multinational firms

3. • An enterprise operating in several countries but managed from
one (home) country..
• A Multinational firm (MNF) do several activities like
exporting, importing, manufacturing in different countries.

4. • When, a company want to get technological
advantage.
• When a company develop an international brand like
for exple coca cola that have an international brand
• To get cheap labor.( a few go in china to reduce labor
cost)
• To increase the market share

5. • First create Subsidiaries : is An enterprise
controlled by another (called the parent) that have more than
50 percent of capital
• Make Joint Ventures :it's the creation of a common
entity by two company that put together their resource to
achieve a common goal
• Franchising : Franchising is agreement by which a
company called "franchisor" is agrees to providing a second
business, called "franchised" trademark and expertise in return
for remuneration .

6. • Innovations: when a MNF develop new product and
make new designs of product.
• Market characteristic : it’s effective market
information, advertising effective, goodwill .
• Technological advantages MNF enable to invest in
research and develop advanced technology
• Financial superiority: MNfs have huge financial resources.
They can use funds more effectively.

7. • Horizontally integrated : is manage production located
in different countries to produce to same poduct.
• vertically integrated : when There are Merger of
companies at different stages of in the same industry.
• Diversified Company: is a company that operates or
invests in several bussines sector

8. • Create employment for host country
• Increase in the investment level the income and employment
in the host country.
• Acquisition of raw materials from abroad.(home
country).
• Get benefits of foreign culture.(home country)

9. • relocation of production sites deletes several
jobs.(home country)
• Transfer capital to other countries and cause
unfavorable balance of payments.(home country)
• the FMN competes with domestic enterprises.(host
country)

10. WORLD’S TOP MNFs:

11. Top 10 of MNF’s
RANK COMPANY COUNTRY FIELD
1 Wal-Mart Stores United States Retail
2 Royal Dutch Shell Netherlands Petroleum
3 Exxon Mobil United States Petroleum
4 BP United Kingdom Petroleum
5 Sinopec China Petroleum
6
China National
Petroleum
China Petroleum
7 State Grid China Power
8 Toyota Motor Japan Automobiles
9 Japan Post Holdings Japan Diversified
10 Chevron United States Petroleum

12. MNfs are suitable for only a set of business categories :
• Businesses where the Government wants to enjoy foreign
technology and foreign capital
• Where foreign management expertise is needed
• Where an increase in employment opportunities in the country can
be seen as a national interest

13. • Rule of Thumb :
A company whose foreign sales are 25% or more of
total sales. This ratio is high for small countries, but
low for large countries.

14. Subsidiaries in
foreign
countries; Operations in a
number of
countries;
Stakeholders are
from different
countries.

16. Strengths
• Low Cost
• Well Developed
Infrastructure
Weakness
• Location is often very distant
• Lack of Transportation facilities
• Relative Inflexibility
Opportunities
• new markets
• international expension • Govt. restrictions
• substitutes products

17. • Political Factors : concern government policies, laws and
administrative orientations of different countries and regional
economic blocks.
• Economic Factors : Rates of economic growth influence the
levels of demand for your products or services in international
markets.
• Social Factors : Demographic factors such as religion and
culture affect the types, quality, functional features and
demand
• Technological Factors : The availability of technological
infrastructure and technical capacities determine the
prosperity of a multinational corporation in host countries.