Exploring Miele's Expansion: Business Environment Analysis in Mexico
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This report assesses Miele's potential expansion into Mexico by analyzing the business environment. It begins with background information on Miele, a German manufacturer of high-end domestic and commercial equipment, and then explores the business environment in Mexico, including political, social, economic, technological, environmental, and legal factors using a PESTEL analysis. The report highlights Mexico's favorable conditions for foreign investors, including a developed technological environment and economic incentives. It also addresses challenges such as environmental concerns and legal complexities. The analysis considers Miele's strong brand image and its need for government support to establish operations in Mexico. The report concludes by referencing Miele's financial performance and its strategic vision for global expansion.
Business Organisation and Environments in a Global Context
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Contents
Introduction................................................................................................................................ 3
Background information on Miele............................................................................................. 4
Background Information on the Business Environment in Mexico...........................................5
Analysis of the Business Scenario............................................................................................. 8
Conclusion................................................................................................................................10
References................................................................................................................................ 11
Introduction................................................................................................................................ 3
Background information on Miele............................................................................................. 4
Background Information on the Business Environment in Mexico...........................................5
Analysis of the Business Scenario............................................................................................. 8
Conclusion................................................................................................................................10
References................................................................................................................................ 11
Introduction
Business will be stated as the composition of the several business activities that will facilitate
and support in gaining the effective business attribute. Business will occur in the different
nature of business environment by providing the suitable and relevant form of strategies by
conducting the proper assessment of such form of business environment. This project is based
on the Miele and is a premium luxury home appliances company that is designing and
manufacturing high-end commercial and domestic equipment headquartered in Gütersloh,
Germany. The company is founded in Herzerbrock, Germany and is a 119-year-old company
and founded in 1899. Miele has been exported its products to different global markets across
the world in 47 countries. The company is producing the range of domestic appliances such
as vacuum cleaners, laundry appliances, dishwashers, rotary irons, freezers, refrigerators,
hobs, steam ovens, wine coolers, coffee machines etc. Besides this, the company is also
producing the commercial laundry machines such as wet cleaning machines, lab glassware
and many medical and lab accessories. Miele has been awarded as the most successful
organisation of Germany in the year 2007. The current leadership is now planning to expand
their business in the different parts of the globe. In this context, senior management will have
decided to expand their business in Mexico.
This aspect will be helping the management in expanding their business operations and
increase their customer base as well as increase their revenues. Since the business has
enhanced brand image and 119-year legacy that is requiring to assess the business climate of
the other country such as Mexico.
Business will be stated as the composition of the several business activities that will facilitate
and support in gaining the effective business attribute. Business will occur in the different
nature of business environment by providing the suitable and relevant form of strategies by
conducting the proper assessment of such form of business environment. This project is based
on the Miele and is a premium luxury home appliances company that is designing and
manufacturing high-end commercial and domestic equipment headquartered in Gütersloh,
Germany. The company is founded in Herzerbrock, Germany and is a 119-year-old company
and founded in 1899. Miele has been exported its products to different global markets across
the world in 47 countries. The company is producing the range of domestic appliances such
as vacuum cleaners, laundry appliances, dishwashers, rotary irons, freezers, refrigerators,
hobs, steam ovens, wine coolers, coffee machines etc. Besides this, the company is also
producing the commercial laundry machines such as wet cleaning machines, lab glassware
and many medical and lab accessories. Miele has been awarded as the most successful
organisation of Germany in the year 2007. The current leadership is now planning to expand
their business in the different parts of the globe. In this context, senior management will have
decided to expand their business in Mexico.
This aspect will be helping the management in expanding their business operations and
increase their customer base as well as increase their revenues. Since the business has
enhanced brand image and 119-year legacy that is requiring to assess the business climate of
the other country such as Mexico.
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Background information on Miele
Mile is a German manufacturer that is manufacturing the high-end domestic and commercial
equipment that is founded in year 1899and is a family run company. Mile has initially
manufactured the tub washing machine, cream separator, motor cars etc. They have produced
the first washing machine in the year 1914 and set up branches in the Brussels, Vienna, Paris
and Warsaw initially (Jansen, 2017). Mile is manufacturing the several of domestic
appliances that are high in quality and mainly targeting the premium luxury customers.
