Business units [in Europe] still tend to focus on individual countries and in OCUS managerial practices still follow long-standing national patterns.
For firms within Europe, the euro eliminates currency risk, and so “Pan Euro pea thinking becomes not only practicable but essential.” The suc.... readmore
In countries where a fully owned subsidiary is permitted, an MNC wishing total control of its operations can start its own product or service business from scratch, or it may acquire an existing firm in the host country. Philip Morris acquired the Swiss food firm Jacobs Suchard to gain an early insi.... readmore
At a much higher level of investment and risk (though usually less risk than a wholly owned plant), joint ventures present considerable opportunities unattainable through other strategies. A joint venture involves an agreement by two or more companies to produce a product or service together In an I.... readmore
A management contract gives a foreign company the rights to manage the daily operations of a business, but not to make decisions regarding ownership, financing, or strategic and policy changes.55 Usually, management contracts are enacted in combination with other agreements, such as joint ventures. .... readmore
In a so-called turnkey operation, a company designs and constructs a facility abroad (such as a dam or chemical plant), trains local personnel, and then turns the key over to local management - for a fee, of course The Italian company Fiat, for example, constructed an automobile plant in the former .... readmore
A common means of using cheap labor overseas is contract manufacturing, which involves contracting for the production of finished goods or component parts. These goods or components are then imported to the home country, or to other countries, for assembly or sale. Alternatively, they may be sold in.... readmore
Similar to licensing, franchising involves relatively little risk. The franchisor licenses its trademark, products and services, and operating principles to the franchisee for an initial fee and ongoing royalties. Franchises are well known in the domestic fast-food industry; McDonald's, for example,.... readmore
An international licensing agreement grants the rights to a firm in the host country to either produce or sell a product, or both. This agreement involves the transfer of rights to patents, trademarks, or technology for a specified period of time in return for a fee paid by the licensee. Anheuser-Bu.... readmore
Exporting is a relatively low-risk way to begin international expansion or to test out an overseas market. Little investment is involved, and fast withdrawal is relatively easy. Small firms seldom go beyond this stage, and large firms use this avenue for many of their products. Because of their comp.... readmore
For a multinational corporation (or a company considering entry into the international arena), a more specific set of strategic alternatives, often varying by targeted country, focuses on different ways to enter a foreign market. Managers need to consider how potential new markets may best be served.... readmore