multinational companies

• Multinational company (MNC)


  A company that operates in two or more countries
• Multinational companies


  • They don't have to be huge corporations to be considered an MNC
  • What matters is that they operate in two or more countries
• Reasons why companies become multinational

  • Increased customer base
  • Cheaper production costs in less developed/developing economies
  • Global economies of scale
  • Avoidance of protectionism
  • Spread of risks
• Globalization


  The integration of local economies into one global economy where all companies have to think globally but act locally
• Relationship between multinational companies and globalization

  Multinational companies and globalization are closely related
• Opportunities and threats of multinational companies and globalization

  • Cultural diversity
  • Level of competition
  • Ability to meet customer expectations
  • Number of customers
  • Economies of scale
  • External growth opportunities
  • Sources of finance
• Host country


  The country that welcomes a multinational company
• Positive impacts of MNCs on host countries

  • Increased tax revenue and GDP
  • Increased product choices
  • Employment opportunities
  • Integration into global economy
• Negative impacts of MNCs on host countries

  • Repatriation of profits
  • Increased barriers to entry for local businesses
  • Unemployment
  • Reliance on global supply chain