SUNGA, MARLON AMIEL M.

BSBA 2A
INTERNATIONAL BUSINESS AND TRADE

ACTIVITY 1 - INDIVIDUAL ASSIGNMENT

1. MICROSOFT
Microsoft Corporation (abbreviated as MS) is an American multinational technology
company with headquarters in Redmond, Washington.

 Business Model:
The business model of Microsoft develops, designs, supports, licenses, and sells
computer software, personal computers, consumer electronics, and related services.
According to the website of The Business Model Analyst, since its foundation for more
than 45 years ago, Microsoft business model has changed over the years. Since
Microsoft provides systems and software for both entertainment and business, its core
operations involve sale, distribution, and support for those solutions. But its business
model actually encompasses few types, in order to sustain all products and services,
which includes:
- Ingredient Branding: Microsoft is known for its personal computer operating system
software and has a widely known brand in the area of personal computing. Hence,
on computers running the Microsoft operating system, Microsoft is also branded to
signal the customer what software runs on the device. This is important as the
operating system to many customers is as important as the actual device
specifications.
- Layer Player: Especially in the area of personal computers, Microsoft is known as
software provider. It’s core competency is to provide the operating system and
compatible software such as the Microsoft Office package. However, in most of the
cases, the company is not involved in the design and manufacturing of the hardware
its software is running on.
- Lock-in: By providing the most used operating system for personal computers,
Microsoft has the advantage to create an environment which prefers their other
software solutions such as Internet Explorer or the Office package over competing
products. Also, the programs on a Microsoft operating system are ususally not
compatible with other operating systems from companies such as Apple or Linux.
Hence customers have a barrier to switch to another operating system as they would
loose their software programs.
- Solution Provider: Microsoft offers everything needed to run a personal computer.
This includes the operating system as well as support software such as an internet
browser of the office applications.
- Subscription: Microsoft used to sell their Microsoft Office programs for a one-time
fee. New versions of the software had to be purchased again. However, they
introduced Office365, allowing users to subscribe for a monthly or annual fee and
always get the latest version of the Office software on their device. This also allows
 Microsoft to eliminate product CDs but can distribute its software via downloads from
its website.

 Financial Standing:
As reported on their website, in year 2021, they delivered $168 billion in revenue, up 18
percent year-over-year. Operating income grew 32 percent to $70 billion. And they
continue to create successful new franchises. LinkedIn and their security business both
passed $10 billion in annual revenue for the first time.

 Why They Chose To Locate To Other Nation:

Based on the official website of Microsoft, they stated that they have operations centers
that support all operations in their regions, including customer contract and order
processing, credit and collections, information processing, and vendor management and
logistics. To serve the needs of customers around the world and to improve the quality
and usability of products in international markets, they localize many of their products to
reflect local languages and conventions. Localizing a product may require modifying the
user interface, altering dialog boxes, and translating text.

2. IBM
International Business Machines Corporation or IBM is multilingual IT Company based in
America.

 Business Model:
The business model of IBM or International Business Machines Corporation revolves
around Cloud computing, Artificial intelligence, Computer hardware, and Computer
software. IBM is dedicated to innovate and develop in the fields of mainframe,
nanotechnology, personal computers to digital data management, virtualization and
cloud services. Channelization of IBM business model occurs through direct sales, PR,
and advertising. Plus, it is involved in targeting large corporations as their customer
segments.

The business model of IBM is primarily involved in two types of business activities such
as:
- Research and Development
- Operations

 Financial Standing:
While hybrid cloud revenue growth was the obvious outlier result from the company’s
matrix of Q4 outcomes in 2021, there were other bright spots worth considering.
Software revenues were up 8% (10%, constant currency), and consulting-derived top
line was up a strong 13% (16%, constant currency). The result of the generally positive
results was a strong profit outcome. IBM reported gross profit of $9.5 billion, up a slim
2.5%. However, that figure converted into $2.9 billion in net income at Big Blue, up a
shocking 183% on a pre-tax basis. The company’s profit, after taxes, still came to a
strong $2.5 billion, up a slightly more modest 107% compared to the year-ago quarter.
 In simple terms, IBM’s business remains a very lucrative one. And one that, finally, after
years and years of stagnation and decline from a volume (revenue) basis, has not only
managed a string of growth, but, in its most recent quarter, pretty solid top line
expansion, to boot.

