The New Multinationals A new breed of multinational companies is reshaping competition in global industries For most of the nineteenth and twentieth centuries, multinational firms came from the most technologically advanced countries in the world Over the last two decades, however, new multinational firms from upper-middle-income economies (e.g Spain, Ireland, Portugal, South Korea, and Taiwan), developing countries (e.g Egypt, Indonesia, and Thailand), and oil-rich countries (e.g United Arab Emirates, Nigeria, Russia, and Venezuela) have become formidable global competitors These firms not necessarily possess technological or marketing skills In contrast to the classic multinationals, they found strength in their ability to organize, manage, execute, and network They pursued a variety of strategies including vertical integration, product diversification, learning by doing, exploration of new capabilities, and collaboration with other firms This book documents this phenomenon, identifies key capabilities of the new multinationals, and provides a new conceptual framework for understanding its causes and implications mauro f gui llén is the Director of the Joseph H Lauder Institute at the University of Pennsylvania and holder of the Dr Felix Zandman Endowed Professorship in International Management at the Wharton School Trained as a sociologist and political economist, he has studied multinational firms and the process of globalization for more than two decades He is a recipient of best paper awards from both the Academy of Management and the American Sociological Association, and book awards from the Gustavus Myers Center and the Social Science History Association In 2005 he won the IV Fundación Banco Herrero Prize, awarded annually to the best Spanish social scientist under the age of forty esteban garcía-canal is Professor of Management at the University of Oviedo and a member of the Institute of Business and Humanism at the University of Navarra His research interests lie at the intersection of interorganizational relations, organizational economics, and international management He is the author of more than sixty articles published in scientific journals He is, or has been, a member of the editorial boards of international journals such as The Journal of International Business Studies, Management International Review, and Management The New Multinationals Spanish Firms in a Global Context Mau ro F Guillén The Wharton School Es teba n Gar cía-Canal University of Oviedo ca mbr idge u n iv ersit y pr ess Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, São Paulo, Delhi, Dubai, Tokyo Cambridge University Press The Edinburgh Building, Cambridge CB2 8RU, UK Published in the United States of America by Cambridge University Press, New York www.cambridge.org Information on this title: www.cambridge.org/9780521516143 © Mauro F Guillén and Esteban García-Canal 2010 This publication is in copyright Subject to statutory exception and to the provisions of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press First published 2010 Printed in the United Kingdom at the University Press, Cambridge A catalog record for this publication is available from the British Library Library of Congress Cataloging in Publication data Guillén, Mauro F The new multinationals : Spanish firms in a global context / Mauro F Guillén, Esteban GarcÍa-Canal p cm Includes bibliographical references and index ISBN 978-0-521-51614-3 International business enterprises–Spain Spain–Foreign economic relations I GarcÍa-Canal, Esteban II Title HD2887.G837 2010 338.8′8946–dc22 2010023746 ISBN 978-0-521-51614-3 Hardback Cambridge University Press has no responsibility for the persistence or accuracy of URLs for external or third-party internet websites referred to in this publication, and does not guarantee that any content on such websites is, or will remain, accurate or appropriate Contents List of figures List of tables Preface page vi vii ix The new multinationals Traditional and new multinationals 27 Diversification and vertical integration in traditional industries 53 Market access and technology in durable consumer goods 76 Serving global customers in producer goods 99 Learning by doing in infrastructure and financial services 127 Competing in hard and soft services 166 The new multinational as a type of firm 192 References 205 Index 215 Figures 1.1 Spain’s foreign direct investment position, 1980–2008 page 19 1.2 Spain’s net outward foreign direct investment