Question

What are some of the considerations that a multinational firm has to consider when they decide to expand from a domestic firm to a global firm?

Answer 1

The following points must be considered by an organization that was earlier domestic now deciding to become a global firm-

• The legal enviornment- The firm should be aware of the laws, rules and regulation of business operation in the country or countries the firm is thinking to operate in the future. So, that it is easier to comply with the statutory requirements and other legal compliance.
• The economic enviornment- The firm should be aware of the behaviour and pattern of demand, the target audience and the needs of the probable consumers of the country or countries the firm is thinking to operate in the future. So, that it can draft the buying and selling policies according to the needs of consumers.
• The political enviornment- Many countries have strict political interference with the changing government with certain type of industry the previous government supports. So, it is important to know the specific political inclination and agenda with the government currently ruling and probable expected change is when due.