Primary Sector - Involved in extraction, harvesting and conversion of natural resources (e.g. agriculture, fishing, mining, forestry and oil extraction). As economies develop, there is less reliance on the primary sector, as there is little value added in primary production.
‍
Secondary Sector - Involved in manufacturing or construction of products (e.g. clothes manufacturers, publishing firms, breweries, construction firms, electronics manufacturers, energy production).
‍
Tertiary Sector - Specialised in providing services to the general population (e.g. retail, transportation and distribution,  banking, finance, insurance, health care, leisure and tourism, and entertainment).
‍
Quaternary Sector - Involved in intellectual, knowledge-based activities that generate and share information (e.g. information communication technologies, research & development, consultancy services, scientific research) .

An individual who plans, organises and manages a business, taking on financial risks in doing so. An entrepreneur capitalises on opportunities to create a product or service that fulfils a market demand, by building an organisation to support those sales.

An individual who acts as an entrepreneur but as an employee within a large organisation. An intrapreneur generates new ideas and innovations for the organisation, and takes on the responsibility and risks of turning a project or idea into a profitable finished product for the organisation.

Risks Involved - An entrepreneur takes substantial risk with personal consequences, such as a loss of personal finance or credibility with business partners. However, as intrapreneurs act under the guise of an organisation, it is the organisation who incurs the risks and costs of failure.
‍
‍Benefits of Success - An entrepreneur will enjoy unbound benefits to the success of the project, and will have full control over the use of resources that come from the success of the business, such as where to reinvest profits. An intrapreneur's success will benefit the organisation, who has full ownership and administration of the project, with potential minor benefits to the intrapreneur, such as recognition or financial rewards.

Earnings - Potential earnings from setting up a personal business far outweigh a salary from regular employment.
‍
Transference and Inheritance - Many entrepreneurs view their business as something they would like to pass on to their children, giving them a security that might not be possible if they chose to work for someone else.
‍
Challenge - Some people might view setting up and running a business as a challenge, which drives them to perform and gives them personal satisfaction.
‍
Autonomy - Entrepreneurs enjoy independence and freedom of choice when it comes to their work.
‍
Hobbies - Some people have turned the pursuit of a passion or a hobby into a functional business practice.

Lack of Finance - lacking credentials to obtain business loans to cover unforeseen debts, lacking cash inflow to counter initial start-up costs, growing too quickly without having adequate reserves to fund unforeseen circumstances.
‍
Marketing Problems - Insufficient / Inadequate analyses of market trends, consumer demands, unique selling point, etc.
‍
Legalities - Failure to comply with all necessary legislation, such as business registration procedures, insurance for staff and fixed assets, consumer protection laws, copyright issues, etc.
‍
Production Problems - Inaccurate forecast of productivity, market demand, over/under-stock, lack of economies of scale due to small production, etc.
‍
‍External Influences - Exogenous shocks that affect the global economy and increase the difficulty of trade.

Feasibility of Business Idea - Unbiased analysis of market response to product, financial strain and personal investment.
‍
‍Finance Required - Fixed assets required, unbiased forecast of operational costs, and how capital will be acquired.
‍
‍Human Resource Required - Roles required for operational functions, how to attract potential employees, etc.
‍
‍Geographical Advantages or Limitations - Availability of infrastructure for a feasible chain of production, government legislation and communications technologies available, etc.
‍
‍Barrier of Entry to Market - Concentration of competitors in the industry, unique selling point of business.

A business plan is a report summarising the operational and financial objectives of a business, as well as the strategies, plans and budgets to achieve its objectives. An objective business plan will specify the viability of a business idea, and is generally presented to potential investors and lenders to demonstrate the potential of the business.

Viability of Business - Creating a business plan forces managers or entrepreneurs to analyse and evaluate whether any aspects of strategies have been overlooked, and which aspects require more attention and discussion.
‍
‍Attracting Investors - A comprehensive business plan with a viable business idea will aid the business in attracting financial lenders and investors who believe in the direction of the business.
‍
‍Attracting Talent - Especially for unproven startups, a strong business plan will attract talented employees and partners by showing them the direction and growth potential of the business.

