Challenges faced by multi national enterprises

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Multi-National Enterprises is the need to gain a competitive advantage. They are Different strategies which is adopted by different enterprises. It is depend on their opportunities for growth. This puts effects on the organisational structure and culture.oreign direct investments grew above the average of the second half of the XX century. More specifically, it tries to answer two questions. First, which have been the determinants of foreign direct investments in both periods.

the need to set up a foreign plant or a sales network, to try to overcome cultural and legal

differences, to bear the risk of expropriation, and, of course, exchange rate risks. Models that explain the existence of MNEs must highlight the potential benefits of production in foreign markets and show that these are larger than, for instance, the costs of setting up a plant in

a foreign market.

Multinational enterprises that control income generating assets in more than one country.

Multinational business has its operations in more than one country. These businesses mainly function in the entire major global. for Example Coca-Cola, IBM, Ford, etc. these businesses are well established corporate brands and recognised in the world. like example, Coca-Cola is a well established brand in all parts of the world. Mostly these multinational businesses are global by mature and implement similar marketing strategies in the world. Multinational business is large and is highly influential in nature. MNC bring internal investment to countries other than their home base. Multinationals increase the national economy of the country in which they decide to set up operations and are therefore also supported by the national government while setting up their operations.

Multinational enterprises do business in different countries. Like an example SONY, DELL, IBP or Ford. These are famous by their huge size where one division may be larger than many whole companies and where these companies have thousands of employees.

Example: NESTLE faces many challenges when they just want to introduce their business in northern india they had many challenges some of the major challenges was Transportation, business. They made solid place for them.

International property law that reduce the risks of FDI,and improvements in transport and communications which had reduced the costs of managing at a distance. The adoption of foreign technology and know-how, which can happen via licensing agreements, imitation, employee training, and the introduction of new processes, and products by foreign firms; and the creation of linkages between foreign and domestic firms.

COMPITATIVE ADVENTAGES. The competitive strategy could believe how it operate relative to other companies which it competes. An important quantity of resources should be put into planning and strategiesThe strategy behind the MNEs should merge basic action strategies .In the case of very large firms, range of techniques which classify the driving force of the organisation.

Example:

Microsoft is located in Seattle not in Silicon Valley. It wants to protect their knowledge and expertise from competitors.

Competitive strategies organize business for entry and its success in the worldwide. In these changes the business will have to accept in order to maximise its competitive ability. These changes appeal to control strategies. Its a way of alleviate any negative impact whilst the transformation are taking place. In this way of tie together planning,marketing and performance ornamental processes that would balance the universal needs to a domestic level. The most prominent factor for MNEs communication takes the place transversely different time zones and there is a cost for the design and execution of effective electronic communication systems. These cultural differences have an impact on communication and the ability to standardise business processes. Planning is an vital part of strategy shape. Planning relies on good quality information in order to form perceptive long-term control strategies. These engage external ecological factors such as local economies and different cultures with the different kind of objectives.

EXAMPLE:-

Marks and Spencer is a trader, generate revenues of over 13 billion US dollars per annum. It got over three hundred stores and over five hundred million customers per annum. It is famous for its friendly service.

M&S has faced deep rivalry within the world wide recently. It has implemented some strategic changes to restore itself as a leader of the market and for the need of quickly response to consumer demand. M&S established the will to operate in agreement within the countries where it operates. These guidelineses promotes the worker to good working conditions.

HSBC has faced many challenges. The most contentious are connected with HSBC,s technical management. Its unsuitability lead to customer data escape.Tthe missing data did not created the appalling effect overall. These challenges prove that any of the largest banking group, may become issue to threat, The successful management of critical situation has always been a exacting feature of HSBC worldwide operation.

HSBC may focus on the strategic areas of its worldwide operations for the further importance. Latest security systems will be operate to avoid further leak of in order. More than 330.000 staff eternally requires a solid ground for professional development and therefore HSBC will further enlarge expert training and development programs for its employees.

In light of the ongoing financial crisis, HSBC is not going to apply the £25b. Fund has unveil by the UK government to save the country's banking system. This approach is entirely different from those currently led by the Group's from its main rivals. Conversely, HSBC intends to lend £750 m. to reinforce the UK capital base. With this purpose, over the last four years the bank has provided loans to help other UK banks.

CONCLUSION:

The assumption behind the formulation of strategy for Multi-National Enterprises was presented in the context of a fiercely competitive global market. Decision making as a key tool to providing that global success through diligent planning was also discussed. The concept of control strategies was introduced along with the accompanying idea of control mechanisms and how they help contribute to helping MNEs develop and optimise their key strengths and achieve economic success and notoriety.

Two different kinds of 'strategic style' were discussed: that of an open, flexible modus operandi as exemplified by Microsoft whereby foreign subsidiaries are given the power to determine their own objectives and implementation plans and that of the more formal and traditional style of management in the case of Marks & Spencer where top management regularly monitors and therefore more strictly controls the workings of its subsidiaries.

REFERENSE:

1.Campbell D., Storehouse G. and Houston B. (2002), Business strategy, 2ndedition,

Butterworth-Heinemann, pp9-13.

2.Son, G.J, schools K, Whittington R (2008), Exploring corporate strategies, 8th edition, Pearson education limited, England, p11

3. Wood M (2001), International Business: An Introduction, Palgrave publishers, New York, pp192-193

4. Martin, R. L. (2002). The virtue matrix. Harvard Business Review, 80(March (3)), 68-75

5. Stiglitz, J. (2002). Globalization and its discontents. New York: Norton and Company

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