Competition

Competition has always been central to the agenda of firms. Any MNCs can get competitive
advantage if they provide good quality of product with low prices. There are the following points
that may be help full to complete in the global market.

Cheap Labor Force

Multinational organizations have the ability to source labor cheaply. The ability to
operate in multiple different companies builds in the ability to capitalize on cheap labor
markets. The multinational footprint is clear in countries with abundant labor forces
willing to operate at a lower cost. This maximizes profit margins and can also deliver
goods to markets at a lower cost.

Access to Lower Tax Rates

The multinational business model has a central brand/corporate office but each arm of
the business has some autonomy and independence as well. This makes it possible to
run independent arms of the business in areas with lower tax rates and tax shelters.
Intentionally locating manufacturing facilities in countries with cheap labor and low
import/export costs gives the multinational a major advantage.

Access to Much Larger Markets

The multinational business model has access to a much larger market than a national
model. Organizations working under this model can essentially open their doors
anywhere that has potential for returns. Entering new markets and expanding the reach
of a single brand creates a global brand influence. The multinational model means that
each arm will operate under a consistent brand, but can alter the product offering in
response to local cultures.

For example, a fast food chain will use consistent branding, but the menu adapts to
cultural tastes. The business model makes it possible access a huge market, while
maximizing potential within each individual market.

Independent Locations Mitigate Risk

The autonomy of each arm in a multinational structure mitigates risk. Power and capital
are distributed across individual locations, and each is responsible for returns. Each
location is independent and therefore expendable, if returns are not accomplished. The
flexibility provided by the distribution of power and capital acts as an advantage for
multinational organizations. It looks like a chess board, where pieces are added or
removed, based on performance and return to the head office