Relationships between the internationalization and operations strategies decisions of multinational companies in the soybean chain

Silva, Ronald Tavares Pires da; Finger, Andrew Beheregarai; Vieira, Luciana Marques; Teixeira, Rafael

doi:10.1590/0104-530X1814-17

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Original Article • Gest. Prod. 24 (4) • Oct-Dec 2017 • https://doi.org/10.1590/0104-530X1814-17 copy

Relationships between the internationalization and operations strategies decisions of multinational companies in the soybean chain

Authorship SCIMAGO INSTITUTIONS RANKINGS

Abstract

Internationalization decision-making relates to the location of subsidiaries while international operations define the configuration and coordination of the processing plant activities. This paper aims to identify how internationalization strategies are related to operation strategies decisions. We illustrate this relationship with two case studies of multinational companies in the soybean chain located in Brazil. The analysis of secondary data, on-site visit to the processing plants and interviews, suggest that the location is determinant to all the other strategic operations decision categories. Findings suggest that the study framework is useful to understand international operations in other commodities chains.

Keywords:
Decision categories; International operations strategy; Internationalization strategy; Multinationals; Soybean chain; Commodities

Competitive advantages in international strategies of the multinational of commodities.	ALFA Company	BETA Company
Companies started activities in Brazil, through FDI, acquiring native companies with culture and knowledge in the commodities sector (O)	In 1905 it entered Brazil acquiring a Brazilian wheat grinding company. It made other acquisitions in the food sector among other segments.	It arrived in Brazil in 1965, directly in the agricultural segment, leasing and acquiring warehouses, dryers/processors of commodities (corn).
Companies seek FDI: fiscal and exchange incentives by the government; infrastructure for plants; low-cost labor; possibility of expansion in productive volumes. (O)	Factors that impact competitive advantages in the decision-making process of international strategies.
Geographic extensions available for soybean cultivation and environmental conditions, determining factors when chosen Brazil (I).	The Companies emphasized that such elements are fundamental. This elements impact simultaneously on decisions of international/operations strategies. In Brazil - unique in world terms.
Strategic positions on international decisions in the soybean chain. (I)	Inaugurated in March / 2013 - Nova Mutum (MT) - a biodiesel beneficiation plant from soybean. It was a strategic step to act in a complementary sector, expanding participation in the soybean chain.	High “Brazil cost” - inflation, exchange, labor, regulatory milestones, and logistical “chaos” in the commodity chain. Investments in operations in South Africa, and construction and management of one of Brazil's largest port terminals for soy.
Location Motivators (L) (Dunning, 1988aDunning, J. (1988a). The theory of international production. The International Trade Journal, 3(1), 21-66. http://dx.doi.org/10.1080/08853908808523656. http://dx.doi.org/10.1080/08853908808523... )	Both organizations seek strategic resources and perceive operations as competitive advantages in Brazil or in the world. Focus on new business opportunities in agribusiness segments.

Operations Estrategies	ALFA Company	BETA Company
About the coordination / configuration of the soybean chain.	Strategic position in operations and in the commodities segment. Converged multidomestic activities for the categories of local operations decisions.
Strategic alignments - reconcile economic and sociocultural differences that each market has, ensuring what was planned.	Development and constant updating according to specific plans, in BP (business plan).	Permanent strategic planning.
Existing trade-off issues.	Corrective actions to solve logistics problems.

Similarities between perceptions about strategies	ALFA Company	BETA Company
Capabilities	Differences in technology between harvesting and grain storage capacities.	Involve production volumes, technology and process detailing.
Installations	Prioritize facilities located near sources of raw material (farm), logistic conditions and facilities with supply chain agents.	Prioritize facilities located near sources of raw material (farm), logistic conditions and facilities with supply chain agents.
Technology	Presence of partnerships for development, with Embrapa and experiments in rural properties.	Presence of partnerships for development, with Embrapa and ESALQ, in addition to experiments in rural properties.
Vertical Integration	Present at all levels of the soybean chain. Reaches all links. Bureaucratic factors affect negotiation and logistics problems.	Active in all links of the soybean chain. Especially issues on logistics, transport, and management of ports.
Workforce	Qualification of employees, safety at work, training, growth opportunities, internal policies for people.	Concern about behaviors that motivate teams to work in leadership and self-assessment.
Quality	Permanent concern in maintaining quality of the grains (moisture, damages and burned).	Permanent concern in maintaining quality of the grains (moisture, damages and burned). Own internal programs already mentioned.
Planning and production control	All planning carried out by business plan (BP), with one year in advance discussed at all levels, commercial and operations.	They follow the company's global strategic planning, integrated with Brazil with other parts of the world.
Organization	Autonomy of the subsidiary based on BP actions.	Differentiated characteristics due to the behavior of a family business.

Universidade Federal de São Carlos Departamento de Engenharia de Produção , Caixa Postal 676 , 13.565-905 São Carlos SP Brazil, Tel.: +55 16 3351 8471 - São Carlos - SP - Brazil
E-mail: gp@dep.ufscar.br

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