The New Mission for Multinationals Harvard Case Solution & Analysis

As globalization marches onward, powerful local firms are increasingly winning out against multinational adversaries. In China, the ice cream, appliance markets and laundry detergent provide interesting examples of the phenomenon. Regardless of the existence of multinationals in these markets, the market-share leaders are local companies. The writers note, nevertheless, that in some scenarios multinationals have been able to resist the marketplace increases of local rivalry, whether through first-mover advantages or by obtaining the leading players that are local and nurturing their local identity and strengths. For decades, multinationals were able to make good returns by acting as efficient global conduits for assets which were difficult to transfer, including intangibles for example management systems, technologies, product designs and business cultures. However, several forces have been eroding that edge. First, with the maximum returns, established multinationals focused on activities in the drive to reduce costs. This meant that lower-value tasks regularly off shored to emerging economies and were outsourced, creating global markets in which local firms can also source services and components. The end result is that once-shut worth chains are opened up, enabling local players to source "plug-and-play “modules that may be joined to make products very similar - and sometimes exceptional -to those of foreign multinationals. If companies are to be successful against local competitive firms in emerging markets, the writers write, they must move past the credo of "incorporate internationally and adapt locally." They will have to create new edges in target markets by integrating their businesses with the local commercial networks and also the society itself. They will need help in shaping local markets, rather than just to adapt them.

The New Mission for Multinationals Case Study Solution

This is just an excerpt. This case is about GLOBAL BUSINESS

PUBLICATION DATE: July 01, 2015 PRODUCT #: SMR527-HCB-ENG

 

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