Effects of the establishment of a multinational firm
- What is Subway concept?
- Why is it called Subway?
- Why the name was not translated to French
- Subway's adaptation to French culture and gastronomy
There are three major development strategies of multinationals. The first is a strategy called "supply" which is characteristic of the primary multinational sector. The second is a market strategy. It is the answer to the exchange and product life cycles. The last strategy is purely financial: it is to maximize the return for shareholders. The impact of multinationals is variable, depending on the term considered. Their influence therefore requires appropriate actions.
An international firm is a large company with starting a national basis,the production locations abroad (not just marketing) and shapes its strategy and organization in the world. The authors disagree, but it takes at least a quarter of jobs, one third of production and one third of foreign investment so that one can talk about multinational.
A multinational is a new production entity resulting in investments. The production capacity of the host country thus increases its production capacity which is a growth factor by increasing the capital.
In developing countries, a multinational company from a developed country provides technology that is supposed to encourage technological development and methods of work organization.Therefore, there would be more growth by improving techniques.
A multinational corporation provides jobs. It has an impact on employment. For example, 30% of employment in Brazil in 2000 was in the hands of multinationals. It is 37% in Malaysia and 60% in Singapore.
The reasons for a multinational to locate in a developing country is due to the low value in raw materials. The next step is to sell primarily to developed countries. However, these exports have an impact on growth and external balance. The balance of the overall trade balance will improve. Similarly, with the multinational bringing capital into developing countries, the balance of the balance of capital improves.
Tags: multinational companies; effects of establishing mulitnational companies