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Multinational Corporations

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by

Aarthi Madadi

on 12 January 2015

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Transcript of Multinational Corporations

Multinational Corporations

An MNC is a corporation that has facilities or assets in atleast one country other than its home country.
- 25% of its revenue must come from outside its home country.

Top 500 control 70% of world trade

What is a Multinational Corporation?
Methods:
(1)Joint Venture- partnered with foreign firms to expand into the new country
(2)Sequential Market Entry- slowly opening branches owned and controlled by the head office
(3)Merger or direct acquisition of existing companies in a new market

Board of directors,executive management, directors for different foreign countries, large number of employees.
Entry and Management
Creates jobs
Improves quality of life globally
gives company access to new markets
Access to technology
Advantages
Profits and Taxes
MNCs are almost always public corporations. Stock is traded, raising money for the corporation. Stock owners profit as the company profits.

MNCs must pay taxes and follow the laws in each of the countries that they are located in.
Disadvantages
Cultural differences
criticized for using cheap labor
Complex international trade restrictions
high taxes
Gerber baby food didn't sell well in Africa because in Africa the pictures on food depict what the food is. The picture on Gerber is of a baby.
Gerber didn't sell in France because it means "to vomit" in french.
One company printed the "OK" finger sign on each page of its catalogue. In many parts of Latin America that is considered an obscene gesture.
In Italy, a campaign for Schweppes Tonic Water translated the name into "Schweppes Toilet Water."
Fun Facts
Full transcript