Chapter 8

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Questions and Answers

What primary advantage do emerging multinationals gain through acquiring local competitors?

They can decrease product diversity.

They can avoid adopting local practices.

They can consolidate their position in specific markets. (correct)

They can reduce their workforce.

Which of the following is NOT a characteristic of family-owned multinational companies?

Private capital is typically involved.

Succession planning is unimportant. (correct)

Shareholding is often held through family trusts.

Family members control decision making.

Which family is associated with the multinational company Walmart?

Ortega family

Grifols family

Ellison family

Walton family (correct)

How does Cargill exemplify family-owned multinational companies?

It has over 51% equity held by family members. Signup and view all the answers

What trend is described by the term 'globally born'?

Startups that rapidly achieve global reach from inception. Signup and view all the answers

What is a key issue in managing family-owned multinational companies?

Managing competitive advantages. Signup and view all the answers

What diversification strategy does the provided content highlight for digital business models?

Offering local experiences and activities. Signup and view all the answers

Which company was founded by William W. Cargill?

Cargill Signup and view all the answers

What defines emerging multinationals?

They are based in fast-growing emerging markets. Signup and view all the answers

Which of the following is a characteristic of emerging multinational companies compared to established MNCs?

Weaker marketing skills. Signup and view all the answers

What is a common challenge faced by emerging multinational companies?

Competing against advanced country MNCs. Signup and view all the answers

What is one way that companies like Bimbo Group exemplify emerging multinationals?

They have origins in a fast-growing emerging market. Signup and view all the answers

What term is used to describe companies that are established and operate from their inception with a global focus?

Globally born MNCs. Signup and view all the answers

Which aspect distinguishes family-owned multinational companies from other MNCs?

They may prioritize long-term business interests over quick profits. Signup and view all the answers

What international expansion strategy is most commonly associated with emerging market multinationals?

Cross-border acquisitions and foreign direct investment. Signup and view all the answers

Which of the following factors tends to be a disadvantage for emerging multinationals?

Limited technological resources. Signup and view all the answers

What characterizes globally born multinational corporations?

They achieve a certain level of internationalization between year 3 to 5. Signup and view all the answers

How did Bimbo Group primarily establish its presence in Latin America during its initial expansion?

By acquiring existing companies and forming partnerships. Signup and view all the answers

What was the significant acquisition that allowed Bimbo Group to enter the U.S. market?

Mrs. Baird's Signup and view all the answers

What digital business model characteristic helps globally born MNCs optimize costs?

A fully integrated digital consumer experience. Signup and view all the answers

Which countries did Bimbo Group expand into following its acquisition of Panrico?

Spain and Portugal Signup and view all the answers

What strategic approach did Airbnb take during its international expansion?

By translating the platform and adjusting local policies. Signup and view all the answers

What is a key advantage of digital business models for globally born MNCs?

Ability to attract worldwide talent. Signup and view all the answers

Which of the following is NOT characteristic of emerging multinationals?

Dependence on government subsidies. Signup and view all the answers

Study Notes

Section 4: Unit 8 - The New Multinational Companies (MNCs)

This unit examines multinational companies (MNCs) originating from emerging markets, called "Emerging Multinationals", along with "globally born" MNCs and family-owned MNCs.

Multinational Companies from Emerging Markets ("Emerging Multinationals")

MNCs based in emerging markets have rapidly expanded globally through foreign direct investment (FDI) and cross-border acquisitions.
These companies are characterized by rapid internationalization.
They are also known as emerging MNCs, emerging market firms, or 3rd-world MNCs.
Compared to established MNCs, these companies show lower levels of technological advancement, marketing expertise, organizational efficiency, capital intensity, and control over foreign subsidiaries.

The Phenomenon of the "Globally Born"

"Globally born" MNCs are businesses that achieve a significant level of internationalization within 3-5 years.
These companies are often associated with digital business models and are able to optimize costs and attract global talent.
A key characteristic of "globally born" MNCs is their strong link to a digital model, which is integrated throughout the consumer experience.

Family-Owned Multinational Companies

Family-owned MNCs are multinational corporations that have at least 51% of their shares held by family members or through family-controlled entities.
Private capital and family ownership are common aspects, with family members usually involved in controlling the company's decision-making processes.
Succession planning for leadership is a crucial issue in these companies.
Competitive advantages often stem from the unique experience and knowledge passed down through generations within the family.

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Description

This quiz explores the characteristics and dynamics of multinational companies (MNCs), particularly focusing on those emerging from developing markets. It covers concepts such as 'Emerging Multinationals' and 'globally born' MNCs, including their rapid growth through foreign direct investment. Test your knowledge on these modern corporate entities and their international impact.