Luck does not help those who do not help themselves. Many companies see the possibility of expanding internationally as a lucrative opportunity.
However, there are difference between multinational and global companies and their different options to develop a company abroad.
You can choose to become a multinational company, which is centralized in certain countries, or a global company, which provides a standard product worldwide.
The term “globalization” refers to the business strategy in which a company launches the same product in different countries simultaneously. It means that even if you live in Argentina or Russia, your cereal box will be the same.
Through globalization, multinational vs global company a US company you can take advantage of technologies and industry developed abroad to access untapped markets abroad.
A multinational strategy vs global strategy, on the contrary, consists of offering non-standardized products in different countries.
It means that instead of marketing cereals in exactly the same way in Russia and Argentina, the company will make changes to the product to adapt it to the tastes of each market.
Companies make the decision to become multinational or global, based on some factors. One of them consists of the concept called “economies of scale”.
This term refers to the reduction of costs due to the increase in production facilities. Sometimes the cost is not reduced no matter how much the production facilities are expanded, making it less expensive to develop separate factories in different countries.
In addition, some industries require differentiated products for specific countries.
In the business world, competition means that there is a rivalry in an open market, where each seller competes for his share of the profits and the market.
A multinational company faces competitors in the countries where it sells its products. In contrast, a global company competes internationally. Their rivals compete in the same field.
Companies plan in different ways, depending on whether they adopt a multinational or global strategy. Multinational companies must manage their subsidiaries as distinct and separate entities, that is, decisions must be based on the local business environment and its problems.
Global companies, on the other hand, need to plan their strategies on an international scale. Its subsidiaries do not act independently, and they all follow the same strategy.