The Global Company

   The global company is the opposite of the Multi-domestic company. The global company strives to concentrate the activities in the value chains as much as possible to one country, instead of several countries like the multi-domestic company. The main reasons for such a strategy is economies of scale in production and other activities, the location advantage of certain countries and the advantage of co-located linked activities. The strategy of the global company is economies of scale and scope through rationalisation of production, concentration of R&D and standardisation of marketing activitites. Mergers and acquisitions of local competitors are common in this strategy in order to reach a scale large enough to serve the global market. The integration between activities is high in the global company and cross-border integration is low since operations are concentrated to one or a few countries. The global company differs from the multi-domestic company since the global company does export to other countries.