The previous factors contributed for the significant change in the scenario of and resulted in the variations in the operations of International companies.These variations in the scenarios generally categorised into five stages-
Stage 1. Domestic Company-
Domestic company limits its operations,mission and vision to the national political boundaries. This companies focuses its view in the domestic market opportunities, domestic suppliers, domestic financial companies, domestic customers, etc.
the domestic company never thinks of growing globally. If it grows, beyond its present capacity, the company selects the diversification strategy of entering into new domestic markets, new products, technology, etc. The demotic company does not select the strategy of expansion penetrating into the international markets.
Stage 2. International Company-
Some of the companies which grow beyond their production or domestic marketing capacities,think of internationalizing their operations.These companies believe that the practices adopted in domestic business, the people and products of domestic business, the people and products of domestic company are superior to those of other countries. The Focuses of these companies is domestic but extends the wings to the foreign countries.
The International company holds the marketing mix constantly and extends the operations to new countries. Thus, the international company extends the domestic country marketing mix and business model and practices to foreign countries.
Stage 3. Multinational Company-
Sooner or later, the international companies learn that the extension strategy (that is extending the domestic product, price and promotion to foreign markets) will not work.
This stage of multinational company is also referred to as multi-domestic. Multi-domestic company formulates different strategies for different markets; thus, the orientation shifts from ethnocentric to polycentric orientation the offices/branches/subsidiaries of a multinational company work like domestic company in each country where they operate with distant policies and strategies suitable to the country concerned. Thus, they operate like a domestic company of the country concerned in each of their markets.
Stage 4. Global Company-
A global company is the one, which has either global marketing strategy or a global strategy. Global company either produces in home country and focuses on marketing these products globally, or produces the products globally and focuses on marketing these products domestically.
Stage 5. Transnational Company-
Transnational company products, markets, invests and operates across the world. It is an integrated global enterprise that links global markets at profit. There is no pure transnational corporation. However, most of the transnational companies satisfy many of the characteristics of a global corporation. For example, Coca-Cola, Pepsi-Cola, etc.
Domestic Operations The firm’s market is exclusively domestic.
Export Operations The firm expands its market to include other countries, but retains
production facilities within domestic borders.
Subsidiaries or Joint Ventures The firm physically moves some of its operations out of
the home country.
Part 4- Next topic is Differences between Domestic and International business.