Multinational Companies

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Examine the assertion that the success of a multinational company depends on exploiting the opportunities and blocking threats in the international markets. This corresponds to Porter's concept of 'environmental fit' that allows the company to improve its competitive position.


Multinational companies have previously enjoyed the benefits of competitive advantage in the respective markets as a result of their ability to position themselves in the market and exploit resources. However, the values of competitive advantage are under threat as a result of increasing competition, and also the volatility in the market. For example, clothing companies were able to exploit the low cost labour market in some parts of the world, but improved communication links and the Internet have resulted in public outcry over perceived exploitation. The countries involved in supplying these companies have also benefited from the infrastructure and equipment injection which has resulted in an increase in wages. This suggests that the competitive advantage of multinational companies can no longer be guaranteed which has prompted most to seek out sustained competitive advantage.
Sustained competitive advantage is when the benefit of implementing value is prolonged, especially when value strategy is one which cannot be duplicated (van Zyl 2006). This would suggest that more and more companies are investing resources into researching value-creating strategies in a bid to maintain their market positioning and competitive advantage. ...
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