Defining International Business

2. International Business Strategy LON301BUS Defining International Business Unit: 2 Knowledgecast: 2

3. Module Learning Outcomes • Demonstrate a sound appreciation of current strategic management concepts • Assess current developments in the organisational environment and alternative responses related to strategy

4. Who Participates? Multinational Enterprise (MNE): “ A large company with substantial resources that performs various business activities through a network of subsidiaries and affiliates located in multiple countries.” • (Cavusgil et al 2008:13)

5. Who Participates? Small and Medium Sized Enterprise (SME): “ A company with 500 or fewer employees in the United States, although this number may need to be adjusted downward for other countries.” • (Cavusgil et al 2008:13)

6. Who Participates? Born Global Firm “ A young entrepreneurial company that initiates international business activity very early in its evolution, moving rapidly into foreign markets.” • (Cavusgil et al 2008:14)

7. Who Participates? Non-governmental organisation (NGO): • Non profit making • Pursue special causes • Act as advocates • Conduct activities internationally or raise funds NB: Many MNEs operate charitable foundations that operate internationally.

8. Who Participates? Focal Firms: The initiator of an international business transaction, including MNEs and SMEs, that conceives, designs and produces the offerings intended for consumption by customers worldwide.

9. MNE Influence in the Global Economy • Largest MNEs are as large as (and perhaps more influential than) mid-sized countries • Exxon Mobil value-added 2003: $72 billion • Chile value-added 2003: $72 billion • Some industries completely dominated by MNEs • 85% of all automobiles, 70% of all computers manufactured and sold by MNEs

10. International to Transnational • Multinational Perspective: Overseas markets a portfolio of local opportunities; managed as a decentralized federation • International Perspective: Leverages its domestic capabilities worldwide; managed as a coordinated federation • Global Perspective: Views world as a single unit of analysis; operations managed centrally • Transnational Perspective: Simultaneously responds to local needs, global demands, and cross-border learning opportunities; managed as an integrated network

11. Evolving Mentality High Global Transnational Global Integration International Multinational Low Low High National Responsiveness

12. Knowledgecast Summary • Demonstrate a sound appreciation of current strategic management concepts • Define the range of international business participants • Assess current developments in the organisational environment and alternative responses related to strategy • Should all firms develop a transnational mentality?

14. Seminar Whirlpool’s Dramatic Turnaround Through Internationalisation Read the closing case on page 23 of your text by Cavusgil, Knight and Reisenberger ‘International Business’ in preparation for this seminar. Be prepared to answer Questions 1 – 4 from page 24 regarding this case.

15. Group Activity Assessment Preparation This is your first opportunity as a group to read through the major case study and the assessment brief (see Unit 5) collectively and highlight key points. What note taking process did you choose to use? • Bullet points • Mind Map • Short sentences • Highlighting/underlining and annotating text

16. Group Activity Assessment Preparation This is your first opportunity as a group to read through the major case study and the assessment brief (see Unit 5) collectively and highlight key points. Discuss as a team; 1. What are the key activities involved in this assessment 2. Who will be responsible for each activity 3. When the activities will need to be completed 4. How you can guarantee SUCCESS (what will success look/feel/sound like?) Be prepared to share your plans with your tutor.