1. Chapter 1
Introduction: Multinational Enterprise and Multinational Financial Management

2. PART I. THE RISE OF INTER-MODAL INTERNATIONAL TRADE
A. GLOBALIZATION IS:
T. Koulopoulos in “Smartsourcing”
Evolution
Survival
A necessary counterbalance to the power of disruption from civilization’s networks

3. GLOBALIZATION B. Globalization creates: Mutual reliance Security
Tolerance
Prosperity
Greater access to economic resources

4. Containerization C. THE REVOLUTION IN WORLD TRADE AND FINANCE (1985)
a. Containers (20’ (TEU) and 40’)
b. Make Inter-modal transport possible

5. International Finance is about Risk Mitigation aka Risk Engineering

6. This New Method of Shipping Has Revolutionized
Global Trade and Finance

7. CARGO CRUSH
7.5
NO. 1 LA
7.3
6.7
NO. 2
Long B
5.8
= 2005
4.8
NO. 3
NY/NJ
4.5
= 2004
Source: L.A. Times, C-1, 2/4/2006
- IN MILLIONS OF TWENTY FOOT CONTAINERS (TEUs)

8. World’s Top 5 Container Ports
Millions of Twenty
Foot Containers
Source: L.A. Times C-1, 2/22/2006

9. The Third Largest Port in the World The largest in North America
Los Angeles
The Third Largest Port in the World The largest in North America

11. Port of Long Beach
                                                                                                                        

12. A Containerized Port in China

16. Containerized Shipping is Intermodal
By rail mode
By ground mode
By air mode

17. A “Small” Container Ship

18. The Largest Shipping Company

22. The Alameda Corridor

23. Intermodal Transport

24. Voyages to Hong Kong on Hanjin
The Time Length Of Global Shipping
Voyages to Hong Kong on Hanjin
From
Departure
Arrival
Transit
Service
Vessel
Long Beach
Tue Sep 25
Sat Oct 13
18 days
AWEPD
Priwall
New York Metro
Mon Sep 17
Tue Oct 16
29 days
AWE
Lt Genova
Oakland
Tue Oct 2
Wed Oct 17
15 days
PSPD1
H.J. Athens
Le Havre
Thu Sep 27
20 days
CEX
H.J. Savannah
Fri Oct 5
Fri Oct 19
14 days
PSPD2
Portugal Senator
Fri Sep 28
21 days
PDA
H.J. Amsterdam
Sat Oct 20
German Senator

25. PART II. THE RISE OF THE MULTINATIONAL CORPORATION
II. What is an MNC?
A. Definition:
a company with production and distribution facilities in more than one country.

26. THE RISE OF THE MULTINATIONAL CORPORATION
B. EVOLUTION OF THE MNC
Reasons to Go Global:
1. raw materials
2. more markets
3. minimize costs of production
Historical
Time

27. THE RISE OF THE MULTINATIONAL CORPORATION
1. RAW MATERIAL SEEKERS
exploit markets in other countries
historically first to appear
modern-day counterparts:
Anaconda Copper
Exxon-Mobil

28. THE RISE OF THE MULTINATIONAL CORPORATION
2. MARKET SEEKERS
produce and sell in foreign markets
heavy foreign direct investors
representative firms:
IBM
Nestle
Levi Strauss

29. THE RISE OF THE MULTINATIONAL CORPORATION
3. COST MINIMIZERS
seek lower-cost production abroad
motive: to remain cost competitive and maintain profits.
representative firms:
Texas Instruments
Motorola

30. THE RISE OF THE MULTINATIONAL CORPORATION
SUPER ADVANTAGES OF THE MNC
3 ARBITRAGE POWERS
TAX
FINANCIAL
REGULATORY

31. What is a Global Corporation?
“Think locally but act locally”

32. LOGISTICS RISK

33. THE PORT OF LOS ANGELES

34. THE PORT OF LOS ANGELES

35. THE PORT OF LOS ANGELES