Multinational Enterprises and several aspects of multinational enterprises were learned

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The advent of globalization has led to emergence of many multinational enterprises. The multinational enterprises are firms that operate in more than one continent with several operational bases across the globe.

From the chapter studied, several aspects of multinational enterprises were learned. I managed to learn that though multinational enterprises are international companies that are headquartered in a given country, they try to shed the notion that they are foreign held in the countries where they operate. I also learnt that United States is the single country that has the highest number of multinational enterprises, 139 in number followed by Japan with 71. European Union has a combined number of 160 multinational enterprises. These data are for the year 2009. From the chapter, I managed to get a better understanding of the features of the multinational enterprises. The multinational enterprises have affiliates that are pseudo independent and have to design their own unique ways to deal with the local environmental forces that affect their operations. However, they have a common strategic global goal. Also, the multinational enterprises have a common pool of resources for their operations. Another unique lesson from the chapter is the process and techniques of internationalization. Different strategies are used to enter the new markets, with setting up of a subsidiary being the most expensive and tricky one. The strategies that I discovered are foreign direct investment, having a representative, local assembly, licensing and having a distributor.

From the chapter, I got new knowledge that is relevant in internationalization. The knowledge is related to the OLI strategy. To enter the foreign markets and survive the competitions and risks, firms need to analyze the ownership factors (O). These are firm specific factors (FSAs) that can be managed and controlled. There are the Location factors (L) that are Country Specific Factors (CSAs). They are largely difficult to control. Lastly, there are the Internalization factors (I). These are FSAs and entail strategies developed by the firm.

However, from the chapter, I found it difficult to understand some reasons for internationalization. For example, the argument those multinational enterprises go international as a response to foreign competition. Before doing more research, I could not understand how going to foreign market would limit local competition. Also, I found it hard why multinational enterprises go international as a cost reduction strategy. That is, in my view, going international entail additional costs such as human capital, marketing and operational costs.

The chapter is very important for the business that wants to go international as well as those that are already multinational enterprises. The chapter outlines the steps of internationalization and the various strategies that the firms can adopt. The chapter can help the managing to decide when and how to enter a foreign market. By looking at the reasons for internationalization, businesses are able to justify why they need to internationalize. Another important element of the chapter entails the building blocks of international business. Before designing internationalization strategy, the multinational enterprises should look at their specific factors and factors that are specific to the targeted country. The chapter is thus helpful for the management, since they can use the information to draw CSA-FSC matrix and look at their strategies and weaknesses in each quadrant. In the process, they can make strategic decisions that would guide their operations and ensure competitive advantage and survival in the markets.