Private Sector - Organisations are owned and controlled by private individuals and businesses, rather than by the government.
‍
‍Public Sector - Organisations under the ownership and control of the government. Traditionally, they provide essential goods and services that may be unsustainable enterprises for the private sector (i.e. emergency services, education).

Sole Trader / Proprietorship - A business that is owned and controlled by an individual or singular entity (i.e. self-employed plumbers and mechanics, cafes, farms, florists, etc.).
‍
Advantages
‍Lower Start-Up Costs - Sole traders are generally small enterprises that would require small start-up costs due to a smaller expected output.
‍
‍Profit taking - Sole traders receive full profits of their business, guaranteeing that a rise in effort and productivity would promise higher monetary returns.
‍
‍Autonomy - Sole traders are their own boss, and hence have full authority in decision-making.
‍
‍Privacy - Unlike other types of businesses, sole traders do not have to publish financial records and the owner enjoys confidentiality.

Disadvantages
‍Unlimited liability - As an unincorporated business, the sole trader and her/his business is seen as the same legal entity, and hence the trader will be liable for all debts incurred by the business.
‍
‍Limited sources of finance - Sole traders will find it difficult to secure funding beyond personal savings and their private network, as licensed money lenders may judge a sole trader to be risk averse.
‍
‍Limited economies of scale - A sole trader will not be able to exploit the reduction of costs with an increased scale of production. This puts them at an economic disadvantage in terms of pricing and availability in comparison to large incorporated businesses.

Partnerships - An unincorporated business owned by 2 to 20 parties who manage and operate the business, sharing its profits and losses. Partnerships may have a “silent partner”, who has a financial stake in the business but is not involved in its daily operations.
‍
Advantages
‍Specialisation and Division of Labour - Often in partnerships, the synergy of experience and skillsets improve the efficiency of operations as different partners manage different functions and operations of the business.
‍
‍Financial Privacy - As an unincorporated business, partnerships enjoy financial privacy as they do not have to publicise their financial records to stakeholders.
‍
Disadvantages
‍Unlimited Liability - Partnerships are liable for debts incurred by the business as the owners and the business are seen as the same legal entity.
‍
‍Conflict - Often in partnerships the multiple owners will oppose each other with different perspectives on a decision. The conflict prolongs decision making and hampers the efficiency of operations.

Companies - Incorporated businesses owned by shareholders.

Advantages
‍Raising Capital - Companies are able to generate large amounts of profits with the sale of their stock, which they can repeat regularly after they perform a stock buy-back so that they can resell the stock at a higher price.
‍
‍Limited Liability - Companies are seen as separate legal entities from its owners. Hence, shareholders and other stakeholders do not risk personal assets when the company incurs debts.
‍
‍Economies of Scale - Companies often operate at a large scale, allowing them to benefit from economies of scale due to a reduction in unit costs of production.
‍
Disadvantages
‍Bureaucracy - As a business grows, its structure becomes more complex. Companies are often large businesses with many layers, and the time lag for communication to climb through each layer to the next decreases its inefficiency and isolates employees from upper-management.
‍
‍Disclosure of Information - Financial data of companies must be disclosed to all shareholders. On top of the time and cost of audits, companies become vulnerable to market reactions to their financial records, which may threaten to lower their stock value.

Private Limited Company - A company that cannot raise share capital from the general public. Companies often choose to stay limited when owners want to retain strict ownership and control over operations.
‍
Public Limited Company - A company that is able to advertise and sell its shares to the general public via a stock exchange. Companies tend to crossover from private to public with an Initial Public Offering (IPO), where its shares are listed on the public stock exchange for the first time.

Social Enterprise - Revenue-generating businesses with social objectives at the core of their operations. Whilst commercial for-profit businesses commonly aim to maximise revenue and cut costs, social enterprises have an added philanthropic motivation.

