The Rapid Change of International Business

International Company

Global Company

Multi-domestic Company

Operations and Trading

 -Sell their products in foreign countries by exporting products to those countries.

- Might be involved in importing activities.

- Do not have their own establishment in foreign countries.

- Have operations and trading in many countries across the world, at least around 15 countries.

- Have branches and establishments across many countries in the world.

Investment

- Do not receive any FDI from the foreign countries where they exports to or imports from their products/services.

- Mostly have FDI in some or all foreign countries where they operate in.

- Mostly have FDI in some of the foreign countries where they operate in.

Strategy

- The key decision making functions is always taken from the domestic country of the company as these companies do not have any foreign set up or branches.

- Centralized: The major decisions on the organizational approaches/changes are taken from the headquarter of the company. For example, merger and amalgamation, new products launching, etc.

- Decentralized: Each of their branches is responsible for its own key decisions, which have to suit the respective domestic places.

Products/ R&D

- Product development processes are accomplished in the domestic country.

- The Parent company generally initiates and completes the products development processes, and then distributes to the subsidiaries.

- Subsidiary companies at other countries may be allowed to take part in idea involvement process.

- Subsidiary companies at different countries are given the rights to develop product as per the local taste and demands.

Challenges

- Face regulatory and legal issues.

- Following one uniform product type across all countries may lead to miss the local touch and lower the demand in some countries.

- Have to face legal, regulatory and customs issues.

- The taste of products in some countries does not match.

- Mainly face internal manpower issues, and organizational problems, etc.

Example

Wal-mart

Coca-Cola, Microsoft, Lenovo

McDonald, KFC, Lotteria