini below 20 percent, says CEO Adam Carr. The company has even rolled out a limited-run flavour called Everything to appeal to bagel lovers. Manufacturers are targeting kids, too, with single-serve packs for snacking and lunchboxes even as they promote hummus as a vegetarian option for schools.
Sabra, a joint venture between PepsiCo and Tel Aviv-based Strauss Group, controls about 60 percent of the U.S. refrigerated flavoured spreads market, having grown almost 20 percent in the 12 months ended May 19, according to market researcher IRI. The next three competitors—Tribe, Athenos, and Cedar’s Mediterranean Foods—together held nearly 20 percent.
That wasn’t always the case. Kraft’s Athenos led the category seven years ago with a 31 percent share. At the time, Sabra held
10
percent, behind Tribe and Cedar’s. Sabra took over the market one consumer at a time, handing out millions of samples a year from roving trucks, while Zohar used PepsiCo’s clout with retailers to help take up residence in the grocery deli section.
The sales surge has wakened Tribe, which is looking to “leapfrog” from its current No. 2 position, says Carr, who was hired away from PepsiCo a year ago. Carr says he’ll promote Tribe’s lack of preservatives and fully recyclable packaging. “Sabra’s done a good job building the category,” he says. “We would tell all the other competitors to watch out.”
Athenos, meanwhile, has concentrated its recent advertising on its market-leading feta cheese, taking a holistic approach to the Mediterranean foods trend, says Gwen Gray, Kraft’s senior director of dairy snacking. “While we haven’t grown at the rate of the category, our sales remain strong,” she says.
Cedar Chief Financial Officer Chris Gaudette says his small private company doesn’t have deep pockets and retail power to compete chickpea to chickpea with Sabra, so it’s concentrating on hyping its all-natural hummus. Grocery chains are also joining the fray, boosting sales of private-label refrigerated flavoured spreads 21 percent in the past year, to 9 percent of the segment.
To defend its turf, Sabra is doubling what it says is already the world’s largest hummus plant, in Virginia, and working with farmers to ensure U.S. chickpea supplies. Contests and NFL-centered promotions will come in the fall. “When people taste hummus,” Zohar says, “they change their mind about it.” (Business Week, July 18, 2013)
MCDONALD’S DEBUTS FIRST MEAT-FREE ENTREES IN A DECADE
McDonald’s Canada is making headlines for introducing the branch’s first vegetarian entrees in more than a decade: Mediterranean Veggie and Sante Fe Veggie wraps.
The Mediterranean wrap is stuffed with garlic hummus, feta cheese, tomatoes, cucumber, red onions, lettuce and a feta-based sauce, while the Santa Fe wrap features tomatoes, roasted corn, black beans, a blend of cheddar and Monterey Jack cheese, red onions, lettuce, tortilla chips, chilli lime glaze and a Southwest-inspired sauce. Both are made with a whole wheat tortilla.
“People always ask for the veggie burger. So this we’re going to surprise them with,” McDonald’s Canada CEO John Betts told Canada’s National Post. “It’s a much more contemporary product, and I think it tastes a lot better.”
Betts also noted that wraps are popular with millennials, and he believes they appeal to a broader range of groups than burgers.
Healthy dishes are popping up on fast food menus more and more these days, even though patrons don’t always order them.
McWraps first debuted on McDonald’s permanent U.S. menu earlier this year, although none are vegetarian. In fact, McDonald’s U.S. menu advertises not a single sandwich, wrap or salad served without meat.
Still, if the veggie wraps are a success in Canada, could they migrate south to the U.S.? McDonald’s U.S. spokeswoman Ofelia Casillas told The Huffington Post that the fast food giant is “always testing new options based on what our customers are looking for.” Currently, consumers seeking vegetarian options can “order McWraps without chicken and with extra veggies.” (Huffington Post, August 28, 2013)
HUMMUS IS CONQUERING AMERICA
Prodded by the largest U.S. hummus maker, farmers in the heart of tobacco country are trying to grow chickpeas, an improbable move that reflects booming demand for hummus.
Sabra Dipping Co., wants to cultivate a commercial crop in Virginia to reduce its dependence on the legume’s main U.S. growing region—the Pacific Northwest—and to identify new chickpea varieties for its dips and spreads.
For Sabra, which makes hummus at a plant near Richmond, Va., a secondary source of supplies could help protect the company if a chickpea shortage occurred because of crop failures in Washington or Idaho. Sourcing chickpeas locally also would lower its shipping costs. But the Virginia effort carries risk, because experts say the state’s high summer humidity could prove a significant obstacle to its viability.
