2. On December 5, 1997 the US lost its first major trade dispute in the newly formed World Trade Organization (WTO). The high-profile case pitted photographic paper and film giants Kodak and Fuji against one another along with their respective governments, the US and Japan. Kodak claimed that Japan's photographic market &distribution structure, "denied Kodak fair and equitable market opportunities.”
Essentially, Kodak was arguing that it could not penetrate the Japanese market beyond a certain level due to structural restraints, government intervention, and back-room policies that favored Fuji.
On the other hand, Fuji & the Japanese government contended that Kodak’s poor showing in Japan was due to deficient marketing, management, and investment in the Japanese market. Fuji and the Japanese government refused to enter into negotiations with Kodak because they perceived Kodak’s allegations as groundless.
This refusal to even discuss Kodak’s complaint prompted a May 1995 Kodak filing with the US trade representative’s office under section 301, which allows the US to use unilateral action against the unfair trading practices. This was viewed to be Kodak’s best chance to inquire closely Japanese market. To Kodak’s jeopardy, the case was turned over to the WTO’s Dispute Settlement Body in June of 1996. On December 5, 1997 the WTO ruled against Kodak and the US saying it had found no evidence that “Japan rigged its domestic markets to favor Fuji Photo Film Co. over Kodak”.
International Companies are importers and exporters; they have no investment outside of their home country.
Multinational Companies have investment in other countries, but do not have coordinated product offerings in each country. More focused on adapting their products and service to each individual local market.
Global Companies have invested and are present in many countries. They market their products through the use of the same coordinated image/brand in all markets. Generally one corporate office that is responsible for global strategy. Emphasis on volume, cost management, and efficiency.
Transnational companies are much more complex organizations. They have invested in foreign operations, have a central corporate facility but give decision-making. R&D and marketing powers to each individual foreign market.
A MNC is a corporation with extensive ties in international operations in more than one foreign country. Examples are Generic Electric, Exxon, WalMart, Mitsubishi, Daimlet Chrysler, etc.
A Transnational corporation is a MNC that operates worldwide without being identified with a national home base. It is said to operate on a border less basis.
(a)Explain why MNCs have located R & D centres in developing countries?
Theories of the globalization of innovation assume that multinational corporations (MNCs) distribute their innovation activities hierarchically, with advanced technology being confined to the advanced industrialized countries, while more routine low-end innovation is decentralized in a few…