MNC Matrix the Multinational Corporation International Phone

MNC Matrix

The multinational corporation International Phone Inc., has shifted its overall business strategy into investing into emerging markets. The purpose of this report is to give background on International Phone Inc., by creating a matrix to evaluate three emerging market countries that may suit the overall business mission of this organization. I will first describe the type of business International Phone Inc. conducts by describing the products and services it provides. I will then create a matrix that compares three emerging market countries across the following elements: economics, political environment, ethical system, social responsibility indicators and cultural dimensions. I will assign a numeric value between one and five to both quantify and qualify how these three countries match up against one another. I will then interpret the results and make a recommendation which emerging market I believe this company should consider expanding into.

International Phone Inc. is a cellular phone, smart phone, handheld mobile device manufacturer that has gained recent success in the telecommunications industry. The company sells its own phones to different telecommunications outlets who then rebrand the phone to their own specifications. There are currently five manufacturing sites within the United States owned and operated by IPI and the leadership is looking to expand into international territory. International Phone Inc. employs over 5000 personnel, conduced approximately $250 million in total sales over the last year, and is a minority owned business. International Phone Inc. corporate motto suggests that it is a company that is committed to gaining competitive advantage regardless of the circumstances. Social responsibility and other noneconomic principles are important to this company, however the leadership at International Phone Inc. understands that the competitive arena needs to be exploited all possible opportunities.

The three countries I've chosen to investigate as to whether or not International Phone company should expand to that location are Brazil, Poland and South Africa. While China and India are obvious choices for emerging markets, Palepu (2011) suggested that these markets may be saturated and the opportunities that serve the greatest potential lie in countries that are a few years behind the development of China and India.

It is important to understand each of the elements of the matrix before revealing the numeric value assigned to each country. The economic system is evaluated for obvious reasons. The political environment is important to evaluate in order to understand the different traditions and cultures within that country and how that might apply to making a competitive advantage within that area. Ethical systems are also important as to demonstrate to the whole world what the company stands for and how it will treat one another when expanding into the country. Social responsibility indicators are also important in knowing how much to pay workers and how they are treated within their own home nation. Cultural dimensions also include the idea of historic and religious connotations to the homeland of the country.

Economic

Political

Ethical

Social

Cultural

Total

Brazil

4

4

4

4

4

20

Poland

3

3

4

4

5

19

South Africa

5

2

3

4

5

19

MATRIX SUMMARY

Overall, it appears that Brazil is the best option for International Phone Incorporated. Mozee (2008) seemed to agree: "Brazil is now the 10th largest market in the world as measured by the MSC I RULED index with the free flow market capitalization of $509.1 billion." Economically appears sound. The political environment in Brazil has developed to the point where the Olympics will be conducted in the near future. The ethical climate Brazil exudes is satisfactory for International Phone corporate social and cultural value of Brazil gives it an advantage due to the historic and eclectic history Brazil holds. Developing within this country seems to be the most logical and safest investment.

Poland, does not lag far behind Brazil as far as the second choice. Poland has a superior cultural and social, but be European markets, especially in the East tend to have less ability and the economic status of this country does not lend itself to a most wise choice. South Africa, while proving its economic stability in the recent closing of the World Cup, amongst other business and capitalistic ventures, still hold a political stigma with the violent and often tumultuous racial struggle that still occur within this country. South Africa would not be able bad choice, if some of that risk were to be understood beforehand.