Chapter I:

MNEs coming from few industries: utilities, oil gas, motor vehicles => oligopoly.

Japan reserve, not allow foreigner going to their country, consumer confident is low,
domestic consumption, zero growth but still stable => domestic demand help them =>
not encourage FDI inflow but outflow.
Growth in developing countriess FDI is fast. (convergence theory)
FDI inflow (gim):
FDI outflow (gim): US, Ger, can, korea,
In spite of the 25% drop from USD 234 billion in 2011, accounting for the decrease in
both equity and intercompany loans, the United States remains the first FDI destination
within the OECD area. FDI in Germany, which ranked as the 5th largest host economy
within the OECD in 2011, declined by 87% in 2012 to USD 6 billion, ranking at the 20th
position. This development is due to disinvestments (in equity) by foreign investors and
reimbursements of intercompany debt.
SME v large enterprises l g?
Why companies go Multinational:
OLI paradigm:
o Ownership adv: main factors explaining for the existence of MNEs. In
order to compete with other firm in other countries, they have to possess a
certain advantages or specific assets:
Ownership of superior tech.
R&D
Product differentiation
Entrepreneurial and managerial skills, marketing skills.
=> sufficient to compensate the cost of setting up + foreign value added
operation, facing domestic and potential firms.
For ex, iphone => reputation, specific tech ( intangible assets) => charge
higher prices
o Location adv:
Raw materials, natural resources:
Vietnam: wide range of natural mineral resources: coal.
Lead. Zine, bauxite, iron on north and central of Vietnam,
promising large reserves of ooil, gas are located offshore of
vn, Mekong, red river.
Cost and quality inputs: labour inputs is less costly,

Abundant cheap but well-educated ( Vietnam 197$/month,

Indonesia 183$/month comparing to China 613/month,
Japan 3320$/month in 2013).
Wage rising in developed countries => need to move out
production to low cost countries.
Transportation and tariff cost:
Favourable government policy towards FDI:
o Internationalisation adv:
Keeping good and high control on product
Reduce transaction cost
THE CASE OF VIETNAM OLI: (Hoang , 2004)
L:
o Rapid growth 8% annually, political and economic stability,
inflation single digit.
o Vietnam: wide range of natural mineral resources: coal. Lead. Zine,
bauxite, iron on north and central of Vietnam, promising large reserves
of ooil, gas are located offshore of vn, Mekong, red river.
o Abundant and cheap labour but well-educated:
Labour force increase
High literacy rate
o Low labour cost comparing others in region: Abundant cheap but welleducated ( Vietnam 197$/month, Indonesia 183$/month comparing to
China 613/month, Japan 3320$/month in 2013).
o Suitable place to produce product and exports to neighbors countries:
Laos, cam, southern Asia.
o Government positive attitude:
All foreign business forms, including 100% foreign enterprises,
are an integral part of Vietnamese economy.
Providing more tax incentives, reduce charge for lands, power
and water supplies
I:
o Government industrialization policies: promoting several infant
industries, several financial incentives, high import tariffs, non-tariff
barriers use to promote domestic industries and infant industries.

Internationalization:
o Process of the increasing involvement in international operations (Welch
and Luostarinen, 88).
o Process of adapting firms operations (strategy, structure, resources) to
international environment ( Colof and Beamish, 95).
1. Upsala Internationalization model: casual cycle process.

Interplay between development of knowledge about foreign market and

operations + an increasing commitment of resources to foreign market and
operations.

One of key points of the Uppsala model has been to explain how the
organization learns and gains knowledge throughout its international operations.
2. Born Global
o At least 25% international sale in 3 years from the use of resouces and sales
of its products or servs in multiple countries. Sell internationally, gain adv
from internationally distributed purchasing, manufacturing or sales.
o Born global firms from their beginning have global focus and commit their
resources to international ventures. They have borderless view and adopt
developed strategies to bring them abroad.
3 factors driving international entrepreneurs:
1. Market factors: fall of tariff barriers and other legal barriers + harmonization in
business practives and consumer tastes.
Newer industry not strongly segmented into domestic markets but
globally.
competition, less opportunities, mature markets.
Unexpected global pull => perceive demand with highly differentiated
products => internationalize
2. Technology => Lower cost (communication + transportation), xoa b khong
cach vs existed firms.
3. Networks forms of org:
Company rely on networks of production and distribution: span traditional
market boundaries.
Produce locally, rely on distribution network international
Rely on international network, sell local + inter.
Centre between inter and domestic which kho to copy.

Connect through ethnic ties => share common ethnic identity => help each
others => foundation and operation.
Benefits: provide social support, give opp for learning and rise
interaction, contact,
4. Value creation:
Factors to success:
1. Global vision:
Global view of markets => built on complex inter production,
distribution and sales => difficult to imitate => be competitive
advantages.
2. Promiscuous collaboration:
3. Cross-cultural competence: