Presentation meeting 2

1. Expanding Abroad Motivations, Means, and Mentalities

2. Multinational Enterprise (MNE) What is it? An enterprise that has a substantial direct investment and active management of entities in a foreign country.

3. 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

4. Influence Top 500 MNE’s account for: MNEs produce __% of the world’s automobiles, __% of computers, __% of toothpaste, and __% of soft drinks. 85 70 35 65

5. The Motivations: Pushes and Pulls to Internationalize

6. 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

7. Going International Prerequisites Motivation Strategic Competencies Organizational Capabilities

8. Uppsala Learning Model of Internationaliztion

9. Approaches to Foreign Market Entry

10. Evolving Mentalities International Mentality Multinational Mentality Global Mentality Transnational Mentality

11. 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

12. 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

13. Global Mentality Provide standardized products at low costs Provides the company with more central coordination and control

14. 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

15. Questions?