2. In a narrow sense, an international enterprise refers to a multinational enterprise whose international operation level has developed to an advanced or mature stage-an enterprise that owns or controls production and service facilities in two or more countries and engages in international operation activities under the unified decision-making system of the parent company.
The basic motivation of international enterprise management
(1) Expand sales;
(2) access to resources;
(3) Diversification.
Second, the types of international enterprises
1, depending on the nature of the project:
1) International enterprises mainly engaged in resource exploitation and processing: oil companies are typical representatives;
2) Traditional international enterprises mainly engaged in processing and manufacturing: General Motors, Toyota, Coca-Cola, etc.
3) International enterprises focusing on new technology products: Microsoft, Cisco, Lucent, etc.
4) International enterprises focusing on service industry: Citibank, McKinsey Consulting, etc.
2. According to the company's decision-making system.
1) Home country central decision-making system (key);
2) Diversified decision-making system (multiple key points);
3) Global-centered decision-making system (global overall consideration).
Second, the types of international enterprises
Structural standard
1, transnational degree-at least 2
2, the nature of ownership-multinational owners, decentralized property rights.
3. Nationality of the company's senior managers-multinational
(3) Behavior characteristic standard
This means that any international enterprise should have global strategic goals and ideas.
1983 The report "Developing Multinational Corporations in the World" issued by the United Nations Center for Transnational Development is defined as:
First, it includes two or more entities;
Second, operating in a decision-making system, one or several decision-making centers can adopt consistent countermeasures or * * * the same strategy;
Third, the connection formed by various subjects through equity or other means makes it possible for one or several subjects to have a significant impact on other subjects, especially to share knowledge resources and assume responsibilities with other subjects.
3. According to the internal management structure of the company:
1) horizontal international enterprises: the products and operations of the parent company and its subsidiaries are the same. There is no professional division of labor between the parent company and its subsidiaries in terms of products and technology; In order to share technology within international enterprises, subsidiaries basically copy the business and knowledge system of the parent company. Coca-Cola, McDonald's, etc.
2) vertically internationalized enterprises (product diversification): the products and operations of the parent company and subsidiaries are different, but they are interrelated. There are two specific situations: one is the division of production between upstream and downstream products in an industrial chain (petrochemical: exploration, mining, refining, processing, manufacturing and sales); One is the division of labor of different processing procedures in a product (mechanical and electrical products, airplanes, automobiles, electronics, etc.). The most typical one is Boeing: the production, assembly, testing, packaging and transportation of various components.
3) Mixed (industrial diversification) international enterprises. Within the company, the parent company and subsidiary company are not related in products or projects. For example, general electric company
Chapter III Theory of Foreign Direct Investment
Neo-classical international capital flow theory
monopolistic advantage theory
Product cycle theory
internalization theory
Compromise theory of international production
Comparative advantage theory
Section 2 Theory of Monopoly Advantage
Through the empirical analysis of American enterprises, Harmo found that foreign direct investment has many disadvantages, such as unfamiliar environment, consumption discrimination in the host country, foreign exchange risk and so on. However, a lot of foreign direct investment (especially monopoly industries) has succeeded, and there must be some specific advantages to make up for it.
Harmo believes that there are two conditions for enterprises to make foreign direct investment:
First, enterprises must have monopoly advantages to offset the unfavorable factors in competition with local enterprises;
Second, the existence of incomplete market makes enterprises have and maintain this advantage;
Second, the impact on the economy of capital-importing (developing) countries.
1, increase the source of funds for the economic development of the host country.
2. Promote technological progress and management experience accumulation in the host country.
3. Promote the economic and social modernization of the host country.
4. Adverse effects: profit outflow; Resource outflow; Investment in polluting industries; The invasion and infiltration of technology, economy and even culture. -The root causes of the anti-globalization movement
First, the concept of foreign direct investment
1, the concept is the capital investment outside the host country for the purpose of participating in enterprise management and gaining partial control rights, accompanied by the transnational transfer of resource consortia with operational capabilities, technologies and equipment.
