Assignment
Choose TWO multinational enterprises (MNEs) that have invested in at least one market which was or became high-risk, and used prevention or mitigation strategies to remain in that market. The two MNEs do NOT necessarily have to be direct competitors or operate in the same industry.
High-risk environments are those environments that are volatile, uncertain and unpredictable, and are caused by the cumulative impact of multiple types of risks which are external to the firm. They may impact negatively on the performance and profitability of the firm. Often costs of insurance in these markets are high or assets are difficult to insure.
Prevention strategy involves taking steps to counter a potential problem before it occurs, whilst mitigation involves reducing the impact of a problem once it has occurred. In the case of government corruption, for example, prevention may involve lobbying the host country government, whilst mitigation may involve partnering with other firms (perhaps local firms) in order to spread the risk of capital loss.
1. Prepare an Introduction for your essay:
Include a brief history of the TWO MNEs, their overall internationalisation strategies over time (e.g. Dunning's resource seeking, market seeking terminology etc.), an idea of the global industry ranking for each of the MNEs, a brief analysis of the adequacy of the organizational structures in place and their strategies, and the level of centralisation of decision taking.
2. For EACH MNE, select ONE market to which they have internationalised which was or became HIGH-RISK and do the following analysis:
2.1 Highlight the strategic importance of that market in the overall activity and performance of the MNE.
2.2 If you have information about the entrepreneur(s) who managed the business at the time the high risk situation occurred, explain how she/he/they dealt with the high risk situation, how they assembled and realocated resources, and how they captured value to the firm.
2.3 Discuss the motivations for entering that market, and the rationale for the choice of mode of entry. Use frameworks/ theories discussed in the classes. Some ideas of frameworks to use in the analysis are: Alan Rugman's matrix on country specific advantages vs. firm specific advantages, to explain the international business strategy followed by each MNE; Porter's diamond to discuss whether by investing that market the MNE is fashioning its strategy to achieve international competitiveness.
2.4 Explain why that market is, or has become, high-risk. Assess the different types of risk that contributed to the market being considered high-risk.
2.5 Discuss the strategy (or strategies) and organizational structure used by the MNE to deal with such risks.
2.6 Do you think that these risks could have been foreseen or was it out of the question? Do you think measures could have been put in place before the risky situations occurred?
Provide a Conclusion - where you discuss and COMPARE CRITICALLY the strategies and structures followed by the TWO MNEs, their ability to operate in highrisk environments, and also their long-term positioning in the industry. Also discuss whether the impact of the entrepreneur was productive or unproductive to the firm and its stakeholders, and to society in general.
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also include a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also Include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.