Use this information for the questions:
Royal Dutch Schell is very successfull in the European Union and the third oil and gas company in the world. the history starts with the company The Royal Dutch Shell Group was created in April 1907 through the amalgamation of two rival companies The Royal Dutch Petroleum Company and of the Netherlands and the Shell Transport and Trading Company Limited of the United Kingdom. The objectives are to engage efficiently, responsibly and profitably in the oil, gas, chemicals and other selected businesses and to participate in the search for and development of other sources of energy. The advantage of my choice is Shell has extensive crude oil assets, the fact is that about 48% of overall production comes from natural gas. another advantage is shell uses exploration and development of energy projects. The disadvantage is the deep water drilling and tar sand harvesting. Another disadvantage is that they agressivly cuts cost. The MNC might may invest funds in a financial market outside its own country probably because they believe that the currency of country that they invest will appreciate in future. The financial institutions prefer to provide credit in financial markets outside their own country because they want to diversify their credit so that they are not dependent on single country’s economic conditions.
The most popular way for international expansion is for a local firm to acquire foreign companies. One of the most benefits for international expansion is global distribution capability that helps expanding the market share.There are different implications of running a company that is within or outside of the European Union. If you were the head of a firm based in the United States, please answer the following questions, providing the rationale behind your answers:
- Would you seek to acquire a company within the European Union or outside of it? Why?
- Describe the advantages and disadvantages of the choice you made.
- Describe the advantages and disadvantages inherent in the option you did not choose.
- Explain why an MNC may invest funds in a financial market outside its own country.
- Explain why some financial institutions prefer to provide credit in financial markets outside their own country.
