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Emerging Multinational Strategies

Emerging Multinational Strategies. Process of Internationalization. Factors (5 Ms): Markets (IPLC) Motivators ( Determinants for Cross Border Business ) Modes of Entry (Arms-Length, JVs, M&A, Greenfield) Management (Finance, Production, HR, Leader & Technology)

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Emerging Multinational Strategies

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  1. Emerging Multinational Strategies

  2. Process of Internationalization Factors (5 Ms): Markets (IPLC) Motivators (Determinants for Cross Border Business) Modes of Entry (Arms-Length, JVs, M&A, Greenfield) Management (Finance, Production, HR, Leader & Technology) Methods (Systems & Processes– execution & maintenance) Others: Morals (Ethics, Value & Culture) Metaphors (Image & Perceptions of Foreign Clients)

  3. Russian Multinationals Industry Type – Product category Ownership Year Founded Year of Foreign market entry International Presence (sale, mfg. R&D) Size (revenue, employees, profits, growth) % of International sales Technology Focus Russian Economy & Characteristics

  4. Leading Multinationals from Russia http://www.rusal.com http://www.severstal.ru http://www.ibs.ru http://www.sistema.ru/ http://www.sitronics.com/ http://www.transas.com/ http://www.pcmp.ru

  5. Summary of Russian Companies

  6. Russian Economy - Characteristics 1985 – 1990 Perestroika (program of economic restructuring) Glasnost (liberalize freedom of press) Privatization:http://findarticles.com/p/articles/mi_m1132/is_n6_v44/ai_12841723 http://econpapers.repec.org/paper/wpawuwpdc/0312002.htm http://en.wikipedia.org/wiki/Boris_Yeltsin High rates of Inflation in the early 90s State ownership to Private Ownership Nature of entrepreneurs Nature & characteristics of business focus Focus on technology Privatization to Globalization

  7. Chinese Economy - Characteristics

  8. Chinese Multinationals Industry Type – Product category Ownership Year Founded Year of Foreign market entry International Presence (sale, mfg. R&D) Size (revenue, employees, profits, growth) % of International sales

  9. Leading Multinationals from China http://www.smtcl.com/web/en/aboutus/index.html http://www.dmtg.com http://wwwen.zte.com.cn/ http://www.huawei.com/ http://www.tcl.com/main_en/ http://www.konka.com/about/about.jsp

  10. Summary of Chinese Companies

  11. Summary of the article on Emerging Multinationals

  12. Key Differences b/w EMNCS & Western MNCS Emerging multinationals tended to internationalize much faster and often skipped some modes in the normal Uppsala model progression from low commitment to high commitment modes. Emerging multinationals normally did not expand to gain access to inexpensive resources (e.g., inexpensive labor) or to gain access to additional markets to sell products to Instead to acquire respected brands and modern technology

  13. Emerging multinationals normally internationalized to improve their position in their home market rather than to access other markets For many emerging multinationals the greatest challenges were finding ways to overcome the problem of a negative country image and the lack of ability of foreigners to differentiate between firms in the same industry from the same transforming economy A strong focus on quality as shown by getting international quality certificates proved to be one useful way

  14. Emerging multinationals normally found it easier to do business in other developing countries since they were better able to deal with these challenging environments than their western counterparts Extreme lack of international experience and foreign language skills among emerging multinationals - As a result, paying significant attention to recruiting for and developing these skills proved to be especially important for emerging multinationals EMNCS, the new kids of global business are serious challengers to the existing & traditional Global players

  15. Additional perspectives on EMCS 1. Emerging multinationals had a pool of motivated manpower to explore the world as compared to western multinationals whose manpower considered being sent outside the home country as a punishment

  16. 2. How are the EMNCS leveraging their local culture & values into building quality? India: discipline and strong principles; cultural? China: strong nationalistic feeling (directing their energy for mass scale production) ? Russia: Home grown Technology and scientific manpower ? Strategic Convergence & Strategic Decay, Gary Hamel(2000),

  17. 3. How are they leveraging the best local talent from a much bigger pool? Larger population v/s lower opportunity – leads to higher domestic competition Willingness to work harder Higher level of competitiveness Majority of population in middle income group: At lower level of self – seeking material achievements Local Talent is thirsty to grow – wings of fire

  18. Questions to be answered 1. How do the EMNCS acquire assets and competence in their respective economies? 2. How do they reconfigure their assets in the global market to compete? 3. Do EMNCS have different management practices compared to their triad counterparts?

  19. 4. How are they amassing national assets (through favorable local Government policies) in their respective nations to grow to global size? 5. If historically, MNCs have been observed to behave as stateless corporations, how will the EMNCS contribute to their respective nations in the future? 6. Can the EMNCS discover new routes and strategies and not tread the same old path of competition?

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