1. 26 International environment Global business
Why do global firms exist?
Transnational companies
Global marketing
Global marketing mix

2. Global business Globalisation of products and services
Business world is single trading market (global sales)
Export-based industries
Standardised product, mass production, brand recognition
Economies of scale
Example: Intel, Microsoft, Toyota and Nike

3. Why go global companies exist?
Domestic markets too small for growth
Production technology creates economies of scale
Free trade
Communications developments (e.g. online sales and online marketing)
Mergers and alliances
Changing world politics bring about new markets (e.g. Russia and China)

4. Transnational companies
Transnational companies (TNCs) are also called multinational companies
Produce and market products in different countries
Create fully owned subsidiaries:
Overcome language barrier
Benefit from low overheads
Benefit from cheap labour costs
Example: Poland and China
Overcome trading barriers:
Japanese cars manufactured in Europe to overcome import restrictions
Standardised products are easier to market

5. Transnational companies
Why TNCs are attracted to Ireland?
Access to SEM
Low taxation
Skilled and educated workforce
Good infrastructure
Benefits of TNCS
Create jobs
Improve balance of payments (reduce imports and increase exports)
Taxes to government
Disadvantages of TNCs
Social and economic problems if business closes
Repatriation of profits
Competition for indigenous businesses

6. Global marketing International marketing
Same brand marketed and sold in different countries
Standardised products
Example: Coca-Cola and McDonald’s
Bigger profits and economies of scale
Challenges of marketing a global brand:
Currency
Language
Cultural differences
Legal differences
Costs of adapting marketing plan

7. Global marketing mix Four Ps: product, price, promotion and place
Product: may need to adapt standardised product (e.g. right-hand drive)
Price: take local prices into account
Promotion: cultural nuances
Place: distribution channels