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Business strategy in global economy

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Business strategy in global economy

Business strategy in global economy

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  • 1. 12 Globalisation and Multinational Corporations
  • 2. Multinational Corporations
    • Diversity among MNCs
      • size
        • the comparative size of MNCs and countries' GDP
  • 3. Comparison of the 10 largest multinational corporations (by gross revenue) and selected countries (by GDP): 2002
  • 4. Comparison of the 10 largest multinational corporations (by gross revenue) and selected countries (by GDP): 2002
  • 5. Multinational Corporations
    • Diversity among MNCs
      • size
      • the nature of the business
  • 6. Multinational Corporations
    • Diversity among MNCs
      • size
      • the nature of the business
      • overseas business relative to total business
  • 7. Multinational Corporations
    • Diversity among MNCs
      • size
      • the nature of the business
      • overseas business relative to total business
      • production locations
  • 8. Multinational Corporations
    • Diversity among MNCs
      • size
      • the nature of the business
      • overseas business relative to total business
      • production locations
      • ownership patterns
  • 9. Multinational Corporations
    • Diversity among MNCs
      • size
      • the nature of the business
      • overseas business relative to total business
      • production locations
      • ownership patterns
      • organisational structure
  • 10. Multinational Corporations
    • Diversity among MNCs
      • size
      • the nature of the business
      • overseas business relative to total business
      • production locations
      • ownership patterns
      • organisational structure
    • Trends in multinational investment
  • 11. Multinational Corporations
    • Diversity among MNCs
      • size
      • the nature of the business
      • overseas business relative to total business
      • production locations
      • ownership patterns
      • organisational structure
    • Trends in multinational investment
      • the growth and geography of FDI
  • 12. FDI inflows (% of gross fixed capital formation) FDI as % of gross fixed capital formation
  • 13. FDI inflows (% of gross fixed capital formation) FDI as % of gross fixed capital formation Advanced countries
  • 14. FDI inflows (% of gross fixed capital formation) FDI as % of gross fixed capital formation Advanced countries Developing countries
  • 15. Multinational Corporations
    • Diversity among MNCs
      • size
      • the nature of the business
      • overseas business relative to total business
      • production locations
      • ownership patterns
      • organisational structure
    • Trends in multinational investment
      • the growth and geography of FDI
      • FDI and the UK
  • 16. Direct investment into and out of the UK
  • 17. Direct investment into and out of the UK Inward investment
  • 18. Direct investment into and out of the UK Outward investment Inward investment
  • 19.
    • Types of multinational expansion
      • horizontally integrated multinational
      • vertically integrated multinational
      • conglomerate
    • Going global to reduce costs
      • international differences in input prices
      • international differences in productivity
        • labour skills
        • entrepreneurial and managerial skills
        • learning by doing
      • low-cost access to local markets
      • economies of scale
      • taking advantage of government policies
    Business Strategy in a Global Economy
  • 20.
    • Going global to access new markets
      • increased demand
      • spreading risks
      • can exploit advantages over local firms
        • ownership of superior technology
        • entrepreneurial and managerial skills
        • R&D capacity
      • access to local technology
      • learning from experience in diverse markets
    Business Strategy in a Global Economy
  • 21.
    • The product life cycle and the MNC
      • the launch phase
        • multinational spread likely to be limited
      • the growth phase
        • MNC likely to shift production abroad in order to retain cost competitiveness
      • maturity
        • MNC increasingly seeks markets abroad as growth in home market slows
      • late maturity and decline
        • MNC increasingly seeks both markets and ever lower cost production abroad
    Business Strategy in a Global Economy
  • 22.
    • Problems facing multinationals
      • language barriers
      • selling and marketing
        • cultural issues
      • relations with host governments
      • relationships between subsidiaries
        • possible diseconomies of scale
        • easier if subsidiaries are run independently
    • The global strategy trade-off
      • economies of scale of standardisation or higher costs of customisation?
        • determinants of trade-off
    Problems Facing Multinationals
  • 23. MNC Investment and the Host State
    • Advantages of MNC investment
      • employment
      • balance of payments
      • technology transfer
      • tax revenues
    • Disadvantages
      • uncertainty
      • power and control by the MNC over the host
      • transfer pricing
      • the environment
  • 24. Is Globalisation a 'Good Thing'?
    • The benefits of globalisation
      • benefits of trade
      • benefits of increased FDI
      • competition reduces costs and encourages innovation
      • faster spread of technology
      • political and social ties
    • The costs
      • can exacerbate inequality
      • erodes national cultures
      • environmental costs
      • domination by MNCs