its product sales into a new overseas market. What factors do they
need to take into account?
Introduction - Multinational Company
Economists are not in agreement as to how multinational or
transnational corporations should be defined. Multinational
corporations have many dimensions and can be viewed from several
perspectives (ownership, management, strategy and structural).
According to Franklin Root (1994), an MNC is a parent company that:
1. engages in foreign production through its affiliates located in
2. exercises direct control over the policies of its affiliates,
3. implements business strategies in production, marketing, finance
and staffing that transcend national boundaries (geocentric).
In other words, MNCs exhibit no loyalty to the country in which they
Simply put, a multinational (sometime called a transnational) is a
company that has headquarters in one country, but has operation in
other countries (Wall et al 2001).
It is very important that an organization considers the environment
before beginning the marketing process. This includes all factors that
can influence an organization, but that are out of their direct
control. There may be aggressive competition and rivalry in a market
and the threat of substitute products and new entrants through
globalisation. The wider environment is also ever changing, and the
marketer needs to compensate for changes in culture, politics,
economics and technology. To assess the external factors that
influence the organisation, the marketing department should execute a
PESLTLE analysis, which is the acronym for:
The political arena has a huge influence upon the regulation of
businesses, and the spending power of consumers and other businesses.
Organisation seeking to internationalise typically investigates
factors in the county such as:
Ø The stability of the political environment.
Ø Influence of government policy on laws that regulate or tax the
Ø government's position on marketing ethics, policies on the economy
and their view on culture and religion.
... middle of paper ...
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http://quickmba.com/strategy/matrix/annsoff [Assessed on October 21
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