flows by destination, 1993–2008 21 1.3 Spain’s net outward foreign direct investment flows by industry, 1993–2008 22 2.1 Expansion paths of new MNEs in developed and developing countries 34 8.1 The process of initial accumulation of resources by the new multinationals 198 Tables 1.1 Outward foreign direct investment stocks, 1990 and 2008 1.2 Technology and quality management indicators page 1.3 The largest new non-financial multinationals ranked by foreign assets, 2006 1.4 The new multinationals on the 2009 Boston Consulting Group 100 Global Challengers list, by country 1.5 The new multinationals on the Fortune Global 500 ranking by country, 2008 10 1.6 New multinationals with the largest global market positions, end of 2008 12 1.7 The Spanish multinationals with the largest global market positions, end of 2008 14 2.1 The new multinational enterprises compared to traditional multinationals 33 2.2 Motivations for foreign direct investment by the new multinational enterprises 2.3 Intangible assets of the new multinational enterprises 37 42 2.4 Capability development, global reach, and the new multinationals 48 3.1 Growth strategies in the agro-food and beverage sector 55 4.1 Four types of durable goods industries 77 5.1 Growth strategies in producer goods industries 102 6.1 Four cases in infrastructure and financial services 133 7.1 Hard versus soft service firms by type of service 168 8.1 A typology of new multinationals 200 Preface Over the last two decades, the world has witnessed the fall of the Soviet bloc, an increase in the number of failed states, the rise of international terrorism, trade liberalization coupled with the formation of new trade blocs, a series of devastating financial crises, the expansion of the Internet, the beginnings of a green revolution, a spike in migration, and a drastic geographical reconfiguration of production While these changes represent major shifts and discontinuities in the global political and economic landscape, looking towards the future the one that is likely to bring about the deepest consequences is the rise of the new multinationals from upper-middle-income, emerging, and developing countries The international growth of these new multinationals marks the coming of age of a tier of countries that have hitherto being passive players in global economic, financial, and political affairs It is hard to underestimate the importance of this phenomenon as one industry after another feels the impact of the increasing size, sophistication, and geographical reach of the new multinationals, challenging our assumptions regarding the division of labor between developed and emerging countries While research on the new multinationals has blossomed in parallel with the phenomenon itself, little has been said or documented about the capabilities that the new multinationals bring to the table Often dismissed as creatures of protected home markets, beneficiaries of subsidized lending, and technology laggards, the new multinationals have been the subject of multiple jokes, condescending comments, and dire predictions of ultimate failure And yet, here they are, investing not only in other countries at a similar level of development but also making daring acquisitions and conquering market shares in the most advanced economies The rise of the new multinationals clearly shows that their countries of origin x Preface have more to offer than domestic markets to be exploited and cheap labor force In expanding around the world on the basis of know-how, project-execution, networking, and political skills, the new multinationals represent not only a challenge to their established counterparts in developed economies but also to our traditional ways of understanding the multinational firm We argue that the new multinationals not require a wholesale revision of the theory of foreign direct investment and the multinational firm, but they make it necessary to revisit some of the assumptions about the role of the home country, the process of capability building, and the pace and sequence of international growth This book is the result of a long-standing collaboration between two scholars located on different sides of the Atlantic Ocean While most of the evidence presented in these pages focuses on the new multinationals from Spain, as they compare to those from the United States and the more advanced parts of Western Europe, we also used our research on Asian, Latin American, and Middle Eastern multinationals to elucidate