Post on 21-Jan-2015
description
EXPANDING ABROADMotivations, Means,
and Mentalities
Multinational Enterprise (MNE)
What is it?
An enterprise that has a substantial direct investment and active management of entities in a foreign country.
Scope In 1984, the UN’s definition of MNE changed.
An MNE is an enterprise:
Comprising entities in two or more countries
Operates under a system of decision making permitting coherent policies and a common strategy through one or more decision-making centers
The entities are linked in a way that allows one or more to exercise significant influence over the activities of the others
Influence
70%
30%
World Trade
Top 500 MNEs
Other
MNEs produce __% of the world’s automobiles, __% of computers, __% of toothpaste, and __% of soft drinks.
Top 500 MNE’s account for:
85
70 35
65
The Motivations: Pushes and Pulls to
Internationalize
Traditional Vs. Emerging
TRADITIONAL EMERGING
Need to secure key supplies
Market-seeking behavior
Access to low-cost factors of production
Increasing scale economies, ballooning R&D investments, and shortening product life cycles
Global scanning and learning capability
Competitive positioning
Going International Prerequisites
Motivation
Strategic Competencies
Organizational Capabilities
Uppsala Learning Model of Internationaliztion
Approaches to Foreign Market Entry
Evolving Mentalities
International Mentality
Multinational Mentality
Global Mentality
Transnational Mentality
International Mentality
Overseas portions are distant outposts whose role is to support the parent company
Products are developed for the domestic market and are only subsequently sold abroad
Multinational Mentality
Growing sales convince managers that the foreign branches have more than marginal significance
The parent company will modify its main products to fit the needs of foreign markets
Global Mentality
Provide standardized products at low costs
Provides the company with more central coordination and control
Transnational Mentality
Companies are more responsive to local needs and pressures to develop global scale competitive efficiency
Resources and activities are dispersed but specialized to for efficiency and flexibility
QUESTIONS?