transnational corporations

• what are TNC's


  transnational corporations - companies that produce/sell in two or more countries.

  they play an important role in the global economy and they also connect countries because of their spacial organisation and global supply chain.
• explain a TNC's spacial organisation

  headquarters - located in HIC's. make major decisions.

  R&D - usually in HIC's but also in countries where they sell to be specific to the target market.

  manufacturing - concentrated in LIC's due to low labour costs, meaning higher profits.
• explain production in TNC's

  economies of scale

  global supply chains

  outsourcing and offshoring

  these methods allow a company to maximise profits
• explain linkages between countries for TNC's

  links through FDI - creates links by investing in them, which creates jobs and developed the economy. this could be in the form of ,mergers or takeovers.

  links through integration - horizontal and vertical integration, so they are linked between other companies.
• explain trading and marketing patterns for TNC's

  mostly trade with HIC's because that's where the target market is, however there's a growing demand for these products in emerging economies. therefore, trading has expanded to more countries.

  TNC's take advantage of global marketing to create a brand but they have enough money to adjust their marketing to suit different countries and maximise profits.