the drivers and the consequences of the rise of this new type of firm We would like to thank the Fundación Rafael del Pino for offering not only financial support but also, and most importantly, the intellectual guidance that helped us focus on an important topic that is likely to reshape the global economy for decades to come Over the years, Amadeo Petitbò and his team have encouraged us to re-examine our assumptions, revisit traditional arguments, and develop a new theory to tackle the rapid ways in which the business world is changing We would have been utterly unable to complete the book without the diligent assistance of several teams of research assistants At Wharton, Wifredo Fernández, Arun Hendi, Jason Chien Jee, Chelsea Lew, and Maya Perl-Kot compiled numerous datasets and case studies used in the various chapters of the book 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Abbey National Bank, 21, 156 Abeinsa, 186 Abelló, Juan, 88 Abengoa, 186 Abertis, 130 ABN AMRO, 22, 156 Abu Bint, 59 Accenture, 1, 2, 76 Acciona, 15, 16, 18, 116, 118, 119, 130, 144 Aceica Refinería, 59 Aceitunas y Conservas, 59 Acelik, 97 Acer, 6, 12, 203 Aceralia, 113 Acerinox, 13, 15 ACS, 16, 127, 130, 144, 152, 186 Adeslas, 161, 162 ADN, 182 Adolphus, 59 AESE, 178 Africa, 11, 13, 60, 80, 94, 119, 134, 164, 168 Agbar (Aguas de Barcelona), 131, 133, 157, 158, 159, 160, 161, 162, 163, 164, 196, 199, 200 Agua Lavanda Puig, 90 Ahorro Corporación, 88 Airbus, 107, 120 Airbus A350, 107 Airtel, 151 Alabama, 69 Alcampo, 85 Alcor, 107 Angelo Alfred, 81 Algeria, 58, 159 Alicante, 83, 86, 88 Alierta, César, 139 Alliance & Leicester, 155 alliances, 13, 23, 25, 30, 35, 40, 44, 47, 50, 58, 60, 66, 68, 71, 74, 77, 96, 98, 107, 111, 116, 120, 126, 132, 134, 138, 139, 141, 142, 149, 150, 153, 154–8, 161–3, 178, 180–4, 189, 194–5, 204 ALSA, 166, 167, 168, 169, 170, 171, 180, 189, 190, 191, 196, 198, 200, 201 Alstom, 186, 188 Altos Hornos de Vizcaya, 112 Altos Hornos del Mediterráneo, 112 Amazonia Celular, 139 Amena, 151 América Móvil, 133, 136 American Beauty, 57 American Rice, 59 American TXU, 144 Americas, 13, 78, 80, 94 Amsden, 42, 44, 124, 131, 187 Andalucía, 59 Anglian Water, 158 Antoveneta, 155 Applus+, 160, 162 Arana Maderas, 58 Arbed, 113 Arcelik, 36, 200, 202 Arcelor, 111, 112, 114 Arcelor Distribución Iberia, 112 Arcelor-Mittal, 111, 112 Archer Daniels Midland, 72 Arcor, 12, 54, 55, 71, 72, 74, 194, 197, 200 Argentaria, 20, 158 Argentina, 3, 4, 5, 9, 10, 12, 21, 54, 71, 72, 80, 96, 105, 114, 126, 135, 149, 153, 154, 159, 160, 178, 183, 188 Ariel, 181 Arizmendiarrieta, José María, 93 Arrasate, 93 Arriva, 169 Arrocera del Trópico, 59 Arrocerías Dársena, 59 Arrocerías Herba, 56 Arroz Sos Sevilla, 59 216 Index Asia, 2, 11, 13, 36, 54, 69, 71, 72, 78, 80, 82, 86, 87, 89, 90, 94, 110, 112, 118, 140, 147, 164 Asia-Pacific, 147 Associated British Foods, 56 Asturias, 112, 167 AT&T, 136, 138 Auna, 151 Australia, 60, 65, 72, 120, 121, 122 Austria, 137 Autobuses Lit, 171 AVANZA, 169 Avui, 182 Babcock & Brown Wind Partners, 121 Banco Central Hispano, 150, 151 Banco Pastor, 88 Banco Real, 155 Banco Santander, 28, 60, 88, 130, 151, 153, 157 Bandai, 83 Banespa, 156 Banesto, 154 Bangladesh, 79 Barbie, 84 Barcelona, 17, 61, 81, 91, 102, 104, 106, 108, 109, 112, 113, 131, 158, 174, 179, 182 Barsa International Publishers, 183 Basque Country, 66, 93, 96, 112 BBV, 154 BBVA, 17, 21, 130, 141, 142, 154, 175 Bechtel, 158 Beijing, 72, 172 Belgium, 123, 168, 170, 184 BellSouth, 139 Benetton, 79, 98 Berlinwasser, 158 Bernabé Biosca Tunisie, 59 Bertelsmann, 182, 183 Bertolli, 60 Bharat Forge, 12, 124, 125, 199, 200 Biar, 86 Bic, 89, 90 Bich, Marcel, 90 Bilbao stock exchange, 58 Bimbo, 10, 12, 54, 55, 71, 72, 73, 74, 194, 198, 200 Blue Ribbon, 59 BMW, 102 Boeing, 120, 175 Bogal Bolachas, 59 Bolivia, 149 Bombardier, Bonardi, Jean-Philippe, 127 Borrás, 86 Bosch, 94, 96, 97, 102, 183 Bosch Siemens, 94 Bosto, 58 Boston Consulting Group, 6, 9, 27, 76, 124 Botín, Ana Patricia, 157 Botín, Emilio, 151, 153, 154, 157, 192 Bouygues, 158 Brackenbridge, 81 Bradford & Bingley, 155 brands, 1, 6, 27, 30, 35, 39, 40, 41, 46, 53, 56–75, 76–96, 129, 150, 181, 192, 192–203 Brazil, 1, 3, 4, 5, 8, 9, 10, 12, 13, 21, 28, 45, 60, 69, 72, 78, 91, 99, 105, 106, 107, 108, 110, 114, 115, 127, 135, 139, 154, 155, 156, 159, 174, 178, 183 Brides International, 81 Brillante, 58 British Water, 159 Brussels, 170 BT, 138 Buckley, 30, 36, 43, 44 Bucks County, 121 Buenos Aires, 179 Burgos, 112 CIS, 62 Cables