Besides this, the company is producing the several industrial laundry equipments.
Currently, Miele has a direct presence in 47 countries worldwide and selling indirectly in 50
additional countries with the help of various importers. This company has been equally
committed to its business owners, customers, employees, suppliers and also working for the
environment and society. Miele is also manufacturing for medical facilities by the separate
business entity known as Miele professional. The financial success of the Miele has been
ensured through sustainability. Miele is assumed as the best company to work for in terms of
balancing the work life and family life. Besides this, the company has set an exceptional
example of occupational health and safety (Vyuptakesh, S., 2013). Miele is the company that
is minimising the supply risks and providing the full compliance with social and
environmental standards. The company is also giving respect to all the races on the global
scale.
The strategic vision of the company is to become the most desirable and trusted brand
globally. The company is offering the products to its customers that are setting the standards
for durability, ease of use and performance and energy efficiency. The philosophy of the
company is to develop the long-term planning and thinking, following the ethical values and
goals as well as developing an effective leadership culture. This company is also developing
an effective employee-oriented culture that is creating a sustainable employee environment.
Mile is a German manufacturer that is manufacturing the high-end domestic and commercial
equipment that is founded in year 1899and is a family run company. Mile has initially
manufactured the tub washing machine, cream separator, motor cars etc. They have produced
the first washing machine in the year 1914 and set up branches in the Brussels, Vienna, Paris
and Warsaw initially (Jansen, 2017). Mile is manufacturing the several of domestic
appliances that are high in quality and mainly targeting the premium luxury customers.
Besides this, the company is producing the several industrial laundry equipments.
Currently, Miele has a direct presence in 47 countries worldwide and selling indirectly in 50
additional countries with the help of various importers. This company has been equally
committed to its business owners, customers, employees, suppliers and also working for the
environment and society. Miele is also manufacturing for medical facilities by the separate
business entity known as Miele professional. The financial success of the Miele has been
ensured through sustainability. Miele is assumed as the best company to work for in terms of
balancing the work life and family life. Besides this, the company has set an exceptional
example of occupational health and safety (Vyuptakesh, S., 2013). Miele is the company that
is minimising the supply risks and providing the full compliance with social and
environmental standards. The company is also giving respect to all the races on the global
scale.
The strategic vision of the company is to become the most desirable and trusted brand
globally. The company is offering the products to its customers that are setting the standards
for durability, ease of use and performance and energy efficiency. The philosophy of the
company is to develop the long-term planning and thinking, following the ethical values and
goals as well as developing an effective leadership culture. This company is also developing
an effective employee-oriented culture that is creating a sustainable employee environment.
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Background Information on the Business Environment in Mexico
The business environment is very dynamic and will change over a course of time. It is very
essential for the senior upper management of the company to assess the business environment
of the company before starting their business operations in a new area. It is essential for every
organisation to assess the business environment at the foremost priority for enhancing their
business operations. It is necessary for the company to understand the market and identify the
factors that are favourable to the company and also analyse the factors are that are not
favourable to the company (Harrison, 2013). Assessing the market will help the company to
develop the strategies that are needed to be incorporated. Business operations of any specific
company will be affected only the company will be facing a dynamic business environment.
Mexico has a favourable business environment for the foreign investors and is providing the
vast nature of opportunities to a different type of business. Mexico has high developed a
technological environment and effective economic conditions that will be providing the
ample form of business opportunities where the companies are getting a sustainable business
environment. The business community of Mexico will be providing the significant growth
opportunities to the different forms of facilities such as subsidized electricity and rebate in
taxes. Below given is the PESTEL analysis of Miele that is exploring the opportunities to
expand their business in Mexico.
Political: The Mexican government is playing the effective and significant role in providing
the stable and sustaining political business environment. The government is providing the
effective infrastructure to the emerging foreign investors who are exploring the opportunities
in this nation (Harrison, 2013). FDI is the help the nation by developing their infrastructure
and help the government to earn revenue also. Miele is also looking forward to expanding
their reach by assessing the business environment of Mexico. Miele has a strong international
brand image and already has a presence in about 97 countries directly and indirectly. If Miele
has to start their business in this county they need effective cooperation from the local and
central government of Mexico. Also because of the Miele, there is a lot of job opportunities
are also emerging. Miele is a designing and manufacturing the high-class products and it will
need exceptional political support to set their base in this country by setting up the plant and
without the government support, this will not be possible. The Mexican government will be
providing the land at a subsidized rate to foreign companies and encouraging the foreign
investment.
