... as well as China, India, and Latin America, opened their closed markets to foreign investment in a cascading fashion. Although this significant economic and social transformation has offered vast new growth opportunities for multinational corporations (MNCs), its promise has yet to be realized. First, the prospect of millions of “middle-class” consumers in developing countries, clamoring for products from MNCs, was wildly oversold. To make matters worse, the Asian and Latin American financial crises have greatly diminished the attractiveness of emerging markets. As a consequence, many MNCs worldwide slowed investments and began to rethink risk–reward structures for these markets. This retreat could become even more pronounced in the wake of the terrorist attacks in the United States last September. The lackluster nature of most MNCs’ emergingmarket strategies over the past decade does not change the magnitude of the opportunity, which is in reality much larger than previously thought. The real source of market promise is not the wealthy few in the developing world, or even the emerging middle-income consumers: It is the billions of aspiring poor who are joining the market economy for the first time. This is a time for MNCs to look at globalization strategies through a new lens of inclusive capitalism. For companies with the resources and persistence to compete at the bottom of the world economic pyramid, the prospective rewards include growth, profits,...
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...| | |[pic] | |Assignment Submission Sheet | | | |Student name: MARTIN RONAN | | | |Lecturer name: JOHANNA FAHY | | | |Module: RESEARCH PROJECT | | | |Course :BA Business Administration PT | | ...
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... as well as China, India, and Latin America, opened their closed markets to foreign investment in a cascading fashion. Although this significant economic and social transformation has offered vast new growth opportunities for multinational corporations (MNCs), its promise has yet to be realized. First, the prospect of millions of “middle-class” consumers in developing countries, clamoring for products from MNCs, was wildly oversold. To make matters worse, the Asian and Latin American financial crises have greatly diminished the attractiveness of emerging markets. As a consequence, many MNCs worldwide slowed investments and began to rethink risk–reward structures for these markets. This retreat could become even more pronounced in the wake of the terrorist attacks in the United States last September. The lackluster nature of most MNCs’ emergingmarket strategies over the past decade does not change the magnitude of the opportunity, which is in reality much larger than previously thought. The real source of market promise is not the wealthy few in the developing world, or even the emerging middle-income consumers: It is the billions of aspiring poor who are joining the market economy for the first time. This is a time for MNCs to look at globalization strategies through a new lens of inclusive capitalism. For companies with the resources and persistence to compete at the bottom of the world economic pyramid, the prospective rewards include growth, profits, and incalculable contributions...
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... as well as China, India, and Latin America, opened their closed markets to foreign investment in a cascading fashion. Although this significant economic and social transformation has offered vast new growth opportunities for multinational corporations (MNCs), its promise has yet to be realized. First, the prospect of millions of “middle-class” consumers in developing countries, clamoring for products from MNCs, was wildly oversold. To make matters worse, the Asian and Latin American financial crises have greatly diminished the attractiveness of emerging markets. As a consequence, many MNCs worldwide slowed investments and began to rethink risk–reward structures for these markets. This retreat could become even more pronounced in the wake of the terrorist attacks in the United States last September. The lackluster nature of most MNCs’ emergingmarket strategies over the past decade does not change the magnitude of the opportunity, which is in reality much larger than previously thought. The real source of market promise is not the wealthy few in the developing world, or even the emerging middle-income consumers: It is the billions of aspiring poor who are joining the market economy for the first time. This is a time for MNCs to look at globalization strategies through...
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...a. One of the actors who should be interested in innovating for the BOP markets is the MNCs. For these companies large economic benefits can be reached and increased growth, as these markets grow at an incredible speed they can put an end to matured firms stagnation in growth. The purchasing power of the BOP population is higher than imagined usually. As a large company with economies of scale, it should be easy to produce a similar cheap product as the ones already in the BOP markets, but with better quality, thus market penetration can have a steep upward curve. Furthermore, for MNCs to outsource e.g. customer service to BOP market is a way to reduce costs, and it aids to enhance the growth of both the company and the BOP population, as their purchasing power increases. One of the smartest things to offer the BOP markets is connectivity, as this meets one of their most urgent needs head on and thus enables a strong market position for the company bringing it. Connectivity decreases the need for intermediaries, which improves access to the population and costs for the company. (Prahalad and Hammond, 2002) According to Prahalad and Hammond (2002), BOP markets have been the subject to social entrepreneurship and NGOs for several years, trying to solve the demands of the population, so clearly there are similar benefits to be reached by these actors. Small businesses and start-ups also show an interest, as for example in Uganda where a small business offers packages...
