EVALUATE THE INFLUENCES OF MULTINATIONALS THROUGH GLOBALISATION
A multinational is a firm which has its headquarters in one country but with bases, manufacturing or assembly plants in others. A company would have a number of objectives which would drive them to expansion including:
o Increased sales and revenue
o A chance to sell in markets where incomes are growing most strongly
o Shareholder pressure to maintain profit growth
o The opportunity to diversify into a range of markets so that heavy dependence on one or a few markets, which could decline, can be avoided. This reduces risk.
The process of globalisation has three distinguishable phases for the individual business:
o Companies with a national focus look to expand their markets by selling abroad.
o They develop bases in overseas markets from which they can service their sales activities.
o They go on to develop sources of inputs based on the cost advantages of a wide variety of locations.
A multinational is a firm which has its headquarters in one country but with bases, manufacturing or assembly plants in others. A company would have a number of objectives which would drive them to expansion including:
o Increased sales and revenue
o A chance to sell in markets where incomes are growing most strongly
o Shareholder pressure to maintain profit growth
o The opportunity to diversify into a range of markets so that heavy dependence on one or a few markets, which could decline, can be avoided. This reduces risk.
The process of globalisation has three distinguishable phases for the individual business:
o Companies with a national focus look to expand their markets by selling abroad.
o They develop bases in overseas markets from which they can service their sales activities.
o They go on to develop sources of inputs based on the cost advantages of a wide variety of locations.