Globalisation has brought about a paradigm shift in recent decades, but How important are multinational companies in this process?
For a company to be considered a multinational, it must meet the following requirements:
- Presence and marketing in various countries.
- Adapting strategies in the various markets.
- They have a centralised structure.
- Significant economic impact through capital and technology contributions.
Companies of this kind play a key role in the development of the global economy.
The difference between an international company and a multinational
Distinguishing between a multinational and an international company can be a challenge in some cases, so let’s take a look at the main differences:
| INTERNATIONAL COMPANY | MULTINATIONAL COMPANY |
|---|---|
| The country of origin is the hub of operations. | It operates in several countries, regardless of where its headquarters are located. |
| It focuses exclusively on sales and exports to other countries. | It manufactures, sells and exports abroad. |
| The process is carried out in the country of origin. | It is not managed centrally, but is adapted at a local level. |
| The risks are lower as the structure is simpler, which in turn means that the opportunities are limited. | Greater risks due to more complex management, but these also present more opportunities. |
What was the world’s first multinational company?
If we look back at the world’s first multinational company, we have to go back 400 years in time, as it is none other than the Dutch East India Company (VOC), founded in 1602. It pioneered this business model and marked a shift in the way international trade was conducted.
This multinational had a presence in Asia, Africa and Europe, meaning it operated from various locations and exercised control in different countries. One of the distinguishing features that draws attention to this company was the financial innovation which was the world’s first stock market, as it was the first to establish a stock market and allow investors to buy shares. Furthermore, it had its own army, which meant that it had a political and economic power which granted it powers similar to those of a government, thereby enabling it to manage its businesses more effectively.
Examples of multinational companies
The best way to get to grips with a concept is through examples, so let’s look at some well-known multinational companies to help us with this process.
Multinational company in Spain
In Spain, we find Take action, a global sustainable development company specialising in renewable energy and sustainable infrastructure. It operates in more than 60 countries across five continents and has its headquarters in Madrid.
Acciona has focused its strategy as a company in complying with the Sustainable Development Goals (SDGs) of the UN.
Multinational company in Germany
Adidas It is one of the world’s leading sports goods companies; indeed, the German firm operates in more than 160 countries worldwide. Founded in 1949 by Adolf Dassler, it has its headquarters in Bavaria.
It is a clear example of a strategy tailored to each market, which has successfully established itself in the minds of consumers as one of the leading sports brands “top of mind”.
Multinational company in Argentina
In Argentina, we find the most widely used platform in Latin America for e-commerce and digital payments, Mercado Libre. It was founded in 1999 in Buenos Aires and currently operates in 18 countries.
This multinational company developed its own payment platform, Mercado Pago, so that transactions can be carried out securely.
US multinational
We find several giants from the world of US-based multinationals, including Amazon. It started out in 1994 as an online bookshop and has since grown into a tech giant; it is so much more than just an online shop.
It is regarded as one of the most influential companies of the 21st century.
Asian multinational
The company Toyota It stands out amongst Asian multinationals as it is one of the largest car manufacturers. It is also a pioneer in the development of hybrid vehicles and is currently ranked as the world leader in the manufacture of this type of car.
The company was founded in Japan in 1937, where its head office is currently based.
Trends and the future of multinational companies
In recent years, multinational companies have grown significantly in a number of areas, namely:
- Geographical expansion.
- Market capitalisation.
- Job creation.
It is the various trends that will shape the future of multinationals, which are currently making a positive contribution to their growth. We can see how the digital transformation It has been very effective in this case, as it ranges from the use of AI to automation, including various process optimisations.
Similarly, the enhancement of reputation through responsible practices, globalisation, the emergence of new business models and the search for professionals with a global outlook have been the key factors driving the evolution and growth of multinational companies in recent decades.
Conclusion
In short, and following a brief overview of the history of the multinational companies, we can conclude that they are a a pillar of the global economy who live in constant adaptation due to the constant evolution of society, as well as the fact that new trends are setting the pace for change and development.
