Stages in the Development of a Multinational Corporation - MNC
Typical stages in the growth of a multinational corporation are as follows
1. The domestic firm begins to export its products abroad through middlemen in
the home country.
2. As sales of products increase abroad, the firm begins to sell directly to an
importer located abroad. The firm establishes an export department or division
in the home country.
3. The firm establishes a sales branch abroad to handle sale:, and promotional
work in a given foreign market. The manager of the sales branch is directly
responsible to the home office.
4. An overseas sales subsidiary is established. It is incorporated in a foreign
country and hence enjoys, greater autonomy than a sales branch.
5. The firm starts production in the, foreign country through contract,
manufacturing or assembly operations.
6. A manufacturing facility is established abroad. Now the fain has a subsidiary
abroad that, manufactures and sells the product in the foreign -market.
7. The subsidiaries or operating units abroad are integrated, the parent company
takes strategic, or, policy decisions, for all subsidiaries. The subsidiaries
operation undercapitalized planning and control.
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