IGCSE, A Level Business Student Forum

Q18. Explain one reason why a business might become a multi-national rather than a national business. [3]

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Possible Structure:
[KN]
[AN]
[AN+]

[KN]: A multinational business can operate in multiple countries.
[AN]: A business can spread its risk across different markets.
[AN+]: The business reduces its dependence on any one market.

(Kn) increase target market and attract more sales (an) a major reason for a business to shift to a multi national is to attract more sales through the new market (an+) by doing so they will receive a much higher revenue and greatly influence their profits

KN: It is to grow a global customer base and increase its market share abroad
AN: When the business will have a much larger customer base it will have much higher productivity due to the presence of a larger workforce that would be serving all the customers
AN+: When the productivity of the business is high the employees sees that their efforts contribute to the overall productivity and success of the company, it can boost morale and job satisfaction and will lead towards lower turnover rates

OR

KN: Same as before
AN: When there will be a larger customer base more profit will be developed
AN+: Businesses with strong profits are more attractive to investors, making it easier to secure funding for expansion

(kn) international trade links between countries
(An) multi national compines trade their good and services in international market and fullfil demand of other countries through foreign exchange.
(An+) this boosts companies profit margins and increases their reputation in domestic country which helps them to easily to convince government for relaxations on strict rules.

Business might become a muti national because it serves customer world wide reaching diverse demographics, Therefore national business serves nationwide thus this means business should always go for muti nation because it will increase more revenue his more profit can be earned .

Kn: Being a multi national company is more benifitial as business become more popular and competitive worldwide.
An: Offering consistant quality makes company more competitive and if customers will be satisfied this will build a strong brand image.
An+: Product need to be upgraded with the change in trend and taste of people this will lead to fulfilling consumers demand and providing them what they actually want.

Kn: Being a multi national company is more benifitial as business become more popular and competitive worldwide.
An: Offering consistant quality makes company more competitive and if customers will be satisfied this will build a strong brand image.
An+: Product need to be upgraded with the change in trend and taste of people this will lead to fulfilling consumers demand and providing them what they actually want.

[KN] Increase in popularity of the business
[AN] which will increse the sales of the business
[AN+]thus,Increase in size of business

[KN] multi national businesses have a wide market range
[AN] therefore, if there products are successful it would increase their revenue and profits
[AN+] as a result, leading towards increased brand image and customer loyalty

[KN] National businesses have branches across one country whereas multinational businesses have branches across more than one country.
[AN] This means national businesses can sell their hoods across only one country whereas multinational businesses can sell their goods across more than one country.
[AN+] therefore it improves their sales as compared to sales in national businesses.

KN: if business are succeeding in multiple markets, they will become a multinational corporation for growth and expansion of market share.
AN: Expansion in market share will help in becoming market leaders
AN+: Market leaders are the trend setters and hence will have an advantage in the shifting dynamic markets

[KN] To expand into international markets
[AN] Allowing the business to establish operations in other countries or to sell internationally
[AN+] Resulting in an increase in sales by consumers abroad and help it achieve purchasing economies of scale due to the business expanding.

[KN] Businesses may become multinational to take advantage of countries that have lower corporate tax rates [AN] This means that the business may benefit from greater profits as less tax is deducted from it due to the multinational business operating a less developed country. This may not be possible if the business operated as a national business facing high corporate tax rates set by the government in the home country. [AN+] This proves that the business may have a greater chance of maximizing profits and this may allow it to have sufficient retained profits to expand in other counties and increase its market share.

KN: Higher chances of increase in market share
AN: Will help business get more customer base in the market
AN+: Hence improving there sales and brand image across many countries