To be considered an MNC, a company based in the United States earnsmore than 25%of its total sales revenues from operations outside the United States.Novartis is using education to build a market where none has existed before. Why have very poor people been underserved by for-profit companies?These people have found that the products and services offered for sale are unsuited to their needs.These people do not know how to save up their money to make major purchases.These people have not used available infrastructure to access products and services.If a company differentiates its operating style for the different countries in which it operates, it isa polycentricorganization. It is likely to staff key positions in foreign countries with local nationals.By building a presence in Pakistan from the ground up, including bottling factories and warehouses, Coca-Cola is engaged in agreenfield venture.When a company licenses technology to a company in another country, the foreign company can use that technology to make a product similar to the one the first company makes but using its own systems and name.A company that treats its resources, products, and people as transcending national boundaries isa geocentriccompany, and it will hire and transfer people for key positions without regard to nationality. To acquire expertise in another country’s market, a firm may purchase a company in that country. Suchawholly owned foreign affiliatecan also help the purchasing company avoid any stigmaassociated with being a foreign enterprise.
A joint venture, a wholly owned foreign affiliate, and a greenfield venture are all forms of global direct investing .Which concept is Novartis’s marketing initiative based on?MultinationalismBottom of the pyramid (BOP)Direct investingThe following diagram shows an overview of the strategies companies use to enter the global market.A.Exporting B.Global OutsourcingC.Licensing D.FranchisingE.Joint VentureF.Acquisition G.Greenfield VentureSituationStrategyIn thinking about it, Jerzy realizes that he and Leon could create a shoe-manufacturing facility in Spain. Doing so would certainly require a large outlay of money, but Jerzy thinks that with his expertise in shoe design and Leon’s expertisein navigating Spanish management and business practices, they could create a partnership that has true synergy.Joint venture
SituationStrategyJerzy wants to keep his overall costs down and to enter into the international marketplace slowly and carefully. He is considering the use of countertrade, where he would send his shoes to Spain in return for high-quality Spanish cowhides.ExportingJerzy thinks that he would like to work closely with someone who really knows the Spanish market, and he is not concerned with maintaining high levels of control over his product. He is considering giving Leon the rights to use his shoe designs for a fee. This will keep Jerzy’s costs down but still give his shoes a wider exposure.
You've reached the end of your free preview.
Want to read all 19 pages?
- Fall '17