 Why They Chose To Locate To Other Nation:

IBM (IBM, Fortune 500) has relocated some employees overseas, but those moves
sometimes involved Americans training foreign workers, followed by a pink slip for the
U.S. employee, according to Trip Chowdhry, senior analyst at Global Equities Research.

Analysts have varied opinions on why IBM chose to employ this new strategy, including
further staffing up in foreign posts; retaining and exporting the skilled resources it has
developed; and cost-saving alternatives to layoffs here. The company has been fairly
mum on the issue. Asked about overall corporate strategy, an IBM spokesperson said
only that more than a dozen employees have taken advantage of the new program and
that most of them were native to the country they moved to.

A business analyst Carl Claunch suggests that since the company is hiring in emerging
countries anyway, it's preferable for IBM to retain the people they already know. He said
that IBM is pretty sophisticated about its onshore and offshore employment. The
company want to have resources in the same location as their customers with an
understanding of the local business environment.

3. NESTLE
Nestle is a Swiss multinational food and drink processing coglomerate corporation
headquartered in Vevey, Switzerland. It is the largest food company in the world,
measured by revenues and other metrics, since 2014.

 Business Model:
Nestlé is a powerhouse of consumer brands spanning across baby foods, bottled
waters, powdered drinks, cereals, coffee, drinks, pet-care, and more. The company
made almost $92 billion in 2018, with high margins on its powdered and liquid beverages
(coffee, cocoa, and malt beverages and tea categories).

 Financial Standing:
Organic growth reached 8.1%, with real internal growth (RIG) of 6.8% and pricing of
1.3%. Growth was supported by continued momentum in retail sales, a return to growth
in out-of-home channels, increased pricing and market share gains. Total reported sales
increased by 1.5% to CHF 41.8 billion (6M-2020: CHF 41.2 billion). Foreign exchange
reduced sales by 3.5%, reflecting appreciation of the Swiss franc against most
currencies. Net divestitures had a negative impact of 3.1%. The underlying trading
operating profit (UTOP) margin was 17.4%, unchanged versus the prior year. The
trading operating profit (TOP) margin decreased by 20 basis points to 16.7%.

 Why They Chose To Locate To Other Nation:

 In 1990s Nestlé faced significant challenges in its market growth. Despite of the stagnant
population in western countries the balance of power was increasing from large scale
manufacturers like Nestlé, toward supermarkets and discounted chain stores. In result,
Nestlé decided to lessen its focus on developed markets like North America and its
home based market in Switzerland to emerging market like India and China. The driving
force behind the decision of expanding its market share in emerging market is simple, as
the population grows and government decisions favoring market economies brings
attractive business opportunities for public living at intermediate income.

4. PROCTER & GAMBLE

The Procter & Gamble Company is an American multinational consumer goods
corporation. It has headquarters in Cincinnati, Ohio.

 Business Model:
Procter and Gamble’s products primarily reach consumers via a network of retailers and
distributors. Its customers include department stores, supermarkets, mass
merchandisers, salons and grocery stores, among other businesses. Procter and
Gamble also sells its products to consumers directly through its online store. With its
broad variety of products, ranging from male grooming products to diapers to toothpaste.
Procter and Gamble provides value to consumers through its range of quality products,
its customer service and its reputation as a reliable manufacturer. The company
provides products that cater to all customer segments, including some of the world’s
most popular and respected consumer brands. Procter and Gamble’s broad range of
high quality products, and its reliable supply chain and distribution operations, also
create value for its retail and distribution customers in the form of revenue and sales.

 Financial Standing:
The Company reported fiscal year 2021 net sales of $76.1 billion, an increase of seven
percent versus the prior year. The Company returned $19.3 billion of value to
shareholders in fiscal 2021 through $8.3 billion in dividend payments and $11 billion of
share repurchases.