“We need to establish the supply chain to meet our growing demand,” says Sabra’s chief technology officer, Tulin Tuzel. “We want to reduce the risk of bad weather or concentration in one region. If possible, we also want to expand the growing seasons.”
Long a staple of Middle Eastern cuisine, hummus is earning a growing following among Americans seeking more-healthful snacks. The chickpea dip is low in fat and high in protein. Sales of “refrigerated flavoured spreads”—a segment dominated by hummus—totalled $530 million at U.S. food retailers last year, up 11% from a year earlier and a 25% jump over 2010, according to market-research firm Information Resources Inc.
Sabra recently announced an $86 million expansion of its hummus plant near Richmond to help meet demand. It will add 140 jobs to the facility, which currently employs about 360, over the next few years.
Growing demand for hummus has pushed up prices for chickpeas, spurring farmers to increase production. The average price that farmers received for chickpeas was 35 cents a pound last year, a 10-cent increase over the mid- 2000s, according to the U.S. Department of Agriculture. Though chickpeas are a tiny crop compared with corn or wheat, last year’s U.S. harvest totalled a record 332 million pounds, up 51% from the previous year, according to the USDA. The value of the U.S. chickpea crop hit a record $115.5 million last year, USDA data show.
U.S. farmers are expected to plant a record 214,300 acres of chickpeas this year, up 3% from last year and a fivefold increase over a decade ago, the USDA said. Demand for the U.S. crop from Spain, Turkey and Pakistan also has led farmers to plant more.
In Walla Walla, Wash., farmer Pat McConnell, 51, said he intends this spring to plant about 950 acres with chickpeas, more than double his crop last year. “They’ve become a pretty lucrative option,” he said.
Virginia officials are eager to develop new crops in a state where tobacco farming has shrunk dramatically since the 1990s because of declining cigarette sales.
James Brown, a 72-year-old tobacco, corn and soybean farmer in Clover, Va., said he knew nothing about chickpeas when an extension agent from Virginia State called him several months ago and asked if he would plant the legume. He said he jumped at the opportunity because he is looking for ways to make his roughly 300-acre farm more profitable. Mr. Brown planted four acres with chickpeas in mid-April. That week, his wife served him the first chickpeas he’d ever eaten. “They tasted pretty good,” the farmer said. (Wall Street Journal, April 30, 2013)
CAN HUMMUS SAVE THE WORLD?
Once only found in Middle Eastern restaurants or ethnic food stores, hummus has become a surging business for food companies here in the U.S. and abroad. The chickpea (garbanzo) bean spread is no longer a secret and limited only to those who were fortunate enough to have a Lebanese restaurant in the neighbourhood. Hummus has now gone corporate, with brands such as Tribe and Sabra.
But the growing affinity for hummus is more than just another food trend. As global production of hummus increases and with it, the cultivation of chickpeas, this simple spread could benefit people, and the planet, in various ways. Think about better managed farms with higher yields and resilient soil, another tool in the kit to fight global hunger, a key to better nutrition and a food that can fight obesity are among the reasons why hummus can help with the transformation of both people’s diets and global agriculture.
It is hard to walk out of a Whole Foods and spend less than 20 bucks. But at a time when fast food companies are still relentlessly trying to convince us that a dollar menu or combo meal is a great deal for lunch, you can walk into a Whole Foods or other supermarket, grab an eight ounce tub of hummus and have a meal for $2 to $3. Before you even add the bread or vegetables to go with that dip, those eight ounces already offer the base for a nutrient- and caloric-rich meal. With a serving (two tablespoons) offering anywhere from 60 to 80 calories, that small tub has close to 500 calories. Then add protein, folate, B-vitamins and iron–not to mention that hummus is relatively low in fat, save for the oil.
And not only is this mysterious dip from the Middle East good for you, it tastes good and is affordable. Hummus is not difficult to make: just blend chickpeas, tahini (sesame seed paste), oil, garlic and lemon or citric acid. But finding the right balance can be tricky. Too much tahini and it becomes gritty. Add too much garlic and you cancel out the other subtle flavours. Excessive lemon juice or citric acid will also ruin the flavour.
But large companies and the kitchens that sell their private label products to chains such as Whole Foods or Trader Joe’s have got the formula down, and now they can scale. They have an opportunity to sell small tubs in schools or even–imagine this–in fast food restaurants. The McHummus may sound a few pita chips short of a Happy Meal, but as the appetite for hummus surges, so do opportunities in new markets.
