2. A domestic company will be a company that is within
the country of it's own origin.
or...
Domestic organizations are company who travel
within their current country for e.g. Rail gives a travel
service within the UK. It reaches to most destinations
dedicated to their passenger needs, coaches is also
another example because it reaches numerous
amounts of destinations within the UK
Domestic Company
3. operates beyond national borders and in more than one country,
sees the globe as one single market without borders, and earns
profits in a global basis.
It pursues integrated activities on a worldwide scale, sees the
whole globe as one market and moves products, manufacturing,
capital and even personnel wherever they can gain advantages.
They operate with resolute consistency with relative price as if
the whole world or large areas are single ones.
They sell the commodity the same way everywhere, that is a
standardized commodity.
They usually have strong base on economic regions such as the
Pacific Rim, NAFTA, and EU. Products are developed for the
entire globe market and the company gives changes in order to
be able to move from regional to product line based on profits.
Centers and senior executives are from different countries. For
example; GE, Texas Instruments, Hitachi, ICI British Chemical,
Daewoo, and Hyundai.
Global Companies
4. In the multi-domestic company the subsidiaries in different
countries operate the entire value chain including purchasing,
production, marketing, sales activities and R&D.
The integration between activities across subsidiaries and
country borders are limited.
Export to neighbor countries may occur, but typically the
multi-domestic company concentrates on the local business.
Subsidiaries' interactions across borders mainly concern
administration and finances, rather than production and
services.
Multi-domestic companies often exploit a firm-specific
advantage abroad, which focuses on local responsiveness.
The reasons for that are differences in markets, cost of
transportation and importance of a close link to specific
customers etc.
Multidomestic Comany
5. The multi-domestic company becomes
international because of the companies it
owns in several countries, rather than due to
cross-border operations. The dominant form
of internationalisation for the multi-domestic
company is foreign acquisitions. In the multi-
domestic company the operations of the
different subsidiaries are adapted to the
different host-markets, and their operations
are relatively independent of the parent
company. The strategic role of the subsidiary
is the role of a local innovator.
Contd
6. is a firm having operations in more than one country,
international sales and a multinational mix of managers and
owners. (e.g., Ford, Toyota, GE, IBM, Intel, Sony with
headquarters both in N.Y. and Tokyo).
Some MNC have more than a hundred subsidiaries and
follow absolute and comparative advantages policies.
MNC also have different number of foreign production sites
and thus different numbers of international markets. This
company earns profits in different markets and not only
operates in different countries but, owns alliances in other
countries and has no allegiance to a particular country.
MNC are based and owned in one country with
manufacturing facilities in two or more countries in which
profits are not invested. The company is owned by
stockholders in several countries and is based in two or
more countries.
MNC
7. is any business which has productive activities in two or more countries
and manufactures and markets products and services in different
countries.
MNE is an efficient agent for transferring capital, managerial skills,
culture, technology, industrial know how, product design, line and brand
name, and goods and services across countries.
MNE also transfers information such as its superior information gathering
ability, headquarter’s discoveries, and exploit opportunities beyond the
domestic market. MNE can bear the risks of ventures great size and
financial strengths better than the domestic company can do. In the
1980's, there was a rise of non U.S. MNEs and the growth of the mini
multinationals in the 1990's.
United States. MNEs account for 2/3 of all direct investment, but in 2000,
of the 260 largest MNE, only 48.5% were U.S. owned multinationals;
Great Britain had 18.8%; Japan had 3.5%, and Latin America had 5%.
Other countries with MNEs are: France, Germany, Canada, Sweden,
Netherlands, Switzerland, Hong Kong, Singapore. Countries with mini
multinationals in 2000's are Israel, Germany, United States, Australia,
Italy, Brazil and Mexico with medium to small size companies such as
Lubricating Systems of Kent, Ohio, Swan Optical and Cardiac Science.
MNE
8. TNC
are corporations owned and managed by the United States
in different countries. Transnational corporations also tend to
view the world as one giant market for purpose of business.
TNCs combine elements of function, product, and geographic
designs, while relying on network arrangements to link
worldwide subsidiaries.
Advantages of MNE:
1. Advance Technology: It has better access to advance
technological levels which makes them extremely
competitive when entering new foreign markets.
2. Learning Curve: Productivity of the MNE in
manufacturing industries increases through the experience
production.
3. Product Development: It can capitalize in development
of products in one market, and; if successful, uses that
success to exploit other foreign markets.
9. 4. Financial Strength: Because of its sheer size, MNEs can be
larger than governments of countries in which they operate. (g.
GM is larger than fifty countries. They are able to capitalize
easier, at a lower costs, than local foreign companies. The issue
of control is important.
5. Management: Being large organizations, MNEs have depth in
management ranks. MNCs can afford to employ individuals with
specialized business skills to enhance company’s profits and/or
effectiveness.
6. Reduction of Political Risk: Because there are different
political and economic systems in existence there is more risk
involve for the MNCs, but MNEs do business in many different
sovereignties and therefore, they are able to spread the risk over
many other locations. a 7. Rationalized Production and Global
Sourcing: MNEs are able to produce different components in
different markets and sell their products in different markets.
8. Less Interdependence: Because of regionalization and
because of realignments at the macro and micro levels.
Cond
