POB 1.03 Part 3 Understand business in the global marketplace.

What is a Multinational Company? Multinational Company (MNC) is an organization that does business in several countries ◦ The parent company is in the home country and does business activities in the host country. ◦ Pros: cheaper goods and career opportunities ◦ Cons: may become an economic power; host may depend on the MNC for jobs & products

International Business Strategies Global Strategy: selling the same product and using the same marketing strategy worldwide Multinational Strategy: treats each country market differently

Entry Modes into the Global Marketplace Franchising Licensing Joint Venture

Franchising Franchising is the right to use a company name or business process in a specific way. ◦ Usually involves selling a product or service. ◦ Example: McDonalds, KFC

Licensing Licensing is selling the right to use some intangible property for a fee or royalty ◦ Production process, trade mark or brand name

Joint Venture A Joint Venture is an agreement between 2 or more companies to share a business project ◦ Popular in manufacturing

Major International Trade Organizations International Monetary Fund ◦ 150 member nations; helps to promote economic cooperation; keeps orderly system of trade and exchange rates World Bank ◦ Formed in 1944; gives economic aid to less developed countries World Trade Organization (WTO) ◦ Formed in 1995 to promote trade; over 150 countries; settles disputes and enforces free trade agreements