What in the World? • A firm that operates in more than one country • Headquarters in one country and branch plants in several other countries Ie. Microsoft Canada - Software, services and solutions. Motorola Canada - Wireless hardware products. Primus Telecommunications Canada - Voice, data/Internet and VoIP solutions. Xerox Canada - Document imaging equipment.
Why? Improve profitability • Access to cheaper raw materials & labour = lower operating costs • Tax concessions or development grants • Geographic diversification - market & political instability (country A) = market & political instability (country B)
Always a benefit? • Wealth and mobility = strong political influence in host country Strict environmental laws = • Shut down & move • Political pressure to change laws/special exemptions
Definitions • Outsourcing - business obtains services or products used in manufacturing from an outside (often overseas) supplier or manufacturer in order to cut costs. Ie?
Definitions cont. • Push Production - manufacturers of products decide what to produce, how much to produce and the price of the product. • Pull Production - retailers determine what the manufacturer will produce, how much to produce and the price of the product.