Appendix A:
Advantages and Disadvantages Entry Modes
The table below shows the advantages and disadvantages of the various entry modes.
Exporting Low cost
Acquire Market Knowledge
Vulnerable to Tariffs Logistical
Complexities Contractual Agreements Low Financial Cost
Avoid restrictions FDI
Limits Market
Creates future Competitor
FDI High Profit Potential
High Control High Investment Managerial Complexity PR Exposure
Appendix B
Foreign Direct Investment: the Netherlands
This Appendix shows the amount of FDI of the Netherlands, between 1975 and 2000. This table also makes a division between the different geographical regions of the world. Source: Sluyterman, 2004.
Appendix C:
FDI Outflow and Inflow OECD Countries
This Table shows the Inflow and Outflow in FDI of the 29 OECD countries. An average is taken of the years 1996 and 2005.
Source: OECD, 2006.
Appendix D:
Dutch and Australian Case Study Multinationals
Top 10 Dutch and Australian Multinational companies. Listed in order how presented in the Forbes 2000 list. Name, Country, Industry and the market value which Forbes 2000 used to determine the largest companies of the world are presented below.
Source: Forbes Global 2000 of the year 2005.
Top 20 Dutch Multinational firms N# Name Company Industry Market Value ($bil) Position Forbes 2000 N1 Royal Dutch/ Shell Group
Oil & Gas 203,52 7 N2 ING Group Diversified
Financials 81,43 11 N3 Fortis Diversified Financials 45,74 38 N4 ABN-Amro Holding Banking 54,74 41 N5 Aegon Insurance 26,40 98 N6 Philips Group Conglomerates 42,94 135 N7 Royal KPN Telecommunications 22,26 269
N8 Akzo Nobel
Group Chemicals 14,51 393
N9 TNT Transportation 14,80 448
N10 Ahold Food Markets 12,67 624
(table A-4: Sample Case Study Australian Multinationals)
Top 20 Australian Multinational Firms A# Name Company Industry Market Value ($bil) Position Forbes 2000 A1 National Australia Bank Banking 42,96 86 A2 Commonwealth Bank Banking 42,94 113
A4 Westpac
Banking Group Banking 32,77 161
A5 Telstra Telecommunications 36,73 195
A6 St George Bank Banking 11,62 532
A7 AMP Insurance 11,95 542 A8 Woolworths Food Markets 14,53 566 A9 QBE Insurance Group Insurance 12,21 570 A10 Macquarie Bank Diversified Financials 11,09 596
(table A-5: Sample Case Study Dutch Multinationals)
Appendix E:
Region Explanation
In this appendix and explanation of the variables used in the case study analysis is given. The analysis of the case study research can be found in Appendix E for the outcome of Australia and in appendix F for the Netherlands.
Variables Certain Regions
1 America (incl. USA/ Canada/ Latin-America) 2 Asia
3 Europe 4 Oceania (incl. Australia and New Zealand)
5 Pacific Islands
6 Other (incl. Africa, Middle East)
Appendix F
Australia A1 A2 A3 A4 A5 A6 A7 A8 A9 A10 Appendix F Table A-7 Foundation Date 1858 1911 1830 1817 1901 1937 1849 1924 1886 1969 Date Entering Foreign Country 1987 1913 1835 1861 1946 1939 1859 1983 1890 1985 Time before Internationalization 129 2 5 44 45 2 10 59 4 16 Number Countries Active 6 11 29 14 2 5 6 24 24 Number of Regions 4 3 5 5 3 1 3 4 5 5 Type of Regions 1,2,3,4 2,4,5 1,2,3,4,5 2,4,5 2,4,5 4 2,3,4 1,2,3,4 1,2,3,4,5 1,2,3,4,6 Asset Value Total2005 426,887 329,035 293,185 290,000 N/A 77,589 85,690 N/A 25,102 23,549 Asset Value
Abroad 2005 153,356 57,439 97,685 137,000 N/A 0,000 2,923 N/A 18,913 8,015 Asset Value Australia 2005 273,531 271,596 195,500 153,000 77,589 82,767 6,189 15,534 Asset Value Regions 2005 1 41,650 78,474 55,000 2,638 2,118 0,277 2 2,118 1,359 3 95,453 7,297 6,383 4,611 4 1,478 5 1,469 6 57,903 15,789 9,796 82,000 0,285 9,053 0,180 Asset Value Total
2001 354,988 230,411 185,493 595,000 N/A 50,804 165,338 N/A 19,585 28,175 Asset Value
Appendix G
The Netherlands N1 N2 N3 N4 N5 N6 N7 N8 N9 N10
Appendix G Table A-8