The business environment is very dynamic and will change over a course of time. It is very
essential for the senior upper management of the company to assess the business environment
of the company before starting their business operations in a new area. It is essential for every
organisation to assess the business environment at the foremost priority for enhancing their
business operations. It is necessary for the company to understand the market and identify the
factors that are favourable to the company and also analyse the factors are that are not
favourable to the company (Harrison, 2013). Assessing the market will help the company to
develop the strategies that are needed to be incorporated. Business operations of any specific
company will be affected only the company will be facing a dynamic business environment.
Mexico has a favourable business environment for the foreign investors and is providing the
vast nature of opportunities to a different type of business. Mexico has high developed a
technological environment and effective economic conditions that will be providing the
ample form of business opportunities where the companies are getting a sustainable business
environment. The business community of Mexico will be providing the significant growth
opportunities to the different forms of facilities such as subsidized electricity and rebate in
taxes. Below given is the PESTEL analysis of Miele that is exploring the opportunities to
expand their business in Mexico.
Political: The Mexican government is playing the effective and significant role in providing
the stable and sustaining political business environment. The government is providing the
effective infrastructure to the emerging foreign investors who are exploring the opportunities
in this nation (Harrison, 2013). FDI is the help the nation by developing their infrastructure
and help the government to earn revenue also. Miele is also looking forward to expanding
their reach by assessing the business environment of Mexico. Miele has a strong international
brand image and already has a presence in about 97 countries directly and indirectly. If Miele
has to start their business in this county they need effective cooperation from the local and
central government of Mexico. Also because of the Miele, there is a lot of job opportunities
are also emerging. Miele is a designing and manufacturing the high-class products and it will
need exceptional political support to set their base in this country by setting up the plant and
without the government support, this will not be possible. The Mexican government will be
providing the land at a subsidized rate to foreign companies and encouraging the foreign
investment.
Social: Society is made up of the people. It essential for a business entity such as Miele to
find out the key trends that are prevailing in the society because these social trends are
affecting the business. Society will be changing by the change in the educational level and
also change in the age group along with a change in taste and preferences. Miele is designing
and manufacturing the high class the products for home and also for the industrial use. So it is
necessary to assess the society before expanding in this nation. This is necessary to evaluate
the market and identify if the market is capable enough to absorb their product that is also
high in price (Tung, 2016). As per the research it has been seen that the Mexican people are
love for quality and exceptional preferences of high-class products. Society of Mexico is
currently emerging and per capita of income of the citizens is increasing. The Mexican
economy is the 15th biggest economy in the world and is based on manufacturing, tourism
and remittances and oil business. Majority of the Mexican people are living in the US and are
sending back their income to their home country. This will upgrade the social standard of the
Mexican people and their demand for luxury and high-class product increases. Miele has
found that their market is very favourable in this country.
Economic: The economy of any country defines the government, individuals and businesses.
The economy of the nation will determine the price that any business has to pay for the
resources such as labour, raw materials etc. Businesses are constantly affected by the changes
in the economy. It is necessary for the company such as Miele to identify the economic status
of the nation before entering in that region. Miele should asses the economic condition of
Mexico before entering in the nation (Murray, et. al., 2017). The GDP in the Purchasing
power parity (PPP) in 2014 was the US $2,143.499 billion. It is the second largest economy
in Latin America. Though the GDP has slowed down to 2 per cent in 2017 currently the
nation has stable economic conditions. As per the reports, the current economy of Mexico is
approximate $2.4 trillion. Currently, the Mexican economy is very attractive for foreign
investors because of the favourable strategy of the president Perna Nieto. The economy of
Mexico is marked by the free market economy. As per the assessment of the Miele Mexico is
favourable for their business expansion.