Gandía, 103 Caja de Ahorros del Mediterráneo, 88 Caja Laboral Popular, 93 Caja Madrid, 60, 113, 161 California, 64, 72, 159 Cambodia, 79 Cambria County, 121 Campa, José Manuel, 38 Canada, 55, 57, 58, 62, 69, 73, 76, 120, 184 Canal Satélite Digital, 141 Canals, Jordi, 176, 177 capabilities, 48, 70, 123, 199 and distribution channels, 24, 57, 62, 77, 82, 84, 89–92, 98, 181, 184 internal and external, 66, 75, 77, 97–8, 194–5, 204 of the new multinationals, 31–50, 197–204 index 217 project-execution, 2, 23, 51, 123–4, 131–2, 142–3, 163, 186–7, 193, 195, 197–9, 202–4 CapitaLand, Carapelli Firenze, 59 Carbonell, 58, 59 Cariplo, 155 Carolina, 58 Carrefour, 84, 85 Casa Editorial El Tiempo, 183 Casanova, 20, 177 case-study method comparative as a teaching tool at business schools Castellano, José María, 79 Castellblanch, 64 Castilla, 86 Catalonia, 82, 158, 177 Cavallé, Carlos, 176 Caves, Richard, 52 CEIBS, 174, 178 Cemex, 7, 10, 12, 28, 203 Central America, 69, 149 Centro de Estudios CEAC, 182 Cepsa, 145 Cesky Telecom, 138, 139 challengers, 1, 27, 76, 98 Chile, 1, 3, 4, 5, 9, 45, 72, 83, 135, 153, 154, 159, 169, 171, 178, 183, 188 China, 1, 3, 4, 5, 6, 7, 9, 10, 12, 28, 36, 52, 65, 68, 69, 72, 78, 79, 80, 81, 84, 85, 87, 88, 90, 94, 97, 105, 106, 107, 108, 110, 114, 116, 117, 118, 119, 120, 122, 123, 124, 125, 127, 134, 140, 160, 169, 170, 171, 174, 178, 186, 189, 194 China Netcom, 134, 140 Chupa-Chups, 54 CIE Automotive, 101 Cinta Azul, 59 Citroën, 103, 108, 113, 114 City Developments, Clipper, 89 Codorníu, 14, 62 Colombia, 73, 80, 135, 149, 154, 159, 178, 183, 188 Comarro, 68 Comercial de Laminados, 112 Comet, 59 Commerzbank, 155 Compagnie de Suez, 162 Compía Peruana de Teléfonos, 138 Compass, 22 competitive advantage, 33 Confederation of Spanish Savings Banks, 88 Continental, 169 Cordón Negro, 63 Corporación Gestamp, 18, 101, 102, 110, 111, 115, 123, 124, 125, 195, see Gestamp Corsan, 186 Cortina, Alfonso, 20 Cosmen, Andrés, 172 Cosmen family, 168, 169 Cosmen, José, 166, 168, 171 Costa Rica, 69, 149, 153, 174 Cricket, 89 Croatia, 80 CTC, 135 Cuba, 159 Cuétara, 59, 60 Curitiba, 110 Czech Republic, 69, 72, 108, 110, 139 Daewoo, 105 Daimler-Benz, 102 Danone, 73, 74 Daum Communications, 141 DBK, 169 DeAgostini, 181, 183, 189 Del-Met, 110 Delphi, 102, 125 Denmark, 116, 117, 118, 119, 123 Denso Corporation, 102 Departamento de Acción y Consultoría Externa, 147 Destino, 181 Detroit, 68 Deutsche Telekom, 134 Deutsche Touring, 171 Devro, 66, 67, 69 discriminator, 200 Disney, 83, 85 distribution channels, 24, 57, 62, 77, 82, 84, 89–92, 98, 181, 184 diversification, product, 53, 55, 102 Dominican Republic, 149, 153 Dos en Uno, 73 Dragados, 151 dragon multinationals, Dubai, 11, 12, 45 218 Index Dumez, 162 Dunning, 43, 100, 193 Duro Felguera, 167, 168, 184, 186, 187, 188, 189, 190, 196, 198, 200 EAE, 182 Eastern Europe, 58, 80, 94, 96, 147, 171 Ebensburg, 121 Ebro, 14, 54, 55, 56, 57, 58, 60, 61, 71, 72, 74, 194, 198, 200 Ebro Agrícolas, 56, 57 Ebro Puleva, 14, 54, 55, 56, 57, 58, 60, 71, 72, 74, 198, 200 Ebro valley, 61 Echevarría, Jaime, 66, 68, 70 Eckes, 63 economies of scale, 41, 50, 54, 57, 60, 69, 73, 76, 84, 95, 101, 103, 109–10, 118, 124, 129, 131, 185, 189, 192, 201, 203 Economist Intelligence Unit, 175 Ecotecnia, 119 Ecuador, 149, 153, 178, 183 EDF, 145 Ediciones Deusto, 181 Editis, 184 Editorial Deusto, 182 Editorial Dom Quixote, 183 Editorial Joaquín Mortiz, 183 Editorial Sudamericana, 183 EDP, 122, 143, 144, 182 EDP-Editores, 182 Educa, 86 Egypt, 1, 4, 5, 58, 80, 81, 164, 178 Egyptian General Petroleum Corporation, 150 Eisenhardt, 25 Eko, 86 El Corte Inglés, 85 Electrolux, 94, 96, 97 Electronic Arts, 83 Embraer, 9, 12, 28, 120, 203 Emecé, 183 emerging multinationals, 2, 66 Empresa Cosmen, 168, 169 Empresa Nacional de Telecomunicaciones, 135 Enatcar, 169, 171 En-BW, 144 Endemol, 140, 141, 142 Endesa, 7, 16, 20, 130, 143, 144, 148, 150, 151, 152, 158, 161, 165 Enel, 144, 145, 165 Enercon, 118, 122 Energoinfo, 147 England, 118 ENI, 150 Enka Insaat ve Saayi, 11 Ensidesa, 112 Entel Chile, 135 Entel Perú, 138 EOI, 174 Eroski, 85, 94 ESADE, 174, 179 Escuela de Organización Industrial, 174 ESE, 178 Espasa Calpe, 181 Estampaciones Arín, 114 Eurasia, 69 Eurodom, 96 EUROLINES, 168 Europe, 9, 11, 13, 20, 21, 40, 41, 45, 54, 55, 62, 66, 71, 72, 73, 78, 80, 83, 90, 93, 94, 104, 105, 108, 110, 112, 116, 118, 119, 122, 125, 130, 133, 134, 139, 142, 155, 156, 159, 168, 173, 174, 175, 177, 178, 180, 182, 187, 194 Europe and the North American Free Trade