Multinational companies An introduction:

Multinational Companies Definition: A company which operates in several countries. It will own factories, sites and business in more than one country.

Multinational Companies Examples of multinational companies:

Multinational Companies These tend to operate in the main developed trading areas of the world. These are: North America The European Union South – East Asia

Multinational Companies Multinational companies are split into: Parent Company This is the part of the company which owns the rest and does tend to be where the headquarters of the company is based.

Multinational Companies Multinational companies are split into: Subsidiary Company A company owned by the parent company but that has its own limited liability. Much of the production and sales is done in the Subsidiary Company.

Benefits Can spread manufacturing around the world to be close to the market Economies of scale gained by doing things in bulk Can produce goods in places where costs are lower

Drawbacks Communication problems caused by being located in different countries High cost of transporting goods Different legal requirements in different countries Fluctuating exchange rates for different currencies