Exam 11: Global Strategy and the Multinational Corporation

Many retailers that have been outstandingly successful in their how markets have experienced much poorer performance when they have entered overseas markets.These include: Tesco,Marks & Spencer,Laura Ashley,and Body Shop in the UK);Best Buy,Sears,Macy's,and Walmart in the US.This reflects:

Large countries have an advantage over small countries in technology-intensive and capital-intensive industries,because:

Internationalization occurs through two main mechanisms: trade and government policy.

McKinsey & Company's finding that found that successful MNCs are underperforming successful "national Champions" is evidence of:

Comparative advantage refers to countries' relative efficiencies in producing different products

Service industries such as commercial banking and hotels tend to be "multidomestic" in their pattern of internationalization.

Internationalization often involves mergers and acquisitions,hence,it tends to reduce seller concentration within individual national markets.

A start-up company based in Canada and led by an academic microbiologist has patented genetically-modified,drought-resistant maize particularly suitable to arid regions of Africa.The firm has been unable to attract significant venture capital investment.How should the firm exploit commercial opportunities for its product in Africa?

International trade is motivated by the quest for market opportunities in other countries,while foreign direct investment is motivated by the desire to exploit resources and capabilities in other countries.

Traditionally,European-based multinational companies such as Unilever,Shell,and Philips have been highly centralized;Japanese multinationals such as Honda,Sony,and Hitachi have been highly decentralized.

The Dutch-based electrical and consumer electronics multinational,Philips,has transferred the headquarters for several of its global business away from the Netherlands.In terms of Bartlett and Ghoshal's typology of multinational strategies,this represents a transition from:

Firms internationalize through two mechanisms:

With internationalization,the threat of new entry into domestic industries are increases because:

The value chain for a product will tend to be dispersed across different countries when:

The rise of Shenzhen to become one of the world's most important industrial centers is evidence of:

Internationalization offers a remarkable opportunity for businesses to expand and prosper.Only the unimaginative and the pessimistic would regard it as a threat.

Sheltered industries are shielded from imports by government restrictions such as import quotas and high tariffs and .

A key difference between Bartlett and Ghoshal's "transnational corporation" and the conventional US multinational corporation (described by Bartlett and Ghoshal as a "coordinated federation")is that communication and coordination occurs between national units rather than exclusively between each national unit and the corporate HQ

Saudi Aramco and Statoil are both major oil producers.Saudi Aramco's competitive advantage is based on its access to low-cost domestic oil reserves;Statoil's competitive advantage is its capability in offshore exploration and production.The implications for the internationalization strategies of the two companies are:

Porter's "national diamond" framework implies that government policies which foster "national champions" within technology-based industries are likely to be successful in stimulating national competitiveness in these sectors.