The Impact of Multinational Enterprise (Mne) on the International Market and Nigerian Economy.

Topics: Multinational corporation, Corporation, Investment Pages: 7 (2222 words) Published: September 3, 2012
Over the years, Multinational enterprise have matured and developed into large companies that they are now part of our everyday lives. Form the use of mobile phones to the cars, personal computers and their software and even the beverage we drink, most of these products are supplied by Multinational companies. Their existence has great impact on our lives. In the world today, Multinational enterprises are powerful companies and they own resources in excess that most host countries possess. These companies are so powerful that they turn out to be power centers that can manipulate the host countries and even international organizations and at times the affairs in its home country. The setup of Multinational enterprise can take different models. (1) The headquarters is based in one country and the production company is based in another country. This is a common model and it allows companies to take advantage of the local firms and also allows for cheap cost of production and services. (2) The parent company is based in one company and the subsidiaries work from another country. E.g. Nestle Nigeria Plc. This kind of model operates differently independently from the parent company except from the basic ties to the parent company. (3) The headquarters is based in one country which supervise different conglomeration that stretches to other different company. This kind of model includes affiliates, subsidiaries and they give account directly to the headquarters (Tatum 2010). It can be said that the aim of an MNE is maximization of profit at the lowest viable cost. The idea behind investing in a foreign land is to take advantage of the resources of the host country to better the home country. Such action has produced a vile reaction from many scholars. Onimode 1982, a Nigerian economic scholar said MNE are monsters that have constantly and steadily crippled the Nigeria economy. MNE in Nigeria have the protection and support of the Nigerian government which has lead to the increase of corruption and unfair treatment for the local companies. Nestle Nigeria Plc in one of the largest MNE in Nigeria. A member of a respected nutrition health and wellness company known worldwide for its high superior products. As I have stated in my proposal and outline its headquarters is in Switzerland. It commenced operations in Nigeria in 1961 and has grown to be a leading food and beverage manufacturing and marketing company in Nigeria. Listed on the Nigerian stock Exchange in 1979 and its number of shareholders at 31,000 and still counting. Nestle Nigeria Plc is known to be the largest company in the beverage sector hence the need to analyze its strategy and how it maintains competitive advantage over its competitors. Competitive advantage can be defined as when a company acquires new tactics, skills and improve its existing ones to outshine its competitors (Child J, 2005). Table 1 illustrates the strategy the company uses to stay above its competitors. Competitive advantage- a mixture of hard to copy advantages of its value chain which has been built over the years. The strong link between the products and its R & D, widest geographical Table 1.

Presence and its industrial spirit, strong values. Growth drivers-With every product the company manufactures the company seeks to offer its customers products that best fit their needs. Operational pillars- this has helped in the performance of the company and also helped to achieve excellence. Global presence is another competitive advantage the company has been able to acquire. The presence of its products in the international market, emerging markets goes far back as over a century. This has produced a close relationship between the management and its customers, the brands and the customers and even its suppliers. Before an investing company makes the decision to invest in another country, it must make the decision on its entry mode that best fit its operations. The entry mode of Nestle Nigeria...
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