Case study Chapter 5

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Questions and Answers

What characterizes multinational companies from emerging markets?

They are primarily family-owned businesses.

They typically have higher capital intensity than rich-country counterparts.

They exhibit rapid growth and a fast pace toward internationalization. (correct)

They have advanced technological skills.

Which of the following is NOT a term used to describe emerging multinational companies?

Established MNCs (correct)

Emerging market firms

Third world MNCs

Unconventional MNCs

What is a common disadvantage faced by emerging country MNCs?

Better control over foreign subsidiaries

Weaker marketing and technological skills (correct)

Higher scale of operations

Advanced organizational overhead

Which company is cited as an example of a Mexican multinational in the baking industry?

Grupo Bimbo Signup and view all the answers

How do emerging country MNCs generally compare to established MNCs from advanced countries?

They lag in technology and marketing skills. Signup and view all the answers

What is one characteristic of the Bimbo Group?

One of the largest food companies globally. Signup and view all the answers

Why are emerging multinational companies referred to as 'latecomers' in international markets?

They entered the market after established competitors. Signup and view all the answers

What does FDI stand for in the context of multinational companies?

Foreign Direct Investment Signup and view all the answers

What was the primary focus of Bimbo Group's international expansion in the 1960s and 1970s?

Establishing a presence in Latin America Signup and view all the answers

Which company did Bimbo Group acquire in 1996 to enter the U.S. market?

Mrs. Baird's Signup and view all the answers

Which key acquisition allowed Bimbo Group to expand its product portfolio in the U.S.?

Entenmann's Signup and view all the answers

In which year did Bimbo Group enter the European market?

2011 Signup and view all the answers

What common characteristic defines 'globally born' multinational companies?

They achieve a level of internationalization within 3 to 5 years Signup and view all the answers

What distinguishes globally born MNCs in terms of business model?

They are often linked to digital business models Signup and view all the answers

Which approach did Airbnb take for its international expansion starting in 2011?

Adapting to local cultural and regulatory needs Signup and view all the answers

What key aspect of digital consumer experience helps globally born MNCs?

Ability to optimize costs Signup and view all the answers

What is a defining characteristic of family-owned multinational companies?

They must have at least 51% of their share capital held among family members. Signup and view all the answers

Which of the following companies is a family-owned multinational?

Walmart Signup and view all the answers

What is a key issue in the management of family-owned multinational companies?

Succession planning Signup and view all the answers

What type of diversification do current local competitors aim for within multinational companies?

Expanding local experiences and activities Signup and view all the answers

What is often the source of competitive advantage for family-owned multinational companies?

Family control and protocols Signup and view all the answers

Cargill started its operations as which type of business?

Grain mill Signup and view all the answers

Which of the following family-owned multinational companies is associated with the healthcare industry?

Roche Signup and view all the answers

What was a significant factor for Cargill's diversification in its operations?

Getting involved in various areas of the food supply chain Signup and view all the answers

Study Notes

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

Multinational companies from emerging markets ("Emerging Multinationals") are registered and based in developing countries, rapidly expanding globally through FDI and cross-border acquisitions.
These companies are characterized by rapid internationalization. Other names include emerging MNCs, emerging market firms, and 3rd world MNCs.
Emerging multinationals often lag behind established MNCs in technology, marketing skills, organizational overhead, scale, capital intensity, and control over foreign subsidiaries.

The Phenomenon of the "Globally Born"

Digital business models are key to fostering "globally born" MNCs, enabling rapid internationalization within 3-5 years.
These MNCs are typically linked to digital business models influencing the entire customer experience.
Global competition advantages stem from a digital consumer experience, optimizing costs and attracting global talent.

Family Owned Multinational Companies

These companies are MNCs where family members own at least 51% of the share capital or equity, directly or through entities like trusts.
Key characteristics include private capital and family ownership controlling company decision-making. Succession planning within the family is crucial for managing these types of business.
Competitive advantages often originate in strong family control and decision-making processes.
These companies often exhibit long-term orientations influenced by family management.
Examples of family-owned MNCs include Novartis, Roche, Walmart, Oracle, Grifols, Puig, Inditex.
Cargill is a well-known example of a family owned multinational company active in agriculture and food sectors, established in 1865. They expanded internationally from the Midwest of the United States, with diversification of activities to include meat, dairy products, oils, and other agricultural products.

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Explore the dynamics of emerging multinational companies (MNCs) in this quiz focused on their rapid internationalization. Understand the role of digital business models in shaping globally born MNCs and their competitive advantages. Assess how these firms differ from traditional MNCs in various operational aspects.