Q1. Identify the four basic strategies that MNCs use and the situations in which they are used. The four basic strategies used by MNC’s are international strategy, multi-domestic strategy, global strategy, and transnational strategy. Global strategy is an integrated strategy based primarily on price competition, therefore it is most commonly applied in situations where the need for integration is high and awareness of differentiation is low. Multi-domestic Strategy is differentiated strategy emphasizing local adaptation. Multi-Domestic Strategy is the opposite of Global Strategy, it is typically implemented when the need for differentiation is high but the concern for integration is low. International Strategy is a mixed strategy combining low demand for integration and responsiveness, it incorporates those cases in which both the need for integration and awareness of differentiation are low. Transnational Strategy is the integrated strategy emphasizing both global integration and local responsiveness. The need for integration and differentiation are both high. There is a strong need for integration in production along with higher requirements for regional differentiation in marketing. Q2. “Companies still in the developmental stages of international business involvement are most likely to adopt the international division structure." Why? There are a number of advantages associated with the use of an international division structure. Due to international operations
Multinational corporations can be divided into three broad groups according to the configuration of their production facilities:
The internationalisation process of the firm has been a subject, which has been motive of study for a number of
16. A ____________ is a business in which a multinational company owns 100 percent of the stock. A. joint venture B. strategic alliance C. wholly owned subsidiary D. franchising operation 17. Firms following a global strategy strive to offer ______________ products and services as well as locate manufacturing, R&D, and marketing activities in _____________ locations. A. a wide variety of; several B. a wide variety of; few C. standardized; several D. standardized; few 18. Recent trends that might lead managers of multinational corporations (MNCs) to adopt a more decentralized strategy for their operations would include all of the following except A. customers' needs, interests, and tastes are becoming increasingly homogenized or similar. B. consumers around the world are increasingly willing to trade off idiosyncratic preferences in product features for lower price. C.
Strategies: What strategy or mix of strategies is the corporation following? Are they consistent with each other,
In addition, the internationalisation is the strategy to occupy the foreign market step by step. Also, the porter’s competitive advantages theory is to analysis the strategies of global business. They could divide to three strategies: over cost leading, diversity, and market focus strategy (Passemard& Calantone, 2000). The cost leading strategy focus on establish efficient scale production facility and minimize the research and advertising cost. The diversity strategy focus on introduce some unique product in whole industry. But, this strategy will with a high cost price. The focus strategy is attack of a particular customer group or specialist regional market, its purpose to design the service for a particular target. Consequently, the companies need to consider the internal and external factor condition, such as: factor condition, demand condition, related and supporting industries condition, and firm strategy and rivalry. They are called diamond system. This dynamic system gives the company a standard to measure theirs advantage and disadvantage before they enter foreign market. Moreover, the specific advantage in Internationalisation of Production is give companies a new choose for exhausted market (Strange,S. 1992). In an international environment, the companies will face more uncertain and unequal condition than home market, therefore the companies need keep the attention of more factors:
Better Way should create a new division solely for international expansion. This way company can allocate proper
1.Briefly describe reasons for Phillips and Matsushita to operate internationally. Why do they do it? Describe the international strategy of Phillips and Matsushita using the international strategy classifications we discussed in class (e.g., localization, transnational, global).
In the business industry, if businesses want to export their goods and services to other countries, they must become familiar with and adopt international and global strategies. Consequently, there are three types of international and global business strategies. The first type is international, which entails conducting a significant amount of activities outside the home country, yet its focus remains on the home market (Fung, 2014). The second type is multinational, which consists of operating in multiple countries, yet the headquarters is in its home country, not to mention that the competitive advantage will vary by country (Fung, 2014). The third and final type is global, which is when the organization treats the whole world as one market and one source of supply, not to mention, that its competitive advantage is contingent of common brands, standardized products, and global scale production (Fung,
We found innovation, cost reduction and market conditions as key elements supporting a successful internal strategy and strategic alliance and diversification to be among the most widely applied strategies for a foreign market penetration and development, while fusions and licenses were the least preferred.
Lately, the international financial integration has increased. Over the years, the world economy has witnessed an increase in the number of individuals and businesses using international banking services. In today’s competitive global economy banks have the option to solely service their home market, to export services to foreign markets, or to establish a presence in that market. Essentially, banks have two options of expanding their operations in foreign markets. They can either service foreign clients through their domestic offices or they can establish a presence in the foreign markets. In general, the reasons for bank internationalization in
The objective of MNC to operate in other countries is to gain competitive advantage through several ways. Firstly, MNC is able to take advantage of difference in country-specific circumstances. For example, MNC may choose to locate its productions in less developed country like Vietnam to gain cheap labor cost. Secondly,
Companies can decide to go global or to enter international markets for various reasons, and these different objectives at the time of entry that enable the business to produce different strategies and the performance goals, and even forms of market participation.
Subject : Appraisal of a MNE's recent market entry (2007-2010) ( 1. Firm Motivations for internationalization 2. Entry Strategy 3. Corporate Strategy)
Well known companies like Nike, Microsoft, Sony, Shell Group are just some of the big companies that went global and expanded their trading around the world, they are large businesses that operate internationally in many countries. Development of worldwide integration urges companies to reach out international markets and interact with foreign customers. Businesses focus on fulfilling the demand of the market by its products or services, besides their target is increasing profit, in order achieve these goals they favor to expand their work in a foreign market. Other reasons to internationalize their business may be to become
There is a synergy between the divisions where the combined result is better than the