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...organization and the technology it uses to pursue these goals are different from one organization to another. These key variables are the most important factors that map out how an organization is going to be structured. Therefore, there is no one best way to structure an organization. The structure of an organization, particularly ones operating in several countries, i.e. MNC’s is closely related to its strategies, as argued by (Qiu and Donaldson 2010,P 82). Their hypothesis suggests that small changes in the way an organization is structured may play a big role in how successful it is in reaching its goals. They effectively sort out different structural models that the organizations can base their structure on depending on a number of determinants. The key determinants being how responsive the organizations want to be in regards to the local market changes, how diversified they want their products to be between different countries and the degree to which they want a similar global rule, i.e. global integration. (Qiu and Donaldson 2010,P-98 ) An MNC with a more standardized product line globally such as Dell, Asus etc., which will have a more rigid approach with high centralization of authority cannot have the same strategy as another MNC which might be more accepting to selling diversified products and thus may be more willing to allow greater autonomy amongst their subsidiaries in other countries. Similarly, the role of the subsidiaries of an MNC will also affect how...
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...through the discovery of new facts. It is divided into two general categories: (1) basic research is to achieve the goal of increasing scientific knowledge, and (2) Applied research is an attempt to use basic research in order to solve problems or develop new processes, products and technologies. The development is a process of economic and social transformation that depends on the cultural and environmental factors and complex interactions. When we compare these two, and this means that we will get on research and development, and it means new knowledge about products, processes and services to discover, and then apply this knowledge to create products, processes and services that fill the needs of new and improved market. Assignment Task : In the last 10 years, the face of innovation and its management has changed. The main driver for this development is the changing role of Asian countries like India and China (e.g., Agarwal and Brem, 2012). Multinational companies (MNCs) used to rank emerging market economies primarily as low-cost locations for routine operations, while most of their research and new product and service development was carried out in the home country, as the creation of new technology was geographically sticky to a company’s headquarters (Patel and Pavitt, 1991). However, research and development (R&D) activities began to shift to developed countries outside of the home countries, producing a...
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...WHAT IS FOREIGN DIRECT INVESTMENT (FDI) Foreign Direct Investment (FDI) is the process whereby residents of one country (the source/home country) acquire ownership of assets for the purpose of controlling the production, distribution and other activities of a firm in another country (the host country) The International Monetary Fund (IMF) defines foreign direct investment (FDI) as a category of international investment where a resident in one economy (the direct investor) obtains a lasting interest in an enterprise resident in another economy (the direct investment enterprise). (IMF, 1993) * Two parts of this definition are important to note: 1. The “lasting interest” implies the existence of a long-term relationship between the direct investor and the direct investment enterprise, 2. The “direct investment” implies the acquisition of at least 10 percent of the ordinary shares or voting power of an enterprise abroad. * Foreign Direct Investor - an individual, an incorporated or unincorporated public or private enterprise, a government, a group of related individuals, or a group of related incorporated and/or unincorporated enterprises which has a direct investment enterprise – that is, a subsidiary, associate or branch – operating in a country other than the country or countries of residence of the foreign direct investor(s). Common Misconceptions of FDI. * FDI does not necessarily imply control of the enterprise since only a 10 percent ownership...
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...typical font and spacing, this comes to between 1½ and 3 pages.) It is recommended that you refer to outside sources as you consider these issues. Be sure to document your sources correctly. Answer one (1) of the following questions: We live in a world in which 13 of the top 50 economies are companies, not countries. How does this change the responsibility companies have for providing for social needs and addressing big-ticket challenges of the future? How can companies ensure their own future prosperity by beginning to engage looming issues of concern—from energy needs to public health to income inequity? Is the proliferation of nongovernmental organizations the result of an incapacity on the part of governments? Or, are NGOs an innovation in human social organization and an important step forward for addressing global and local challenges? How can NGOs and governments work together to complement one another? How should the private sector involve itself in such coalitions? Answer the following question: If we have truly crossed the bridge from the Westphalian nation-state model, then what is the next step in the evolution of our societies? Will governments around the world be over- whelmed by this new environment? Will they adapt to meet the constellation of new challenges and opportunities? Will authority become increasingly decentralized? What importance does leadership play in this new system and how can it help guide countries, corporations, organizations, and institutions...
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...‘A still growing but more complex China’: Current opportunities and challenges for MNCs in China 1. Introduction 2. Challenges for MNCs as they expand their footprint in the world’s second largest economy 3. Opportunities for MNCs to operate in China 4. Comments of CEOs and news articles relating to the topic 5. Conclusion and future suggestions for MNCs to successfully compete References ‘A still growing but more complex China’: Current opportunities and challenges for MNCs in China 1. Introduction An overview of China today Relationship of China and world MNCs ‘A still growing but more complex China’ Impact of global financial crisis on the relationship China in the ranking of MNCs wish-list What does today’s China hold for MNCs 2 ‘A still growing but more complex China’: Current opportunities and challenges for MNCs in China 2. Challenges for MNCs as they expand their footprint in the world’s second largest economy “Not ‘Cheap China’ any more: costs are soaring across China Business Challenges Labor shortages; due to China’s aging problem Wage inflation; country’s ageing population has changed the cost equation abruptly Conducting Regulatory successful Challenges Rise of trade protectionism Local competitors are becoming more competitive business in the world’s 2nd largest economy is increasingly Regional ‘There is more than one China’ Differences challenging Rising consumption ...
