Session 2: The International Business
Environment
- TATA: Is an Indian car company. They currently have over 165 billion dollars in revenue. They also are the
mother company of Range Rover etc.
- Expected world GDP growth in 2025 following the IMF is around 3.2%. Compared to previous years this
isn’t too bad.
- MNE: Multinational enterprise
- Belgian city is home to Belgium’s largest MNE = Leuven namely AB-InBev
The firm as a system of transformation activities
- The Porter value chain
- Is a way to start & analyze firms
- 2 directions:
o Horizontally
Supporting activities
Not related to the flow of
the goods
o Vertically
Considered as “steps”
Those are from left to right
what goods / materials go
through
The firm embedded in a set of relations
- Companies have a lot of relations
- Also, competitors are a sort of “relation”
, Multinational Enterprise
- = MNE
- A multinational enterprise is any business that has productive activities in two or more countries
- Such companies have risen since the 1960s
o The number of non-US multinational has risen
o The number of mini multinationals has risen
- Special forms:
o Born Globals
Companies that are born to be global
They have a global vision from the start
(Begin exporting within 2-3y of formation)
o Emerging Market MNEs
Companies that come from rapidly growing economies like China, India etc
Often lack traditional advantages like brand recognition
Firms have different reasons to internationalize
- Market-seeking globalization of markets
o Exploring and discovering new market opportunities
o Following customers
- Resource-seeking globalization of production
o Exploiting factor-driven location advantages
o Exploiting demand-driven location advantages
- Using global network both of the above
o Global experience
o Economies of scale in all types of ways (production, logistics…)
o Mobility of production
o Lowering risk
Eg: if there’s crisis in country A, countries B and C could cover those
o Product differentiation
Why would you want to produce close to your customers Follow your customers
Environment
- TATA: Is an Indian car company. They currently have over 165 billion dollars in revenue. They also are the
mother company of Range Rover etc.
- Expected world GDP growth in 2025 following the IMF is around 3.2%. Compared to previous years this
isn’t too bad.
- MNE: Multinational enterprise
- Belgian city is home to Belgium’s largest MNE = Leuven namely AB-InBev
The firm as a system of transformation activities
- The Porter value chain
- Is a way to start & analyze firms
- 2 directions:
o Horizontally
Supporting activities
Not related to the flow of
the goods
o Vertically
Considered as “steps”
Those are from left to right
what goods / materials go
through
The firm embedded in a set of relations
- Companies have a lot of relations
- Also, competitors are a sort of “relation”
, Multinational Enterprise
- = MNE
- A multinational enterprise is any business that has productive activities in two or more countries
- Such companies have risen since the 1960s
o The number of non-US multinational has risen
o The number of mini multinationals has risen
- Special forms:
o Born Globals
Companies that are born to be global
They have a global vision from the start
(Begin exporting within 2-3y of formation)
o Emerging Market MNEs
Companies that come from rapidly growing economies like China, India etc
Often lack traditional advantages like brand recognition
Firms have different reasons to internationalize
- Market-seeking globalization of markets
o Exploring and discovering new market opportunities
o Following customers
- Resource-seeking globalization of production
o Exploiting factor-driven location advantages
o Exploiting demand-driven location advantages
- Using global network both of the above
o Global experience
o Economies of scale in all types of ways (production, logistics…)
o Mobility of production
o Lowering risk
Eg: if there’s crisis in country A, countries B and C could cover those
o Product differentiation
Why would you want to produce close to your customers Follow your customers