 Why They Chose To Locate To Other Nation:

For P&G, successful international expansion is contingent upon the creation of local
country subsidiaries whose structure, policies and practices resemble a replica of the US
organization. For the modern consumer, P&G’s global presence may be perceived as
somewhat unified. Of course, such universalism exemplifies a stark contrast to
international expansion strategies deployed during the 1980s whereby the autonomy of
national P&G subsidiaries led to an increase in operating costs, the prevention of
product roll-outs and limited profits.

Under the new organizational structure, profit responsibilities shifted from P&G’s four
regional organizations to seven global business units (GBUs) to manage the product
development, manufacturing and marketing of their respective categories worldwide.
The new strategy was designed to encompass P&G’s overarching Purpose, Values, and
 Principles (PVCs), eliminate bureaucracy and strategically release culturally relevant
product lines into specific markets.

5. COCA-COLA
Coca Cola or Coke is a carbonated soft drink manufactured by The Coca Cola
Company. It is one of the most high earning Multinational Company.

 Business Model:
The company generates revenue by selling concentrates and syrups to bottling facilities
globally and by selling finished products to retailers and other distributors. They bottle
and sell the beverages of The Coca-Cola Company exclusively in their 29 markets. They
also partner with other beverage businesses such as Monster Energy, Edrington, Brown-
Forman and Campari to sell their products. They create value for all their stakeholders
by supporting the socio-economic development of the societies in which they operate
and believe building a more positive environmental impact is integral to their future
growth.

 Financial Standing:
Net revenues grew 16% to $10.0 billion, resulting in net revenues ahead of 2019, and
organic revenues (non-GAAP) grew 14%. Revenue performance included 8% growth in
concentrate sales and 6% growth in price/mix.

 Why They Chose To Locate To Other Nation:

The company started expanding in its early years and by 1900 it had spread to Asia and
Europe. Throughout World War II American troops were provided with Coca Cola and at
that time it was manufactured in over 60 factories around the world. It became a global
symbol of Americanism. Moreover, the Coca-Cola Company is mentioned as a global
company with global products and global activities. In 1980, the company was moving
towards centralised control. At that time, the motive of the company are to be global in
order to expand geographical wise into many of the countries in which the company
does business today.

6. PEPSICO
PepsiCo, Inc is an American multinational food, snack and beverage corporation. The
company has headquarters in Harrison, New York.

 Business Model:
With 53% of revenues coming from food, and the remaining 47% coming from the
beverage. PepsiCo is a Food and Beverage Empire that in 2017 made over $63 billion in
revenues. North America Beverage segment represented 33% of those revenues. 58%
of its revenues were in the US. The company distributes its products via direct-store-
delivery, customer warehouses, and other distribution networks.
 With a multi-billion dollar empire, PepsiCo has refined its business model to make it as
agile as possible. With reduced management layers and by leveraging on digitalization
the food and beverage empire has managed its logic costs to capture as much growth
from the world’s market. The company offers a vast range of products in food and
beverage. In addition to that PepsiCo, through licensing agreements manufactures and
distributes an even broader set of products by organizing joint ventures with other
brands.

 Financial Standing:
The company reported fiscal fourth-quarter net income of $1.85 billion, or $1.33 per
share, up from $1.77 billion, or $1.26 per share, a year earlier. Excluding items, Pepsi
earned $1.47 per share, beating the $1.46 per share expected by analysts surveyed by
Refinitiv.

 Why They Chose To Locate To Other Nation:

According to the annual report 2011 of PepsiCo, it has strategic plan to expand business
worldwide with its wide product lines particularly macro snacks with beverages (Lay’s,
Doritos, Cheetos and SunChips); therefore, it is initiating to offer new flavors in tune
considering the choice of the consumers of local market and the capability of the
company. At the same time, the purpose of the company is to develop strong logistics to
reach global consumers and make available in this brand (PepsiCo 2011, p.6).

