Revenues it wouldnt have otherwise generated spending

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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 outsourcing. 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 ($2 billion) 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 nations; 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 expertise. 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 different countries. 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 Take-aways National market differences are being quickly blurred. National However, protectionism remains a viable national However protectionism political option; political A business with unique core competencies can reach business much profit from becoming a Multinational Enterprise. Multinational There are a variety of modes of involvement in IB, and There MNEs avail themselves simultaneously of most of them. them....
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