Local, National, International Businesses and MNCs (Cambridge International A-Level Business)

Local Businesses

• Local businesses operate in a specific and limited location, such as a town, city zone or within a tourist attraction
• Their owners usually focus on providing a service to the surrounding community and tend to remain small

Examples of local businesses

Local businesses provide a service to customers within a limited geographical area

National Businesses

• National businesses operate outlets or provide services in numerous locations across the country

• Their focus is on meeting the needs of customers of a particular nationality

• They usually aim to increase market share and achieve economies of scale

• Examples of national businesses include:

  • Bricoman in France is a national retailer of DIY and building supplies
  • Spoon in Costa Rica is a national chain of fast food restaurants
  • Amasvin is a popular bubble tea brand with more than 80 stores across South Korea

International Businesses

• International businesses operate outlets or provide services in more than one country

• They tend to operate in countries that share characteristics of their home country, such as

  • Similar customer needs and wants
  • Common business procedures or regulations
  • The same language

• Examples of international businesses include

  • Fashion retailer Zara
  • Holiday company Eurocamp
  • Publisher Time Out

Multinational Businesses

• A multinational company (MNC) is a business that is registered in one country but has manufacturing operations/outlets in different countries

  • E.g. Starbucks headquarters are in Washington, USA but they have 32,000 stores in 80 countries

• Factors such as globalisation and deregulation have contributed to the growth of MNC’s

• MNC’s choose locations based on factors such as cost advantages and access to markets

  • Nike originates from the USA, but 50% of their manufacturing takes place in China, Vietnam and Indonesia due to the lower production costs in these countries

• The impact of multinationals are considered in more detail later in the course

Exam Hint The scale of a business can be an important factor in determining its objectives.

Local businesses are likely to want to remain relatively small, with the objective of providing a good service, while international businesses may be looking to grow and operate in more countries to become multinationals and maximise profit.