Cooperatives - For-profit social enterprises owned and run by their members, such as employees or customers, with the common goal of creating value for their stakeholders by operating in a socially responsible way. Cooperatives share any profits earned between all members, who all have decision-making authority.

Advantages
‍Incentive to Work - In cooperatives, all employees have a stake in the business, and are hence directly affected by its performance. This enhances staff motivation and labour productivity.
‍
‍Public Support - As a social enterprise, cooperatives are viewed favourably by the public over businesses that do not advocate social objectives.
‍
Disadvantages
‍Slow Decision-Making - As every member of a cooperative holds decision-making authority, the efficiency of the business may be negative as opposing perspectives may spark conflicts during decision-making processes.
‍
Limited Sources of Finance - As a social enterprise, cooperatives rely heavily on market awareness of their social objectives to sell their products, which tend to not be able to compete on a price standpoint due to the higher costs of acting more ethical (i.e. paying above minimum wage, sourcing materials locally, forwarding a percentage of profits to a social cause).

Microfinance Providers - A type of financial service aimed at entrepreneurs of small businesses, especially to entrepreneurs with a low socio-economic status who would be unable to secure a loan from a bank or an investor. As a social enterprise, microfinance providers enable disadvantaged members of society to gain access to essential financial services that will allow them to take their first steps into business to lift themselves out of poverty.

Advantages
‍Social Benefits - When entrepreneurs are successful with the loans received from microfinance providers, a budding business will spawn new job opportunities and have other beneficial effects on society and the local economies.
‍
Disadvantages
‍Negative Stereotype - Microfinance providers are critiqued as immoral for preying on the poor and financially vulnerable, as they often charge high interest on loans.
‍
‍Limited Finance - Microfinance schemes have a high risk of default as most borrowers use the funds in its entirety to start a business, which may or may not succeed.

Public-Private Partnerships - A contractual partnership between the government or public agencies and the private sector to provide goods or services to the public that are often not profitable. Public agencies can gain the expertise of partnering with specialised organisations in the industry to complete projects that would otherwise not have financial benefits for the private sector.

Non-profit social enterprises - Businesses run in a commercial-like manner but without profit being the main goal. Instead, non-profit organisations (NPOs) use surplus revenues to achieve their social goals rather than distributing it as profits or dividends. (Public libraries, public schools, museums, government hospitals, social services, etc.)

Non-Governmental Organisations - A non-profit social enterprise that is set up and run for societal benefits, but operates in the private sector. UN definition “Private organisations that pursue activities to relieve suffering, promote the interests of the poor, protect the environment, provide basic social services or undertake community development.”

Charity - A non-profit social enterprise that provides voluntary support for good causes, such as the protection of children, animals and the natural environment. Its key function is raising funds through donations in order to financially support a cause.

Benefits of being a charity
‍Tax Exemptions for NPOs - Charities are exempt from corporate tax, and benefit from concessions for other taxes such as business rates, land tax, capital gains tax and inheritance tax on gifts made in a will.
‍
‍Tax Incentives for Donors - Charities have a reliable source of revenue from donations as donors are incentivised with tax allowances for the funds they donate to charities.
‍
‍Limited Liability - Charities can register as limited companies to protect the interests of employees and managers, thereby increasing job security by reducing risks involved.
‍
Drawbacks of being a charity
‍Disincentive Effects - The lack of a profit motive may cause the business to become unsustainable in the long term if costs start accumulating without the revenue to cover any debts incurred.
‍
Large Barrier to Entry - New charities will face well-established, multinational charities who have already gained the trust of their donors.
‍
‍Bureaucracy - Charities are under scrutiny by governing bodies to ensure they do not commit any fraudulent activities

Vision - An outline of the long-term aspirations of the organisation. It is a source of inspiration for the direction of the organisation.

