Пойгина Л.Б., Туринова Л.А. - English for Masters. Management Part 1 (1175658), страница 19
Текст из файла (страница 19)
Canadais overwhelmingly the country of choice for U.S. firms. Firms that achieve international statusmainly export or import products or buy and sell products to capitalize on price differentialsin different nations. Host-country facilities are used initially to market the firm's products,later supported by home-country personnel, supply purees, finances, and facilities.Then, learning from a hopefully successful experience, multinational status is achievedas additional foreign countries are entered, with greater usemade of host-country personnel,supply sources, finances, and facilities. Multinational does not simply imply doing business inmany countries; rather, it refers to companies that produce products or have subsidiaries addvalue in one or more foreign countries, as opposed to merely trading.
This is what theJapanese did in transplanting automobile manufacturing to the United States after years of justmarketing their automobiles here.The world's seven largest multinational corporations were ranked this My in Fortunemagazine, July 25, 2005:62 RankCompanyCountryRevenues ($millions)1234567Wal-Mart StoresBPExxon MobilRoyal Dutch/ShellGeneral MotorsDaimlerChryslerToyota MotorsU.S.BritainU.S.Britain/NetherlandsU.S.GermanyJapan287,989.0285,059.0270,772.0268,690.0193,517.0176,687.0172,616.0Multinationals are often categorized by their stage of development. First stagecompanies operate in one country and sell into others; second stage firms set up foreignsubsidiaries to handle sales in one country, and third stage firms operate an entire line ofbusiness in another country.
Fourth stagemultinationals, which evolved primarily from theInternet and involve mostly high tech companies, situate top executives and core corporatefunctionswherever the firm can gain a competitive edge through low costs, talent or capitalavailability, or proximity to key customers.Conceivably, over time, a firm achieves global status. This term refers to firms thattake advantage of synergies among their various affiliates, planning strategies according tothe comparative advantage of each country location, and using the same production andmarketing resources to form acoherent operation spanning several countries so as to achieveeconomies of scale and scope.
Global companies search for global synergies, as opposed torunning several parallel but separate multinational operations.A key difference between global and multinational status is that global status usuallyimplies global marketing standardization, which assumes that markets throughout the worldare becoming more alike and that products and services can be sold the same way all over theworld. Examples of successful global marketers include Coca-Cola, Colgate-Palmolive, andMcDonald's.How should we enter this market? While passing through these stages frominternational to global status, companies engage in one or more entry and growth strategies,depending on such considerations as the firm's strategic objectives, the product beingmarketed, and political, legal, economic, and competitive threats and opportunities in the hostcountries.
Typically, a firm begins with an exporting strategy during the first, internationalstage, then moves to joint venture and direct ownership strategies during multinational andglobal stages. As shown in Figure 1, commitment, risk, resource needs, and degree of controlall increase with joint venture and direct ownership strategies. Flexibility, the ability tochange or terminate an entry strategy, is highest with joint ventures, lowest with directownership. 63 Fig. 1. Dimensions characterizing alternative global market entryFollowing are characteristics, pros, and cons of these strategies:• Exporting: Using this strategy, the exporting firm markets products produced in theUnited States to foreign customers either directly— usually through the firm's salesforce, orbrokers, or export merchants located in the United States or the host country—or indirectly,through host-country distributors.
This low-risk, low-cost approach works best whencustomers are concentrated and easy to locate. A big drawback is that there is less controlover host-country distributors, who may not be knowledgeable enough to market the firm'sproducts.• Joint ventures: This strategy can assume a number of formats, all of which have incommon a partnership arrangement between the exporting firm and a host-country companyto combine some aspect of manufacture or marketing in order to share expertise, costs, and/ orconnections. Potential advantages of joint ventures include lower costs and more favorabletrading terms because foreign ownership is established. (Some countries require jointownership with a local company as an entry condition).Potential disadvantages include losing patents and profits to host-country owners or, ifthe firm isn't wise enough to maintain a controlling interest in the jointly held company,losing complete control.
Also, the possibility exists that a host-country co-owner can becomea competitor.Joint ownership formats include the following: 1.Licensingoccurs when, for a fee or royalty, a host-country company isassigned some rights, such as the use of patents, trademarks, or marketing expertise.Licensing is often a low-risk way to establish foreign production with minimal capitaloutlays, prevent free use of assets by foreign firms, and generate income in markets where64 exportation or investment is not feasible. The licensormust exercise sufficient control overproperty quality, pricing, and distribution by the licensee, and hope the licensee doesn'tbecome another competitor.2.Franchisingis a form of licensing whereby the exporter (that is, the franchiser)grants an independent entity (the franchisee) the right to do business in a prescribed manner.This right can entail selling the firm's products and/or using its name, and production andmarketing techniques.
Although there are myriad problems involved in franchising foreignfirms – securing good locations, finding franchisees and suppliers, maintaining standardsand cost controls, agreeing on contract terms, and the like – the expansion of U.S.franchisers into global markets has been dramatic since the 1960s. Reasons for thisexpansion include foreign market potential, financial gain, and saturated domestic markets.More than 400 U.S. franchisers operate more than 40,000 outlets in foreign countries,bringing in sales of over $9 billion. Over half are fast food restaurants and businesses, led byMcDonald's and Coca-Cola.3.Contract manufacturingor private-label manufacturing by aforeign company,entails negotiating contracts under which host-country companies manufacture the exporter'sproducts, with the exporter keeping control of any patented processes.
Like managementcontracting, under which the exporter only contracts to provide management expertise to ahost-country manufacturer or marketer, contract manufacturing represents an effective wayto generate income through trade with little capital outlay: the foreign company produces anagreed-on volume of products to specification, usually with the domestic company handlingthe marketing. Both options are most frequently used in start-up operations, in the face ofhost-country ownership restrictions, and for facilities with operating problems. Althoughthese options avoid most risks of global market participation, they also forfeit many benefits,and are therefore generally seen as a last line of defence.4.Turnkey operationsare specialized management contracts in which theexporting company provides complete operating facilities for a host-country client,including all associated equipment, materials, programs, and expertise.
This packagearrangement assigns responsibility to one source, thereby easing negotiation, supervision,and accountability problems for the host-country client. To the extent that turnkey operationsare owned and controlled by the host-country client, they are often perceived by foreigngovernments as acceptable alternatives to foreign direct investment.5.Joint ownership arrangements, whereby exporters join with foreign investorsto create local businesses in which they share ownership and control of manufacturing andmarketing programs, are often the best way for a firm to spread geographically at a fasterrate and to help spread fixed costs over a larger sales base.
Shared ownership also helpsfirms identify synergies among multiple partners in different countries and assume a localcharacter to deflect host-country criticism of foreign ownership.6.Strategic alliancesare special forms of joint ventures designed to achievecompetitive advantages by leveraging capabilities, increasing innovation, and improvingflexibility in responding to market threats and opportunities: they may be between manufacturers, or between manufacturers and customers, suppliers, distributors, or channelintermediaries.
![](https://s.studizba.com/z.php?f=/templates/si/i/noavatar.png&w=100&h=100&t=1"){kind=avatar}