2. Differences from other international business activities
Difference from international trade —— Cross-border transfer of internal resource complex
The difference between indirect investment and indirect investment-having the right to control and operate the enterprise
The difference from capital flow (international finance)-the flow of comprehensive production factors
M&A includes merger, merger and acquisition.
First, the characteristics of international enterprises
1, international characteristics-stateless enterprises
2. Foreign direct investment is the basic means to form an international enterprise-it requires mastering the control and management rights of the enterprise.
3. Internal integration and strategic globalization.
Strategic globalization means that international enterprises take the world as the background and basis when determining their own business objectives, strategic policies and strategic measures.
Internal integration means that international enterprises consider their branches in various countries in terms of strategic determination, organizational operation and resource utilization, which has internal unity.
In order to realize strategic globalization under the condition of internal integration, international enterprises implement a management system of centralized decision-making and decentralized operation.
Flexibility-an elephant with internal unity, flexible adjustment and light dance.
4. Internalization of technology. International enterprises take their huge organizational system as the main body to realize technology transfer, and obtaining technology from the market is the second. This has two advantages: first, it prevents the outflow of technology; Second, maximize the effectiveness of technology.
Second, the basic viewpoints of the theory of international production compromise
Deng Ning believes that the international business decisions of multinational corporations are determined by enterprise ownership, internalization and location advantages. The different combinations of these three variables determine the choice of multinational companies in export trade, direct investment and license trade. If these three sets of variables meet the following conditions at the same time, multinational companies will engage in foreign direct investment:
First, enterprises have monopoly advantages over enterprises in other countries, such as knowledge and technology advantages;
Second, it is more advantageous for enterprises to expand the use of these advantages through the internal market than to sell or lease them to foreign companies;
Thirdly, it is more beneficial for an enterprise to take advantage of its monopoly advantage in the host country by combining local factor input than by using the factor input of the home country.
Verb (abbreviation of verb) Deng Ning's basic conclusion: Multinational companies have monopoly advantage, internalization advantage,
Location advantage is indispensable.
Only monopoly advantage: choose the permitted trade mode;
It has the advantages of monopoly and internalization; Choose export trade mode;
There are three: choose foreign direct investment, if you have a location advantage, but also choose to export, you will lose the benefits of obtaining a location advantage.
centralism
Think that your enterprise has the best management mode, regardless of the differences in external environment.
polycentrism
People think that there are great differences among countries, and they should operate in a completely different business model from domestic ones.
Second, the manifestations of political risk
There are many forms of political risk, which can be divided into six categories according to the severity of risk consequences: 1. Non-discriminatory intervention.
2. Discriminatory intervention
3. Discriminatory punishment
4. Deprivation of property
5. Property damage
6. Casualties or personal safety losses.
Verb (abbreviation of verb) Types of global strategy of international enterprises
Six, (a) according to the strategic situation
1, development strategy
2. Stability strategy
2. Austerity strategy
(two) according to the main areas involved in the strategy.
1, home country-centric strategy
2. Polycentric strategy
3. Global Center Strategy
(3) According to the differences of means to gain competitive advantage.
1, cost leadership strategy
2. Differentiation strategy
3. Centralized strategy
(4) According to the nature of the strategy.
1, conservative strategy
2. Reliable strategy
4. Risk strategy
International enterprises have four ways of staffing:
Home country-centered model
Multivariate centralized distribution model
Distribution mode of regional centralism
Global centralized staffing model
(d) Basic international marketing concepts
The concept of domestic market expansion
Domestic companies try their best to sell domestic products to foreign markets and put international business in the second place, which is an extension of domestic business.
Concept of rural market
Under the guidance of this concept, companies realize that different countries have different market sizes, and only by making independent plans for each country can they achieve sales success. Such enterprises adopt different marketing strategies for each country on a country-by-country basis.