Mission - A declaration of the underlying purpose of an organisation’s existence, its objectives and its core values. Mission statements are specific and discuss how an organisation plans to achieve its aims and objectives

Statements - A mission statement concentrates on the present and describes what the business wishes to do now; it dictates the desired level of performance and values of the business. Whereas a vision statement focuses on the future and outlines what the company wants to be in the future; serving as a source of inspiration and affirms the impact the business hopes to have.
‍
‍Use - A mission statement can be used as a cohesive management tool: directing day-to-day expectations and objectives. The culture, actions and behaviour of the business all fall under its mission. Whereas a vision statement is an elusive goal that streamlines business decisions towards a certain direction. Instead of directing daily operations, it gives employees a sense of ultimate purpose for their actions to motivate and inspire them to accomplish.

Aims are general and long-term goals of an organisation, providing a sense of direction for decision-making processes.

Objectives are short-to-medium term and specific targets an organisation sets in as instructions to achieve its aims. They are usually realistic and quantifiable targets to be achieved within a time frame, and are derived directly from the aims of an organisation.

To measure and control - Help monitor the progress of the business in the towards performance markers.
‍
‍To motivate - Helps to inspire managers and employees to reach a common goal.

‍To direct - Aids decision-making by providing a clear focus and direction for all individuals and departments.

Strategic Objectives - Long-term goals in alignment with the aims of a business (i.e. Profit maximisation, growth, market standing, image and reputation). Strategic objectives are more general and the progress of the business in achieving these objectives are evaluated over a period of time.

‍Tactical Objectives - Short-term goals that regarding a particular section of the organisation. They are specific goals that guide the daily functioning of certain departments or operations.

Corporate Social Responsibility - A management concept that helps a business integrate ethical concerns in their business operations and interactions with stakeholders. CSR makes a business conscious of its economic, social and environmental impacts on its community and stakeholders.

Advantages
‍Improved Corporate Image - Enhances corporate image and public reputation of the business, with positive media coverage raising brand awareness.

‍Improved Staff Morale - Potential employees may be attracted to work for the business if their values align with the social benefits the business advocates; this gives the business a competitive edge for hiring talent, and enables the business to retain productive employees and improve motivation.

Disadvantages
‍Lower Profits - Compliance with ethical standards typically means sacrificing profits for a better cause. The lower revenue will have to be offset by either cutting costs or increasing prices, which will decrease the competitiveness of the product from a price standpoint.

‍Stakeholder Conflict - Shareholders and financial investors will be concerned with a dramatic adoption of ethical behaviour that threatens to decrease profits and hence reduce the value of the business.

‍Subjective Perspectives - All ethical behaviour will incite conflict over opposing perspectives on whether the business’ actions can be justified as ethical

SWOT Analysis - A useful decision-making tool used to assess the current and future situation of a product, brand, business, proposal, or decision. It analyses internal factors of strengths and weaknesses and external factors of opportunities and threats relevant to the issue under investigation.

Advantages
‍Simplicity - Not time consuming and easy to understand. The business can easily take advantage of its strengths, address its weaknesses, deter threats, and capitalise on opportunities.

‍Decision-Making - Reduces risks of decision-making by providing an objective and logical frame, using foresight and proactive thinking to develop a greater understanding of the business.

‍Achieving Aims - A SWOT analysis allows a business to critique the feasibility of its objectives.

Disadvantages
‍Simplicity - It can be too shallow, ignoring in-depth analyses and details, and the model is static whereas a business environment is always changing.

‍Redundant Information - A SWOT Analysis can produce a lot of information, but will not identify any solutions to problems or alternative decisions

Market Penetration - Selling existing products in existing markets, often to increase the market share of current products. Businesses usually develop new marketing strategies, such as increasing promotional activities or price strategies, in an effort to boost sales. Market Penetration is low risk due to the business' familiarity with both the product and the target market, which will reduce the need for extensive research and increase the accuracy of forecasts.
‍
Product Development - Selling new products in existing markets, often using product extension strategies (i.e. releasing new versions of iphone) to prolong the demand for goods and services that have reached the saturation or decline stage of their product life cycle.
‍
Market Development - Selling existing products in new markets, by opening new distribution channels or launching marketing campaigns to target a different demographic.
‍
Diversification - Selling new products in new markets; suitable for businesses that have reached saturation and are seeking new opportunities to expand their product portfolio. A common way to diversify is to become a holding company that will own the controlling interest in other diverse companies (subsidiaries).