Agreement, 55 European Economic Community, 18, 95 European Union, 18, 55, 58, 83, 95, 101, 104, 114, 133 eurozone, 131, 153 Executive MBA, 175 Exin, 86 expansion: see foreign expansion exploration of new capabilities, 133 Fabrelec, 95 Fábricas Agrupadas de Muñecas de Onil SA, 86 Fagor Ederlan, 101 Fagor Electrodomésticos, 92, 94, 95, 97, 98, 195, 201, 202 Fagor Electrónica, 93, 97 Falca, 87 Famosa, 82, 83, 85, 86, 87, 88, 98, 194, 200 FAW Corporation, 125 FCC, 130, 158 Feber, 88 index 219 Federal Forge, 125 Fénix, 145, 146 Fenosa, 131, 143, 144, 145, 146, 147, 148, 149, 150, 151, 158, 161, 164 Fernández, 170, 174, 177 Ferri, Jaime, 86, 88 Ferrodisa, 112 Ferrovial, 16, 22, 130 Fiat, 102, 103 Fico Co Cipa SARL, 104 Fico Co Triad, 104 Ficosa, 18, 99, 101, 102, 103, 104, 105, 106, 107, 108, 110, 115, 123, 124, 125, 126, 195, 200 Ficosa International, 99, 102, 104, 108 Finland, 76 First Energy Solutions Corp., 121 Flamagas, 82, 89, 90, 91, 92, 197, 200 Flaminaire, 90 Forbes, 2925n, 78 Ford, 89, 100, 101, 102, 103, 104, 108 Ford España, 89 foreign direct investment (FDI), 2–6 defined, 2–3 Spanish, 11–23 See also MNE foreign expansion, horizontal and vertical, 29–30 Formosa Plastics, Fort Worth, 72 Fortis, 155 Fortune Global 500 6, 10, 76 Foya de Castalla, 86 France, 3, 4, 5, 58, 61, 65, 76, 86, 89, 94, 96, 104, 106, 108, 113, 133, 134, 155, 161, 162, 168, 170, 171, 175, 184 France Telecom, 133 Fraser and Neave, Freixenet, 13, 14, 53, 54, 55, 61, 62, 63, 64, 65, 66, 71, 74, 194, 200 Freixenet Alemania GmbH, 62 Freixenet Sonoma Caves, 64 Freixenet USA, 62 French Perfect Wind SAS, 144 Friol Italia, 60 Funcor, 93 García Márquez,Gabriel, 183 Gal, 90 Galicia, 78, 80, 115, 160 Gamesa, 15, 18, 101, 102, 116, 118, 119, 120, 121, 122, 123, 124, 195, 198, 200, 202, 203 Gamesa Energía, 120, 121, 122 Gamesa lica, 120, 121 Gamex, 69 Gap, 79 García, Sever, 76, 81 Garfield, 88 Gas Natural, 15, 17, 20, 144, 145, 152 Gaz de France, 162 GazdeFrance-Suez, 157 Gazmash, 97 Gazprom, 9, 12, 97 GDA, 96 GE, 94, 97, 118, 120, 122 GE Wind, 118, 120, 122 General Domestic Appliances, 96 General Electric Power Systems, 186, 188 General Motors, 100, 101, 102, 103, 108 generalist, 200 Geneva, 170 Germany, 3, 4, 5, 60, 62, 63, 65, 68, 69, 76, 94, 104, 106, 107, 114, 116, 117, 118, 123, 125, 134, 137, 139, 155, 168, 171, 178 Gestamp, 101, 102, 111, 113, 114, 115, 123, 124, 126, 200 Gestamp Automoción, 113, 114, 115 Ghemawat, Pankaj, 92 global alliance, 35, 138 Global Executive MBA, 175 global generalist, 200 global niche player, 197, 200 Global Wind Energy Council, 117 Gloria Ferrer, 64 Goldman Sachs, 122 Goldwind, 120 Gonvarri, 111, 112, 113, 115, 116 Gonvarri Galicia, 113 Gonvarri Infraestructuras Eólicas, 115 Gonvauto, 113 González Barrera, Roberto, 72 Granini, 63 Greece, 81 Gruma, 10, 54, 55, 71, 72, 74, 194, 197, 200 Grupo Antolín, 13, 15, 101 Grupo Bimbo, 53, 71, 72 Grupo Ferrovial, 7, 15, 18 Grupo Globo, 183 Grupo Industrial Arana, 58 220 Index Grupo Modelo, 11 Grupo SOS, 14, 54, 55, 58, 60, 74 Grupo Velasco, 112 Guandong Province, 79 Guangzhou, 87 Guatemala, 72, 80, 149, 153, 178 Güendolina, 86 Guyana, 60 H&M, 78, 80 Haier, 10, 28, 36, 94, 96, 97, 200, 202, 203 Hamel, 25, 124 Hansen Transmissions, 123 hard services, 168 Harper, 184 Harvard, 173, 175, 176, 178, 189 Harvard Business School, 175 Haryana, 110 Hasbro, 83, 84, 85, 86 Henkel, 175 Hennart, 30, 40, 152, 204 Henri Abelé, 64 Hernández Callejas, Antonio, 56 Hernández Callejas family, 56 Hiasa, 112 Hidrocantábrico, 144 Hidroeléctrica Española, 143 Hijos J Sos Borrás, 59 Hikino, 42, 44, 124, 131, 187 Hipercor, 85 Hisusa, 161, 162 Hoechst, 68 Holland, 60 Home English, 182 Hometek, 95 Honda, 102 Hong Kong, 3, 4, 5, 7, 8, 9, 84, 87, 172 Horizon Wind Energy, 122 horizontal expansion, 30 Huawei, 10 Hutchison Whampoa, 7, Hymer, Stephen, 27, 28, 30 Hyundai, 6, 7, 76 IAE, 178 Iberáfrica, 147 Iberdrola, 16, 22, 116, 119, 130, 143, 144, 148, 152, 186 Iberduero, 143 Iberian Peninsula, 59, 104 Iberinco, 186 Iberpacific, 147 Iberpapel, 66 Ibersis, 147 Ibi, 86 IDE, 178 IE Business School, 174, 179 IE Universidad, 179 IEEM, 178 IESE Business School, 167, 168, 173, 174 Imatra Kilsta AB, 125 IMD, 174 IME Institute for Media Entertainment, 178 Imperial Tobacco, 91 Iñaki Santillana, 136 INALDE, 178 INCAE, 174 Indesit, 94 India, 1, 3, 4, 5, 9, 10, 12, 13, 28, 58, 78, 79, 80, 81, 91, 105, 106, 107, 110, 114, 117, 118, 120, 122, 123, 124, 125, 127, 186, 188 Inditex, 13, 77, 78, 79, 80, 81, 82, 98, 194, 200, 203 Indonesia, 1, Indra, 