Hummus could have an impact on public health, too. Dense and filling, it is not hard to fill up when eating this spread. And look at the other options that surround us. Despite more healthful options and more transparent menus at chain restaurants, the obesity epidemic here in the U.S. has shown no sign of receding. Purists who grew up noshing on hummus may blanche at flavour options such as red pepper, chipotle, or Asian fusion, but watch the tubs fly into the shopping carts at Costco and who is buying it–all demographics. And that variance in flavours means that more children and teens are opening up to hummus as a snack. In fact, peruse the web and you will see a flurry of websites and mommy bloggers touting hummus as an alternative to other snacks and as a way to combat obesity. From the American Heart Association touting the spread to more and more school districts, hummus is catching on.
Finally, as is the case with other legumes, hummus – as in chickpeas – benefits farmers and the planet. The cultivation of these hardy beans is a solid crop to add to a farmer’s rotation as they help replenish the soil with valuable nitrogen. (Adapted from Triplepundit.com, November 12, 2012)
THE “ETHIOPEA” ALLIANCE
During the Grow Africa/World Economic Forum in Addis Ababa on May 9, 2012, the Government of Ethiopia’s (GoE) Ministries of Health and Agriculture and Agriculture Transformation Agency, PepsiCo, Inc., the United States Agency for International Development (USAID), and the UN World Food Program (WFP) signed a Memorandum of Understanding (MOU) to support a new EthioPEA Alliance. This public-private collaboration will seek to expand Ethiopia’s potential to be an international source of chickpeas for export while increasing the availability of nutritious food domestically.
The EthioPEA Alliance aims to address constraints and build capacity throughout the chickpea value chain. It will seek to foster economic growth and improve the availability and affordability of nutritious, locally sourced food products, including chickpea-based ready-to-use supplementary food (RUSF), for low-income populations as well as others in Ethiopia and in export markets. The State Minister of Agriculture, Wondirad Mandefro, said that “Ethiopia is uniquely suited to launch such an initiative. It is already the continent’s largest producer of chickpea and the sixth largest producer in the world.”
USAID will contribute a total of US$7 million to support both the commercial and nutrition objectives of the Alliance, providing technical, financial and training assistance. According to Thomas Staal, USAID/Ethiopia Mission Director, “this alliance is an important part of the US Government’s Feed-The-Future (FTF) Initiative in Ethiopia. It furthers FTF’s goals to both increase agriculture output and improve the nutrition status of women and children, in part, through the resources and expertise of the private sector.” Feed-The-Future is a US$3 billion global initiative from President Obama that plans to invest over US$250 million in Ethiopia’s agriculture and nutrition programs over the next five years.
PepsiCo’s work in Ethiopia began with the Memorandum of Understanding (MOU) signed at the World Economic Forum in Davos, Switzerland, last January 2011 between PepsiCo, WFP, and USAID to collaborate on food security and nutrition globally. At that time, Prime Minister Meles Zenawi proposed such an Alliance to make Ethiopia the first country to put the global MOU into action. The PepsiCo Foundation, the philanthropic arm of PepsiCo, has provided a grant of approximately $3.3 million to WFP/USA, an independent charity entity in the United States, to develop a chickpea-based RUSF. PepsiCo is also conducting agriculture pilots and a business case analysis for increasing chickpea productivity.
“PepsiCo is dedicated to seeking innovative ways to improve nutrition and environmental sustainability around the world. We are pleased to be part of such an important collaboration” said Derek Yach, Senior Vice President of Global Health and Agriculture Policy, PepsiCo. According to Khalid Bomba, CEO of the Ethiopian Agricultural Transformation Agency, “Ethiopia believes innovative partnerships with global agri-businesses such as PepsiCo can unlock markets for smallholder farmers and make them part of a global supply chain, and therefore welcomes this project as a positive step in developing agricultural capacity.”
WFP expects to use the chickpea-based supplementary food product in its nutrition work in Ethiopia and the Horn of Africa. It will support farmers’ cooperatives and food processors to develop the product and maintain high quality production standards. “WFP is very proud to be part of this innovative cooperation with the Government of Ethiopia, USAID and PepsiCo,” announced WFP Ethiopia Country Director, Abdou Dieng. “This future nutrition product will help us to advance the fight against hunger and malnutrition in Ethiopia.”
The Government of Ethiopia will support the Alliance through policy and research as the project supports the country’s development goals. In a statement, the Minister of Health said that “we believe this new Alliance offers potential to support the Government’s National Growth and Transformation Plan and Nutrition Strategy to achieve the Millennium Development Goals for halving poverty and hunger by 2015.” (http://www.ata.gov.et/ethiopia-chickpea-alliance-announced/)
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