Module 6 Readings
Early in the week, complete the following:
· Read the overview forModule 6
· From the textbook,International business law and its environment, read the following chapters:
o Bank Collections, Trade Finance, and Letters of Credit
· From the Argosy University online library resources, read:
o Brown, J. S. (2002). Research that reinvents the corporation.Harvard Business Review, 80(8), 105–115.
o Magee, S. (1970). Multinational business.California Management Review, 13(1), 89–94.
o Moreau, R. (2008). Aldi and Lidl's global expansion strategies.Retail Digest, 46–51. Retrieved fromhttp://www.thefreelibrary.com/Aldi+and+Lidl's+global+expansion+strategies.-a0205910738
· From the Internet, read:
o Stone, A., Levy, B., & Paredes, R. (1996). Public institutions and private transactions: A comparative analysis of the legal and regulatory environment for business transactions in Brazil and Chile. In L. J. Alston, T. Eggertsson, & D. Cecil (Eds.),Empirical studies in institutional change(pp. 95–132). Cambridge University Press. Retrieved fromhttp://books.google.com/books?id=A29BVt1my9IC& printsec=frontcover#PPA95,M1
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Module 6 Overview (1 of 2)·
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Does a multidomestic strategy, versus a multinational strategy, improve the chances of a company being accepted in an international market? When consumer companies advertise in the local market place, whether on TV or in print, they usually take on the “look and feel” of the local community.
For instance, in 1991, when McDonald’s opened its first restaurant in India, it faced an issue with its signature product, the Big Mac. The product, made with beef, was unsuitable for India where beef sales are very limited due to local customs and religious practices. Today, McDonald’s Big Mac is sold in India as the Maharaja Mac, and is made with chicken. It operates with a local national in a joint venture arrangement and sources its raw materials from local companies. The strategy McDonald’s used aided its expansion to 123 restaurants by the end of 2008.
Multidomestic organizations are known to be more autonomous across countries and use separate marketing strategies based on the market. The multidomestic company tries to present the appearance of a domestic company. Examples of companies that operate as multidomestic organizations include Nestle Foods, LG (the Korean-based manufacturer of electronics and major appliances), and Toyota.
Multinational companies tend to keep technology and decision making concentrated and tend to rely on the hired locals or nationals to understand the regional cultures. Examples of multinational companies include General Electric, HSBC, and Nokia.
Both multidomestic and multinational strategies require compliance with regulatory and local laws and customs, but with different ways of complying. The multidomestic complies as a local citizen, while the multinational complies as if it were operating within both the host country laws and its own country laws.
Module 6 Overview (2 of 2)Multidomestic or Multinational Strategy
This module discusses some of the issues companies need to consider when choosing a multidomestic or multinational strategy.
Both multidomestic and multinational companies have to considerlegalandculturalrequirements when expanding in international markets. In your assignment, you will explore the regulatory issues and stakeholder interests associated with each type of strategy. As part of the course project you will assess your chosen MNC’s current financial status and future financial growth opportunities.