Plus, experts say, European brands are simply becoming stronger and more consistent. Meanwhile, European brands are gaining momentum in the areas of white goods and consumer goods, putting the pressure on such well-known U.
For instance, Gaggenau is a popular, high-end European kitchen appliance brand, along with Bosch and Dyson.
Multinationals can also tap new technology from around the world. In the United States, Xerox has introduced some 80 different office copiers that were designed and built by Fuji Xerox , its joint venture with a Japanese company. It was developed by six research centers in five countries. Finally, multinationals can often save a lot in labor costs, even in highly unionized countries. Eventually, the union agreed to change work styles and to improve productivity to keep the jobs at home.
Multinational corporations have several advantages. First, they can sidestep restrictive trade and licensing restrictions because they frequently have headquarters in more than one country. Multinationals can also move their operations from one country to the next depending on which location offers more favorable economic conditions. In addition, multinationals can tap into a vast source of technological expertise by drawing upon the knowledge of a global workforce. Skip to content Competing in the Global Marketplace.
As overseas investment grows, so does the need for global branding. Recognizable to NBA fans the world over, Antetokounmpo personifies a youthful, dynamic spirit that transcends cultural and geographic boundaries. Why is it increasingly important that multinational advertisers identify and sign celebrity spokespersons capable of bridging different cultures?
The Multinational Advantage Large multinationals have several advantages over other companies. Samsung produces the largest curved ultra-high-definition UHD screens for the worldwide home-theater market. How does being a multinational corporation enable Samsung to succeed in the high-end electronics market?
The application of the comparative advantage is the second one of the main key success factors for a successful international business. The USA has higher advantage in land, capital, labor and technology than many states of the world. The application of the imperfect markets theory is the third one of the main key success factors for a successful international business.
Traditionally every firm or MNC must use three kinds of the factors for producing economics goods. Wal-Mart also enlarges its business outside of U. S for minimizing those costs of transfer and passing out the restrictions related to this transfer.
The application of the products cycle theory is the fourth one the main key success factors for a successful international business. As time passes, the Multinational Corporation decided to export the economic goods directly or via internet outside U. For minimizing the costs of the exports, Wal-Mart decided to produce in foreign market. The application of the Global Strategies is the fifth one of the main key success factors for a successful international business.
Let us take the example of Wal-Mart that increases international business and imports in 28 countries physically and more via internet websites by doing regularly research marketing and using a consistent budget for that.
The application of the intentional trade is the sixth one of the main key success factors for a successful international business. The application of the Joint venture is the seventh one of the main key success factors for a successful international business. The joint venture helped Wal-Mart to manage risk of west if there is failure. The above explanation speaks for itself. The application of the acquisition of existing operation is the eighth one of the main key success factors for a successful international business.
For example, in Canada, Wal-Mart had an acquisition of 39 stores locations of target. Indeed, in , Wal-Mart had also an acquisition of stores of Woolco discount that located in North of the border from Woolworth Corporation.
Economics, Management and environment are the forms and sources of risk facing to Wal-Mart in international business. The management control is one of the forms and sources of risk that facing MNCs. We must choose between the centralized or decentralized management for subsidiaries.
The environmental constraints are also impact on international business. Nowadays developed and undeveloped countries build codes, laws and policies for protecting their environments.
Wal-Mart was also faced by environments constraints. The regulatory Constraints are one of the forms and sources of risk to successful international business.
The Ethical constraints are one of the forms and sources of risk to successful international business. Each country has a proper acceptable ethic. Wal-Mart meets also that reality of multiple and different countries. Managing within constraints are relevant to the forms and sources of risk to successful international business that facing MNCs. The risk of movement in exchange rate is another side of the existence forms and sources of risk to successful international business.
Each fluctuation of exchange rate is affecting cash flow of Wal-Mart. The risk in economics foreign market is one of the forms and sources of risk to successful international business. In each country, economic conditions determine the level of selling goods in the market.
Economic conditions fluctuate also regulatory in the world in many countries. Political risk is also one of the real challenges in international business. Each political decision can affect MNCs. In fact, the case of zairianization is a real example of impact of political decision. In that way, several MNCs lost their subsidiaries in foreign countries.
The difference between two cultures in power distance is a barrier to communication in international business. For example, one Indian, ancient student in U. S with the PhD of there, in reporting his story, said that for keeping job in India, we have to accept all instruction that belong to the owner of firm. But in U. These two opposite cases explain how India is applied higher power distance but U. S lower power distance. In culture of high power distance, we have high respect of hierarchy but in low power distance, we respect hierarchy on the basis of the law with rationally.
The explanation above shows that the meeting of higher power distance and lower power distance generates the miscommunication. Doh oriented us for constructing this above point [46] [47]. The cross-cultural between Individualism-collectivism, cultural dimension, is another barrier to communication in international business.
