International Business Organizations

International Business OrganizationsSection 3-3

Multinational Companies (MNC)•Do business in several countries

▫Home country▫Divisions or separate companies▫Host countries

MNC StrategiesGlobal 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 INTELliGEnt

•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 Quiz1. What are the three global entry

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

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