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API 121 | RISE OF ASIA PACIFIC MULTINATIONALS

   

Added on  2020-03-04

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Asia Pacific Multinationals 1RISE OF ASIA PACIFIC MULTINATIONALSBy (Name)Course TitleProfessor University Affiliation Date

Asia Pacific Multinationals 21.IntroductionMost of the developed and developing countries in the Asian Pacific regions have, in the recent past became major contributors to the global economy due to the increase of multinationalcompanies from these countries. They usually engage in Foreign Direct Investments, and within their home countries, retains a measurable amount of management and overall control of their businesses. The Asian countries with major multinational companies include Japan, Taiwan, Korea, China and India. These multinational companies produce varied range of products which include electronics, medical equipment, and automobiles, among others. Most of the multinational organizations or business firm in the Asian Pacific region has achieved their success mostly due to the availability of cheap labor from the local population, making production process cheap as well as their subsequent end products (Dunning and Lundan, 2008). They also, possess a rich macroeconomic management coupled with conducive policies that favors export of their manufactured products. The multinational companies in Asian regions have, by far overtaken their western rivals who majorly concentrate on the products that targets the high class and middle class customers only.The largest percentage of the Asian population are on average lifestyle and others live below the poverty line. Companies who produce products and services that are pocket friendly tothis kind of population will likely succeed in terms of high revenues. Airtel for example, which isa leading mobile phone service provider in the Indian market offers services that are friendly to those individuals living below the poverty line. This company has markets in various parts of theworld including Africa. The western rivals produce classy products, for example Apple Inc., their products are expensive such that, most of their consumers are only the high class population

Asia Pacific Multinationals 3which are few in number. On the other hand, western multinationals produced products that are technologically competitive, and pocket friendly at the same time.2.Aims of the Japanese multinationals in regards to global strategies Japanese economy has been rapidly growing, especially after World War II. Currently, the Japanese economy is ranked third globally in 2017 (Oecd.org, 2017). This economy is being driven by multinational companies that deals with automobiles and electronics such as the Toyota, who deals with world’s largest selling brands of cars and Sony Corporation that deals with electronics among others.The aim of the Japanese multinational companies (MNCs) is to produce world class products that are directed to the middle and low class population at local and international markets. Toyota, which is the leading Japanese MNC has been the leadxporter of cars to Middle East, America and Asian countries since 1950’s after the World War II. Their cars were in high demand due to the efficiency and economy in terms of fuel consumption (Rugman and Li, 2007, p.335). For many years, Toyota, as company has been strategizing on increasing their productions which will be subsequently sold in various markets both, locally and intentionally.Sony, on the other hand, is one of the largest competitor in the electronics market globally. It was started in 1946 by Akio Morita and Masaru Ibuka, whereby their major focus is to produce electronic gadgets such as TVs, mobile phones, gaming consoles, etc. The products that is being produced by the company since its initial times up to date has been of the best quality, and has attracted a lot of consumers, from within Japan and globally (Sauvant, Maschek and McAllister, 2010, p.22).

Asia Pacific Multinationals 43.Aims of Korean and Chinese multinationals and international business strategiesThe multinational corporations has a direct relationship (and impacts to) with the ForeignDirect Investment. These Asian multinationals have long be known in their brands such as Samsung and Sony electronics, which are situated in Korea, Hyundai and Honda among others. These multinational companies from Japan and Korea have deeply get their roots into the global markets for over four decades (from 1980’s). Their products have been in the fore front in terms of technology, and has greatly boosted innovations across the world (Black and Morrison, 2010).Most of the Asian Pacific countries are still developing, or are not developed at all, but this does not limit the multinational companies from emerging from these nations. The Asian Pacific region was recorded to be the most growing region in terms of economy which contributed to more than 30% of the global GDP in 2013. According to the research that was conducted in 2014 that was analyzing the top 500 Fortune companies globally, 192 of the companies came from this region (Guillen and Garcia-Canal, 2009, p.27). The Korean and Japanese companies’ targets global markets with their cheap and high end products that targets all groups of people, either rich or poor. This is the basis of their success.4.Differences between industries and types of businesses The car manufactures in the APAC regions are leading their competitors from other regions of the world. Shanghai Automotive Industry Corporation, for example, has been growingin terms of production and sales of their FAW trucks and other cars in the recent years. Also, Indian Mahindra and TATA, Bajaj and Maruti have been experiencing one of the largest growth in the automotive industry (Cuervo‐Cazurra, 2012, p.155). Japanese companies although, has been recording a consistent drop in their range of products in terms of production, stock and sales from 2014 when compared to the previous years. The reason for this drop is due to the

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