Stakeholder - Any person or organisation with a direct interest in, and is affected by, the activities and performance of a business. Stakeholder groups are characterised either as internal stakeholders, who are members of the organisation, and external stakeholders, parties that do not form part of the business but have a direct interest in or involvement in the organisation.

Employees - Concerned with job security and performance-related rewards.

Managers and Directors - Concerned with efficiency of daily operations.

Shareholders - Concerned with financial performance and public reputation of the business.

Customers - Concerned with product quality and value.

Suppliers - Concerned with supplying stocks of raw materials, component parts and finished goods needed for production.

Pressure Groups - Concerned with the ethical implications of a business’ actions.

Competitors - Concerned with the financial success of the business.

Government - Concerned with business’ compliance with laws and regulations.

Aims and Objectives - The organisation's focus, whether it be on achieving social objectives, on remaining sustainable, or on profit-driven objectives, will direct its conflict resolution process as it steers decision-making towards maximising its reach of its aims and objectives.

‍Identify Priority Stakeholders - Different businesses will have varying perspectives on the significance of each stakeholder group. For example, a profit-driven business may prioritise the demands of shareholders, social enterprises may prioritise the demands of pressure groups and customers, and a product-oriented business may prioritise the demands of management.

‍Conciliation and Arbitration - Businesses can employ the services of an independent party to settle a conflict and help the business arrive at a mutually beneficial conclusion.

Economies of Scale - Lowered average costs of production as operations increase in scale due to improvements in productive efficiency. Economies of scale represents the cost-savings and competitive advantages businesses will gain from a growth in operations.

Technical Economies - The use of automation and machinery to produce a large output will reduce the average costs of production as the fixed costs of the machinery over the scale of the output.

‍Financial Economies - Larger firms can borrow large sums of money at lower interests rates as they are seen as less risky to financial lenders.

‍Managerial Economies - Larger firms are able to divide managerial roles so that management staff can be concentrated on specific tasks.

‍Specialisation Economies - Larger firms are able to hire specialised employees as they divide their workforce into specific departments.

‍Marketing Economies - Large firms can benefit from lower average costs by selling in bulk to retailers.

‍Purchasing Economies - Large firms can lower average costs by buying resources in bulk and negotiating with suppliers for discounts.

‍Risk-Bearing Economies - Large firms with a diversified product portfolio have larger room for error and risk-taking, as other successes can balance out any failures.

External Economies of Scale - Cost saving benefits of large-scale operations arising from factors outside the control of the business due to its favourable location or general growth in the industry. Examples include technological progress, improved infrastructure, growing economy, abundance of skilled labour in the area.

Internal Diseconomies of Scale - Higher unit costs of production as a firm continues to increase in size as inefficiencies begin to arise.

Possible Diseconomies of Scale
‍Lack of Control and Coordination - Span of control of management increases beyond their competence, causing a lack of overview of subordinates, as well as communication and decision-making problems.

‍Poorer Working Relationships - With a larger workforce, senior management will begin to become detached from subordinates lower in the hierarchy. The decrease in management involvement may leave subordinates feeling isolated and alienated, which can harm staff morale and hence their productivity.

‍Division of Labour - Highly specialised tasks may begin to feel monotonous and repetitive. Staff may begin to slack and lower their productivity.

External Diseconomies of Scale - An increase in average costs of production as a firm grows due to factors outside of its control.

Possible Diseconomies of Scale
‍Market Saturation - An increase in the number of competitors in the markets will see market share drop for all players, hence reducing the revenue for all businesses in the industry.

‍Increase in the Value of Land - As businesses begin to immigrate to a certain location, the value of land will increase and hence businesses will face increasing fixed costs without any corresponding increase in output.

