Should the Multinational Firm Be Involved In International Business or Essay

Should the Multinational Firm Be Involved In International Business or Investment with a Developing Country - Essay Example In this study, Supermart is taken as a frictional multinational company which is based in the United Kingdom. It is a developed country. Supermart is a retail company doing its business for a long time in various countries of the world. It is one of the largest companies in the retail industry segment of UK. But for the large numbers of players the market of UK has become very much saturated which limits the growth of the company. Therefore expanding its business internationally will help this retail company to generate more revenue by acquiring the new customer base. For this reason, this UK based company has made a plan of expanding its business in the emerging market of China. Supermart can have many benefits and advantages of this decision. China is experiencing a huge growth in its retail market. A significant rise in the income of household people influences the retail industry of China to grow. China is a developing country having an emerging market. The improvement of the Chi nese economy Influences its people to spend more which becomes an advantage in its retail industry. The purchasing power of the people is increasing in this country which leads to the rise in demand. A positive marketing environment is created for this reason. The government of China is providing business licenses to many new companies for the development of the country. But in some cases, its government policies create many difficulties in case of foreign companies for establishing its business. Some of the reforms of China opens the country’s market and attracts many big companies. The political factor of China influences a lot in its national institutional system. Previously there were many trade regulations in the retail industry sector of this country. This industry was not considered as a prestigious industry by its government and it was not sanctioned. But modernization of China facilitates the growth of its retail industry. The open market system of the country influe nces its institutional system. The economic system of China has become market-oriented economy. The country has become a significant player in a global economy. It supports the growth of its private sector industry. For business operations, the country maintains strict regulations and laws. There is a specific framework under which the companies have to operate its business.