Globalization and Multinational Enterprise

Question 1

What are the drivers of Globalization?

Answer 1

1. Converging Consumer Preferences
2. Declining Trade and Investment Barriers
3. Technological Change
4. New Competitors

Question 2

What is FDI?

Answer 2

Foreign Direct Investment

Question 3

What are the Dynamics of Global Competition?

Answer 3

1. Higher intensity and scope of competition
2. Competitors, Customers and Suppliers are global
3. Cost pressure and demand to be present in many locations

Question 4

What do the Dynamics of Value Chain contribute to?

Answer 4

1. Globalization of a single value chain activity
2. Fragmentation and global dispersion of entire value chain
3. Following regional specialization in value adding

Question 5

What are the Support Activities of the Value Chain Configuration?

Answer 5

• Firm Infrastructure
• Human Resource Management
• Technology Development
• Procurement

Question 6

What are Primary Activities of Value Chain Configuration?

Answer 6

• Inbound Logistics
• Operations
• Outbound Logistics
• Marketing and Sales
• Service

Question 7

What does the Global Value Chain Configuration offer?

Answer 7

• comparative cost advantages
• knowledge and learning advantages
• networking advantages

Question 8

What are the strategic decision fields of global value chain configuration?

Answer 8

• Geographic Dispersion of value chain activities (Geographic Scope)
• Task dispersion (make, ally, or buy) value chain activities (vertical scope)

Question 9

What is a MNE?

Answer 9

Multinational Enterprise

Question 10

What factors do you need to consider when looking at concentration vs. dispersion of supply chain activities?

Answer 10

• Demand for goods (geographical location, need for local adaptation)
• Comparative advantages of countries (labor costs, know-how)
• Lot size of production output (Economies of scales, Learning effects)
• Transferability of goods (durability, transportation costs)
• Integration of supply chain activities

Question 11

What are governmental interventions of MNEs?

Answer 11

• Tariffs and rationing of imports and exports
• Restrictions on transfers of earning and taxes
• Labor market regulation
• Local-content clauses
• Privileges in special economic areas
• Partially state-owned enterprises

Question 12

What is the management implication of MNEs?

Answer 12

-Concentration of upstream activities (R&D, supply, production
-Dispersion of downstream activities (marketing, slaes)
(SLIDE 38)

Question 13

What is the Internationalization Matrix cross-examining?

Answer 13

Benefits of Globalization vs Need for Localization
(SLIDE 39)
-High benefit, low need: Global: Integration Strategy
-High benefit, high need: Integrated Network: Interaction strategy
-Low benefit, low need: International: Selection Strategy
-Low benefit, high need: Multinational: Single Market strategy