International Business
Should a multinational company use the same mode of entry into all international markets?
Introduction
This paper well examines the role of what Multinational Company is and how they enter markets with verity of entry modes. Well look at theories of market entry and Dunning’s theory that can motivate firms to enter new markets, as well using two case studies on entering the Chinese market of Coke-Cola and Foster’s to see if a company should use all the same entry modes to international markets.
Multinational Companies
Multinational Companies (MNC’s) are corporations that control interests in production/services in more than one country, operating across borders on a global scale. They usually do this by having offices and/ or factories in host countries that are low economically developed countries (LEDC’s) as they are cheap source of labour and production, and having their headquarters located in their home country. They do this to gain entry to markets, cuts cost, become more competitive and to gain economies of scales and scope. They have both negative effects of, environmental impacts, changing local policies to their needs, expiation of labour and resources and positive effects of economic development, employment and transfers of knowledge and skills (Meyer, 2004).Globalisation has been a driving force of the creation of MNC’s and their needs to conduct business internationally, as it has made the transfer of production and financial factions more efficient and productive, with the advances in technology, transport, and communication bring cheap costs and faster production and transport times, and insistent communication globally. This has bought about the MNC’s being a global company that acts local, that is it has advantages of reducing costs, devilry times, gain economies of scale, increased efficiency, and being able to serve and meet different local market needs (Buckley & Ghauri, 2004). MNC’s can use a lot of different strategies to
Introduction
This paper well examines the role of what Multinational Company is and how they enter markets with verity of entry modes. Well look at theories of market entry and Dunning’s theory that can motivate firms to enter new markets, as well using two case studies on entering the Chinese market of Coke-Cola and Foster’s to see if a company should use all the same entry modes to international markets.
Multinational Companies
Multinational Companies (MNC’s) are corporations that control interests in production/services in more than one country, operating across borders on a global scale. They usually do this by having offices and/ or factories in host countries that are low economically developed countries (LEDC’s) as they are cheap source of labour and production, and having their headquarters located in their home country. They do this to gain entry to markets, cuts cost, become more competitive and to gain economies of scales and scope. They have both negative effects of, environmental impacts, changing local policies to their needs, expiation of labour and resources and positive effects of economic development, employment and transfers of knowledge and skills (Meyer, 2004).Globalisation has been a driving force of the creation of MNC’s and their needs to conduct business internationally, as it has made the transfer of production and financial factions more efficient and productive, with the advances in technology, transport, and communication bring cheap costs and faster production and transport times, and insistent communication globally. This has bought about the MNC’s being a global company that acts local, that is it has advantages of reducing costs, devilry times, gain economies of scale, increased efficiency, and being able to serve and meet different local market needs (Buckley & Ghauri, 2004). MNC’s can use a lot of different strategies to
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