1. FOUR BROAD MULTINATIONAL STRATEGIES
Solutions to the global--local responsiveness dilemma
Multilocal
Transnational
International
Regional 5

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3. Partner’s different capabilities Partner's knowledge of the market
WHY SEEK ALLIANCES?
Partner’s different capabilities
Partner's knowledge of the market
Government requirements
To share risks
To share technology
Economies of scale
Low cost raw materials or labor 35

4. REASONS TO INVEST IN FOREIGN COUNTRIES
To extract raw materials
To find low cost sources of labor, components, parts, or finished goods
To penetrate new markets, the major motivation 39

5. POSSIBLE ADVANTAGES OF FDI
Greater control
Lower costs of supplying host country
Avoiding import quotas
Greater opportunity to adapt product to the local markets
Better local image of the product 40

6. POSSIBLE DISADVANTAGES OF FDI INCLUDE
Increased capital investment
Increased investment of managerial and other resources
Greater exposure of the investment to political and financial risks 41

7. GEOGRAPHIC DISTANCE Transportation costs
More difficult for managers to communicate face-to-face and local managers may feel "out of the loop" in corporate decision making 49

8. With very different cultures, direct investment more risky
CULTURAL DISTANCE
With very different cultures, direct investment more risky
Joint ventures, licensing and exporting
Local partners deal with local cultural issues 50

9. POLITICAL AND FINANCIAL RISK
Economic risk
Currencies, markets, etc.
Political risk
Governments change
Policies regarding foreign firms change 51

10. NEED FOR CONTROL Key areas for concern
Product quality in the manufacturing process, product price, advertising and other promotional activities, where the product is sold, and after market service 52

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