Internationalization Stages of MNCs: A HI5013 Report - University Name

This report provides an analysis of the evolutionary stages in the internationalization of multinational corporations (MNCs). It outlines the five key stages: domestic company, international company, multinational company, global company, and transnational company. The report defines each stage, detailing the characteristics and strategies employed by companies at each level of international expansion. It highlights how companies evolve their operations, vision, and market focus as they move from a domestic orientation to a global or transnational approach. The report uses examples of companies like McDonald's, Apple, Nike, Volkswagen, and Coca-Cola to illustrate the practical application of these stages. It emphasizes the factors that drive internationalization, such as market opportunities and the desire for increased market share. The analysis concludes by summarizing the transition of firms through these stages and the implications for their organizational structure and global strategy.

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Managing Across Borders
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Executive Summary
The assignment has thrown light on understanding the different stages which are
included in the process related to internationalization of the different multinational
corporations present in the economy. With the help of internationalization, it will be
suitable for the companies to gain a proper insight on the different aspects of the
other companies which resulted in the effectiveness of the companies in comparison
to the other competitors present in the market. Through the different instances, it can
be analyzed the fact that the internationalization has become one of the major
elements of the proper functioning of the firm along with future perspectives.

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Table of Contents
Introduction...................................................................................................................3
Analysis of Evolutionary Stages in Internationalization of an MNC.............................3
Stage 1- Domestic Company....................................................................................3
Stage 2- International Company...............................................................................4
Stage 3- Multinational Company...............................................................................4
Stage 4- Global Company.........................................................................................5
Stage 5- Transnational Company.............................................................................5
Conclusion....................................................................................................................5
References...................................................................................................................7

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Introduction
In the context of the business economics, the internationalization is referred to
the organization which takes different steps for increasing footprint or capture the
greater amount of the share in the market outside the country or domicile through
branching in the different international markets (Beugelsdijk et al. 2018). The
internationalization of the different Multinational corporations is composed of different
kinds of several stages and the identified steps are being characterized through
increasing, re-increasing along with decreasing the commitment towards the foreign
markets.
The stages of internationalization can be triggered with the help of the
external and internal factors which can be achieved through the different factors. In
addition, there are companies which take part through exporting the different
products to the different foreign countries along with continuing to strengthen their
home market. Importing as well as exporting plays a vital role and it is considered to
be the most common strategy for the firms to pursue the process of
internationalization.
Analysis of Evolutionary Stages in Internationalization of an MNC
Stage 1- Domestic Company
As commented by Kuramoto Gonzalez and Kindl da Cunha (2012), in the
respective scenario, the domestic company tries to limit their operations, vision and
mission to the national political boundaries. In the respective aspect, the companies
focus their view in domestic market related opportunities, domestic customers,
suppliers along with domestic financial related organizations. When the domestic
organizations think of growing beyond their present capacity, the organization
selects the strategy related to diversification for entering in the new domestic
markets, new technology and products. Instead of focusing on penetrating in the
international markets. Moreover, as opined by Santangelo et al. (2016), the domestic
company may extend their products in foreign markets through exporting, franchising
as well as licensing. In such scenario, it can be seen that orientation is ethnocentric

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and, in many instances, it can be seen that exporting is indirect is the beginning
prospect.
For instance- McDonald’s have introduced the different vegetarian dishes
such as McAloo Tikki for the customers staying at Gujrat and there are different beef
related items for Dubai market. From the respective instance, it can be identified that
McDonald’s have introduced different items specifically for the different foreign
markets (McDonald’s.com 2019).
Stage 2- International Company
As commented by Kuramoto Gonzalez and Kindl da Cunha (2012), when the
different companies start trading abroad, some of the organizations grow beyond the
production or the domestic marketing capacities and they internationalize their
operations. These are the different companies which feel the fact that different kinds
of practices which are adopted by the different domestic companies, in such
scenario, the products and people of the domestic company are superior in nature.
The main focus of the companies is domestic, but extends their wings to foreign
countries.
For instance- When the Canadians Companies are expanding their
operations in the international marketplace, it usually addresses the market of United
States first for gaining competitiveness. Apple is one of the suitable examples
wherein they have introduced the different products as per the choices of the
customers, however the pricing and the other elements of marketing mix has been
constant (Apple.com 2019).
Stage 3- Multinational Company
As commented by Revindo and Gan (2016), the respective stage of the
multinational company is referred to as the multi-domestic and it helps them in
formulating various strategies for the different markets. In such scenario, the
orientation of the companies shifts from ethnocentric to polycentric orientation and
the different subsidiaries of the international company works as the domestic
company in each of the country which helps them in managing the activities in a
smooth manner.