7. CITIGROUP
CitiGroup Inc. is an American multinational investment bank and financial services
corporation headquartered in New York City. Citigroup owns Citicorp, the holding
company for Citibank as well as several international subsidiaries.

 Business Model:
Citi generates revenue through the provision of various banking products and financial
services to individuals, businesses, and government entities. The Company’s revenue is
derived primarily in the form of fees associated with these services, including clearing,
brokerage, treasury, administration, fiduciary, credit card, and other service fees.

 Financial Standing:
For the full year 2021, Citigroup reported net income of $22.0 billion on revenues of
$71.9 billion, compared to net income of $11.0 billion on revenues of $75.5 billion for the
full year 2020. Citigroup revenues of $17.0 billion in the fourth quarter 2021 increased
1%, reflecting strong growth in Investment Banking, the Private Bank and Securities
Services in ICG and growth in Corporate / Other, partially offset by lower revenues
across regions in GCB and in Fixed Income Markets in ICG.

 Why They Chose To Locate To Other Nation:

Citigroup’s global expansion is starting to yield some choice dividends, but headwinds
still exist. The latest mark in the win column comes courtesy of the Chinese government,
which last week authorized Citi to offer credit cards to the nation’s rapidly growing
consumer class. That would make Citi the first non-Chinese bank to offer a credit card
 there on its own. The move expands the bank’s international retail and commercial
footprint as it seeks revenue growth from outside the United States. It also further
expands the chasm between it and its big rival, Bank of America, which is focusing more
on rightsizing its domestic retail operations as opposed to growing overseas.

8. SONY
Sony Corporation is a Japanese multinational conglomerate company. The company
has headquarters in Minato, Tokyo. Sony is one of the leading players in the film and
television entertainment industry.

 Business Model:
Sony is one of the most coveted and leading manufacturers of communication, gaming
consoles, information technology products, electronics, and video for professional
markets and customers, which has helped the company grow into one of the world’s
wealthiest and most likeable corporations.

The business model of Sony is hinged on its high-quality products and excellent
customer service. They are the entertainment industry’s market leaders, and their
products are quite beneficial. Sony Corporation produces the following items:
- Portable, automobile, and home audio, as well as personalized navigation systems
- TVs – LCD televisions, LCD projection televisions
- Digital cameras, Video cameras, Video DVD/Video recorders, and players are
available
- PlayStations are video games
- Semiconductors include CCDs, LCDs, and a variety of other semiconductors
- Printers and computers–computers and printers
- Television and movies

 Financial Standing:
Sony company reported that net income for fiscal year 2020 grew 101 percent to $10.7
billion (1.17 trillion yen) with operating income growing 15 percent to $8.9 billion (971.9
billion yen). Sony’s total sales increased 9 percent to $82.5 billion (9 trillion yen).

 Why They Chose To Locate To Other Nation:

Sony's decision to shift focus from the domestic to the international market took seed
during Morita's 1953 visit to Philips. "Holland resembles Japan in many ways. If a
company like Philips can succeed in the international market, there's no reason why
Totsuko can't," he thought. Boosted by this convicton, he directed Sony to begin
concentrating its energies on producing exports for the international market. Their initial
goal was to build up overseas markets which would yield 50% of their gross sales.

9. HP (HEWLETT & PACKARD)

The Hewlett-Packard Company commonly known as HP. It is an American multinational
information technology company. It has headquarters in Palo Alto, California.

 Business Model:
 HP is a large corporation with multiple product and service verticals in which it dabbles.
Due to their differentiated nature of products, HP has to employ a highly variable
business strategy to market all of them to their respective customers and market
segments.

HP has a mass market business model, with no significant differentiation between

customers. Its customer segments are consumers, small and medium-sized businesses
(SMBs), and large enterprises, including organizations in the education, health, and
government sectors.

 Financial Standing:
HP Inc. and its subsidiaries (“HP”) announced fiscal 2021 net revenue of $63.5 billion,
up 12.1% (up 10.2% in constant currency) from the prior-year period. Fiscal 2021 GAAP
diluted net EPS was $5.33, up from $2.00 in the prior-year period and above the
previously provided outlook of $3.56 to $3.62.

