Question

Create an idea for your own MNC to conduct international business. Your idea should be simplified to the degree that you could possibly implement it someday. However, your idea should also be sufficiently creative to be successful if done properly. Your idea should focus on one country and one foreign currency since many MNCs are focused in this manner when they are first created. So that you can recognize the issues regarding exchange rate risk that is discussed throughout this text, you should assume that you will receive foreign currency when selling your product. Your idea should be for a small MNC instead of a large MNC because even most large MNCs began as small firms. The following questions will help you define your MNC idea:

What is the product that you plan to sell?

What foreign country do you plan to target?

How will you sell the product in that country? (i.e., Through a distributor? By mail?)

Is there some evidence that consumers in that country would buy this type of product?

Do you need to purchase supplies or to hire labor?

Will any expenses you incur from producing the product be in dollars or some other currency

Answer 1

The MNC product that I plan to sell is cosmetics. These would be imported from China and I plan to sell them to countries such as India and SriLanka. I will begin with Sri Lanka since there are not too many competitors there. I will set up small kiosks in malls and in popular markets. This will be sold through brand name "New U". The demand for cosmetics is growing in Sri Lanka which is confirmed by various reasearch reports. I would need to purchase the cosmetics from China and hire staff to sell the same in my kiosks. The expenses will be in Sri Lankan rupees and so will be the income. The expense of procuring the materials will be in Chinese yuans.