AHBM Unit 1- MNCs

What is one advantage of joint ventures?

• Reduced risk of failure
• Full control over decision making
• Guaranteed long-term growth
• New revenue streams from a new market

Which method of growth involves two or more businesses undertaking a project together?

• Expanding marketing efforts
• Buying over an existing business abroad
• Creating new purpose-built production facilities abroad
• Setting up joint ventures with other organisations

What are the advantages of buying over an existing business abroad?

• Strengthens the firm's position in the market, provides a platform for further growth, gives access to resources
• Ability to adapt to different cultures quickly, access to more customers, savings from the integrated company
• Constructing your own facilities means you can choose any locations, manage them on a common footing, more easily instil new company culture in a foreign land
• Cost of investment, large risk if it goes wrong, exchange rate

What are some ways in which MNCs can grow?

• Expanding their marketing efforts
• Investing in research and development
• Hiring more employees locally
• Creating new purpose-built production facilities abroad

What is one disadvantage of creating new purpose-built production facilities abroad?

• It increases the risk of failure
• It guarantees full control over the business
• Less investment in management and technology is needed
• It eliminates language barriers

What is one advantage of buying over an existing business abroad?

• Easy replication of culture and values
• Guaranteed full control
• Resistance from existing employees
• Cost of investment

What are the disadvantages of setting up joint ventures with other organisations?

• Time to find a suitable location and construct the building, effort and negotiation with national or local authorities in host country, possible need to develop new infrastructure
• Ability to adapt to different cultures quickly, access to more customers, savings from the integrated company
• Cost of investment, large risk if it goes wrong, exchange rate
• Strengthens the firm's position in the market, provides a platform for further growth, gives access to resources

What are the disadvantages of buying over an existing business abroad?

• Ability to adapt to different cultures quickly, access to more customers, savings from the integrated company
• Strengthens the firm's position in the market, provides a platform for further growth, gives access to resources
• Time to find a suitable location and construct the building, effort and negotiation with national or local authorities in host country, possible need to develop new infrastructure
• Cost of investment, large risk if it goes wrong, exchange rate

What are the advantages of creating new purpose-built production facilities abroad?

• Ability to adapt to different cultures quickly, access to more customers, savings from the integrated company
• Constructing your own facilities means you can choose any locations, manage them on a common footing, more easily instil new company culture in a foreign land
• Strengthens the firm's position in the market, provides a platform for further growth, gives access to resources
• Cost of investment, large risk if it goes wrong, exchange rate

What is one advantage of creating new purpose-built production facilities abroad?

• It reduces the risk of failure
• It guarantees full control over the business
• It eliminates language barriers
• Less investment in management and technology is needed