 Why They Chose To Locate To Other Nation:

The company has been making numerous acquisitions across the United States of
America and its desire to expand to other territories is their main goal since they have
penetrated every aspect of the American market and saturated it with its products thus
its time they expand to other territories and Israel provides the potential for its further
growth and expansion and future revenues (Ladendorf 2010).

10. APPLE. INC

Apple Inc. is an American multinational technology company headquartered in
Cupertino, California. It is considered to be one of the Big Tech technology companies,
alongside Amazon, Google, Microsoft and Facebook.

 Business Model:
Apple's business model is based on innovation and consumer-centric devices. They are
able to keep their base due to easy-to-use designs and data migration to new product
lines. Apple easily bests its competitors in terms of hardware sales and high-end
gadgets. Thanks to the company's early 2000s reputation as a nonconformist response
to Microsoft, millennials grew up using Macs in large numbers. This is buoyed by the
company's brilliant insistence on integrating its products, making it easier to keep using
new Apple products and thus more difficult to switch to a competitor's interface; this is
sometimes referred to as the "Apple Ecosystem Lock.

The weakness in the Apple's business model lies in the historic success of the
company's golden invention: the iPhone. Nearly half of all Apple revenue comes from
iPhone sales, and no new, comparable innovation has taken off since its former CEO
died and was replaced by Tim Cook. However, Cook has done a good job of preserving
Jobs' legacy and has propelled Apple stock to all-time highs.

 Financial Standing:
 With fiscal 2021 sales of $365.8 billion, Apple averaged a billion dollars a day for the
year. Apple's net income for fiscal 2021 of $94.7 billion topped the previous record of
$59.5 billion from fiscal 2018.

 Why They Chose To Locate To Other Nation:

Although Apple’s consistency may be veiled as a one-size-fits-all approach, the
company’s localized branding for other countries makes it successful worldwide. They
believe that localizing products and marketing info for all of your target markets is
important, and Apple’s success is a prime example of that. If Apple continues to keep
messaging consistent globally and cater to consumers’ emotions and geographic
regions worldwide, it’s likely the brand will remain on top of its game well into the future.
REFERENCES:

Apple vs. Microsoft Business Model: What’s the Difference? (2022, January 26). Investopedia.
https://www.investopedia.com/articles/markets/111015/apple-vs-microsoft-vs-google-how-their-
business-models compare.asp#:%7E:text=Apple’s%20business%20model%20is%20based,as
%20Windows%20and%20Office%20Suite.

Bhasin, H. (2021, October 13). Business Model of IBM and How does IBM Make Money?
Marketing91. https://www.marketing91.com/business-model-of-ibm/

Bhasin, H. (2021, October 13). Business Model of Microsoft & How Does Microsoft Make
Money? Marketing91. https://www.marketing91.com/business-model-of-microsoft/

Cuofano, G. (2021, October 6). The Business Model Of The PepsiCo Food and Beverage
Empire. FourWeekMBA. https://fourweekmba.com/pepsico-business-model/#:%7E:text=It
%20comprises%20independent%20bottlers%20and,merchandising%20affect%20their
%20commercial%20success.

Garg, A. (n.d.). Citigroup Revenues: How Does Citigroup Make Money? Trefis.
https://dashboards.trefis.com/no-login-required/Vi49hW9i/Citigroup-Revenues-How-Does-
Citigroup-Make-Money-

How Coca-Cola Makes Money: Syrup and Finished Product Sales. (2021, September 10).
Investopedia. https://www.investopedia.com/articles/markets/112515/how-does-cocacola-
actually-make-money.asp#:%7E:text=The%20company%20generates%20revenue%20by,two
%20non%2Dgeographic%20business%20segments.