Global marketing concept
Companies oriented by this concept will usually become global companies, whose marketing activities are global marketing and the market scope is global.
(A) the steps of international promotion
Research target market
Determine the degree of global standardization
Determine the promotion mix in domestic or global markets.
Develop the most effective information
Select a valid media.
Establish an effective control system to help monitor and achieve global marketing goals.
(A) the definition of global strategy of international enterprises
The global strategy of international enterprises refers to the optimal allocation of resources by international enterprises on a global scale to achieve the optimization of overall benefits, that is, an overall and long-term strategy for long-term survival and development under the guidance of correct strategic thinking and on the basis of scientific analysis of frontier operating environment and enterprises' own conditions.
(B) the characteristics of the global strategy of international enterprises
1, global.
2. Long-term.
3. programmatic.
Step 4 resist.
5. risks.
Third, the motives and methods of internationalization of enterprises
Basic ways of international operation
(1) Import and export of commodities;
(2) Import and export of labor services;
1) turnkey project;
2) franchising;
3) manage the contract;
4) License agreement.
(3) investment activities.
4. Three basic strategies
Michael Porter put forward three basic strategies: total cost leading strategy, innovation strategy and goal focusing strategy.
Total cost leading strategy: To produce and provide acceptable products or services to the market at the lowest cost, the key is to obtain lower costs than competitors when providing products and services to Gu Rong.
Innovation strategy: gain competitive advantage by providing unique products and services. Its strategic focus is not cost, but continuous investment and development of different characteristics of products or services that customers think are important.
Target-focused strategy: use the core competitiveness of enterprises to meet the needs of specific industry segments. Its core lies in focusing on developing the differentiated needs of a narrow target market, regardless of other markets in the industry.
Porter's five-force model
3. Joint ventures and cooperative enterprises
(1) Meaning:
Joint venture: an enterprise that is jointly invested and operated by investors from two or more countries or regions, and shares profits, risks and losses in proportion to the investment.
Cooperative enterprise: the general name of various forms of economic cooperation established by investors from two or more countries or regions on the basis of contracts for profit.
(2) Features
Advantages:
It is conducive to making full use of the intangible assets of local enterprises.
Which is beneficial to reducing the investment cost.
Conducive to adapting to local needs
Conducive to resolving political risks
Disadvantages:
Conflicts of interest between partners
Second, the main reasons for foreign direct investment by international enterprises
(1) Optimize the allocation of resources globally and seek to maximize profits.
1, in capital
2. Technology
3. Human resources (labor force, technicians and managers)
4. Raw materials
5. Soft resources (management and information)
(2) Break through barriers and realize internationalization, scale and economy.
1, tariff and non-tariff barriers (types, differences)
2. Obstacles to capital restrictions
3, technical barriers (learning to master cutting-edge advanced technology)
4. Foreign exchange barriers
5. Non-scale economic barriers
(3) Seek more commercial advantages in expanding economic integration with foreign enterprises.
1. Promote the export of equipment, technology, products, semi-finished products and services of domestic enterprises.
2, can cultivate a large number of international management talents.
1, wholly-owned enterprise
(1) Meaning: All the capital established by an international enterprise in the host country is owned by the company.
(2) The characteristics of a wholly-owned enterprise:
Advantages:
Less controlled by the government
Light tax
Conducive to the protection of trade secrets
Strong competitiveness and enterprising spirit.
Disadvantages:
It's very risky
Limited enterprise scale
Third, the investment field: tilt to the service industry.
2. reasons
First, the proportion of service industry in the national economy and world trade has increased.
Second, the growth of service demand and the continuous liberalization and opening up of the market environment have created conditions for the development of FDI in service industries.
Third, the intensification of competition in the service industry has prompted multinational companies to expand overseas.
Fourth, non-service transnational direct investment turned to service industry.
Fifth, the wave of cross-border mergers and acquisitions is the driving factor of FDI in service industry.