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POB 1.03 Part 3

POB 1.03 Part 3. Understand business in the global marketplace. What is a Multinational Company?. Multinational Company (MNC) is an organization that does business in several countries The parent company is in the home country and does business activities in the host country.

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POB 1.03 Part 3

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  1. POB 1.03 Part 3 Understand business in the global marketplace.

  2. What is a Multinational Company? • Multinational Company (MNC) is an organization that does business in several countries • The parent company is in the home country and does business activities in the host country. • Pros: cheaper goods and career opportunities • Cons: may become an economic power; host may depend on the MNC for jobs & products

  3. International Business Strategies • Global Strategy: selling the same product and using the same marketing strategy worldwide • Multinational Strategy: treats each country market differently

  4. Entry Modes into the Global Marketplace • Franchising • Licensing • Joint Venture

  5. Franchising • Franchising is the right to use a company name or business process in a specific way. • Usually involves selling a product or service. • Example: McDonalds, KFC

  6. Licensing • Licensing is selling the right to use some intangible property for a fee or royalty • Production process, trade mark or brand name

  7. Joint Venture • A Joint Venture is an agreement between 2 or more companies to share a business project • Popular in manufacturing

  8. Major International Trade Organizations • International Monetary Fund • 150 member nations; helps to promote economic cooperation; keeps orderly system of trade and exchange rates • World Bank • Formed in 1944; gives economic aid to less developed countries • World Trade Organization (WTO) • Formed in 1995 to promote trade; over 150 countries; settles disputes and enforces free trade agreements

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