Foundation Date 1901 1845 1991 1824 1983 1891 1852 1835 1799 1887 Date Entering Foreign
Country 1905 1863 1991 1893 1986 1899 1835 1931 1977 Time before Internationalization 4 18 0 69 3 8 0 132 90 Number Countries Active in >100 >50 >50 60 20 >60 >5 >80 >200 10 Number of Regions 6 5 3 3 4 4 1 5 6 3 Type of Regions 1,2,3,4,5,6 1,2,3,4,6 2,3,5 1,2,3 1,3,6 1,2,3,6 3 1,2,3,6 1,2,3,4,5,6 1,2,3 Asset Value Total
2005 N/A 1158,639 728,994 880,804 308,643 33,620 22,702 22,471 6,018 N/A
Asset Value Abroad
2005 N/A 887,543 512,381 595,731 253,169 27,602 11,752 19,410 3,394 N/A
Asset Value
Netherlands 2005 271,096 216,613 285,073 55,474 6,018 10,950 3,061 2,624 Asset Value Regions
2005 1 295,314 134,431 195,548 178,400 8,178 2,578 0,078 2 64,176 5,159 67,261 1,804 1,017 0,207 3 494,788 355,296 332,922 69,049 3,035 11,752 4,415 2,895 4 26,832 0,180 5 6 6,433 17,495 5,72 14,585 11,400 0,034 Asset Value Total
2001 N/A N/A 893,287 N/A 259,39 37,235 N/A 12,5 8,544 26,209 Asset Value Abroad
2001 N/A N/A 784,046 N/A 214,556 31,982 N/A 9,901 5,997 25,075 Asset Value
Netherlands 2001 109,241 44,834 5,253 2,599 2,547 1,134 Asset Value Regions
Appendix H:
Entry Modes
The data collection on the type of entry mode was quite difficult to find. Most companies to not specify the type of entry mode they use. The data found can be considered the most important entry modes used by the case study multinationals. It can be possible that they also use other entry modes, but this data can not be collected.
So the data presented below are the main entry modes the companies use when expanding to the international market.
More detailed description of the different entry modes.
Entry Modes Specified entry modes
Exporting Direct & Indirect (export departments) Contractual Agreements Licensing/ Franchising/ Outsourcing/
Management Contracts/ Representative Offices/ Contract Manufacturing/ Associated Companies/ Strategic Alliances e.g.
FDI Joint Ventures/ Mergers & Acquisitions/ Greenfield Investments (Wholly Owned Subsidiaries)
(Table A-9: Division Entry Modes)
Different type of Entry Modes Australian Multinationals Multinational Preferred
Entry Modes
Other Entry Modes
Specified Entry Modes
A 1 FDI Mergers
Acquisitions
A 2 FDI Contractual
Agreements
Joint Ventures
Representative Offices A 4 Contractual
Agreements
Representative Offices
A 5 FDI Contractual
Agreements Controlled Entity Joint Ventures Investments A 6 FDI Mergers Acquisitions Joint Ventures A 7 FDI Contractual Agreements Joint Ventures Acquisitions Alliances A 8 FDI Acquisitions 100% Equity Holdings (favorite)
A 9 FDI Equity Holdings
A 10 FDI Joint Ventures
50% Equity Holdings (favorite)
(Table A-10: Entry Modes Australian Multinationals)
Different type of Entry Modes Dutch Multinationals Multinational Preferred
Entry Modes
Other Entry Modes
Specified Entry Modes
N 1 FDI Contractual
Agreements
Joint Ventures
75-100% Equity Holdings Associated Companies
N 2 FDI Joint Ventures
Acquisitions N 3 FDI Contractual Agreements Joint Ventures Mergers Acquisitions Associated Companies N 4 FDI Acquisitions
N 5 FDI Joint Ventures
Mergers Acquisitions N 6 Contractual Agreements Strategic Alliances N 7 Contractual Agreements
FDI Strategic Alliances Joint Ventures
Acquisitions N 9 FDI Contractual Agreements Joint Ventures Acquisitions Strategic Alliances N 10 FDI Mergers Acquisitions Joint Ventures
(Table A-11: Entry Modes Dutch Multinationals)
Appendix I:
Triad Cluster
This appendix shows what percentage of the companies foreign assets is located in their neighboring countries and what percentage is located internationally. This is based on the theory of Rugman and Verbeke (2000) to determine if the case study multinationals are truly international companies or that that foreign business is located in their surrounding regions. (‘Triad Cluster’).