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For instance- Nike is one of the suitable examples which can be considered
as the multinational company wherein they have their presence in different parts of
the world. In Indian market, Nike works as the domestic company through managing
the distant policies along with strategies which are suitable for the country concerned
(Nike.com 2019). In the Indian market, the customers prefer the different kinds of
attires which are moderately priced and Nike tries to offer them the same.
Stage 4- Global Company
As opined by Fletcher and Harris (2012), a global company is defined as the
one which considers either the global market strategy or global strategy. In the
respective aspect, the global companies produce the products in home country along
with focuses on marketing of the respective products in the global market, or on the
contrary, produces the different products globally as well as focuses on the
marketing of the respective products in a domestic manner.
For instance- Volkswagen is one of the suitable examples of global company
wherein they have them headquarter at Germany and they have their presence in
the different other markets and they follow the aspect wherein they produce the
various products globally and focuses on the marketing of the different specific
products in the domestic country (Volkswagen.com 2019).
Stage 5- Transnational Company
As stated by Beugelsdijk et al. (2018), the transnational companies’ products,
markets, operates and invests across the entire world and it is considered as the
integrated global kind of enterprise which helps them in linking the global markets at
profit. However, on the contrary, there are different kinds of transnational companies
which satisfies many of the different characteristics of the global corporation.
For instance- Coca-Cola is one of the transnational companies wherein they
take advantage of low worker wages in the different developing countries and the
low wages of the workers along with the freedom granted by governments in
developing countries are result to attract foreign investment (Coca-Cola.com 2019).

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Conclusion
Therefore, from the overall analysis, it can be concluded that there are
different kinds of stages in the process of internationalization. The five major steps in
the internationalization process helped in understanding the different nature of the
firms in various scenarios. From the different instances of the different companies, it
can be inferred that in the domestic aspect, the firms are exclusively domestic, in
international markets, the companies are expanding their market, however it retains
the production related facilities within the domestic borders. Additionally, in case of
multinational company, the firms physically move out some of their operations from
home country and in global company, there is proper decentralization of the different
operations. Lastly, in transnational companies, the firms owe little allegiance to the
country of their origin.

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References
Apple.com 2019 Apple (online) Retrieved from https://www.apple.com/ [Accessed on
12th August 2019]
Beugelsdijk, S., Kostova, T., Kunst, V.E., Spadafora, E. and van Essen, M., 2018.
Cultural distance and firm internationalization: A meta-analytical review and
theoretical implications. Journal of Management, 44(1), pp.89-130.
Coca-Cola.com 2019 Coca-Cola (online) Retrieved from https://www.coca-cola.com/
[Accessed on 12th August 2019]
Fletcher, M. and Harris, S., 2012. Knowledge acquisition for the internationalization
of the smaller firm: Content and sources. International Business Review, 21(4),
pp.631-647.
Kuramoto Gonzalez, R. and Kindl da Cunha, S., 2012. Internationalization process
and technological capability trajectory of Iguaçu. Journal of technology management
& innovation, 7(2), pp.117-130.
McDonald’s.com 2019 McDonald's: Burgers, Fries & More. Quality Ingredients.
(online) Retrieved from https://www.mcdonalds.com/us/en-us.html [Accessed on
12th August 2019]
Nike.com 2019 Nike - Shop for Nike Apparels (online) Retrieved from
https://store.nike.com/ [Accessed on 12th August 2019]
Revindo, M. and Gan, C., 2016. Export stimuli, export stages and internationalization
pathways: The case of Indonesian SMEs.
Santangelo, G.D., Meyer, K.E. and Jindra, B., 2016. MNE subsidiaries’ outsourcing
and insourcing of R&D: The role of local institutions. Global Strategy Journal, 6(4),
pp.247-268.
Volkswagen.com 2019 Volkswagen (online) Retrieved from
https://www.volkswagen.com/ [Accessed on 12th August 2019]