International Business Essay Example | Topics and Well Written Essays - 3000 words - 4

International Business - Essay Example Multinationals are powerful companies employing many people and earning a lot of money. Often their location is welcomed by governments around the world because of the benefits of employment and wealth they bring to a country. Multinationals are a source for progress. I agree with the statement because of the fact that it gives way to globalization, international relations and sustainable development. The first multinational corporation in the world was the Dutch East India Company and the first modern multinational company is believed to be East India Company. It was a mega corporation holding immense power and control in the sub-continent by coining money, forming colonies and negotiating treaties. Multinationals have power and control, they can use their huge revenues and control over distribution channels and brand loyalty of consumers to push countries to open their markets and lessen their support for local companies. If we talk about China alone, great amount of foreign invest ment has entered their economy with foreign-funded firms increasing from a number of 470,000 to over 500,000 in just a span of two years, from 2004 to 2006. Multinationals form a major part of this increasing number, employing about 24 million people and representing around hundred of China’s 200 large exporters and monopolize main market segments like soft drinks. With the emergence of multinationals, the world is advancing leaps and bounds due to increasing globalization. Technology and communications have advanced to such a level that it has revolutionized the selling of products all over the world. Multinationals get in touch with new communities in the global market by building production factories in other countries, besides, their home country. Coca-Cola, a huge soft drink manufacturer now sells and manufacturers soft drinks in over 200 countries across the world. Similarly, Microsoft, a computer software company, earns its 27% of annual sales revenue outside of the Un ited States. In many ways the world is becoming one large market than a series of separate national markets. The same goods and services can be found in many countries throughout the world. Globalization is the term now widely used to describe the increased worldwide competition between businesses (Stimpson, 2006). There are several reasons for this increasing global competition. Free trade agreements and economic unions have reduced protection for industries. Consumers can now purchase goods and services from other countries with no import controls. Improved travel links and communications between all parts of the world have made it easier to compare prices and qualities of goods from many countries. This has further developed as the internet has become more widely available worldwide. Many countries which used to have undeveloped manufacturing industries have been building up these businesses very rapidly. Countries in South East Asia and China itself used to import many of the go ods they needed. Now, that their own manufacturing industries are so strong they can export in large quantities. This creates much more world competition. Globalization has led to more choice and lower price for consumers. It has forced firms to look for ways of increasing efficiency. Inefficient producers have gone out of business. Many firms have merged with foreign businesses to make it easier to sell in foreign markets. This is one of the