Technological: Technological factor is evaluating any significant changes in the business
world. The effective changes in the technological environment will make the company decide
its effective course of future (Murray, et. al., 2017). Technology is changing rapidly in the
business world. In the recent years, there has been massive progress in the information
technology that has transformed the lives of the people. Miele has been a progressive
find out the key trends that are prevailing in the society because these social trends are
affecting the business. Society will be changing by the change in the educational level and
also change in the age group along with a change in taste and preferences. Miele is designing
and manufacturing the high class the products for home and also for the industrial use. So it is
necessary to assess the society before expanding in this nation. This is necessary to evaluate
the market and identify if the market is capable enough to absorb their product that is also
high in price (Tung, 2016). As per the research it has been seen that the Mexican people are
love for quality and exceptional preferences of high-class products. Society of Mexico is
currently emerging and per capita of income of the citizens is increasing. The Mexican
economy is the 15th biggest economy in the world and is based on manufacturing, tourism
and remittances and oil business. Majority of the Mexican people are living in the US and are
sending back their income to their home country. This will upgrade the social standard of the
Mexican people and their demand for luxury and high-class product increases. Miele has
found that their market is very favourable in this country.
Economic: The economy of any country defines the government, individuals and businesses.
The economy of the nation will determine the price that any business has to pay for the
resources such as labour, raw materials etc. Businesses are constantly affected by the changes
in the economy. It is necessary for the company such as Miele to identify the economic status
of the nation before entering in that region. Miele should asses the economic condition of
Mexico before entering in the nation (Murray, et. al., 2017). The GDP in the Purchasing
power parity (PPP) in 2014 was the US $2,143.499 billion. It is the second largest economy
in Latin America. Though the GDP has slowed down to 2 per cent in 2017 currently the
nation has stable economic conditions. As per the reports, the current economy of Mexico is
approximate $2.4 trillion. Currently, the Mexican economy is very attractive for foreign
investors because of the favourable strategy of the president Perna Nieto. The economy of
Mexico is marked by the free market economy. As per the assessment of the Miele Mexico is
favourable for their business expansion.
Technological: Technological factor is evaluating any significant changes in the business
world. The effective changes in the technological environment will make the company decide
its effective course of future (Murray, et. al., 2017). Technology is changing rapidly in the
business world. In the recent years, there has been massive progress in the information
technology that has transformed the lives of the people. Miele has been a progressive
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technology-based company that is always focusing on the technology and the exceptional
products that are enabling the lives of the people by providing the effective products.
Technological up gradation will make the company enable to work in a technology effective
environment. The technological environment of Mexico is also highly upgraded that will
make the local people highly skilled. It is easy for the company like Miele to work in such an
environment because they don’t have to train the local peoples for the technology they are
using in designing the products. Local people will able to match as per the technological
needs of the Miele that is also planning to set their base in Mexico
Environment: Environment analysis is a strategic form of the tool. It is a process that will
help in identifying all the form of external and internal elements that will affect the
performance of any organization. The environmental factors will assess the threat level or
opportunities that are presenting in the area the company is expanding. Environmental factors
will be stated as the attributes that are affecting the environmental change. The environmental
factors will be the soil, water, climatic conditions, landforms and natural vegetation
(Lasserre, 2017). It has been assessed that Mexico has a lot of environmental problems.
There is a lot of chemical pollution from the industries that are prevailing in Mexico and
there is not a proper waste disposal mechanism in Mexico. The main threat to Mexico is the
threat to its biodiversity and reason behind is excessive deforestation and loss of natural
habitat. Mexico is facing significant environmental challenges that are affecting every
segment of the nation. Miele should have assessed the environmental condition of Mexico
seriously before entering in this nation.
Legal: Legal segment will provide the information about the legal infrastructure, corporate
policies, tax structure and laws to inaugurate a new business. Legal environment of any
nation will affect new business in various ways (Lasserre, 2017). It is essential for Miele to
assess the legal environment of Mexico before setting their base in the nation. If the legal
environment o,f any nation is complex it will create a barrier for the company to grow
effectively. The legal environment will define what a company can do or cannot do at a
specific timeframe. The complex legal system will incur the high cost of legal settlements
and legal expenses. This will affect the revenues of the Miele significantly and make the
operations of the company slow.
products that are enabling the lives of the people by providing the effective products.
