How Multinational Corporations Enter New Markets Essay

How Multinational Corporations Enter New Markets Essay

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Multinational Companies are corporations which have their home in one country but operate & lives under the law & customs of other countries as well. MNC are giant firms with their headquarters located in one country and with variety of business operations in several other countries. Offices/branches/subsidiaries of MNCs work like domestic company in each country where they operate with district policies & strategies suitable to the concerned country (market). They are duopolistic in nature. Sometimes their operations extend beyond the boundaries of nation in which they originally started hence; they also act as transnational corporations.
‘Profit is like blood of businesses. When domestic markets do not promise a high frame of profits, business firms search for foreign markets. If some domestic companies expanded their production more in proportion to the demand, then they are forced to sell their excess production in foreign markets. Hindustan Machine Tools Ltd. Took up exports very seriously because of recession in the home country in the late 1960s. Competition can become a driving force for firms to become MNC because once competition starts in domestic markets, the week companies which are unable to meet the competition start entering international markets. Many governments provide a number of incentives & other support to domestic companies like tariff fees, less export duties, etc to invest in foreign markets. Monopoly power can be achieved due to resources, technological advances, product differentiations, exclusive market information being proactive stimulus.
Most of the countries today liberalised their economies & opened to the rest of the world. These changes in policies attracted the MNCs to extend operations to...

... middle of paper ...

... were, they are & they will continue to grow.

Works Cited

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