Unformatted text preview: rying menus around the world due to the different
preferences of its customers.
Responds to challenges by funding research and adding
healthier options. For Example Malaysia: Bubur Ayam McD – Chicken strips in porridge with
onions, ginger, and shallots.
Egypt: Mcarabia – Grilled chicken with tehina sauces, lettuce,
tomato and onion on Arabic bread.
Japan: Teritama – Teriyaki burger topped with an egg.
Germany: Want a beer with your burger? You can order one in
the German stores.
Israel: Operates using Kosher kitchens. Contract Manufacturing
A foreign company produces private-label goods
to which a domestic company then attaches its
own brand name or trademark. A form of
Nike produces its wares in China and the Far
East through contractors, and then distributes
and markets the products.
The first international move of WalMart was not
opening stores abroad! Instead, WalMart opened contract manufacturing
offices in HongKong/Shenzhen and in Taipei, for
production of its private label goods. Joint Ventures
A partnership where two or more companies join
to undertake a major project
Benefits of joint ventures Shared technology and risk
Shared marketing and management expertise
Entry into markets where foreign companies are often
not allowed unless goods are produced locally Shell/Cosan $12 billion JV Shell: technology, marketing, additional investment
Cosan: land, production capacity, access to Brazilian
sugarcane Strategic Alliance
A long term partnership between two or more
companies established to help each company
build competitive market advantages; Strategic alliances don’t typically share costs, risks,
management or profits;
Provide broad access to markets, capital, and
technology. Example: Fiat – Chrysler Chrysler – Access to US market
Fiat – Access to “Rest of the World” Foreign Direct Investment
The buying of permanent property and businesses in
Foreign Subsidiary A company owned in a foreign country by another company
called the parent company. Most common form of FDI
Parent company maintains control over technology and
Parent company commits funds and technology within foreign
boundaries. WalMart has Acquired ASDA (second largest retail chain in the UK)
Acquired controlling stake in Seiju (Japan)
Acquired Cifra in Mexico. Now largest retailer in Mexico.
Acquired Woolco in Canada. Now largest discount retailer in
Canada. “Born-global” Ventures
New companies that are founded with an active global
strategy and have sales, employees, and financing in
Why? Quick, reliable worldwide transportation (especially air travel)
Inexpensive communication technologies
Critical mass of internationally minded businesspeople How? A fully developed and communicable global vision;
Entrance into several foreign markets at the same time. Successful entrepreneurs are also forming some
surprising cross-border collaborations. Shai Agassi, an
Israeli-American businessman based in Palo Alto,
California, is promising to upend the car industry by
going electric, in alliance with politicians, entrepreneurs
and companies in Israel, Denmark, Japan and France.
Israel and Denmark (and now Australia) are both
building networks of recharging stations. Danish
entrepreneurs are working on technology that will
prolong the life of batteries. Renault and Nissan are
building electric cars. The Economist, March 12th, 2009 Take-aways
National market differences are being quickly blurred.
However, protectionism remains a viable national
A business with unique core competencies can reach
much profit from becoming a Multinational Enterprise.
There are a variety of modes of involvement in IB, and
MNEs avail themselves simultaneously of most of
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- Spring '06
- International Trade, U.S.A., voluntary export restraints, unique core competencies, Government import standards