Global Business - Business Revision Notes
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- These are companies which sell their goods in several different countries.
- They have a head office in one country which controls the business and branches in different countries.
- Example: Ryanair are a transnational company that only fly to European destinations.
- These are companies that sell their goods worldwide.
- They treat the world as one country with a single market.
- Example: Coca Cola are a global company.
- Diversify: transnational companies are not solely dependent on one market. They spread their risk so if one market is in a downturn the hope is that other markets will keep the company profitable.
- Communication and Technological Advances: improvements in the area of technology have made it easier to run overseas branches. Video- conferencing allows meetings to take place in different countries without travel expenses.
- Saturated Home Market: if the business has expanded its sales to all possible target markets it can look to increase sales by expanding to other countries with larger populations and markets.
- Overcome Trade Barriers: if transnational companies expand into the EU, they can overcome EU Quotas on products from outside the EU. Example: If a Japanese car company opens a branch in Ireland they will avoid EU quotas on Japanese cars.
- Increase in Sales: expanding overseas creates the opportunity to sale to more customers and increase profits of th...