The Rapid Change of International Business
Essay by Diệu Tú Nguyễn • October 24, 2017 • Case Study • 457 Words (2 Pages) • 824 Views
Full name: Nguyen Thi Dieu Tu
Student ID: 11154762
Class: International Business 57A
INTERNATIONAL BUSINESS: HOMEWORK CHAPTER 1
Question #1: What are the differences among international, global, and multi-domestic companies?
International Company | Global Company | Multi-domestic Company | |
Operations and Trading | -Sell their products in foreign countries by exporting products to those countries. - Might be involved in importing activities. - Do not have their own establishment in foreign countries. | - Have operations and trading in many countries across the world, at least around 15 countries. | - Have branches and establishments across many countries in the world. |
Investment | - Do not receive any FDI from the foreign countries where they exports to or imports from their products/services. | - Mostly have FDI in some or all foreign countries where they operate in. | - Mostly have FDI in some of the foreign countries where they operate in. |
Strategy | - The key decision making functions is always taken from the domestic country of the company as these companies do not have any foreign set up or branches. | - Centralized: The major decisions on the organizational approaches/changes are taken from the headquarter of the company. For example, merger and amalgamation, new products launching, etc. | - Decentralized: Each of their branches is responsible for its own key decisions, which have to suit the respective domestic places. |
Products/ R&D | - Product development processes are accomplished in the domestic country. | - The Parent company generally initiates and completes the products development processes, and then distributes to the subsidiaries. - Subsidiary companies at other countries may be allowed to take part in idea involvement process. | - Subsidiary companies at different countries are given the rights to develop product as per the local taste and demands. |
Challenges | - Face regulatory and legal issues. - Following one uniform product type across all countries may lead to miss the local touch and lower the demand in some countries. | - Have to face legal, regulatory and customs issues. - The taste of products in some countries does not match. | - Mainly face internal manpower issues, and organizational problems, etc. |
Example | Wal-mart | Coca-Cola, Microsoft, Lenovo | McDonald, KFC, Lotteria |
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