The data used for this Appendix comes from the foreign asset value of both Australia and the Netherlands in the year 2005 (Appendix E & F).
Australia
Company Oceania Pacific Australia ‘Australian’ Triad % International (ROW) % Total A 1 57,453 273,531 77,6 % 95,453 22,4 % 426,437 A 2 15,789 271,596 87,3 % 41,650 12,7 % 329,035 A 3 9,796 195,500 70,0 % 87,889 30,0 % 293,185 A 4 82,000 153,000 81,0 % 55,000 19,0 % 290,000
A 5 N/A N/A N/A N/A N/A N/A N/A
A 6 77,589 100 % 0 0 % 77,589
A 7 0,285 82,767 96,9 % 2,638 3,1 % 85,690
A 9 9,053 6,189 60,7 % 9,860 39,3 % 25,102 A 10 1,478 1,469 15,534 78,5 % 5,068 21,5 % 23,549
(Table A-12: Globalization Level Australian Multinationals)
The Netherlands
Company Europe The Netherlands ‘Dutch’ Triad % International (ROW) % Total
N 1 N/A N/A N/A N/A N/A N/A
N 2 494,788 271,096 66,1 % 392,755 33,9 % 1158,639 N 3 355,296 216,613 78,5 % 157,085 21,5 % 728,994 N 4 332,922 285,073 69,7 % 268,529 30,3 % 886,524 N 5 69,049 55,474 42,3 % 184,120 57,7 % 308,643 N 6 3,035 6,018 26,9 % 24,567 73,1 % 33,620 N 7 11,752 10,950 100 % 0 0 % 22,702 N 8 4,415 3,061 33,3 % 14,995 66,7 % 22,471 N 9 2,895 2,624 91,7 % 0,499 8,3 % 6,018
N 10 N/A N/A N/A N/A N/A N/A
(Table A-13: Globalization Level Dutch Multinationals)
Appendix J:
Division of Assets
This appendix will show the division of the total amount of assets of the ten multinational companies around the different regions of the world.
Australia 2005
Region Absolute Amount Assets ($m) Percentage Assets
Australia 1.075,706 69,2 % America (region 1) 180,157 11,3 % Asia (region 2) 3,477 0,2 % Europe (region 3) 113,744 7,3 % Oceania (region 4) 1,478 0,09 % Pacific (region 5) 1,469 0,09 % Other (region 6) 175,006 12,2 % Total 1.551,037 100 %
(Table A-14: Division of Assets of Australian Multinationals)
Some annual reports of the companies did not specify the certain regions as detailed as other companies did. Therefore does the category others not only include the other regions
(as mentioned in Appendix D), but also include foreign assets, in either Asia, Oceania
and the Pacific. America and Europe, were always specifically mentioned in the annual reports. This might alter the outcome of the division of the assets slightly, but it will still show
how much of the assets are located in the home country and foreign countries. Besides this the case study research already showed that the multinational countries were hardly active on the ‘other’ regions, so it can be assumed that most of the category ‘others’ can be placed in either Asia, Oceania or the Pacific.
Australia 2001
Region Absolute Amount Assets ($m) Percentage Assets
Australia 1.065,876 65,4 % America (region 1) 160,882 9,9 % Asia (region 2) 1,368 0,08 % Europe (region 3) 71,955 4,4 % Oceania (region 4) 98,124 6,0 % Pacific (region 5) 1,649 0,1 % Other (region 6) 229,940 14,1 % Total 1.629,794 100 %
The Netherlands 2005
Region Absolute Amount Assets ($m) Percentage Assets
The Netherlands 850,909 26,9 % America (region 1) 814,527 25,8 % Asia (region 2) 139,624 4,4 % Europe (region 3) 1.274,152 40,2 % Oceania (region 4) 27,012 0,9 % Pacific (region 5) x x Other (region 6) 55,667 1,8 % Total 3.161,891 100 %
(Table A-16: Division of Assets of Dutch Multinationals)
The Netherlands 2001
Region Absolute Amount Assets ($m) Percentage Assets
The Netherlands 165,608 13,4 % America (region 1) 237,771 19,2 % Asia (region 2) 3,428 0,3 % Europe (region 3) 772,472 62,4 % Oceania (region 4) 0,222 0,01 % Pacific (region 5) X X Other (region 6) 57,664 4,69 % Total 1.237,165 100 %
(Table A-17: Division of Assets of Dutch Multinationals)
