Lecture-9-MNC+Management

Thus movie companies have gone global to get the thus

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Unformatted text preview: lobal” to get the Thus, volume necessary to support pictures such as Titanic. Titanic. 7 Why do MNCs go global? NCs To seek raw materials-Many U.S. oil companies, such as Exxon Many Mobil, have major subsidiaries around the world to ensure access to the basic resources needed to sustain the companies’ primary business line. primary To seek new technology-No single nation holds a commanding No advantage in all technologies, so companies are scouring the globe for leading scientific and design ideas. For example, Xerox has introduced more than 80 different office For copiers in the United States that were engineered and built by its Japanese joint venture, Fuji Xerox. Similarly, versions of the superconcentrated detergent that Similarly, Procter & Gamble first formulated in Japan in response to a rival’s product are now being marketed in Europe and the US . 8 Why do MNCs go global? NCs To seek production efficiency-Companies in high-cost Companies countries are shifting production to low-cost regions. For example, GE has production and assembly plants in Mexico, South Korea, and Singapore, and even Japanese manufacturers are shifting some of their production to lower-cost countries in the Pacific Rim. BMW, in response to high production costs in Germany, has BMW, built assembly plants in the United States. The ability to shift production from country to country has The important implications for labor costs in all countries. 9 Why do MNCs go global? NCs To avoid political and regulatory hurdles-The primary The reason Japanese auto companies moved production to the United States was to get around U.S. import quotas. Now Honda, Nissan, Toyota, Mazda, and Mitsubishi are all Now assembling vehicles in the United States. One of the factors that prompted U.S. pharmaceutical maker One SmithKline and Britain’s Beecham to merge was that they wanted to avoid licensing and regulatory delays in their largest markets, Western Europe and the United States. 10 Why do MNCs go global? NCs Now SmithKli...
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