Issues faced by multinational companyies Essay Example | Topics and Well Written Essays - 1500 words

Issues faced by multinational companyies - Essay Example In this present day context, companies are eager to earn an extraordinary reputation for themselves in the global market, which further encourages them to diversify their respective business operations. The issues that face by the multi-national organisations might impose considerable impact upon the reputation along with the overall performance of their business in an unfavourable way. In recent years, multinational companies are dealing with critical issues while performing their respective operations throughout the globe. This can be owing to the reason of their wider operational network and prevalence of extreme business market competition among others. A few of the challenges that face by multi-national companies include incessant alteration of business environment, changing trends in the preferences of the customers and rising competition among others (Sabir , 2013; Elnaugh, 2008). Contextually, this paper intends to evaluate the present issues and challenges facing by multinat ional companies in the global business environment. The evaluation will be conducted through reviewing several noteworthy literatures and critically comparing different concepts or theories related to the subject matter. Critical Evaluation of Issues/Results As discussed above, multi-national organisations on the modern day environment often face several issues that impose unfavourable impacts upon their operational performance. With the advent of globalisation, the companies have to deal with stern competition, forcing them to adopt unconventional strategies for the purpose of overcoming the identified issues and attaining sustainability. Apart from this, companies also need to move parallel with the changing demands of the customers. Additionally, constant advancements in technology present another major challenge for companies in this present day context (Slideshare Inc., 2013). The challenges that are currently faced by the multi-national companies have been illustrated hereunde r with reference to the relevant theories. Comparing and Contrasting Different Theories, Concepts and Research Findings Multi-national companies are observed to remain continuously under immense pressure in order to perform effectively in an evenly poised competitive global market. According to the study conducted by McDonald & Burton (2013), there are certain major challenges that companies face when they perform their respective operations in several regions of the world, which can be explained with the assistance of the globalization and international theories. Emphasising the same context, Hennart (2000), affirmed that the foremost among them is the changing economic conditions that have been explained as ‘market imperfections’ in Hymer’s international theories. In this regard, the global financial conditions fluctuate quite frequently due to gaining momentum of globalisation and other crucial factors mainly owing to two driving forces, viz. ‘boundedly rational’ and ‘opportunistic’ forces, influencing companies to change their strategies on a constant basis in correspondence to their transaction costs (Hennart, 2000). Moreover, McDonald & Burton (2013) also affirmed that volatility in the political conditions of various nations also forced multi-national co

Market Model Patterns of Change Research Paper Example | Topics and Well Written Essays - 1000 words - 1

Market Model Patterns of Change - Research Paper Example The introduction of Pepsi and other competitors into a market changed Coca cola’s business operations. Among these was the adoption of increased advertisement to popularize the brand. In addition, it introduced new incentives to the market like sports sponsorship and holiday campaigns. The company has also introduced new products like bottled water. The company entered new markets and increased the number of outlets in the globe (Petretti, 2008). In the short run a business seeks to maximize on the profits by increasing production, decreasing production and continue producing. Coke started operating aggressively in France in 1999. Its primary concentration was customer satisfaction. This is evident through incentives offered to retailers and middlemen. This has made coke available to the customer. It has also acquired shelf spaces in areas that the customer can easily access the product. Coca cola aims to reduce it cost of production in the long run. This could be achieved thr ough the change in capacity levels in order to reach low cost, which is evident through its plan to increase production in china. It would be achieved through introduction of new production line. ... Needless to say, the company was sued by its distributors as it sought to expand its market of powdered sport drinks. This created a bad reputation to the Coca Cola Company. It however created a problem within its distribution channel. Coca cola has faced tough economic conditions. According to Gill (2008), these conditions have led to low consumption of the beverages. It has encountered high ingredients cost and a decline in sales. In countries such as India the company has received criticism from activists. It has been accused of depleting underground water where the bottling plants are located. The company has to improve on its corporate social responsibilities in order to remain competitive in the industry. Competitors are forging partnerships that are aimed at increasing their market share in certain markets (Gill, 2008). Pepsi and Tingyi holding corporation established an alliance that aims to exploit the China market. Coca cola moved in to increase its production in the market by building new production lines. On the other hand, Pepsi has been able to improve its market share to almost 20 percent as compared to coca colas’ 17 percent. Coca cola has experienced a decline in profit levels. In Europe it registered a 4 percent decline in sales. This is due to the economic crises facing the continent (Gill, 2008). Pepsi produces soft drinks as well as snacks. Coca cola has been able to improve on its products as well as come up with bottled water. This indicates that the competition is stiff. Petretti (2008) denotes that these companies are innovating new ideas to remain relevant in the market. Pepsi has been reported to have spent around 3.5 billion dollars in marketing its products. Pepsi has recently realized