Research and Development in International Business

International business 0
International business strategy

International business 1
Contents
Research and development..............................................................................................................2
Geographical issue...........................................................................................................................3
Structural Issue................................................................................................................................4
Control issue....................................................................................................................................5
Reference.........................................................................................................................................9

International business 2
Research and development
Research and development is the most important aspect for all multinationals companies.
It is necessary to analyze the market before entering into the market. Multinationals make a huge
investment in R&D globally as it helps in making the business successful globally. Multinational
companies operate their business in several countries and manage by doing research and
development. Multinationals need to do R&D for creating jobs, wealth and improving
technologies in different countries for the growth and development of the company. For doing
business internationally, the company relies on R&D activities to achieve its strategies. In order
to achieve the objectives of the organization, Research, and development help in analyzing the
culture of different countries. Examples of MNC like McDonald's which operate in many
countries and do the R& D before entering into the market to analyze the taste and preferences of
the customers. They offer the food products according to the need of the consumers and which
they prefer to eat. International business is driven by the economic, social and political factors of
global market (Dong, et al., 2008).
Research in international market helps in making export planning successfully. Global
research and development are the activities in which the company performs to innovate and
introduce new products and services for taking the business globally. It is the first step of the
process for development in the international market (Han, et al., 2010). The goal of MNC's is to
take the product and services to the international market and adding it to the company's bottom
line. Companies of all sectors and industries have to perform the Research and development
activities to analyze the market situation. R&D helps in making effective marketing strategies to
exist in the market with competitors. It helps in keeping the company on top as compare to its
competitors. The company may not be able to survive in the international market without doing
the R&D of the market in which the company wants to enter or to analyze the market conditions
in which the company already exists. Global R&D is a totally different activity than the
operational activities which are performed by the company (Drahokoupil, 2014). R&D is done
globally not to only make profits but to contribute to the long-term profitability and growth of
the company. Multinationals Companies invest and set up the R&D department. MNC’s totally
rely on the R&D activities for achieving the various strategies for the growth and development of
the company. Research and development help in achieving competitive advances in the local
market. The various strategies which are implemented by the management help in analyzing the

International business 3
R&D location in the global market. In order to maintain and improve their performance in global
market, MNC can adopt the generic competitive strategy to improve its competitive performance
(Purdy and Wei, 2014).
R&D by multination involves the exporting, setting up a foreign sales subsidiary,
licensing agreement with the country, and it is the establishment of foreign production. R&D
helps in minimizing the risk of the business and increases the profits and sales in the global
market. It is necessary to set up the process in the foreign market to do the business effectively
and efficiently (Farndale, et al., 2014). R&D helps in keeping the track on the competitor's
strategies when a number of competitors exist in the global market. It is necessary to continually
monitor the market by research for evaluating the various factors which are effective for the
current business strategies. R&D helps in analyzing the new information of the global market
and market perceptions as it will help in changing the risk-return of the entry strategy. The
greatest challenges which are faced by top managers of MNCs is organizing, fostering, and
exploiting innovation and new product development. Innovation is the most important factor for
MNCs to grow in global market. R&D helps in bringing new innovative ideas of the global
market. For the international operation of MNCs, technology innovation and R&D has become
the most driving factors.
Geographical issue
In international business, it is necessary to consider the environment for the growth and
development of the organization. R&D helps in analyzing the market and its environmental
issues to be considered for doing the business. The company has to consider the geographical
issue for doing business internationally. Research and development department of the company
analyze the various environmental issue which the company may face before entering and during
the business. As some countries do not allow doing business as they say that it will cause
economic damage in their country (Hennart, 2001). As the US has banned the importing of
shrimp harvested without turtle excluder as they are concerned about the sea turtles. Some
developing countries are affected because of some industries relocation as it causes pollution in
their country. MNC’s may face the issue of location in global market. It is necessary to
determine the geographical location by research and development. MNC’s may consider the
three sets of factors for taking the decisions are national resource availability as the resources