Technological up gradation will make the company enable to work in a technology effective
environment. The technological environment of Mexico is also highly upgraded that will
make the local people highly skilled. It is easy for the company like Miele to work in such an
environment because they don’t have to train the local peoples for the technology they are
using in designing the products. Local people will able to match as per the technological
needs of the Miele that is also planning to set their base in Mexico
Environment: Environment analysis is a strategic form of the tool. It is a process that will
help in identifying all the form of external and internal elements that will affect the
performance of any organization. The environmental factors will assess the threat level or
opportunities that are presenting in the area the company is expanding. Environmental factors
will be stated as the attributes that are affecting the environmental change. The environmental
factors will be the soil, water, climatic conditions, landforms and natural vegetation
(Lasserre, 2017). It has been assessed that Mexico has a lot of environmental problems.
There is a lot of chemical pollution from the industries that are prevailing in Mexico and
there is not a proper waste disposal mechanism in Mexico. The main threat to Mexico is the
threat to its biodiversity and reason behind is excessive deforestation and loss of natural
habitat. Mexico is facing significant environmental challenges that are affecting every
segment of the nation. Miele should have assessed the environmental condition of Mexico
seriously before entering in this nation.
Legal: Legal segment will provide the information about the legal infrastructure, corporate
policies, tax structure and laws to inaugurate a new business. Legal environment of any
nation will affect new business in various ways (Lasserre, 2017). It is essential for Miele to
assess the legal environment of Mexico before setting their base in the nation. If the legal
environment o,f any nation is complex it will create a barrier for the company to grow
effectively. The legal environment will define what a company can do or cannot do at a
specific timeframe. The complex legal system will incur the high cost of legal settlements
and legal expenses. This will affect the revenues of the Miele significantly and make the
operations of the company slow.
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Analysis of the Business Scenario
In the financial year 2016-17, which is, ended up on 30th June 2017, Miele has achieved a
sales volume of € 3.93 billion. This sales volume is approximately 5.9 per cent higher than
the last financial year and sales volume has increased by € 218 million. In the parent market
of the company, the company grew by € 1.18 billion and € 2.75 billion on the international
market. The company is significantly the increased in the international market while slow
growth witnessed in the domestic market. The segment that is contributing to this growth is
vacuum cleaners and built-in appliances. As per the management of the board of the Miele,
the growth of the company is quite satisfactory by total investments of 357 million and in the
climate of fluctuation in exchange rates. In the fiscal year, the company has sold the, highest
number of 2.5 million vacuum cleaners for the first time.
(Figure 1: Sales Volume of Miele)
(Source: Miele, 2018)
In the current business world, the companies are looking to expand their business in the new
unexplored areas. Miele has looking to enter into the various nations on the global scale. The
company has entered the Indian market in 2011 and is planning to invest 100 crores in the
Indian market. It has been forecasted that Miele India is planning to contribute 4.9 per cent of
the total sales (Knight, et. al., 2016). Mexico is a country that is progressive and currently
In the financial year 2016-17, which is, ended up on 30th June 2017, Miele has achieved a
sales volume of € 3.93 billion. This sales volume is approximately 5.9 per cent higher than
the last financial year and sales volume has increased by € 218 million. In the parent market
of the company, the company grew by € 1.18 billion and € 2.75 billion on the international
market. The company is significantly the increased in the international market while slow
growth witnessed in the domestic market. The segment that is contributing to this growth is
vacuum cleaners and built-in appliances. As per the management of the board of the Miele,
the growth of the company is quite satisfactory by total investments of 357 million and in the
climate of fluctuation in exchange rates. In the fiscal year, the company has sold the, highest
number of 2.5 million vacuum cleaners for the first time.
