International Business Organizations Section 3 3 Multinational Companies

International Business Organizations Section 3 -3

Multinational Companies (MNC) • Do business in several countries ▫ Home country ▫ Divisions or separate companies ▫ Host countries

MNC Strategies Global Strategy Multinational Strategy • Same product • Same marketing strategy ▫ Example: Coca-Cola • Each country is considered different • Adapts to the consumer ▫ Customs ▫ Tastes ▫ Buying Habits

Global Entry Methods Licensing Franchising Joint Venture

Licensing • Selling the right to use an intangible property for a fee or royalty ▫ Such as �Production process �Trademark �Brand Name ▫ Example: Gerber Baby Food in Japan • Low Risk → Low Return

Franchising • A company is set up to look and run like a parent company ▫ What are some examples of franchises? ▫ What are the benefits to a franchise? • Limited Risk → Limited Return

Joint Venture • Agreement between two or more companies to share a business project • Why would this be used? ▫ Share �Raw Materials �Shipping Facilities �Management Activities �Production Facilities • Ford and Mazda

This Joint Venture Looks INTELli. GEnt • What two companies are starting a joint venture? • What is the goal of the joint venture? • What are the two companies combining? • Is the joint venture a good idea? Why or why not?

World Trade Organizations (WTO) • • Promotes Trade Settles trade disputes Enforces free-trade agreements Lowers tariffs Eliminates quotas Reduces barriers Assists poor countries

International Monetary Fund (IMF) • 150 member nations • Stabilizes world trade and exchange rates

World Bank • Provides economic aid to less developed countries

Pop Quiz 1. 2. 3. 4. 5. What are three global entry methods? What is a joint venture? How much risk does a franchise have? How many nations are part of the IMF? List 3 things that the WTO does?

Dlabay, Burrow and Eggland. Intro to Business 6 e. Mason, OH: Thompson South-Western, 2006.