International Business Strategy

LON301BUS

Defining International Business

Unit: 2 Knowledgecast: 2

• Demonstrate a sound appreciation of current strategic management concepts

• Assess current developments in the organisational environment and alternative responses related to strategy

Module Learning Outcomes

Multinational Enterprise (MNE):“ A large company with substantial

resources that performs various business activities through a network of subsidiaries and affiliates located in multiple countries.”

–(Cavusgil et al 2008:13)

Who Participates?

Small and Medium Sized Enterprise (SME):“ A company with 500 or fewer employees in

the United States, although this number may need to be adjusted downward for other countries.”

–(Cavusgil et al 2008:13)

Who Participates?

Born Global Firm“ A young entrepreneurial company that

initiates international business activity very early in its evolution, moving rapidly into foreign markets.”

–(Cavusgil et al 2008:14)

Who Participates?

Non-governmental organisation (NGO):• Non profit making• Pursue special causes• Act as advocates• Conduct activities internationally or raise funds

NB: Many MNEs operate charitable foundationsthat operate internationally.

–

Who Participates?

Focal Firms: The initiator of an internationalbusiness transaction, including MNEs and SMEs,that conceives, designs and produces theofferings intended for consumption by customersworldwide.

–

Who Participates?

MNE Influence in the Global Economy

• Largest MNEs are as large as (and perhaps more influential than) mid-sized countries

Exxon Mobil value-added 2003: $72 billion Chile value-added 2003: $72 billion

• Some industries completely dominated by MNEs

85% of all automobiles, 70% of all computers manufactured and sold by MNEs

• Multinational Perspective: Overseas markets a portfolio of local opportunities; managed as a decentralized federation

• International Perspective: Leverages its domestic capabilities worldwide; managed as a coordinated federation

• Global Perspective: Views world as a single unit of analysis; operations managed centrally

• Transnational Perspective: Simultaneously responds to local needs, global demands, and cross-border learning opportunities; managed as an integrated network

International to Transnational

Evolving MentalityHigh

Glo

bal

Inte

grat

ion

Low

Low National Responsiveness High

Global

International

Multinational

Transnational

• Demonstrate a sound appreciation of current strategic management concepts

Define the range of international business participants

• Assess current developments in the organisational environment and alternative responses related to strategy

• Should all firms develop a transnational mentality?

Knowledgecast Summary

Whirlpool’s Dramatic Turnaround Through Internationalisation

Read the closing case on page 23 of your text by Cavusgil,Knight and Reisenberger ‘International Business’ inpreparation for this seminar.

Be prepared to answer Questions 1 – 4 from page 24 regarding thiscase.

Seminar

Assessment PreparationThis is your first opportunity as a group to read through the major casestudy and the assessment brief (see Unit 5) collectively and highlightkey points.

What note taking process did you choose to use? • Bullet points• Mind Map• Short sentences• Highlighting/underlining and annotating text

Group Activity

Assessment PreparationThis is your first opportunity as a group to read through the major casestudy and the assessment brief (see Unit 5) collectively and highlightkey points.

Discuss as a team;1. What are the key activities involved in this assessment2. Who will be responsible for each activity3. When the activities will need to be completed4. How you can guarantee SUCCESS (what will success look/feel/sound

like?)

Be prepared to share your plans with your tutor.

Group Activity