IBM stands for I’ve Been Moved - Mar. 31, 2009. (2009, March 31). CNN Money.
https://money.cnn.com/2009/03/31/technology/ibm/

J. (2013, April 8). Nestle – International Strategy » Nestle Profile. Baruch.

https://blogs.baruch.cuny.edu/mgt4880nestle/2013/04/08/nestle-international-strategy/
Our Business Model. (n.d.). Cch Group Website. Retrieved January 29, 2022, from
https://www.coca-colahellenic.com/en/about-us/who-we-are/our-business-model#
P&G Announces Fourth Quarter and Fiscal Year 2021 Results. (n.d.). Procter & Gamble
Investor Relations. https://pginvestor.com/financial-reporting/press-releases/news-details/
2021/PG-Announces-Fourth-Quarter-and-Fiscal-Year-2021-Results/default.aspx#:
%7E:text=The%20Company%20reported%20fiscal%20year,percent%20versus%20the%20prior
%20year.&text=The%20Company%20returned%20%2419.3%20billion,%2411%20billion%20of
%20share%20repurchases.

PepsiCo Inc.’s Global Expansion Strategy - 5539 Words | Research Paper Example. (2021, July
21). Free Essays. https://ivypanda.com/essays/pepsico-incs-global-expansion-strategy/
Pereira, D. (2021, June 2). Microsoft Business Model. Business Model Analyst.
https://businessmodelanalyst.com/microsoft-business-model/
Procter & Gamble. (2017, July 30). Cleverism. https://www.cleverism.com/company/procter-
gamble/

S.A., N. (2021, July 29). Nestlé reports half-year results for 2021, raises full-year organic sales
growth guidance. GlobeNewswire News Room. https://www.globenewswire.com/en/news-
release/2021/07/29/2270866/0/en/Nestl%C3%A9-reports-half-year-results-for-2021-raises-full-
year-organic-sales-growth-guidance.html#:%7E:text=filingsmedia%20partners-,Nestl
%C3%A9%20reports%20half%2Dyear%20results%20for%202021%2C%20raises%20full
%2D,15%20ET%20%7C%20Source%3A%20Nestl%C3%A9%20S.A.&text=Organic%20growth
%20reached%208.1%25%2C%20with,%25%20and%20pricing%20of%201.3%25.&text=Total
%20reported%20sales%20increased%20by,2020%3A%20CHF%2041.2%20billion).

Sanati, C. (2014, July 18). The global growth that saved Citi. Fortune.
https://fortune.com/2012/02/14/the-global-growth-that-saved-citi/

Shastri, A. (2021a, October 7). Detailed Guide On Business Model Of HP: 2022. IIDE.
https://iide.co/case-studies/business-model-of-hp/

Shastri, A. (2021b, October 16). Updated 2022: The Business Model Of Sony Explained. IIDE.
https://iide.co/case-studies/business-model-of-sony/#:%7E:text=The%20business%20model
%20of%20Sony%20is%20hinged%20on%20its%20high,well%20as%20personalized
%20navigation%20systems

Shofner, K. (n.d.). Thinking Differently: Why Apple’s Brand Succeeds Worldwide. United
Language Group. https://www.unitedlanguagegroup.com/news/thinking-differently-why-apples-
brand-succeeds-worldwide

Smith, H., & Fisher, G. (2015, October 17). Internationalization at Procter & Gamble: a brief
summary of cross-cultural convergence. Mba Strategy Blog.
https://mbastrategyblog.wordpress.com/2015/10/16/internationalization-at-procter-gamble-a-
brief-summary-of-cross-cultural-convergence/

Sony Group Portal - Sony History Chapter10 Sony Corporation of America. (n.d.). Sony.
https://www.sony.com/en/SonyInfo/CorporateInfo/History/SonyHistory/1-10.html
Staff, M. (2021, October 28). Apple Reports 4Q 2021 Results: $20.6B Profit on $83.4B
Revenue. MacRumors. https://www.macrumors.com/2021/10/28/apple-4q-2021-earnings/

TechCrunch is part of the Yahoo family of brands. (2022, January 24). TechCrunch.
https://techcrunch.com/2022/01/24/not-dead-yet-ibms-revenue-growth-accelerates-in-q4/