Question

For the following statement, please choose either true or false, and explain:

 It is risky to operate multinationally, so it is not always wise to expand globally.

Answer 1

The given statement is false. It is not risky to operate multi-nationally, so it is always wise to expand globally

Multinational company

The multinational company has atleast a branch in one county. Multinational company setups thier production not only in their home country which expands their branch into various countries according to their interest by consideribg the local government of nation. It makes a positive effect on the economy. Its a international company which have high level of profit.

Mainly mncs will take the developed nations for their operation by paying high salary and high quality products.

Most of the companies choose their product according to the demand of the consumers

. They will consider the tastes and preference of the consumer, the level of capital accumulation, lowest wage etc. Here they have a strategy that they produce their goods at lower cost and will fix a lowest price to increase the purchasing power parity of the consumer. The company operates with a intermediary. They selects a local distributor or local company to sell their products.