Impact of Financial Crisis and Recession †MyAssignmenthelp.com

Question: Discuss about the Impact of Financial Crisis and Recession. Answer: Introduction Most of the developed and developing countries in the Asian Pacific regions have, in the recent past became major contributors to the global economy due to the increase of multinational companies from these countries. They usually engage in Foreign Direct Investments, and within their home countries, retains a measurable amount of management and overall control of their businesses. The Asian countries with major multinational companies include Japan, Taiwan, Korea, China and India. These multinational companies produce varied range of products which include electronics, medical equipment, and automobiles, among others. Most of the multinational organizations or business firm in the Asian Pacific region has achieved their success mostly due to the availability of cheap labor from the local population, making production process cheap as well as their subsequent end products (Dunning and Lundan, 2008). They also, possess a rich macroeconomic management coupled with conducive policies th at favors export of their manufactured products. The multinational companies in Asian regions have, by far overtaken their western rivals who majorly concentrate on the products that targets the high class and middle class customers only. The largest percentage of the Asian population are on average lifestyle and others live below the poverty line. Companies who produce products and services that are pocket friendly to this kind of population will likely succeed in terms of high revenues. Airtel for example, which is a leading mobile phone service provider in the Indian market offers services that are friendly to those individuals living below the poverty line. This company has markets in various parts of the world including Africa. The western rivals produce classy products, for example Apple Inc., their products are expensive such that, most of their consumers are only the high class population which are few in number. On the other hand, western multinationals produced products that are technologically competitive, and pocket friendly at the same time. Aims of the Japanese multinationals in regards to global strategies Japanese economy has been rapidly growing, especially after World War II. Currently, the Japanese economy is ranked third globally in 2017 (Oecd.org, 2017). This economy is being driven by multinational companies that deals with automobiles and electronics such as the Toyota, who deals with worlds largest selling brands of cars and Sony Corporation that deals with electronics among others. The aim of the Japanese multinational companies (MNCs) is to produce world class products that are directed to the middle and low class population at local and international markets. Toyota, which is the leading Japanese MNC has been the leadxporter of cars to Middle East, America and Asian countries since 1950s after the World War II. Their cars were in high demand due to the efficiency and economy in terms of fuel consumption (Rugman and Li, 2007, p.335). For many years, Toyota, as company has been strategizing on increasing their productions which will be subsequently sold in various markets both, locally and intentionally. Sony, on the other hand, is one of the largest competitor in the electronics market globally. It was started in 1946 by Akio Morita and Masaru Ibuka, whereby their major focus is to produce electronic gadgets such as TVs, mobile phones, gaming consoles, etc. The products that is being produced by the company since its initial times up to date has been of the best quality, and has attracted a lot of consumers, from within Japan and globally (Sauvant, Maschek and McAllister, 2010, p.22). Aims of Korean and Chinese multinationals and international business strategies The multinational corporations has a direct relationship (and impacts to) with the Foreign Direct Investment. These Asian multinationals have long be known in their brands such as Samsung and Sony electronics, which are situated in Korea, Hyundai and Honda among others. These multinational companies from Japan and Korea have deeply get their roots into the global markets for over four decades (from 1980s). Their products have been in the fore front in terms of technology, and has greatly boosted innovations across the world (Black and Morrison, 2010). Most of the Asian Pacific countries are still developing, or are not developed at all, but this does not limit the multinational companies from emerging from these nations. The Asian Pacific region was recorded to be the most growing region in terms of economy which contributed to more than 30% of the global GDP in 2013. According to the research that was conducted in 2014 that was analyzing the top 500 Fortune companies globally, 192 of the companies came from this region (Guillen and Garcia-Canal, 2009, p.27). The Korean and Japanese companies targets global markets with their cheap and high end products that targets all groups of people, either rich or poor. This is the basis of their success. Differences between industries and types of businesses The car manufactures in the APAC regions are leading their competitors from other regions of the world. Shanghai Automotive Industry Corporation, for example, has been growing in terms of production and sales of their FAW trucks and other cars in the recent years. Also, Indian Mahindra and TATA, Bajaj and Maruti have been experiencing one of the largest growth in the automotive industry (Cuervo?Cazurra, 2012, p.155). Japanese companies although, has been recording a consistent drop in their range of products in terms of production, stock and sales from 2014 when compared to the previous years. The reason for this drop is due to the entrance of new players in the market that produces alternative products at more competitive prices. There are also several challenges that the Japanese companies have been facing including the direct negative impact of the natural calamities such earthquakes (Hood and Birkinshaw, 2016). Generally, there exists a stiff competition between the APAC multinat ionals due to the entrance of new players with more innovations. China, as seen in 2010, had produced more cars when compared to United States. They had a growth of more than 20% in 2010. China increased the production of all types of vehicles such as trucks, passenger cars and personal vehicles. The government intervention has been behind this enormous increase production. The Chinese government introduced tax breaks and subsidies. The extent of global versus the local control Currently, Japan is third in terms of the global economy. It is among the best countries that producing the most innovative products. The Japanese companies have closer ties, whereby they take shares of their own companies. This provides a stronger basis for developing industries as they get a major boost in terms of capital and other financial assistance. The local companies provides a dependable market search for their growing members. Apart from local markets that they target, the successful multinational