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Global Business: multinational corporation - PowerPoint Presentation Example

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Foreign direct investment (FDI) and export import trade are international business primary types. A multinational is an enterprise carrying…
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Download file to see previous pages In order for Cocacola to enter into the Mexico market it has to follow procedures which include: Foreign Direct Investment, Cocacola can make its investment through a joint venture or a merger (Czinkota, Ilkka & Michael, 2004). Direct acquisition or merger with existing companies is mostly the straightforward procedure of new markets penetration applied by many multinational corporations. An entry like foreign domestic investment gives large multinationals, the advantage of the economies of scale and the size that it provides.
Cocacola can enter in the Mexican market through licensing, which is a good strategy for companies that have an in demand of a brand or product but does not have the resources required to expand internationally. If Coca-Cola decides to license its product in Mexico it sells rights to manufacture its products in Mexico to a manufacturer in Mexico. Cocacola is not required to invest in the Mexican market so as to develop it but the foreign firm will give payments to Cocacola instead (Czinkota, Ilkka & Michael, 2004). Cocacola has to put a lot of effort in entry to the new market in searching for the product prices, the current market situation, be aware of the country’s laws and regulations. Managers should be aware of the political state of that country before any decision is made whether to enter the market.
Pestle analysis outlines the various factors that can affect the managers’ decision in any organization. These factors are; Political factors, which are government policies, economic factors which include taxation changes, inflation exchange rates and interest rates. Social factors which are social trend changes affecting the demand of a firm’s products, technological factors affects decisions because new technology brings new processes and new products, environmental factors include climate change and weather. Temperature changes bring an impact to tourism, insurance and ...Download file to see next pagesRead More
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