Multinational Corporations Case Study

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Summary Multinational corporations (MNCs) are all around us, in many different forms and sizes. From the small importing/exporting company, to giants such as EY and Coca-Cola. This essay takes a look at why an enterprise would seek to move outside its home country. Examining how Dunning’s eclectic, the motivations to internalize transactions and the evolutionary theory can help us understand why multinational corporations have evolved. This essay also includes an examination of how these theories can be applied in practice, using the Coca-Cola company as an example. Introduction McDonalds has over 36000 locations in 100+ countries (McDonalds 2014). H&M, more than 4000 stores in 62 markets (H & M Hennes & Mauritz AB u.d.). EY, more than 700 offices in 150+ countries (EY u.d.). IKEA, 328 stores in 28 countries (IKEA 2015). These are just a few of…show more content…
Strategic-asset seeking motives could also be a big one in this case. For example, Coca-Cola has a lot of funds and can therefore purchase smaller but viable brands of soft drinks or juices. In doing so they would acquire the immaterial assets such as brand and patents. Applying the notion that transfer of knowledge is central to a firms’ value creation, evolutionary theory could explain why the Coca-Cola company has offices in locations other than its home country. Because of the competitive advantage knowledge constitutes, the firm needs to enable the creation and flow of knowledge within the firm. Analysis The OLI framework works well in terms of assessing whether or not a firm should attempt to internationalize. Analysing if the firm has any ownership advantages, location advantages or if it’s preferable to internalize transactions, can give valuable insight into a firms’ position and its competitive advantages as an international
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