• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Evaluate the influences of Multinationals through Globalisation

Extracts from this document...


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. ...read more.


In addition, ancillary firms such as component manufacturers and suppliers of canteen and cleaning services grow in the local area and provide additional employment. ==> Other factors of production are employed more fully and are used more efficiently through the competition generated by the multinational. ==> Advanced technology is introduced. Examples in the UK include the work that Honda did with Rover, and technology-based multinationals such as Epson (printers), Sony (home entertainment), bringing in new ideas and expertise into our economy. Training in more advanced techniques and skills also develops in the local area. ==> Modern work practices which highlight teamwork, shared goals, and employee participation in decision making. ==> There is greater choice and higher income. Consumers benefit from wider product choice and the economy gains through the multinational's activities, both at home (employment rises, tax revenue is generated and greater expertise improves economic competitiveness), and by exporting (balance of payments benefits). ...read more.


Accusations of bribery, corruption and financial irregularity have been levelled against some multinationals, and exploitation of cheap labour and raw materials can take place with only limited concern for the environment or the long-term stability and growth for the countries affected. As I have discussed, the most obvious way to expand sales to is start selling abroad. Some companies such as Coco Cola have been able to create global brands, which sell world wide. Their strategy is to develop an image that will appeal to everyone everywhere. Coke is perhaps an unusual product in that it can sell in large quantities even in countries wit low incomes. Many global brands are prestige products which sell mainly to people with well-above average incomes. Global brands, by their name are fully standardised. The coke selling in Thailand is the same as the coke selling in the USA. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Economy & Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Economy & Economics essays

  1. Case Study: The Home Depot

    From Home Depot's point of view, when customers gets to know that a sales person gets a certain commission, the small customers would think that they are not worth dealing with. That's why Home Depot doesn't give any commissions on sales.

  2. external influences

    During booms, there is a high level of aggregate demand, inflation increases, unemployment falls, and growth in national income accelerates. During busts, or recessions, when aggregate demand is low, inflation decreases, unemployment rises and national income falls. In extreme recessions deflation (a sustained fall in the general price level)

  1. External Influences of Richer Sounds and Corus

    Therefore the economy can grow and shrink. Richer Sounds and Corus are both affected by these changes. Interest Rates; The interest rate can control the economy if it is raised or lowered, by means of making it dearer or cheaper for businesses to borrow money.

  2. Business - External Influences.

    or Withdrawals of capital into and from the economy. Businesses have to watch out for trends such as very fast growth or large recession as this affects inflation and the prices of their products. Political Environment: Governments are likely to manage their economies to achieve a certain set of objectives.

  1. This report will establish the opportunities and threats presented to Sony by the EU ...

    Due to this, Sony can easily promote products because the EU is like one country with many markets and accessibility is far greater within these countries. As EU largely exports many goods from their market so do USA and Japan but the EU have different specialities e.g.

  2. Sports manufacturers

    had outgrown our ability to manage the business." If Nike and its publics cannot understand the intricacies in Nike's corporate system, they might lose faith in the organization. Management: Since its conception in 1964, Phil Knight has held close control of the company and "ruled with a mix of closely allied senior managers," according to a business report entitled "Channel Conflict."

  1. External influences

    What is the exchange rate? Describe how a strong � affects businesses that trade with companies overseas for materials, employees, premises, etc. the exchange rate is the conversion rate from one currency to another. The � is very strong comparing to the other overseas currencies.

  2. Toyota Motor Company Limited

    They have to plan and adopt the successful strategies. Listing the world top automakers, Toyota plays an important role in both the world's automobile market and in its own home. Toyota and world automobile industry The world automobile's market is very competitive in these days.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work