152 Industrial Yorka, 109 Industrias Alimentarias de Navarra, 68 Industrias Metalúrgicas Pescarmona, 11 Infosys, 9, 12, 127, 190, 203 Injusa, 87 INSEAD, 174 intangible assets, see capabilities Institute of Higher Business Studies, 174 Instituto de Empresa, 179 Instituto de Estudios Superiores de la Empresa, 174 Instituto Hispánico del Arroz, 56 Interagua, 159 Interbrand, 76 Interforum, 184 International Energy Agency, 185 International Faculty Development Program, 178 International Organization of Motor Vehicle Manufacturers, 100 International Trade Commission, 68 Interván, 59 Inveralia, 88 index 221 investment development path, theory of, 100 IPADE, 178 Ireland, 1, 3, 4, 5, 7, 10, 134 Irizar, 172 ISE, 178 Ishikawajima-Harima Heavy Industries, 188 Isidro Rico Juan, 86 Isidro Rico Miralles, 86 Isolux, 186 Italy, 3, 4, 5, 60, 61, 72, 76, 86, 94, 96, 104, 106, 109, 115, 118, 137, 144, 150, 155, 165, 181, 188 ITERA, 150 Itochu, 65, 90 ITT, 132 joint ventures, 23, 72, 81, 96, 103–7, 114, 125, 137, 139, 160, 171, 172, 181, 188 Japan, 4, 5, 65, 76, 81, 84, 89, 105, 106, 120, 155, 184, 188 Jove, José Luis, 160 JP Morgan, 157 Juguetes Picó, 89 Kellogg, 178 Kemper, 155 Kenya, 147, 178 Kenya Power & Lighting Company Ltd (KPLC), 147 Keolis, 171 Klöckner & Co AG, 112 Koipe, 59 Koipesol, 59 Koteksprodukt, 69 Kraft Foods, 57 Kunshan, 114 Kuwait, 9, 56, 57, 80 Kuwait Investment Office, 56, 57 La Caixa, 161, 162 La Cigala, 58 La Razón, 182 Lacks Enterprises, 109 Lágrima Real, 65 Lames Ibérica, 103 Laminados Velasco, 112, 114 Lara Bosch, José Manuel, 182 Larios, 88 Larousse, 181 Las Flores I, 188 Lassie, 59 latecomer firms, Latin America, 2, 9, 10, 20, 44, 45, 47, 54, 58, 62, 71, 72, 74, 80, 82, 89, 90, 96, 116, 119, 133, 134, 135, 137, 139, 142, 147, 148, 149, 150, 153, 154, 155, 157, 163, 171, 179, 180, 182, 183, 187, 188, 189, 190, 192, 194, 196 LBS, 178 Lego, 83, 86 Lenovo, 10, 12 León, 78 LG, 6, 8, 94, 96, 203 Lille, 175, 176 Lisbon, 87 Lleida, 104 London Business School, 174, 178 Long Distance, 160 Los Palacios, 59 Louit, 58 Lukoil, Lycos, 140, 141, 142 Lyon, 170 Lyonnaise des Eaux, 132 Mabe, 36, 97, 200, 202 Madrid, 17, 23, 61, 66, 87, 112, 151, 170, 174, 175, 179 Magna International, 102 Magneti Marelli, 105 Mahatma, 58 Maier Sociedad Cooperativa, 109 Makro, 85 Malaysia, 3, 4, 5, 7, 9, 10, 13, 97 Mango, 82, 90 Manila Electric Railroad and Light Company (MERALCO), 147 market reforms, 128, 130, 144, 154, 163, 185 Marrakesh, 168, 171 Martini Rossi, 61 Marvel Comics, 83 Matricería Deusto, 114 Mattel, 83, 84, 85, 86 Maurice Lecoy, 104 MBA, 173, 175, 176, 179 McDonald, 72 222 Index MCI, 138 McKechnie, 109 Mera, Rosalía, 78 Meralco, 149 Mercedes-Benz, 100 mergers and acquisitions, 2, 11, 18–24, 35–6, 40, 44–50, 53–61, 65–6, 71–5, 77, 88, 92, 95–8, 110, 113–4, 120, 123–5, 134–84, 190–9, 201 Merloni, 96 Metalbages, 114 Metalúrgica Gerdau, Metropolitan Life, 155 Mexico, 1, 3, 4, 5, 7, 9, 10, 12, 21, 28, 36, 45, 54, 60, 64, 66, 69, 71, 72, 81, 83, 84, 87, 97, 99, 105, 106, 108, 110, 115, 133, 136, 139, 149, 153, 154, 178, 183, 188 Mexico City, 87 Michigan, 68, 110, 178 Microsoft, 83, 84 Middle East, 2, 11, 58, 78, 80, 164 Milady lipstick, 89 Milan, 87 Minerva Oil, 59 Minneapolis, 121 Minnesota, 120 Minotauro, 183 Minute Rice, 57 Mira Vidal, Ramón, 86 MIT (Massachusetts Institute of Technology), 176, 178 Mitsubishi Heavy Industries, 188 Mobile Telecommunications Company, 11 Modelo, 12, 54 Moët & Chandon, 61 Moldova, 149 Mollet del Vallès, 106 Mondragón, 15, 92, 93, 95, 97, 109 Mondragón Corporación Cooperativa, 92, 93, 109 Monterrey, 105 Moreira Gomes e Costa, 171 Mori Lee, 81 Morocco, 58, 79, 94, 96, 115, 134, 137, 159, 168, 170, 171 MR Ediciones, 181 Mr Potato Head, 84 Mrs Baird, 72 Muerza, 68 multi-domestic generalist, 200 multilatinas, multinational enterprise (MNE) new, 1–11, 31–52 theory of, 192, 204 Munich, 174 Myrurgia, 90 Nancy (doll), 86 Nanjing, 172 Nanyio Transportation Services Co Ltd, 172 Narula, 100 Natura Cosméticos, Naturgas, 145 Naturin GmbH, 67, 68 Navarre, 66, 113 Navitas, 120 NEG Micon, 118 Nenuco, 86 Nepture Orient Lines, Nestlé, 54, 73, 74 Netherlands, 3, 4, 5, 59, 72, 76, 123 network organization, 44, 51 networking skills, 2, 33, 36, 51, 60, 197, 199, 202–4, see also capabilities new multinationals, see multinational enterprise New World Pasta, 57 New York, 137, 174 Nicaragua, 149 niche player, 200 Nigeria, 1, 178 Nintendo, 83, 84, 85 Nissan, 100 Nomura, 155 Norconsult, 146 Norsistemas, 146 North Africa, 66, 96 North