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Oli And Uppsala Model Comparison Durham Essay

2860 words - 12 pages

A Case Study of Haier
A firm which owns outputs of good and services originating in more than one country can be defined as a multinational enterprises according to Casson (Casson, 1982). Among these MNEs who are still competing in the global market, Haier Group can be viewed as a symbolic one representing emerging MNEs from developing countries. As for a company which nearly went bankrupt in 1984, the Haier Group is known of its high skill level of management that saved it from the edge (Verbeke, 2013). Moreover, Haier’s successful business strategies allows it to achieve long term development in both domestic and international market. Ultimately, it has become the No.1 company among China’s Top 10 Global brands according to Financial Times in 2005 with a coverage of over 100 hundred countries (Rugman and Li, 2007). In this essay, Dunnign and Lundan’s view that ‘the contemporary network MNE is best considered as a coordinator of a global system of value-added activities’ will be discussed first. Haier’s current business model will be analysed afterwards in terms of its network strategy. Secondly, both OLI paradigm and Uppsala model will be introduced to indicate how enterprise becomes multinational by laying emphasis on external factors and firm itself, respectively. Ultimately, Haier and Nespresso’s strategy on developing ‘relational’ capabilities and skills will be introduced includes Haier’s networking strategy ‘interactive online platforms’ and Nespresso’s AAA strategy with its Nespresso clubs.
There has been a rethink of the realm of International Business (IB) on the boundaries or scope of the firm in the past two or three decades. According to Dunning and Lundan, traditional ownership-based, or resource-based view are increasingly being challenged by contemporary multinational enterprises (MNEs) especially in Asian network (Dunning & Lundan, 2008b). Different from traditional business groups such as those trading companies in 19th century, those emerging MNEs are networked based instead and some of them has ultimately developed into metanational MNEs (Dunning & Lundan, 2008b). Based on Peng and Delios’s research focused on Asian firms, the existing theories of IB cannot meet the needs of analysing those emerging firms so that new theoretical tools are sought to embrace these new forms of organisation (Peng & Delios, 2006). As for multinational countries from developing countries such as Haier from China, its intangible wealth such as its high skill level of its management, its emphasis on knowledge generation, and its focus on its reputation are more crucial for the company’s success instead of relying on tangible wealth as physical assets per se (Verbeke, 2013). Hence, those contemporary network MNE has been viewed as ‘a coordinated system of value added activities’ by Dunning and Lundan in their paper (Dunning & Lundan, 2008b). To understand these network coordinators, resource-based view can be considerably helpful on analysing...

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