Question 10 of 11intermediate💡 UnderstandLong Answer5 marks

Why are global enterprises considered superior to other business organisations?

Correct Answer

Global enterprises are considered superior to other business organisations due to their distinct features which distinguish them from private sector companies, public sector companies and public sector enterprises.

Firstly, global enterprises possess advanced technology in their methods of production. They conform to international standards and quality specifications, which leads to industrial progress in the countries where they operate. They are able to optimally exploit local resources and raw materials. Computerisation and other inventions have come due to the technological advancements provided by MNCs.

Secondly, these enterprises have highly sophisticated research and development departments engaged in developing new products and superior designs of existing products. Qualitative research requires huge investment which only global enterprises can afford, giving them an edge in product innovation.

Thirdly, the marketing strategies of global companies are far more effective than other companies. They use aggressive marketing strategies to increase sales quickly. They possess reliable and up-to-date market information systems. Their advertising and sales promotion techniques are very effective. Since their brands are well-known in the global market, selling products is not a problem.

Finally, their operations extend beyond physical boundaries of their countries. Their international image builds up and market territory expands, making them international brands. They operate through subsidiaries, branches and affiliates in host countries. Due to their giant size, they occupy a dominant position in the market. They also possess huge capital resources and engage in foreign collaboration, making them superior business organisations.

Exercise: EXERCISES | Q: 4 | (Page 22)
For More Understanding

Explanation

This answer covers all the key features mentioned in the textbook context that make global enterprises superior: advanced technology, product innovation, marketing strategies, expansion of market territory, huge capital resources, and foreign collaboration. The answer is structured in 5 paragraphs with key terms bolded as per the marking scheme.