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International Trade and Business - Essay Example
Author : effertzneil
Pages 5 (1255 words)
Cultural differences have posed a major problem to the multinational companies; in each country that the multinational company invest in it faces new and different challenges depending of the culture of the host country. One of the major problems that they face includes tastes and preferences, language differences, government policies and other believes and values posed by the market…
In developed countries multinational companies are likely to face consumers who have a large disposable income and therefore consumers are more concerned about the quality and not the price, in other developing countries consumers are more concerned about the price and quantity.
Different countries have their own standards set by governments and even the consumers, example a multinational company aimed at producing food stuffs may be required to provide its production formula to the authorities in order for them to determine whether such products are fit, an example is the venture of coca cola company into India where the company was supposed to provide information about the formula used to make the drinks, the company declined and its rival Pepsi provided its formula and entered the market, however the authorities later announced that Pepsi contained harmful substances that were used in making pesticides. ...