Unformatted text preview: lobal” to get the
volume necessary to support pictures such as Titanic.
7 Why do MNCs go global?
NCs To seek raw materials-Many U.S. oil companies, such as Exxon
Mobil, have major subsidiaries around the world to ensure
access to the basic resources needed to sustain the companies’
primary business line.
To seek new technology-No single nation holds a commanding
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
copiers in the United States that were engineered and built by its
Japanese joint venture, Fuji Xerox.
Similarly, versions of the superconcentrated detergent that
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
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
built assembly plants in the United States.
The ability to shift production from country to country has
important implications for labor costs in all countries. 9 Why do MNCs go global?
NCs To avoid political and regulatory hurdles-The primary
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
assembling vehicles in the United States.
One of the factors that prompted U.S. pharmaceutical maker
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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