Multinational Corporation Assignment Example | Topics and Well Written Essays - 500 words

Multinational Corporation - Assignment Example This refers to an assumption that the structure of a market would influence the conduct/ behavior of a firm. The manner in which an organization conducts itself in a given market will thereafter affect its performance. For example; in market where there is less competition, organizations have few obstacles. This gives them an opportunity to have various options in which they can behave in a market, and an example is increasing the prices of their products. Entry through green field methodology promotes competition between the companies in the market. This increases the quality of the products offered, and lowers their price. This is because a new company enters into the market, and it comes with its own strategies of penetrating the target market (United Nations Conferance on Trade and Development, 147). Entry into a host market through mergers has an effect of limiting completion, and this leads to an increase to the prices of goods the organization offers. This is because a multinational company collaborates with an existing company that offers similar products. This collaboration reduces competition since the organizations are not in conflicting of taking each other’s customers, but on retaining these customers. The control of the market by the host country can take the form of price controls, or requirements that before an entry to a given market, the company under consideration must incorporate local people as part of its ownership or senior management. A multinational cooperation can enter into a host market either through mergers, or green field entry. Green field entry has an effect of increasing competition. This is because there is an increase of the number of firms operating in a given market. Mergers on the other hand limit competition, because of the reduction of the number of firms operating in a given market. The entry of Mars into the UK ice cream market leads to decline of producers and sellers of ice