America, 11, 45, 54, 56, 69, 72, 118, 137, 138 Northern Europe, 80 Norway, 118 NTU, 178 O2, 22, 134, 139 Ocean, 96 OHL (Obrascón Huarte Ln), 130 Olam, index 223 oligopolistic rivalry, 52, 57 Oman, 80 Onda Cero, 182 Onil, 83, 86, 87 Onilco Innovación SA, 87 Opel, 114 Opus Dei, 174, 176, 177 Orange, 133 Orascom, 11, 164 Original Equipment Manufacturers, 111 Ortega, Amancio, 78 Oryza, 58 Oviedo, 170 PAD, 178 Pagani family, 73 Paidós, 183 Palatchi family, 82 Panama, 153 Panrico, 72 Panzani, 57 Papelera Guipuzcoana de Zicuñaga, 66, 67 Paraguay, 73 Paris, 87, 170 Paseig de Gràcia, 81 path dependence, 36 Paulova, 86 Paya, 86 Pegaso Telefonía Móvil, 139 Peguform France, 110 Penedès, 61, 65 Pennsylvania, 121 Pérez, Florentino, 127, 152 Peru, 68, 72, 135, 138, 154, 178, 183, 188 Peugeot Citroën, 100 PhD in Management, 175 PhD program, 178 Philadelphia, 121 Philippines, 54, 149, 178 Pictolin, 59 Pierina, 86 Planeta, 167, 168, 180, 181, 182, 183, 184, 189, 190, 191, 196, 200, 203 Planeta Brazil, 183 Play by Play, 88 Plush Games, 88 Pokémon, 88 Poland, 10, 69, 91, 94, 96, 105, 184 political skills, see capabilities Polyplastics, 110 Porto, 80, 103 Portugal, 1, 10, 59, 60, 79, 81, 91, 103, 104, 106, 114, 115, 137, 139, 143, 144, 159, 160, 168, 170, 171, 178, 180, 183 Portugal Telecom, 137, 139 Prahalad, 124 Premio Planeta, 180 Prieto Iglesias, José Manuel, 146 Priorat, 65 PRISA (Promotora de Inforamaciones SA), 141 project-execution capabilities, see capabilities Pronovias, 13, 14, 76, 77, 81, 82, 98, 194, 198, 200 Pronuptia, 81 PSA Peugeot Citroën, 102 PTT Telecom, 138 Public Works Financing, 130 Puerto Rico, 58, 59, 83, 135, 154 Puig, 89, 174, 177 Puig, Antonio, 89 Puig Beauty & Fashion, 90 Puig family, 89 Pujol Artigas, José María, 102 Puleva, 56, 57, 58, 194, 199 Puleva Biotech, 58 Pune, 123 R&D (research and development), 38, 60, 64, 69, 84, 92, 95, 96, 99, 104, 106, 107, 114, 119, 123 Radica Games, 84, see also technology Random House, 184 Rasoi Group, 60 Reddy, 152 Reis Fit, 58 Reliance Steel & Aluminum Co, 112 Renault, 100, 101, 102, 103, 108, 114 Renault-Nissan, 102, 108 Rendell, Ed, 121 René Barbier, 64 REpower Systems AG, 123 Repsol, 7, 15, 17, 20, 21, 130, 175 resources, see capabilities Retevisión, 151 Rias Baixas, 65 Ribera del Duero, 65 Riberas Pampliega, Francisco, 111 224 Index Riceland, 58 Ris Fix, 58 Riviana Foods, 57 Rodoviaria Tejo, 171 Romania, 105 Ronzoni, 57 Royal Bank of Scotland, 88, 155 Rubiales, Manuel, 87, 88 Rumasa, 64 Russia, 1, 3, 4, 5, 9, 10, 12, 65, 69, 91, 97, 105, 107, 114, 127 Rutas del Cantábrico S.L., 169 Ryerson Inc., 112 Sacesa, 107 Sacyr Vallehermoso, 158 Sagunto, 112 Sala Vivé, 64 Salamanca, 170 Salazar, Jaime, 58 Saludaes, 59 Samsung, 6, 7, 12, 76, 203 San Juan, 87 San Miguel, 54 Santander, Banco, 17, 18, 21, 130, 131, 133, 151, 152, 153, 154, 155, 156, 158, 163, 164, 175, 192, 196, 198, 200, 203 Santander Investment, 157 Sara Lee, 59 Sasso, 58, 59 Saudi Arabia,10, 59, 81 SBS, 178 scale, see economies of scale School of Business Administration, 178 Scotland, 66, 118, 125, 155 Scottish Power, 22, 144 Scottish Stampings Ltd, 125 SEAT, 103, 113 Seix Barral, 181 Sempere, Ramón, 86 Serbia, 69, 80 services, hard and soft, 166–7 professional and non-professional, 167 Servitje family, 71 Severn Trent, 158 Severstal, 9, 114 Seville, 59 Shanghai, 87, 90, 91, 172, 175 Shenzhen, 172 Shijiazhuang, 172 Siemens Westinghouse, 186, 188 Sikorsky, 120 Silicon Valley, 140, 175 Singapore, 2, 3, 4, 5, 7, 9, 10 Single European Act in 19, 138 SingTel, 7, Sinovel, 120 Sistema de Gestión Comercial, 146 Sistema de Gestión de la Distribución, 146 Slim, Carlos, 133 Slovakia, 115 Snoopy, 88 Sociedad General Azucarera, 56 Sociedad General de Aguas de Barcelona, 157 Sogecable, 141 Sol Meliá, 17, 18 Sollac Aceros, 113 Sony, 83, 84, 85 Soria, 104 SOS, 55, 58, 59, 60, 61, 71, 72, 74, 194, 198, 200 Sos Arana Alimentación, 59 SOS-Cuétara, 59 South Africa, 3, 4, 5, 13, 134, 150 South America, 66, 69 South Korea, 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 36, 45, 46, 52, 76, 80, 84, 92, 94, 99, 105, 106, 122, 126, 141, 203 Southern Europe, 54, 80, 192, 193 Southfield, 110 Sovereign Bankcorp, 155 Spain, 1, 2, 3, 4, 5, 6, 7, 9, 10, 11, 13, 18, 19, 20, 21, 22, 23, 24, 25, 28, 45, 52, 54, 55, 56, 57, 58, 59, 60, 61, 63, 64, 65, 69, 72, 73, 76, 77, 79, 81, 82, 83, 84, 86, 87, 88, 89, 91, 93, 94, 95, 99, 100, 103, 104, 106, 107, 108, 110, 112, 114, 115, 116, 117, 118, 119, 120, 122, 124, 126, 131, 132, 133, 135, 136, 140, 141, 143, 144, 