Answer to Question #264866 in Management for Shelley

Question

discuss how multinational companies and/or international marketers can improve their relationships with the host country governments while lessening political vulnerability.

Answer 1

Multinational companies can enhance their relationship with the host nation governments while lessening political vulnerability by sharing subsidiary ownership with their host country governments or national corporation. Consequently, this would offer them an added advantage in terms of accessing resources and gaining a competitive edge in the market for their goods or service. This strategy would enable the multinationals to acquire preferential access to a strong market base in the host nation, and win sizeable governmental grants or contracts in the host country.

Correspondingly, a multinational company can exploit is bargaining power in the host country by providing an efficient technological package that the host nation could not in other ways obtain, adopt efficient production processes to improve their economies of scale and guarantee product differentiation to improve the relationship between them and the host nation.