Understanding Multinational Enterprises (Mne’s) Essay

907 words - 4 pages

INDEX

1. Multinational Enterprises (MNE’s).
2. Structure of MNE’s.
➢ Horizontally integrated MNE’s.
➢ Vertically integrated MNE’s
➢ Diversified MNE’s
3. Generic strategies of MNE’s.
➢ Global integration strategy.
➢ Host country focus strategy.
➢ Hybrid international strategy.
4. SWOT analysis of MNE’s.
5. Advantages of MNE’s.
6. Disadvantages of MNE’s
7. When is a company classified as an MNE’s?
8. Top ten MNE’s in the world.
9. Reasons why companies would want to be a MNE.
10. Emerging market?
• Developing countries on the rise.
• Developing countries → Emerging markets.
11. Strategies adopted by emerging markets
• Export strategy.
• Licensing strategy.
• Franchising strategy.
• Strategic alliance with foreign partners.
• Strategies of local companies in emerging markets.
12. Globalization of the beer markets in the emerging markets.
13. Reference/Bibliography.

MULTINATIONAL ENTERPRISES (MNE’s)

A MNE is an enterprise, which has its services and assets in more than one country. MNE’s have offices and production unit in different countries known as host countries with a head office in the home country where all global management decisions are coordinated. E.G.: Coca-Cola, Toshiba, and Honda. MNE’s play a very important role in globalization.

STRUCTURE OF MULTINATIONAL ENTERPRISES

MNE’s have three different and unique structures (transnational corporations,2011)

Horizontally integrated MNE’s:

Horizontal integration is a plan where a company manages its production units in different countries to manufacture identical products. The soft drink company is the best example for horizontal integration of MNE’s.

Vertically integrated MNE’s:

Vertically integrated MNE’s manage production units in selected countries, which produce parts required as inputs for the main production units in another country. E.G.: the car industry.

Diversified MNE’s:

Diversified MNE’s manage output in different countries that are neither horizontally nor vertically integrated. E.G.: Joint venture of Coca-Cola with McDonald's.

GENERIC STRATEGIES OF MNE’s

Global integration strategy:

The global integration strategy takes advantage of economies of scale and of diverse opportunities for cost reduction. (A comprehensive strategy for globally integrated operations, 2009)
Host country focus strategy:

The host country focus strategy considers companies as independent national firms
Hybrid international strategy:

Hybrid international strategy is gaining benefits from the combination of both global integration strategy and host country focus strategy.

SWOT ANALYSIS OF MNE’S

ADVANTAGES OF MNE’S

To the host country:

The host country is benefitted in several ways when a MNE plans to set up subsidiaries. There is a transfer technology and capital in the host country, this is helps the host country to...

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