Essay About Foreign Countries And Domestic Companies

The Rapid Change of International Business
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Full name:        Nguyen Thi Dieu TuStudent ID:        11154762Class:                International Business 57AINTERNATIONAL BUSINESS: HOMEWORK CHAPTER 1Question #1: What are the differences among international, global, and multi-domestic companies?International CompanyGlobal CompanyMulti-domestic CompanyOperations and Trading -Sell their products in foreign countries by exporting products to those countries.- Might be involved in importing activities.- Do not have their own establishment in foreign countries.- Have operations and trading in many countries across the world, at least around 15 countries.- Have branches and establishments across many countries in the world.Investment- Do not receive any FDI from the foreign countries where they exports to or imports from their products/services.- Mostly have FDI in some or all foreign countries where they operate in.- Mostly have FDI in some of the foreign countries where they operate in.Strategy- The key decision making functions is always taken from the domestic country of the company as these companies do not have any foreign set up or branches.- Centralized: The major decisions on the organizational approaches/changes are taken from the headquarter of the company. For example, merger and amalgamation, new products launching, etc.- Decentralized: Each of their branches is responsible for its own key decisions, which have to suit the respective domestic places.Products/ R&D- Product development processes are accomplished in the domestic country.- The Parent company generally initiates and completes the products development processes, and then distributes to the subsidiaries.- Subsidiary companies at other countries may be allowed to take part in idea involvement process.- Subsidiary companies at different countries are given the rights to develop product as per the local taste and demands.Challenges- Face regulatory and legal issues.- Following one uniform product type across all countries may lead to miss the local touch and lower the demand in some countries.- Have to face legal, regulatory and customs issues.- The taste of products in some countries does not match.- Mainly face internal manpower issues, and organizational problems, etc.ExampleWal-martCoca-Cola, Microsoft, LenovoMcDonald, KFC, Lotteria