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In: Economics

Identify the strategies - mode of entry- of establishing a multinational corporation (MNC) aboard.

Identify the strategies - mode of entry- of establishing a multinational corporation (MNC) aboard.

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Expert Solution

A corporation which provides facilities and assets in other countries in addition to home country is called a multinational corporation (MNC). Such a corporation has offices and factories in multiple counties along with a centralized headquarter from where the operations are controlled and managed.

In order to establish a multinational corporation (MNC) abroad, many strategies have to be adopted. Some of them could be:

  • Licensing - In this strategy, a license holder sells the license of a service or a product to someone who wishes to enter the market. This strategy is profitable when the market share of the new entrant is large, otherwise it will not be beneficial to enter.
  • Buying a company - At certain times this strategy is considered to be the most suitable and appropriate. For entering the market, investors buy an existing company.
  • Partnering - Many a times, a MNC can be established in partnership with other corporations.

Rahul Sunny answered 7 months ago
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