Page 17 - DMGT545_INTERNATIONAL_BUSINESS

International Business

notes subsidiaries of a MNC work like a domestic company in each country where they operate with
distinct policies and strategies suitable to that country concerned.
Stage 4 – Global Company: Global company is the one which has either produces in home
country or in a single country and focuses on marketing these products globally and focuses on
marketing these products domestically.
Stage 5 – Transnational Company: Transnational company produces, market, invests and operate
across the world. It is an integrated global enterprise which links global resources with global
market at profits. There is no such pure transnational corporation.

characteristics of a transnational company

This company thinks globally and acts locally. This company adopts global strategy but allow
value addition to the customer of a domestic country. The assets of a transnational company
are distributed throughout the world, independent and specialized. The R&D facilities of a
transnational company are spread in many countries.

l z Scanning or Information Acquisition: These companies scan the environmental information
regarding economic, political, social and cultural and technological environment.
These companies collect and scan the information regardless geographical and national
boundaries.
l z Vision and Aspiration are global, global markets, global customers, and grow ahead of
other global/transnational companies.
l z Geographical Scope: They analyze the global opportunities regarding the availability of
resources, customers, markets, technology, research and development etc. The scope is not
limited to certain countries in analyzing opportunities, threat and formulating strategies.
l z Adaptation: Global and Transnational companies Adapt their products, marketing
strategies and other functional strategies to the environmental factor of the market
concerned.

Example: Mercedes Benz is a super luxury car in North America, luxury in Germany and
standard taxi in Europe.
l z Extension: Some products do not require any change when they are marketed in other
countries. Their market is just extension.

Example: Transnational companies create their global brand extending the product
to the new market. Rothmans cigarette extended its products in many Europeans and African
countries.

l z HRM policy: It selects the best human resource and develops them regardless nationality,
ethnic group.

l z Purchasing: Transnational company procures world class material from the best source
across the globe.

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Caselet india to allow fDi in food retail

ndian government is considering allowing Foreign Direct Investment (FDI) in food
retail. The Ratan Tata led Investment Commission has favoured permitting FDI in food
Iretail, especially fresh and processed fruit and vegetables, with export commitments.
Contd...

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