Multinational Corporations: Advantages, Disadvantages, and International Expansion

GLOBAL BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
INDIVIDUAL NOTES 1.................................................................................................................3
Online research.......................................................................................................................3
INDIVIDUAL NOTES 2.................................................................................................................4
Reasons for International expansion of MNC and barrier faced during internationalisation.4
INDIVIDUAL REPORT.................................................................................................................7
MAIN BODY...................................................................................................................................7
INTRODUCTION...........................................................................................................................7
Domestic market analysis.......................................................................................................7
Internationalisation strategy...................................................................................................8
Environmental analysis of India.............................................................................................8
Mode of entry.........................................................................................................................9
Leadership qualities required for this mode of entry..............................................................9
CONCLUSION..............................................................................................................................11
INDIVIDUAL REFLECTION......................................................................................................12
CONCLUSION..............................................................................................................................15
REFERENCE.................................................................................................................................16

INTRODUCTION
A multinational company is defined as an organisation which has the ownership and control over
minimum one other products or services manufacturing sites in a nation apart from its home
country. The international operations of an MNC are usually controlled and supervised by the
company headquarters located in the domestic market of the business firm. The present report is
based on multinational corporations. Online research about European Economic Community is
conducted in this report which highlights the advantages and disadvantages of EEC. In addition
to this the reasons behind international expansion of MNC is provided in this report along barrier
faced by the company during internationalisation. The MNC selected for internationalisation in
this report is UK based fast food chain Pret a manger. This report includes domestic market and
international market analysis along with strategies and entry mode suitable for the company. In
addition to this a reflection is provided in this report which provides an overview of subjects
learned and review of personal entrepreneurial attributes.
MAIN BODY
INDIVIDUAL NOTES 1
Online research
The European Economic community was a an organisation formed in the year 1957 with the help
of treaty of Rome in order to initiate economic integration of various member nations. This
organisation was renamed and included as a part of the European Union in the year 1993.
This economic union was established in the year 1958 after the treaty of Rome was signed
by the six intial six members which included Belgium, France, Luxembourg, The
Netherlands and Germany. The formation of this treaty resulted in the creation of a common
market between member nations which was known as internal market. This internal market
was formalised in the year 1994 with the help of the EEA agreement. The EEC is currently
incorporated in EU
The primary advantages of EEC are provided below:

The creation of internal market between the member states has removed trade barriers and given
access to business enterprises in UK to 27 nations and more than 480 million people to
conduct their business in the most effective way (The advantages of the EEC, 2017).
The member nations of the EEC have established a common currency for member nations which
is the Euro. The nation which utilise euro as their currency are considered a part of the
eurozone. This step is beneficial for business firms across the eurozone as the transaction
costs are lowered and fluctuations in the currency is low. This allows enterprises to expand
in the eurozone easily.
Disadvantage of the EEC are mentioned below:
The main disadvantage of the EEC is that it has not been able to complete the expectations of
economic integration within the eurozone. The years from 1998-2008, the average growth
rate of exports in EUR was 6.5 percent. This depicts the failure of EEC in attaining
economic growth as the average inflation rates were 2.9% during this time (The pro’s and
cons of the eurozone, 2017). In addition to this the trade between eurozone nations grew
slowly in comparison to trade between Eurozone members and non-eurozone countries. This
is another failure of the EEC.
INDIVIDUAL NOTES 2
Reasons for International expansion of MNC and barrier faced during internationalisation
Businesses firms aspire to create a strong international presence. This is conducted by
establishing subsidiaries or opening manufacturing sites in various nations. The reasons behind
focus of MNC on internationalisation are provided below:
Exploit growth opportunities through market diversification: This is one of the biggest reasons
for International expansion of corporations. They aim to exploit opportunities by offering their
services or products in a previously uncoloured market. This gives the company new revenue
generation sources. MNC expand in markets which do not have similar products and have
tremendous growth potential. Apart from this after the commodity offered by the company has
reached maturity in the domestic region, business firms expand globally to offer such services to
a potential consumer base in different regions in order to generate profitability (Bai, McColl and
Moor, 2021).