2 classmates responses

I’m working on a Economics question and need guidance to help me study.

2 classmates responses 125 word each with 1 reference each discussion.

one: International corporations operate in their home country and in another country else where in the world. Many times this consists of the corporation creating new products and other innovations in their home country. After those products are established as something profitable to market, subsidiaries in other countries would manufacturer and market these products to customers living in that market (Hill & Hult, 2019). The products marketed are standard versions of the item. An example would be something of a staple item, Colgate toothpaste for instance.

Transnational corporations face more complex challenges. Aside from the currency exchange factors and how the company would bring profits from other countries without taxation consequences, operating a company in many nations requires adaptation to the tastes and culture of these locations. Corporations that have pursued a transnational presence are motivated by a need to obtain the lowest cost for manufacturing of their products. Profits motivate companies to enter new markets where the products have not been sold before and to use economies of scale to elevate profits. In Africa and Asia there are an abundance of workers who work for very low wages. Working conditions outside of the major industrialized countries are dangerous and unhealthy for employees (Oka, 2016). At the same time there are responsibilities associated with locating a business in a low wage country while pursuing a market presence.

Transitioning from an international corporation to a transnational corporation is a complex endeavor. The opportunity to enter the market prior to anyone else who markets the same product will yield first-mover results: high market share, the ability to build brand loyalty, and profits. However, a corporation would have to consider the costs: cultural differences, modifying the product to the tastes of a particular market is costly and the costs increase exponentially for each new market entered and for each new site opened in each country.

Sylva Scott

References

Hill, C. W., & Hult, G. M. (2019). International Business. McGraw Hill Education.

Oka, C. (2016, September). Improving Working Conditions in Garment Supply Chains: The Role of Unions in Cambodia. British Journal of Industrial Relations, 54(3), 647-672. doi:10.1111/bjir.12118

two: If a firm is changing its strategy from an international strategy to an in transnational strategy it firsts needs to understand the definition of both. International business in simpler term are importers and exporters. “International businesses do not make direct investments in the host countries where they operate (Boykin, n.d.)”.

A transnational business uses similar tactics as international strategy. The main difference is control. The most important challenges it will face is control, since the firm will be going from bureaucratic methods to one that has formal and informal controls. A transnational strategy helps to symbolize the recent idea of the global operations of strategy. The benefits of a transnational strategy are that it helps to create innovation, effectiveness, efficiency, and helps to add the responsiveness to a changing environment. “Transnational strategies involve a full integration of the various branches owned by the organization.” (Brainmass, n.d.)”.There will be a great amount of significant interpretation when it comes to transnational strategies. To help overcome some of these strategies is understanding consumer preferences, and analyzing global opportunities. “A firm using a transnational strategy seeks a middle ground between a multi domestic strategy and a global strategy (Ketchen, 2014).”

References:

Boykin, G. (n.d.). The Differences in International & Transnational Businesses. Retrieved April 15, 2020, from bizfluent: https://bizfluent.com/info-8721175-differences-int…

Brainmass. (n.d.). Changing Strategies from International to Transnational. Retrieved April 15, 2020, from brainmass: https://brainmass.com/business/international-busin…

Ketchen, D. (2014, September 12). Types of International Strategies. Retrieved April 15, 2020, from https://opentextbc.ca/strategicmanagement/chapter/…

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