Issues in global business Essay Example | Topics and Well Written Essays - 500 words - 1

Issues in global business - Essay Example In addition, if the firm has specialized products or services, which cannot be found or found in minor varieties in a foreign market, then also firms will adopt internationalization and become an MNC. Instead of competing in a saturated local environment, if the firm becomes MNC, it will have access to new markets and new customers. In foreign countries, people will always view foreign products with big expectations, particularly if it is a well known brand. If the MNCs are able to provide superior quality product than the local companies, it can attract many customers and earn good profits. However, the disadvantage is, in most cases, the MNCs have to launch a new and localized marketing campaign, to build a brand from scratch. As the local companies would have been operating for a long time, they will be in the minds of the people, but MNCs has to carry out campaigns and this could take time. There are a number of entry paths available to the MNCs to enter foreign countries. However, the common paths are Direct Investment, Joint Ventures, Franchising, Mergers, etc. Although, Direct Investment will be the favourable mode of entry for the foreign firms, if there are any government regulations against it, then they will go for joint ventures and franchising. Franchising has become one of the common entry paths because franchises have local knowledge and expertise that can be leveraged to a competitive advantage. (Neelankavil and Rai