Multinational Corporation Expansion Essay Example | Topics and Well Written Essays - 1500 words

Multinational Corporation Expansion - Essay Example The political and legal factors ruling the target company determine the ease with which the organization can establish its business. Proper understanding of the demographics as well as socio-cultural environment of the target market will determine the strategies and promotional plans for market growth. In the current expansion plan, the company chosen is Pfizer, largest pharmaceutical company worldwide. The target market chosen will be Vietnam, where the company has launched its operations yet. COMPANY DESCRIPTION Pfizer is a multinational pharmaceutical company based in United States (Pfizer, 2013a). It is one of the largest pharmaceutical companies in terms of revenue. The company is involved in manufacturing and production of vaccines and medicines for a wide range of medical conditions. The company has its operations in more than 42 countries around the globe. In the current making plan, the company is planning to launch its business in Vietnam (Pfizer, 2013b). COUNTRY DESCRIPTIO N Vietnam, also known as Socialist Republic of Vietnam and is located in the eastern coast of Southeast Asia. The country is bordered by china, Laos and Cambodia. Hanoi is the capital of Vietnam. The country has a single party socialist system, with the government and the president having executive powers. The country is inhabited mainly by the Viet, constituting about 86 percent of the total population. The average life expectancy is 73 years. Around 70 percent of the demographics belong to age group 15- 64 and merely 7 percent of population constitute 65 years or above. In terms of health and malnutrition, it is one of the major issues in rural provinces. The country has suffered from diseases such as malaria and has made progress in establishing a south health system. DIMENSIONS OF INTERNATIONAL FINANCE Management of international finance deals with monetary and financial decisions taken in the area of international business. High inflation of international trade is responsible f or the growth in international business. Thus, while doing international trade, involvement of trade and tariffs is normal and financial management becomes critical as these trade laws and regulations are different for different international markets. International finance is different from domestic finance. There are three dimensions of International finance which differentiates it from others; 1. Political risks and Foreign exchange, 2. Imperfections in market, and 3. Expanded set of opportunities. Political risks and Foreign exchange When individuals and companies are involved in cross-border transactions, they are exposed to risk associated with foreign exchange markets. These are foreign exchange risks and political risks. The companies are exposed to risk in terms of currency rates and nature of the foreign markets. To curb these risks, Pfizer can opt for conducting business in the local currency. Vietnam’s forex market has remained low, so to decrease the forex risk, P fizer can utilize the foreign risk management techniques used in United States. Political risks range from unexpected changes in tax laws to inappropriate or misuse of assets by foreigners. The economic development