145, 146, 148, 149, 150, 152, 153, 154, 156, 157, 158, 160, 165, 166, 168, 169, 170, 171, 172, 174, 177, 179, 180, 182, 183, 185, 188, 190, 191, 193, 194, 195 Spanish Association of Toy Manufacturers, 85 Spanish Ganomagoga Group, 115 index 225 Special Economic Zone, 172 Spiderman, 83 St Joseph’s University, 121 strategic alliances, see alliances strategies of the new MNEs, 197–9 Suez, 145, 157, 158, 160, 161, 162 Sultanate of Oman, 150 SUMAQ, 179 Sun Microsystems, 175 Super Mario, 88 Supra, 170, 172, 201 Suzlon, 120, 122, 123, 198, 200 Suzlon Energy Ltd, 122 Suzuki, 101, 108 Sweden, 31, 62, 76, 78, 114, 118, 125 Swedish Match, 89, 90 Swiss Telecom, 138 Switzerland, 62, 76, 107, 137, 168, 170, 184 Taiwan, 1, 2, 3, 4, 5, 6, 7, 9, 10, 11, 12, 99, 126 Taiwan Semiconductor Manufacturing Corporation, Target, 84 Tarragó, José María, 102 Tas Choapa, 171 Tata Consultancy Services, 9, 28, 127, 190 Tata Group, 81, 105 Tata Nano, 107 Tavex, 13, 14 Tayasal Escuela de Negocios, 178 technology see also R&D Technomatic, 103 Técnicas Reunidas, 186 Teepak, 67, 68, 69 Telecom Italia, 140 Telefónica, 7, 16, 18, 20, 21, 22, 130, 131, 132, 133, 134, 135, 136, 137, 138, 139, 140, 141, 142, 151, 152, 157, 175, 198, 199, 200, 203 Telefónica Chile, 135 Telefónica Internacional, 136 Telemig Celular, 139 Telerín, 86 Telia AB, 138 Telmex, 133 Tenaris, 11, 12, 203 Tennessee, 110 Terra, 140 Texas, 121 Thailand, 1, 9, 10, 58, 69, 97, 99 The Limited, 79 third-world multinationals, Thomson Electroménager, 96 Thyssen Ros Casares, 112 Thyssenkrupp Steel, 112 Tianjing, 172 Tibi, 86 Tokai, 89, 90 Tokai Corporation, 90 Torras family, 109 Torreal, 88 Toyota, 76, 102, 110 Transpar Ibérica, 103 Transportes Colectivos, 169 Trend, 81 Tunisia, 58, 59, 60, 80 Turkey, 1, 4, 5, 9, 10, 36, 79, 80, 81, 91, 97, 105, 107, 114 turnkey plants, 24, 44, 115, 128, 146, 167, 184–90, 198 Turytrans, 169 UBS, 107 UK, 62, 104, 119, 120, 134, 139, 150, 155, 168 ULGOR, 93 unconventional multinationals, Unilever, 54, 60, 74 Union Carbide, 67, 68 Unión Eléctrica, 143, 145 Unión Eléctrica Fenosa, 143 Unión Fenosa, 130, 131, 133, 143, 145, 146, 147, 148, 149, 150, 151, 152, 155, 157, 158, 160, 162, 164, 196, 198, 199, 200 Unisource, 138 United Arab Emirates, 1, 3, 4, 5, United States, 3, 4, 5, 13, 21, 40, 41, 55, 57, 58, 60, 61, 62, 65, 66, 69, 71, 72, 73, 74, 76, 78, 80, 84, 89, 90, 108, 116, 117, 118, 119, 120, 121, 122, 123, 155, 159, 177, 194 Universidad Comercial de Deusto, 174 Universidad SEK, 179 Universitat Ramón Llul, 179 University of Barcelona, 182 University of Navarra, 174 University of Pennsylvania, 121 University of Uppsala, 31 Uno-e, 140, 141 226 Index Uruguay, 73, 150, 153, 159, 178 Usinas y Transmisiones Eléctricas, 147 Usinor, 113, 114 Vaillant, 96 Valencia, 112 Valero, Antonio, 175 Valladolid, 112 Valley of Toys, 83 Velázquez, Cándido, 135 Venezuela, 1, 72, 80, 135, 154, 183, 188 Veolia, 158 Verizon, 134, 136 Vernon, 27, 31 vertical expansion, 29 vertical integration, 102, 195 Vía Digital, 141 Viajes por Carretera SA, 169 Vietnam, 79 Villalonga, Juan, 138, 140 Viscofán, 13, 14, 54, 55, 66, 67, 68, 69, 70, 71, 74, 194, 197, 200, 203 Viscofán Brasil, 68 Viskase, 66, 67, 68, 69 Visteon Corp., 125 Vitens, 158 Vitoria, 93 Vivo, 139 Vodafone, 133, 134 Volkswagen-SEAT, 100 Vueling, 182 Wal-Mart, 60, 76, 84 Want Want, Wanxiang, 124, 125, 200 Warner Bros, 83, 85 Warren Buffet, 78 Wegu Ibérica, 110 Wenzhou, 90 Western Europe, 83, 89, 96, 108, 150, 153 Western Water, 159 Wharton School, 173, 176, 178 Windstar, 122 Wingara Wine Group, 65 Wipro, 9, 13, 127, 190 Wired, 78 Wonder, 59 World Bank, 127 World Investment Report, 19, 23 World War II, 174 WorldCom, 138 Wrozamet, 96 Yamita, 86 YPF, 7, 17, 20, 21, 130 Yvon Mau, 65 Zanini, 13, 15, 101, 102, 108, 109, 110, 116, 123, 124, 126, 195, 197, 200 Zanussi, 96 Zara, 13, 14, 76, 78, 80, 90 Zavod Avtocomponent, 105 Zed, 182 Zhejiang, 90 Zorba, 78 Zurich, 170 ... at length in Chapter The largest non-financial new multinationals in terms of foreign assets appear in Table 1.3 They operate in a variety of industries The New Multinationals Table 1.1 Outward... return the time to them, but we hope that they will see in the final product that it was worth all the effort The new multinationals The new multinationals have some distinct advantages in their... Whampoa, the world’s largest port operator More recently, the new multinationals from Brazil, Russia, India, and China (BRIC) have made great inroads into the global economy Among Brazilian firms,