Watch the Kaltura video and address the following.
Determine the key reasons why economic freedom is so critical to multinational companies (MNCs).
Provide one example from the information that you learned and compare the economic freedom of two countries and how it affects MNC’s conducting business in each (for example, China versus India).
Be sure to respond to at least one of your classmates’ posts.
October 16, 2022 10:05:12 AM EDT
Tameica Cameron
Week 3 discussion
The key reason why economic freedom is so important to multinational companies is that if a country has economic freedom the multinational companies can select the workers they want to hire, make their products in the country, and can price the products freely (1). Moreover, to multinational companies, countries with greater economic freedom represent a robust market with strong economic growth higher gross domestic product per person, good formal education, and free trade. This represents not only an attractive market for multinationals but also a source of quality labor, and a destination of production.
Comparing China and India, China has economic freedom score of 48 and is the 158th freest economy, whereas India has an economic freedom score of 53.9 and is the 131st freest economy. However, multinational activity is considerably higher in China than in India because China represents a larger market and a cheaper source of labor. This has impacted the two economies. In 1990 in per capita GDP terms India was richer than China but acceding to 2019 figures China is 4.61 times richer than India.
References:
(1)Azman-Saini, W. N. W., Baharumshah, A. Z., & Law, S. H. (2010). Foreign direct investment, economic freedom and economic growth: International evidence. Economic Modelling, 27(5), 1079-1089.
Part two
Watch the Kaltura video.
Sometimes international business is just like a board game. One company adds new features and another attacks by dropping its prices to compete with its rivals. Use the Internet to find three examples of the use of offensive or defensive competitive behavior strategies that the textbook has examined from international newspapers or e-zines.
Address the following:
Determine the major advantages that global companies would have over domestic competitors in sustaining competitive advantage as a result of using offensive or defensive competitive strategies.
Be sure to respond to at least one classmate’s post.
22 10:07:19 AM EDT
Tameica Cameron
Week 4 discussion
Three examples of the use of offensive competitive behavior strategies are Tesla Inc, Salesforce, and Adobe Inc. Each of these companies invests heavily in research and development, and technology. Each of these companies has made aggressive acquisitions, used latest technology, and in the general chased and shadowed changes in their industries to stay ahead of competitors.
The major advantages that global companies would have over domestic competitors in sustaining competitive advantage because of using offensive competitive strategies are that the global company can easily diversify its business through acquisitions. For example, Tesla entered the photovoltaic market through the acquisition of SolarCity. Other major advantages global companies would have over the domestic competition in sustaining competitive advantage through offensive competitive strategies are improving their business agility, using automation and productivity, and higher staff coordination and collaboration. This is achieved through using advanced technology and technological innovation as is being done by Adobe Inc.
Reference:
(a)Tzeng, C. H. (2022). Politics, rumors and identity: how does a domestic firm challenge an MNE in the non-market environment amidst home–host political hostility?. Multinational Business Review, (ahead-of-print).
