Mnc Essay

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1. Q: What are MNCs and how are they different from other business companies?
MNC is a type of company that owns or controls production of goods or services in one or more countries other than their home country. Sometimes there are wrong perceptions from people to differentiate the MNCs and TNC. TNC is basically a commercial enterprise that operates substantial facilities, does business in more than one country and not consider any particular country its national home. The MNCs have their international identity as belonging to a particular home country where they are headquartered, while the TNC is borderless, as it does not consider any particular country as its base, home or headquarters. So the point is, not all MNCs are transnational companies,
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When product life cycle is based on sales volume, introduction and growth often become one stage. When a product grows rapidly in a home market, it experiences saturation when low-wage countries imitate it and flood the international markets. Afterward, a product declines as new, better products or products with new features repeat the cycle. The idea of the product life cycle is used in marketing to decide when it is appropriate to advertise, reduce prices, explore new markets or create new packaging. An effectively marketed product meets a need in its target market. The supplier of the product has conducted market surveys and has established estimates for market size and composition. The growth stage of the product life cycle is characterized by high prices, high profits and wide promotion of the product. International followers have not had time to develop imitations. The supplier of the product may export it, even into follower economies. In the maturity phase of the product life cycle, demand levels off and sales volume increases at a slower rate. Imitations appear in foreign markets and export sales decline. The original supplier may reduce prices to maintain market share and support sales. Profit margins decrease, but the business remains attractive because volume is high and costs, such as those related to development and promotion, are also …show more content…
So basically both Wallerstein and Hymer theory is about the MNCs as the agent of neo-imperialism in this modernization era. We can see that there are lot of MNCs were originally from developed states, the company was use as a government tool to dominate the global market and seek the benefit from other countries. It could be from the lower salary workers, cheaper taxation, higher local demands and

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