companies offers other companies an assistance in performing production process and conducting foreign sales. After the attack of Japan in World War II, the country was negatively affected, and the same was reflected in the multinational companies. Nevertheless, the country took immediate recovery measures to restore their economy to the initial state that they were before the attack. From 1980 to millennium period, Japan retain the second position the world in terms of economy. For the case of Korea, in 1945, there were several crises that emerge and let to the split of the Korean region into North and South. The South Korea became one of the most industrializing nations in the world due to the existence of several multinational companies that provided a great boost to the economy. After the 1990, peace and stability pave way for a conducive environment for industrialization, and a subsequent progress of the multinational companies in the country. Competitive advantage of Asian pacific multinationals compared to those of their competitors The APAC multinationals have always had a greater or good competitive advantage over the western multinationals due to various reasons such as market and competitive pricing of products. In terms of electronics for example, Apple Inc. which is from the western region has less competitive advantage compared to their rivals such as the Samsung Corporation (Sauvant, 2010, p.377). Samsung produces a varied range of products that are technologically competitive and pocket friendly for low income earners. Apple on the other hand, produces products which are quality but expensive (Jaussaud and Schaaper, 2007, p.237). The target market will be the high income earners which are few, hence making Apple to record a lower turnover compared to the Samsung and other electronics from the Asian Pacific region. Also, there is availability of cheap labor in the APAC region which makes the production process economical, and can be translated into cheaper end products. In western countries, labor is expensive making the production process high, and subsequently expensive end products. In terms of automobile industries, using the case example of Toyota from Japan, and General Motors from the western region, both companies are giants in terms of car production. According to Jackson and Deeg, (2008, p.552) in 2008, USA was hit by a great depression which directly affected the production of general motors. The products fell, giving Toyota a competitive advantage in terms of productions. Toyota took the advantage to deeply settle into the global markets, where most of their cars were preferred due to their cheap prizes and high quality (Li and Shooshtari, 2007). Availability of good policies in the APAC regions favors their multinationals and gives them a competitive advantage over their rivals from the western countries. The government offers incentives alongside the innovation differentiation which most of the companies have adopted. Organization and operation in home and host nations The multinational companies in the APAC regions are well established in that they have a strong management as well as the organization. Their operations such as production process have been made efficient through adoption of specialized or hybrid production process. These companies also, have systems that complies with the lows, policies and requirements of the host nations in which they are operating. In this manner, they are able to gain access to wider market for their products. The APAC multinationals have richer history in producing quality products. For example, Toyota brands, Sony products, Samsung electrons and Honda among others. These products are of high quality and have gain trust in most of the countries such as Europe and United States. Their products are cheap and quality since they take the advantage of the available cheap labor at their disposal (McAllister and Sauvant, 2013, p.30). These cheap products makes them compete in the global market with other similar products. The consumers will have to choose between cheap and quality products, and Classy by of equivalent quality. In most cases, the Asian products finds a flowing market, outdoing their rivals. Most of the APAC multinationals have been in the world market for a close to century. This experience have enabled them to adapt to new changes of the local as well as the host country demands. They also utilize the current technology making them to retain the loyal customers (Witt, and Redding, 2013, p.280). Their customers are ever satisfied due to the quality services and products that they provide. They offer products warranty, or repair in the event that their products gets defective. Relevance of the European Union The European Union has been the key player in influencing the global trade. It has a direct influence to the business operations of the multinationals, and specifically those companies from the APAC regions. In most cases, the Asian multinationals does not cooperate with the policies provided by the EU. These companies are rigid due to absence of complex policies in their native nations. The Asian countries are govern by cultures, and are rigid to certain policies due to their nature of colonial states. The Asian policies are not strong enough, and hence when the EU offers guidelines on their operations, they tend to modify to suit their situation (Tan and Mahoney, 2007, p.260). Strong bureaucracies in some countries such as Taiwan and Japan has led to high levels of industrialization. Japan, has in their course incorporated polices laid down by the European Union to their advantage, and this has enabled them to amass their growth in terms of economy. Conclusion The ever growing number and expansion of multinational companies in the APAC regions has played a crucial part in the global market. The existing companies, as well as the new entrants into the market have set a strong organizational base in terms of management and running of the business operations. The market is highly competitive that it requires utilization of high technology and use of available opportunities to reach into new markets. The success of the prominent multinational companies such as the Toyota Corporation is due to the adoption of modern systems of product such as Toyota production which makes the production process efficient and cost effective. Most of the companies in the APAC regions produce products that meets the technological requirements of the individuals, and at the same time, the products are less expensive. The makes their turnover to increase since most of the consumers are the middle and low income earners. Application of new technologies is the source of success of most of these companies as it provides efficiency in production process. Also, in these regions, the cost of labor is extremely cheap which is crucial in the production process. Cheap labor translates into low production costs, which will be equivalently translated into the cost of final products. Cheap, and high quality products attracts a larger market. References Black, J. and Morrison, A., 2010. 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