(Figure 1: Sales Volume of Miele)
(Source: Miele, 2018)
In the current business world, the companies are looking to expand their business in the new
unexplored areas. Miele has looking to enter into the various nations on the global scale. The
company has entered the Indian market in 2011 and is planning to invest 100 crores in the
Indian market. It has been forecasted that Miele India is planning to contribute 4.9 per cent of
the total sales (Knight, et. al., 2016). Mexico is a country that is progressive and currently
encouraging the various businesses on the worldwide scale. By the assessing, the business
environment of the Mexico the company has found that there is ample form of opportunities
are available in this nation. As per the World Bank report, Mexico is the 6th easiest nation on
the Latin America to do the business. The economic environment of Mexico is stable and
GDP has grown by 3.8 per cent in 2011. But during the recession that has happened in 2009,
the country became heavily dependent on Canada and USA. Besides this, due to the
recession, there is the rise in corruption and crime levels in the business. Society of Mexico is
currently emerging and per capita of income of the citizens is increasing. The Mexican
economy is the 15th biggest economy in the world and is based on manufacturing, tourism
and remittances and oil business (Knight, et. al., 2016). Majority of the Mexican people are
living in the US and are sending back their income to their home country. Miele should asses
the economic condition of Mexico before entering in the nation. The GDP in the Purchasing
power parity (PPP) in 2014 was the US $2,143.499 billion. It is the second largest economy
in Latin America. Though the GDP has slowed down to 2 per cent in 2017 currently the
nation has stable economic conditions. As per the reports, the current economy of Mexico is
approximate $2.4 trillion.
environment of the Mexico the company has found that there is ample form of opportunities
are available in this nation. As per the World Bank report, Mexico is the 6th easiest nation on
the Latin America to do the business. The economic environment of Mexico is stable and
GDP has grown by 3.8 per cent in 2011. But during the recession that has happened in 2009,
the country became heavily dependent on Canada and USA. Besides this, due to the
recession, there is the rise in corruption and crime levels in the business. Society of Mexico is
currently emerging and per capita of income of the citizens is increasing. The Mexican
economy is the 15th biggest economy in the world and is based on manufacturing, tourism
and remittances and oil business (Knight, et. al., 2016). Majority of the Mexican people are
living in the US and are sending back their income to their home country. Miele should asses
the economic condition of Mexico before entering in the nation. The GDP in the Purchasing
power parity (PPP) in 2014 was the US $2,143.499 billion. It is the second largest economy
in Latin America. Though the GDP has slowed down to 2 per cent in 2017 currently the
nation has stable economic conditions. As per the reports, the current economy of Mexico is
approximate $2.4 trillion.
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Conclusion
It has been concluded from this report that the business environment of the company is
varying according to the global context. The business environment is also complex for the
organisations. It is essential for the company to assess the business environment of the region
strategically. In this case, the Miele Company want to enter into the new unexplored nation
and before entering it is crucial for the company to evaluate all the factors mentioned in the
PESTEL analysis. It is very essential for the company to customise their organisation goal
and vision as per the business environment of the nation to get success in the new area. After
the company has conducted the PESTEL analysis the data gathered from the analysis has to
be evaluated effectively to assess success factors. This analysis will help the company to
address the issue that may evolve after the company set up their base in the country.
It has been concluded from this report that the business environment of the company is
varying according to the global context. The business environment is also complex for the
organisations. It is essential for the company to assess the business environment of the region
strategically. In this case, the Miele Company want to enter into the new unexplored nation
and before entering it is crucial for the company to evaluate all the factors mentioned in the
PESTEL analysis. It is very essential for the company to customise their organisation goal
and vision as per the business environment of the nation to get success in the new area. After
the company has conducted the PESTEL analysis the data gathered from the analysis has to
be evaluated effectively to assess success factors. This analysis will help the company to
address the issue that may evolve after the company set up their base in the country.
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References
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generation of leaders. Routledge.
Hahn, R. and Weidtmann, C., 2016. Transnational governance, deliberative democracy,
and the legitimacy of ISO 26000: Analyzing the case of a global multi-stakeholder
process. Business & Society, 55(1), pp.90-129.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford
University Press, USA.
Harrison, A., 2013. Business environment in a global context. Oxford University Press.
Jansen, W., 2017. New business models for the knowledge economy. Routledge.
Knight, G.A. and Liesch, P.W., 2016. Internationalization: From incremental to born
global. Journal of World Business, 51(1), pp.93-102.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business, 51(1),
pp.23-34.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher
Education.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher
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