Previously, we said that in individualism culture, people work for his owner interest and his restrict family members. For example, the most miscommunication between powers and richest countries of the world, in term of work, belongs to this cultural dimension. According the research of Hofstede, the most collectivist countries are powers and in the opposite, the most of individualist countries are richest. Doh insist on above point of cross-cultural [46] [47].
The cross-cultural between Masculinity-femininity, cultural dimension, hinds of communication inter people in international business.
The culture of masculinity enjoys to gain when it faced by challenges but the other culture prefers to resign. For example, generally speaking, for saying that your nation gained Germany, you must wait the last whistle of arbiter even if you had already marked five by zero.
Why this? We see easily that there is opposition between both two cultural dimensions and the miscommunication is evidence. Doh guided us for constructing this above point [46] [47]. The cross-cultural between cultures with high uncertainty avoidance and low uncertainty avoidance generate miscommunication in international business. In culture with high uncertainty avoidance, we accept that evidence and we work for managing the uncertainty in creating strong rulers and rationality in manner of working in the present for preventing the future.
But in the other culture of lower uncertainty, we continue to live in the present without to prevent the future. Many Africans countries apply lower uncertainty avoidance than Europeans countries. This comparison between these two cultural dimensions shows that we are in front of two opposite sides of human hand. It is a really case of miscommunication. Doh demonstrate more about this above point [46] [47]. The cross-cultural between cultures with long-term orientation and short-term orientation is also kinds of miscommunication in international business.
This is also the similar case of contradictions that must generate miscommunication. Doh guided the author for constructing this above point [46] [47]. The cross-cultural between indulgence-oriented and restraint-oriented cultures illustrates also the case of miscommunication in international business.
In indulgence-oriented culture we want to enjoy freely without control. But in restraint-oriented culture, we accept to enjoy with many restrictions and controls. These both cultural dimensions will generate miscommunication in meeting. Doh shows the way for speaking about the above point [46] [47].
The cross-cultural between linear actives and multi-actives is a barrier to communication in international business. In the linear active, there is a high respect of the schedule and rendezvous. But in multi-actives, they respect relationship than schedule and rendezvous. These differences demonstrate also that the miscommunication is evident in intercultural between linear actives and multi-actives.
The anxiety and uncertainty of human in the cross-cultural is also a barrier to communication. The anxiety and uncertainty that belong to incapacity to understand speaking of the interlocutor will be a source of miscommunication between people. Doh deal with the above point in their books [46] [47]. The application of the mindfulness is a key for removing a barrier to communication that belongs to cross-cultural.
It is also a key for reducing the economic, environment and management challenges. Indeed, the mindfulness is a real key for removing barrier to communication that generates the cultural dimension. In that way, the mindfulness becomes a key removal of barrier to communication. In addition, the mindfulness is a key removal of barrier to communication belongs to communicative competence. According Hymes , each culture has his language. In the cross-cultural, we will meet several incompatibilities between people from different background [39].
Furthermore, the mindfulness is a solver of the challenge of anxiety and uncertainty, faced by people to communication in cross-cultural. In cross-cultural, people are characterized by anxiety and uncertainty because of not being able to understand and interpret other.
That situation perturbs and confuse human and purchase them to miscommunication. Finally, the mindfulness is also a good thing for reducing cultural stereotype and prejudice of people in cross-cultural for facilitating communication.
The application of the cultural sensitivity is vital as the key removal of the miscommunication in international business. That ability is required for hoping to realize a best profit internationally. The application of becoming cultural awareness is also necessary in international business for obtaining a good result.
That is very important for all success in international business. If not, the Wall-mart will decrease its activity in international. This subject is very important because it gives a good guideline for succeeding internationally to all MNC in front of the foreign market. According to results of analysis, we realized that the application of the economics and business theories are the main keys for getting a successful international business. At the other side, the economic, management, political, cultural and ethical are the challenges that facing to MNC Wall-mart.
For avoiding above all kinds of forms and sources of risk to international business in cross-cultural, we recommend to apply mindfulness, cultural sensitivity and to be cultural awareness to cultural dimensions, communicative competence, anxiety and uncertainty in respecting the four levels of CQ as follows: CQ drive, CQ knowledge, CQ strategy and CQ action. If not, it will be difficult to communicate internationally for doing business.
Thunderbird International Business Review, 40, Have you been considering taking your business global? When businesses have exhausted growth opportunities at home, they turn to global expansion to help grow their business. For many companies, international expansion offers a chance to explore markets and gain access to millions of customers, thus increasing sales. With a much broader customer base, you can generate more business and increase sales. Keeping your business in the home market can limit potential for profit.
One of the downsides companies face when they operate in only one country is the exposure to market changes. Taking your business international allows you the opportunity to diversify your markets, so your revenue is more stable. If your domestic market is slowing down, having the advantage of a global market will help cushion the company during slower economic times.
Another excellent benefit of taking your business global is that you get access to a much greater pool of talent.
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