Given today's economy does it make sense for a small company to go global? According to Charles Hill, author of International Business, he seems to think that it is a good thing along with many other businessmen, influential economists, and even politicians. Yet that is not the answer for every industry, take for example the family entertainment center industry; going global is not always the wisest choice for expansion. This became evident in a recent interview which was held with Richard Beckert, (personal communication, October 20, 2003); the former CEO and President of Malibu Entertainment Worldwide, Incorporated. .
Malibu Entertainment Worldwide, Inc. (MEWI) at one time owned and operated approximately 40 family entertainment centers across the United States, Japan, and Spain. Malibu Entertainment is now no longer in existence as it sold its last park in January of this year. This sprawling global company was a publicly traded company in its prime with shares trading at over $30 per share, today the defunct company's outstanding shares are trading at a staggering $0.0010 per share. This drastic change in the company happened almost overnight after the global expansion according to Mr. Beckert.
After opening the first two locations overseas within weeks of each other the company entered into huge financial difficulties, which forced the sale of the two oversea operations within months of their opening. The sale of the locations came at a huge lose to the company that resulted in a loss of over $10 million. With the huge loss in operating capital and equity in the company its shares literally went for $30 per share to $10 per share overnight. From there on out the company was unable to recover and kept the downward spiral. It was being faced with huge loan repayment notes and investors were pulling funding left and right. The company was forced to slowly sell off assets and parks one by one in an effort to generate the funds to keep the company afloat.