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...national boundaries to address these issues. Case-study data on how eight multinational firms in Singapore apply strategic approaches to human resource management are presented. Findings show that while some adaptation considering local context occurs, the diffusion of headquarters and centrally initiated, but competitively differentiated strategies across cultural boundaries, is significant. Effective human resource strategies were understood as ‘configurational’, integrated both vertically and horizontally. Keywords: convergent/divergent practices, human resource strategy, multinational firms There is a paucity of empirical, especially case-study research on human resource management (HRM) strategies of multinational corporations (MNCs) in South East Asia in general and Singapore in particular. The economic * The authors acknowledge the research assistance from Chang York Hiang, Andrew Fung, Lo Tat Keong, Lee Chee Meng, Liaw Hin Hao, Uwe Kriegshauser, Oliver Palmert, Bernd Rupflin, Kenichi Sakayama, Peter Wee and Zhuang Jing. Correspondence to: Associate Professor Irene K.H. Chew, Nanyang...
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...potential countries favour by Sanctuary Soft in its expansion plan included China, India, Germany and United Kingdom. In order to select a proper country for Sanctuary Soft’s first foreign expansion, this report will provide a detail explanation regard to the motivation of the first internationalization of Sanctuary Soft; the market opportunity of four possible foreign countries, and the expansion strategy in order to decide a proper countries for Sanctuary Soft’s first foreign penetration. Finally, this report will suggest some IHRM strategy/principle that Sanctuary Soft needs to consider in its selected foreign subsidiary. The motivation for internationalization The major motivations for Sanctuary Soft become a multinational company (MNCs) is to explore foreign opportunities, so as to accumulate specific knowledge in order to build their capabilities to provide service to its global basis clients. The larger clients who use the information security system are often having global presence. Therefore Sanctuary Soft needs to acquire new ideas and skills in the overseas market in order to increase its capabilities to serve clients internationally. As we know that the Sanctuary Soft’s capability is being sceptical by its existing client due to the lack of global presence, thus it is obvious that Sanctuary Soft cannot just stay in their home country if they want to attract the larger global clients and increase its market competitive in the global basis. Thus, Internationalization...
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... | |Accountability and governance | |Stakeholder engagement, consultation, reporting and governance | |Corporations, territory and governance | |Globalization Themes | |Corporate power | |New technologies...
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...Companies can Make Fortune at the Bottom of the Pyramid Rajesh N. Kumar James Cook University Table of Contents Executive Summary 3 Background 4 Introduction 4 What is the BoP Strategy 6 What is the Driver for MNCs to Focus on BoP Market 9 Is There a Buying Potential at the BoP 9 Behavior of Consumers in Asian Market 10 Sector With Highest Potential of Business in BoP Market 11 Recommendation 12 How to Approach the BoP Community - Innovation 14 Implement Innovative Approach to tap BoP Market 15 References 16 Appendix A 17 Appendix B 18 Executive Summary This report explores published journals, blogs and books around The Bottom of the Pyramid (BoP) being the breakthrough in the Strategy for businesses across segment and analyse what steps would lead to success through the journey of business around the 4 billion population existing in the bottom of the pyramid layer. Methods of analysis include statistical and market trend, and ratios of performance. Main area of focus is Asian market through the report as they account to 3/4th of the population residing in the bottom of the Pyramid, given the uniqueness of this region around culture, market behavior, people mentality and social dynamics. Gaining that knowledge would become important to have a break through into this market and ensure it’s a sustainable business...
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...E-mail: slhart@unc.edu DRAFT Not for citation or distribution without the permission of the authors August 1999 As multinational firms (MNCs) search for avenues for profitable growth and radical innovation in the new millennium, they may find a unique, counter intuitive opportunity – the 4 billion poor that are at the bottom of the economic pyramid. Converting the very poor into active consumers will foster innovations in technologies and business models. It will challenge managerial (and public policy) assumptions about sustainable development. Managers will be forced to consider the meaning of scale – the need to marry highly distributed small-scale operations and a few world scale capabilities --creatively along the value chain. Most importantly, conceiving of a market of 4 billion of the world’s poorest people will force a reexamination of the “price–performance” relationships for products and services. It will demand a new level of capital efficiency. The bottom of the pyramid presents a new managerial challenge – one potentially as powerful as the challenge presented by the proliferation of the Internet and e-business. The transformation of the bottom of the pyramid and the creation of a new and emerging market, like the opportunty in e-business, requires a total transformation of managerial practices in established MNCs. It will...
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