In general, marketing research is the process wherein vital information pertaining to the market is gathered thru data acquisition and is analysed in order to help the senior management reduce the risk associated with decision-making thru the means of an effective information dissemination system. Because of this, the marketing research tool plays a vital role in the overall process of management information systems. With the expansion of countries into the global market, multinational marketing research has taken flight. Multinational marketing research is the systematic and objective acquisition of data pertaining to the market in which the company wishes to penetrate. It is a support tool for the decision makers in order to reach a sound decision that involves the proper identification and implementation of their multinational marketing strategies and programs targeting the identified market. Marketing research as part of the multinational marketing information system should be able to be utilized Continue reading
International Business
International Business Management deals with the maintenance and development of a multinational operation across national borders, whose manager has the knowledge and the skills to manage and handle cross-cultural processes, stakeholders and business environments in a right way.
Control in Multinational Enterprises (MNEs)
There are various methods of classification of management control in Multinational Enterprises (MNEs). By levels of control here it is meant whether the parent / corporate level managers or subsidiary/country-level managers are involved. The former might be called higher level and the later lower level control. Depending on the sphere of focus we have two types of control called Strategic control and Operational control. In the MNE’s context, strategic control is the responsibility of parent and operational control is the preserve of the subsidiary. Another way puts ‘management control, tactical control and transactional control’ as the 3 levels of control respectively carried out by the corporate top management, collectively by corporate & subsidiary management and subsidiary management in the case of MNEs. Of course, whether an MNE’s structure is ethno-centric, geo-centric, multi-domestic/poly-centric or region-centric is another factor that influences the exact distribution of responsibility. The forward looking information is provided Continue reading
What Pricing Policy should a Global Company Pursue?
Viewed broadly, there are three alternative positions a company can take toward worldwide pricing. 1. Extension/Ethnocentric The first can be called an extension/ethnocentric pricing policy. This policy requires that the price of an item be the same around the world and that the importer absorbs freight and import duties. This approach has the advantage of extreme simplicity because no information on competitive or market conditions is required for implementation. The disadvantage of this approach is directly tied to its simplicity. Extension pricing does not respond to the competitive and market conditions of each national market and, therefore, does not maximize the company’s profits in each national market. 2. Adaptation/Polycentric The second pricing policy can be termed adaptation/polycentric. This policy permits subsidiary or affiliate managers to establish whatever price they feel is most desirable in their circumstances. Under such an approach, there is no control or fixed requirement that prices be Continue reading
Glocalization – Definition, Advantages and Disadvantages
Globalization is one of the most important phenomena of the recent past and of the future. The term “Globalization” describes an ongoing process by which regional economies, societies and cultures are becoming more integrated through a dramatically increased global network of technological, economic, political and cultural exchanges. In specifically economic contexts, the term refers to the integration of national economies into the international economy through trade, particularly trade liberalization or free trade, foreign direct investment, capital flows, migration and the spread of technology. This worldwide phenomenon of interaction among the countries is driven largely by advances in communication, transportation and legal infrastructure as well as the political choice of countries to open cross-border links in international trade and finance. Due to many difficulties that a globalization strategy faces another term has developed in recent years called “Glocalization”. In contrast to globalization, the glocalization strategy, which means thinking globally but acting Continue reading
National Competitive Advantage Theory of International Trade – Porters Diamond Model
It is a fact that Porter (1990) never focused primarily on the factors determining the pattern of trade, yet his theory of national competitive advantage does explain why a particular country is more competitive in a particular industry. If, for example, Italy maintains competitive advantage in the production of ceramic tiles and Switzerland possesses the competitive advantage in watches, it can be interpreted that the former will export ceramic tiles and the latter will export watches and both of them will import goods in which their own industry is not competitive. Why is this there a difference? Porter explains that there are four factors responsible for such diversity. He calls those factors the “diamond of national advantage”. The Porters diamond model includes: Factor conditions Demand conditions Related and supporting industries Firm strategy, structure and rivalry These factors have been more or less taken into account by earlier economists. What is Continue reading
Definition of Arbitrage and Its Types
Sometimes companies deal in foreign exchange to make a profit, even though the transaction is not connected to any other business purpose, such as trade flows or investment flows. Usually, however, this type of foreign exchange activities is more likely to be persuaded by foreign exchange traders and investors. One type of profit seeking activity is arbitrage, which is the purchase of foreign currency on one market for immediate resale on another market (in a different country) in order to profit from a price discrepancy. Hence, arbitrage may be defined as an operation that consists in deriving a profit without risk from a differential existing between different quoted rates. It may result from two currencies (also known as geographical arbitrage) or from three currencies (also known as triangular arbitrage). Interest arbitrage involves investing in foreign-bearing instruments in foreign exchange in an effort to earn a profit due to interest Continue reading