MNES - Lecture 1

Question 1

What is a Multinational Enterprise (MNE)?

Answer 1

An MNE produces goods or delivers services in more than one country, with management headquarters in a home country and operations in host countries.

Question 2

What are other names for a Multinational Enterprise?

Answer 2

Multinational Corporation (MNC), multinational, or international corporation.

Question 3

What is the “home country” of an MNE?

Answer 3

The country where the MNE’s management headquarters is located.

Question 4

What are “host countries” for an MNE?

Answer 4

Countries where the MNE operates outside of its home country.

Question 5

Name two famous MNEs headquartered in the USA.

Answer 5

Apple and Microsoft.

Question 6

Besides the USA, which countries are major homes to MNEs?

Answer 6

Japan, China, Western Europe, and India.

Question 7

Why is McDonald’s a classic MNE example?

Answer 7

It operates globally: ~38,700 outlets in 120 countries, serving millions daily, with assets over $32B USD.

Question 8

When and where did the first McDonald’s open?

Answer 8

1948, San Bernardino, California.

Question 9

Who founded the first McDonald’s restaurant?

Answer 9

Maurice and Richard McDonald.

Question 10

Who expanded McDonald’s into a global franchise?

Answer 10

Ray Kroc.

Question 11

When did Ray Kroc first get involved with McDonald’s?

Answer 11

1954.

Question 12

When did Ray Kroc buy out the McDonald brothers?

Answer 12

1961.

Question 13

What early innovations did McDonald’s introduce?

Answer 13

Self-serve counters, keeping hamburgers warm, high-volume milkshake machines, and lower prices than competitors.

Question 14

What marketing strategies helped McDonald’s growth? (Mascot, etc?)

Answer 14

Ronald McDonald mascot, kids’ toys, golden arches branding, and emphasis on low prices.

Question 15

How many people does McDonald’s serve daily worldwide?

Answer 15

Over 69 million.

Question 16

How many countries and outlets does McDonald’s currently operate in?

Answer 16

About 38,700 outlets in 120 countries.

Question 17

What are McDonald’s current assets roughly valued at?

Answer 17

Over $32 billion USD.

Question 18

What is the Big Mac Index?

Answer 18

A guide created in 1986 by The Economist to check if currencies are at “correct” levels, based on purchasing power parity using the price of a Big Mac.

Question 19

What is purchasing power parity (PPP)?

Answer 19

The idea that exchange rates should adjust so identical goods cost the same across countries in the long run.

Question 20

Give examples of challenges MNEs face.

Answer 20

Legal battles, local regulations, and differing market requirements in host countries.

Question 21

Give a recent tech sector example of MNE legal/regulatory challenges.

Answer 21

Apple lost EU anti-trust battles over music streaming; Google violated U.S. anti-trust laws in 2024.

Question 22

How did Western cosmetics MNEs face regulatory challenges in China?

Answer 22

China required animal testing in the 1990s–2000s, conflicting with Western market ethics.

Question 23

Why do smaller national economies sometimes limit regulation for MNEs?

Answer 23

To attract investment because they lack leverage to enforce strict regulations or taxation.

Question 24

What is meant by “corporate evolution” in McDonald’s context?

Answer 24

The growth from a single restaurant to a global franchise through innovation, marketing, and expansion.

Question 25

How much of the world’s multinationals are headquartered in the U.S.?

Answer 25

About one-third.

Question 26

When was the Big Mac Index introduced?

Answer 26

1986.

Question 27

Why is the Big Mac used in PPP comparisons?

Answer 27

It’s a standardized, widely available product that allows comparison of currency value across countries.

Question 28

What leverage do large national economies have over MNEs?

Answer 28

They can enforce regulations more effectively than smaller economies, influencing MNE operations.

Question 29

Give an example of an MNE facing regulatory challenges in a new market.

Answer 29

Western cosmetics companies in China during the 1990s–2000s due to animal testing regulations.

Question 30

Name two key factors contributing to McDonald’s global success.

Answer 30

Innovative marketing strategies (branding, toys, mascots) and operational innovations (self-serve, low prices).