What is a transnational company?

Over the years, the economic systems of each country have undergone changes. One of the factors that has increased in the contemporary economy, of the towns is the increase of the transnational companies, where they have played a fundamental role in recent years and have become the new responsible for globalizing the products or services of each country. Globalization has served as an entity, to unify markets and that other people disconnected from the state of each country, can become people who play an important role for the economy of the peoples.

The transnational companiesAre those companies that are not only governed in a specific country, but rather, accumulate their capital, in a combined space of several countries. For example; Coke. For this type of company, they are more efficient when it comes to making profits, since they can buy raw materials in the country that is best for them (cheapest). One of the advantages they have is that they carry out market studies and build their factories in the most advantageous places in each country.

Some of the characteristics that transnational companies show are the following:

• Their space is extensive, they were in several countries.
• The products they offer are spread throughout the world, opening new facilities, giving the opportunity for new employees to develop.
• They have factories all over the world and the quantity of products is very large.
• New technologies, marketing and advertising, to give a nuance to your products and company in a general sense.
• They make investments in the communities that are located, to help the development of the surrounding communities and towns.
• The products they sell are not finished in the same plant where they start, they go through a transportation process in other countries to be finalized and finally commercialized.
• Its way of growing, for the most part, is through mergers and buying new franchises.

Transnational companies play a fundamental role in the international economy. 51% of the largest concentrations of wealth in the world are these types of companies. Making it clear that economic dynamism is very active.

It should be noted that transnational companies, in order to enter the markets of developing countries, obtain the greatest possible benefit of these, they renew their strategies, resulting in a better economy, both for the company and for the country in which it is located installed.

The transnational companies have a well structured organization chart, we can see that around the world they provide employment to millions of people, but with the flow of companies around the world it is low compared to the benefits that these get.

According to many analysts and experts, transnational companies have a dark side and that is that they settle in countries with little development and largely use the cheap hand of the workers, to make multimillion-dollar profits, paying a misery. Having said all this, it should also be mentioned that the good market strategies they use in each country individually, has given it results, to expand its profits and ground in the market world.