Reasons for MNC Internationalisation and Challenges Encountered

GLOBAL BUSINESS

Table of Contents
INDIVIDUAL NOTES 1.................................................................................................................3
The European Economic Community (EEC)..............................................................................3
INDIVIDUAL NOTES 2.................................................................................................................3
Reason for MNC to internationalise and challenges encountered by them................................3
INDIVIDUAL REPORT.................................................................................................................7
Introduction.................................................................................................................................7
Analysis of domestic market.......................................................................................................7
Strategy for internationalising.....................................................................................................8
Country environment analysis....................................................................................................8
Mode of entry..............................................................................................................................9
Leadership qualities..................................................................................................................10
INDIVIDUAL REFLECTIVE ESSAY.........................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INDIVIDUAL NOTES 1
The European Economic Community (EEC)
The EEC is a regional company which aims at bringing the economic integration among
all the member states of EEC. This community was created by the Treaty of Rome in the year
1957 by Jean Monnet. The main aim of this was to protect the peace and the liberty of laying
down of foundation within the ever closer union of the people of Europe.
Pros
 The major advantage of EEC is that this is a union and here only single currency is used
that is Euro. All the trading and transaction are undertaken in single currency only. Thus,
this ensures that all the transaction is assessed using the single measuring system.
 Another advantage is that the member states have free movement within the whole
community that is any member country can trade with any of the other country without
any restrictions.
 In addition to this another important advantage is that all the underdeveloped member
countries will get help and this will assist the underdeveloped countries to develop in
better and advance countries.
Cons
 The major drawback of the EEC is that there is high cost of membership within the EEC
and this limits the member to enter in the EEC.
 Another disadvantage is that as there is single currency then this creates problem as it
may not be possible that all the countries has single and same currency only. Thus, this
will create problem in the management of the working of EEC.
 Another drawback of EEC was that there are many problems with the policies of EEC.
This is majorly because of the reason that there are many different countries and it is not
necessary that all the countries will comply with the policies being prepared by EEC.
INDIVIDUAL NOTES 2
Reason for MNC to internationalise and challenges encountered by them
Reasons for internationalisation
In the words of Peng (2016) multinational corporation is the company which runs its
operation in country other than the home country as well. The MNC generally have its office and

branch and operations in the different countries and the head office in the home country only.
The current business environment is very competitive wherein most of the companies are dealing
in homogeneous goods and services and because of this the competition is very high. In addition
to this because of concept of globalization the companies can trade with any of the other country
and because of this reason as well the competition is increasing to a great extent.
On the other side Ferraro and Briody (2017) states that internationalisation is very
essential for the companies to survive in profitable manner in the highly competitive market
conditions. This is majorly because of the reason that when the international business is
undertaken then it assists the business in managing its operations in proper and good manner.
There are many different reason for which the company want to go for internationalisation and
the major reason is growth. This is particularly because of the reason that when the company
expand in the international market then they have more of the growth opportunities. Also, the
company gets access to the new market and this assist the company in managing the success and
growth of the company.
In against of this Adekola and Sergi (2016) argues that the major reason for the
companies going for internationalisation is for seeking the different opportunities for developing
the business with help of market diversification. This is basically because of the reason that when
the company goes in the new and other market then it might be possible that the company gets
access to more good and better market and the new consumers gets attracted towards the
working of the company.
In accordance with the thinking of Hakanen, Helander and Valkokari (2017) states that
another major reason for the internationalisation of the business is that it will help the company
in increasing its profit margin and growth rate. This is particularly because of the reason that
when the it may be possible that the products in which the company is dealing are more liked in
the other country. Thus, this will increase the sales of the company and all will add to the profits
of the company. Hence, internationalisation will help the company in growing its business to a
great extent and will also help company in increasing the number of consumers.
But in contrast to this Ronen and Shenkar (2017) criticizes that the major reason for the
companies to go for international trade is that this will assist the company to recruit new and
fresh talent. This is helpful for the business as this will assist the business in managing its
operations in more effective and efficient manner. Thus, this will increase the operational