Chapter 1 - Expanding Abroad Motivations, Means, and Mentalities

What market opportunities, sourcing advantages, or strategic imperatives provide the motivation for their international expansion?

(—-)

By what means will they expand their overseas presence– through modes such as exports, licensing, joint ventures, wholly owned subsidiaries, or some other means?

(——)

And how will the management mentalities– their embedded attitudes, assumptions, and beliefs– that they bring to their international ventures affect their chances of success?

(———)

What is MNE?

Multinational Enterprise

What are the criteria behind Multinational enterprise (MNE)?

Entity must…

• Have substancial direct investment in foreign countries

  • (Not just trading relationships of import/export biz)

• Be engaged in active management of offshore assets

  • (Not just holding in passive investment portfolio, source materials offshort, licence/export abroad, OR hold minor equity overseas)

Definition of MNE?

Definition: True MNEs have substantial direct investment in foreign countries and actively manage and regard those operations as integral parts of the company, both strategically and organizationally.

What does the changing definition of an MNE suggest?

The primary part of MNE: Importance of strategic and org integration for corordinated management of operations in different countries

Are all MNE’s Large?

No, but most large companies are MNEs

What are examples of MNEs?

• Apple

• BP

• Honda Motors

• Intercontinental Hotels

• Deloitte Consulting

• McDonalds

What are examples of Traditional Motivations of Internationalizing a business? (3)

• Secure Key Suppliers (Example: Oil in Middle East)

• “Market Seeking Behaviour” (Example: Competitive Advantage Abroad, Philips OR Volkswagon expand internationally for new markets)

• Desire for low-cost factors of production (Example: GE (American) moving production from Virgina, USA to China for labour cost)

Summarize Product Cycle theory: (4)

Phase 1:

Phase 2:

Phase 3:

Phase 4: