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Diversification: Multinational Companies

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Some MNCs operate a single business. However, many MNCs have more than one type of business strategy. What are the basics of multinational diversification? How do they choose their mix of different businesses? Explain both related and unrelated diversification.

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Solution Summary

This solution explains the type of diversification multinationals undertake. The sources used are also included in the solution.

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Step 1
The basics of multinational diversification are that multinational companies seek to divest businesses that are mature or declining and acquire businesses that are in the introduction or growth stage. Multinational companies seek to achieve economies of scale and gain efficiencies by diversification. These multinationals also seek to achieve economies of scope, try to gain market share, and find avenues of investing cash.

Step 2
Multinationals choose their mix of ...

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