MNE (Multinational Enterprise), Research Paper Example

MNE Description

The name of the Multinational Enterprise is Motracks, which is a company dealing in the production of tracks for different purposes, military tracks being included. The company seeks to venture and diversify its operations in the manufacture of tracks, bringing a difference in the entire vehicle industry.

The vision of Motrack is to bring a complete transformation in the track vehicle industry and be a company of global reference, which will set the pace for others to follow. The main objective of this company is to manufacture different types of tracks that will be used on any terrain. The mission of the company, therefore, is to supply tracks to those countries with rugged terrain, which make it hard to use the normal operations (Lawrence & Moyes, 2004).

Motrack Company came up with its idea after an intensive market research and identification of the great need for tracks in countries with rugged terrains. It was discovered that there are various countries with such terrains, which have had it, rough to access the interior parts of the country. This comes with considerable risk and consequences that result from inaccessibility. The people in these interior parts cannot have proper access to the resources in the other parts of the country. On the same note, resources that are valuable within such an interior region with rugged terrain cannot be accessed for commercial use.

Therefore, Motarck came up with this noble idea and venture to manufacture and supply tracks that will solve the accessibility problems (Pitelis & Sugden, 2000). The company aims at customizing its tracks to fit certain needs in different countries. The terrains in different countries vary according to the geological morphology in each country. For instance, there are countries whose terrain is characterized by slippery, muddy grounds. On the hand, there are other countries, which have rocky and steep terrains. These differences, altogether, bring differences in terms of accessibility challenges. In countries with steep and rocky terrains, vehicle will have problems in going over the rocks and steep slopes. Therefore, they may need tracks that have accomplished suspensions and a low centre of gravity, which will keep the vehicles stable as it moves. In countries with slippery and muddy grounds, normal vehicles will be stuck. Therefore, such countries need four-wheel drive vehicles, which have a strong differential unit. This will help the vehicles manoeuvres through the mud with exceptional ease.

Motrack venture, therefore, is out to give a solution to such needy countries, but with an aim of profit maximization. In line with this, Motrack has planned to carry out foreign direct investments in various countries. In doing this, it plans it set up business centres in any country where it gets access to, depending on the government policies concerning foreign direct investments. This follows the fact that there are countries that encourage foreign investments while contrary, there are also countries that substantially discourage foreign investments. They discourage through high taxation on any foreign investors unless investors collaborate with local companies (Lawrence & Moyes, 2004).

For companies with ease of accessibility, Motrack plans to set up branches that will act as outlet assembly companies, which will act as distributors. However, for those companies with limited accessibility, Motrack plans to collaborate with already established motor companies in such countries and support its ventures because they help in distribution of tracks. Nevertheless, this will be done with an ultimate goal of purchasing the companies.

Foreign Direct Investment

Foreign direct investment is the main goal and avenue that Motrack seeks to use to access the market. As seen earlier, Motrack has a goal of setting its base in as many countries as it can. However, Motrack has chosen Kenya as a pilot project. This conclusion was arrived at after intensive market research in Kenya. The findings of the research done revealed that Kenya had a lot of rugged terrain in the rift valley region and the mountainous regions, such as Mount Kenya and Mount Elgon regions. Such terrains will favour the operation of the products that Motrack is out to offer to the market.

In addition, it was found out that Kenya is out to the international war against the Al Shaba in Somali, which is an illegal militia that has often terrorised the Kenyan citizens at the Kenya Somali border. The group has also threatened tourism in Kenya, which is dependable by the Kenyan economy, by kidnapping tourists that have visited the country before. This was an added advantage because the military is going to need tracks to access the interior parts of Somali, which are some of the hiding bays of the group (Lawrence & Moyes, 2004).

The use of foreign direct investment comes with not only many benefits, but also cost implications both to home and host country. First, let us consider some of the benefits that FDI will bring to home and host countries. FDI will earn foreign exchange to the home country. This is because the involvement of Motrack in the FDI will be on export basis (Drucker, 2001). It will be exporting either already assembled tracks or vehicle parts for assembly in the outlet assembly company in the host country. The home country reaps foreign exchange through taxation and other levies charged on export goods. The home country also enjoys a cordial relationship with the host country and gets to build a reputation in that country. This is because Motrack will head to the host country in the name of the home country.

Another benefit brought about by the FDI of Motrack is the technological advancement. When Motrack designs, manufactures and supplies this new model of tracks to the industry, the home country will be a notch higher than their status, in terms of technology. The glory that comes with this new design will not only be enjoyed by Motrack as a company, but also by the entire country. Courtesy to the new design, the home country, will get a global recognition.

On the other side, the host country also benefits from the FDI in different ways. First, the economy of the country will be boosted by the fact that the foreign company invests in it. This leads to the advancement of the economy, inasmuch as revenue goes back to the home country (Pitelis & Sugden, 2000). The host country also gets an opportunity to learn from the foreign investors, and soon, local companies may be started to compete with Motrack, which is a foreign investor. Lastly, the host country also benefits from the use of the new designed tracks, which have added advantages to traverse the local terrain. The tracks will also be particularly helpful in the ongoing war that Kenya has engaged with the illegal militia group in Somali.

Multinational Enterprise indeed has a bright, escalating future. This follows the diversity in investments made in diverse regions around the globe. The demand for the goods produced is also bound to increase as the level of need in different countries increase. This will ultimately force the Multinational Corporation to increase its capacity of production, to satisfy the needs of the demand in the marketplace. This will bring about the growth of the operations of the corporation to serve the large market. Ultimately, the corporation will enjoy global glory as it competes, worldwide, with companies of similar objectives (Drucker, 2001).

Multinational Enterprises is bound to grow following the technological advancements, which are desperately needed in globally. This is especially the case for most developing countries, which desire to experience fast growth in the development process. Therefore, these countries will be out seeking for foreign investors who will help boost their economies through direct investments.

References

Drucker, P. F. (2001). The Global Economy and the Nation State. Council on Foreign Relations, 167-169.

Lawrence, S., & Moyes, F. (2004). Writing a Successful Business Plan. Colorado: the University of Colorado at Boulder.

Pitelis, C., & Sugden, R. (2000). The nature of the transnational firm. Routledge, 72.