Internationalization of MNCs: Reasons and Challenges Faced - A Case Study of TESCO

Individual Report

Table of Contents
Introduction......................................................................................................................................3
Individual notes...............................................................................................................................3
Research on European Economic Community............................................................................3
Individual notes 2............................................................................................................................4
Discuss the reason of behind internationalization of MNCs along with the challenges they face
......................................................................................................................................................4
Individual Report.............................................................................................................................9
Introduction..................................................................................................................................9
Analysis of domestic market:.......................................................................................................9
Strategy to internationalize..........................................................................................................9
Mode of entry, challenges it may find in country and possible solutions..................................10
Conclusion.....................................................................................................................................12
References......................................................................................................................................13

Introduction
Currently, internationalization has become a crucial way to increase the business
presence. It is about expanding business in more countries across the globe. The main aim of
internationalization is to enhance the number of customers so that the business entity can earn
substantial amount of profit. Through internationalization, the company can easily get an edge of
competitors (Li and Deng, 2017). The present report is based international expansion of MNC to
attain high amount of profit. The company which is taken into consideration is TESCO. It is a
large multinational company that offers variety of products to the customers including groceries,
mobile phones, clothes and more. It is headquartered in UK and has presence at nearly 12
countries. Now, they are planning to expand in NewZealand. The study will cover details of
European Economic community along with pros & cons. Further, the reason of
internationalization and typical challenges will also include in the report. Additionally, it will
include analysis of domestic market, internationalize strategy, mode of entry and leadership
quality to support the market entry. At end, a reflection has also been covered in the study in
order to summarize the leanings of module.
Individual notes
Research on European Economic Community
European economic community was created in 1957. Certain countries names as France,
Netherlands, Italy, Luxembourg formally known as “common market”. The EEC is a
consolidation of three organizations in 1967. The EEC has aim to become an eventual economic
member of economic nation. Further, they worked for free movement of capital and labor,
development of joint labor policies, social well fare, foreign trade and more (Williams, 2018).
Basically, the main of EEC is to facilitate economic integration among the member states.
During the formation of European Union in 1993, the EEC was incorporated in EU and named as
European community.
The primary aim of the community was to facilitate the economic integration by
including custom union and common market. Further, it received a common set of institution
with European coal and steel community, European atomic energy community under the treaty

merger in 1965. In the year of 1993, a complete single market was formulated that allowed free
movement of goods, services, capital and people. The internal market was also formalized in
1994 through EEA agreement. Further, the agreement was extended so that member states like
European free trade association and more can be included in the internal market. While entering
into Maastricht treaty in 1993, the EEC renamed as European community to cover the wider
range of economic policy.
Pros of EEC:
Single market: Sometimes, it is also referred as an internal market. The EEC has been
removed all the trade barriers by minimizing the complexity of exisiting trade. It has been
simplifies the existing trade rules so that the members can make most out of the trade practices.
Basically, it promotes the free trade with an aim to make EU as a single market (Marsh and
Swanney, 2019).
Free movement of people: EEC gave the right to people so that they can move freely
from one place to other within European country. Now, people can easily move across the
country. With this, they have opportunity to look for jobs in other EU countries, work without
having permit, study and more.
Cons of EEC:
High membership cost: To become a member of EEC, it is required to pay high amount
of fees. Hence, the countries which are planning to become a member of EEC need to consider
will it be worth (Josling and Moyer, 2019).
Problems with the policies: Following similar policies and operating in a common
market can create several discrepancies. There are similar regulations for all the countries. In this
situation, regulations which have been created for small countries can easily affect the large
nations (Bonvicini and Wessels, 2017).