What Is a Primary Goal of a Multinational Corporation?

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Multinational corporations have an obligation to their stakeholders to consistently grow revenue, manage expenses and improve profits. With offices and facilities around the globe, multinational corporations need to be familiar with the needs of varying markets. This unique position presents different challenges and opportunities for the corporation.

TL;DR (Too Long; Didn't Read)

Like many businesses, the primary goal of many multinational corporations is to make a profit and reach their financial goals. However, unlike many other businesses, multinational corporations have to navigate different geographical distances, cultures and target markets while selling their products and services.

Features of Multinational Companies

A multinational corporation (MNC) is a large organization that has a head office in a home country, as well as multiple other offices, factories or plants in other countries around the world. The head office is where the management and strategy of the global offices are coordinated. The satellite offices also have their own executive team that works closely with the head office.

Conduct Detailed Market Research

Operating in different countries means that the multinational corporation needs to be up to date on the demographic, geographic, psychographic and behavioral traits of the target audience in each country. To effectively sell their products and services and make a profit, the MNC needs to conduct detailed market research to understand what each market needs.

For example, if an MNC sells food products, they'll have to navigate many cultural differences across markets. Some countries may not eat beef or pork for religious reasons, for instance, while others may desire a more plant-based approach. In addition to understanding what the market wants, market research can help the company to create effective and culturally unique marketing campaigns.

Enter New Markets

A corresponding objective of an MNC, which contributes to increasing profits, is entering new markets. While the company may be able to sell into different countries from their home office, having a physical base in the new market can provide the company with a distinct advantage. Hiring local employees can give the company unprecedented insight into the market.

In addition to selling to the market where the international office is located, MNCs can also investigate entering neighboring countries. There may be transportation and infrastructure benefits to selling products in those nearby markets, which can further help the company to increase its profits.

Adapt Products and Services for Local Cultures

A multinational corporation needs to be able to make changes to their offerings to meet the needs of local markets. While certain products may seem like they can sell across cultures, geographical borders, religions and races, they still may require some customization. This is where detailed market research can guide product development.

For example, if a multinational corporation sells athletic shoes, they may need to create a lower price point model for some markets and a vegan model for other markets, in addition to a sandal model for warm climates. Being able to adjust products to meet the needs of different markets can help the company to increase profits.

Maintain a Global and Local Brand Image

Multinational corporations need to carefully manage their global and local brand images. As a large corporate entity, the global brand can help to increase customer loyalty and recognition in newer markets. However, businesses may also need to consider local adaptations to the brand image.

For example, the company name on the logo may need to be written in a different language or script, while the advertising campaigns may need to use people from the local countries in their images. Some brand messages may not translate well and campaigns may need to have different unique selling propositions for each country. This level of brand personalization can help the multinational corporation to increase profits in each market.