Multi-National Business
Strategies
For profit … for career …
for fun
Copyright © 1989-2012, Jens Mueller [email protected] www.muellerjens.com
Copyright © 1989-2012, Jens Mueller [email protected] www.muellerjens.com
Copyright © 1989-2012, Jens Mueller [email protected] www.muellerjens.com
Copyright © 1989-2012, Jens Mueller [email protected] www.muellerjens.com
Multi-National Business
Strategies
For profit … for career …
for fun
Multi-National Objectives
Sales
R&D
Competitive Information Gathering
Corporate Image Presence
Foreign Acquisitions
Access to Resources
Control of Logistics Hubs
Satisfy Corporate Ego
Copyright © 1989-2012, Jens Mueller [email protected] www.muellerjens.com
Benefits of Worldwide Presence
Increased Market Size
Sales growth
Increased recognition
Higher profits
Access to Resources
Raw materials, finished goods
Technologies, licenses
Qualified or unskilled staff
Diversification
Competitiveness
Copyright © 1989-2012, Jens Mueller [email protected] www.muellerjens.com
Benefits of Worldwide Presence
Increased Market Size
Access to Resources
Diversification
Move obsolete products
Compensate for cycle sales
Broaden product range
Competitiveness
Gain advance insight on new market
developments/trends
Copyright © 1989-2012, Jens Mueller [email protected] www.muellerjens.com
International strategy
Create value by transferring valuable core
competencies to foreign markets that
indigenous competitors lack
Centralize product development
functions at home
Establish manufacturing and marketing
functions in local country but head office
exercises tight control over it
Limit customization of product offering
and market strategy
Strategy effective if firm faces weak pressures
for local responsive and cost reductions
Management Factors
Domestic
Management
Good
Citizenship
Finance
Production
Human Marketing
Resource
Developmt.
Copyright © 1989-2012, Jens Mueller [email protected] www.muellerjens.com
Sales
Management Factors
Competition
Economy
Monetary/
Political
Local
Laws
Climate
Environmt.
Labor
System
Technology
MultiNational
Management
Good
Citizenship
Finance
Production
Human Marketing
Resource
Developmt.
Copyright © 1989-2012, Jens Mueller [email protected] www.muellerjens.com
Socio-/Cult.
Norms
Sales
Theory of Relative Advantage
Exports
Efficient manufacturing
Export goods which are
more efficiently produced
than others
Import goods which other
countries produce more
efficiently than others
Copyright © 1989-2012, Jens Mueller [email protected] www.muellerjens.com
Outflow of Goods
Inflow of Goods
or Money
Example
Output Capacity
(hours/day)
Calculators
Cigars
Country A
Monozol
Country B
Barnovia
6
20
2
10
Should these countries trade?
What are the economic limits of
trading Cigars for Calculators?
Copyright © 1989-2012, Jens Mueller [email protected] www.muellerjens.com
Relationship of Nations
Independence
Limited availability of goods
Outside events have/little impact
No advantages from competitive
buying
No political/economic compromises
needed to maintain a relationship
Interdependence
Dependence
Copyright © 1989-2012, Jens Mueller [email protected] www.muellerjens.com
Relationship of Nations
Independence
Interdependence
One or more countries depend heavily
on each other
Outside events have major impacts on
the local economy
Political/economic compromises are
required to maintain the relationship
Dependence
Copyright © 1989-2012, Jens Mueller [email protected] www.muellerjens.com
Relationship of Nations
Independence
Interdependence
Dependence
Wide range of goods available
Strong dependency on few partners
Major political/economic compromises
required
Less developed countries are often
more dependent than others
Copyright © 1989-2012, Jens Mueller [email protected] www.muellerjens.com
Forms of Economic Integration
Free Trade Area
No tariffs (example: EFTA)
Customs Union
Joint external tariffs
(example: Caribbean
Common Market)
Common Market
Economic Union
Political Union
Copyright © 1989-2012, Jens Mueller [email protected] www.muellerjens.com
Forms of Economic Integration
Free Trade Area
Customs Union
Common Market
Economic Union
Political Union
Loss of national identity
Single federal government (example:
USA, Canada, former USSR)
Copyright © 1989-2012, Jens Mueller [email protected] www.muellerjens.com
Intellectual Property Issues
Patents, trademarks, servicemarks,
copyrights and other intangible values,
trade secrets, “touch and feel”.
IP is part of the valuable knowledge base
of a firm. Sharing can advance the
business, or harm.
Many firms benefit from lax enforcement
of IP rights.
Internet data transfers accelerate loss of
privacy and IP ownership.
Copyright © 1989-2012, Jens Mueller [email protected] www.muellerjens.com
Intellectual Property
Patents (15-20 years)
International standardization, for 90+
countries
Developing countries seek relief from patent
constraints
Simplified registration process
Trademarks
Service Marks
Copyrights
Web Names
Copyright © 1989-2012, Jens Mueller [email protected] www.muellerjens.com
Intellectual Property
Patents (15-20 years)
Trademarks (10-20 years)
Protection varies by country
Single European Trademark Office for EU
trademark registrations
Service Marks
Copyrights (0-50 years after death)
Berne Convention of 1886
Web Names
Untested international protection
Copyright © 1989-2012, Jens Mueller [email protected] www.muellerjens.com
Opportunities Abroad
Broader scope of management
duties. More job independence and
opportunities to be noticed.
Rank and titles not directly
comparable.
Gain of generally transferable
experience.
Greater interaction with
local/national environment,
language, cultures, etc.
Copyright © 1989-2012, Jens Mueller [email protected] www.muellerjens.com
Challenges Abroad
Significant adaptation required for
employee and family.
Lose contacts at head office.
Different quality of live at different cost.
Out of touch with strategy, technology,
personnel shuffles, jungle warfare.
Future career not always agreed upon.
Repatriation may cause same/greater
adaptation problems.
Copyright © 1989-2012, Jens Mueller [email protected] www.muellerjens.com
Socio-/Behavioral Variables
Physical Appearance (size, height,
weight, hair/skin color, clothing
preference, etc.)
Cultural factors (beliefs, rules,
techniques, institutions, lifestyle
patterns, morals, etc.)
Group membership
Direct/Indirect communication
Copyright © 1989-2012, Jens Mueller [email protected] www.muellerjens.com
Religious Tensions
Religions that govern conduct
during non-religious activities
Religions with direct
influence/control of politics, laws,
duties
Religions with massive followings in
given countries
Copyright © 1989-2012, Jens Mueller [email protected] www.muellerjens.com
Etiquette Factors
Sebenius, HBR March 2002
Greetings: Ego involved?
Formality: Dress and language?
Gift Giving: Expected? Traps?
Touching: Taboos?
Eye Contact: Domination?
Deportment: Who is in charge?
Emotions: Personal v Professional Life?
Silence: Argumentative?
Eating: Which custom counts?
Body Language: It’s there!
Punctuality: How to show respect?
Copyright © 1989-2012, Jens Mueller [email protected] www.muellerjens.com
Polycentrism
Highly decentralized control
Adaptation to local business needs
excessive polycentrism may impact
parent organization
Can global firms be polycentric without
losing their corporate identity?
Why does McDonalds serve wine in
France and beer in Germany?
Copyright © 1989-2012, Jens Mueller [email protected] www.muellerjens.com
Ethnocentrism
Superiority of the mainstream corporate
system
Use cookie-cutter models to do business
worldwide
No learning curve needed
Total control over corporate identity
worldwide
Will a bull in the china shop behave
ethnocentric or polycentric?
Copyright © 1989-2012, Jens Mueller [email protected] www.muellerjens.com