Brand Recognition - A more familiar brand due to larger marketing campaigns will allow large businesses to sell to a wider market.

‍Brand Reputation - Larger firms tend to be trusted due to their brand image and reputation, leading to greater casual purchases from unique customers.

‍Lower Prices - Larger brands have a price advantage due to the economies of scale they can benefit from.

‍Customer Loyalty - Larger brands have greater number of loyal and repeat customers.

Cost Control - Small businesses are able to manage small details more effectively, and have greater control, coordination and communication.

‍Flexibility - Small businesses are able to adapt to changes more readily than big businesses as there are lesser things to maneuver within its operations.

‍Internal/Organic Growth - When a business expands its own capacity using its own capabilities and resources to increase the scale of its operations and sales revenue. Organic growth can be achieved through reinvesting profits to improve operational efficiency, and increase revenue and cash inflow.
‍
Advantages
‍Better Control and Coordination - Incremental growth allows the business to maintain control over the direction of the business, and monitor results of small changes to understand market preferences. Less risk will be associated with the changes made as they can are not definitive.

‍Relatively Inexpensive - A large one-time investment is not required in organic growth as it relies on incremental changes that accumulate over time using retained profits. The lower capital required will allow the business to grow without restricting itself to a vulnerable cash flow position.

Disadvantages
‍Diseconomies of Scale - Higher unit costs of production can accumulate if the business does not monitor potential inefficiencies that appear due to growth of the scale of operations.

‍Slower Growth - Internal growth relies on incremental changes and is inevitably slower than a one-time investment for external growth. This may hamper the competitiveness of the business in comparison to other businesses who have grown at a faster rate with external growth.

External/Inorganic Growth - Growth through dealings with outside organisations to increase the scale of operations of the business.

Advantages
‍Faster growth - Inorganic growth methods will lead to an immediate increase in market share or access to new markets.

‍Synergy - Combining resources with those of competitors may open the door to new insights that can help the business improve its operational efficiency.

‍Competitive Edge - Newfound resources, assets, and market share will enable the business to immediately increase its competitiveness.

Disadvantages
‍Upfront Costs - Funding inorganic growth methods requires significant costs that could leave the business in a vulnerable cash flow position that may cost the survival of the business if the integration does not succeed.

‍Management Challenges - The sudden growth generates complexities associated with organisational structure and management control, such as a sudden increase in the scale of the workforce.

Horizontal Integration - When a company integrates with a competitor operating in the same industry to gain greater market share and power in the industry.

‍Forward Vertical Integration - Integration with a business towards the later stages of production (coffee manufacturer acquiring cafes).

‍Backward Vertical Integration - Integration with a business earlier in chain of production (coffee manufacturer merging with coffee bean supplier).

‍Lateral Integration - M&As between firms that have similar operations but do not directly compete with one another (PepsiCo acquiring Quaker Oats, Nike acquiring Converse).

‍Conglomerate M&As - M&As between businesses that are in completely different industries.

Benefits
‍Greater market share - greater market share and power, and a larger customer base. Allows the business to gain influence over the entire industry.

‍Synergy - Integrating firms will have access to each other’s resources and learn each other’s practices; the synergy of these may birth new processes and operations that maximises the strengths from the merging companies and results in greater efficiency.

Drawback
‍Redundancies - Merging with another company would mean intaking all their employees, which will lead to duplicate roles. Redundancies will be inevitable, and the lowered job security will negatively impact staff morale, leading to lower productivity.

Joint Ventures - when two or more businesses split the costs, risks, control and rewards of a business project, and in doing so, set up a new legal entity. JV allows organisations to enjoy some benefits from M&As without risking the loss of corporate identity.

Strategic Alliance - Two or more businesses cooperate in a business venture for mutual benefit. They share the costs and risks of the project but remain as separate legal entities.

Franchising - A form of business ownership whereby a person or organisation buys a license to trade using another firm’s name, logos, brands and trademarks. In return, the franchisee pays a license fee to the franchisor, together with royalty payments based on sales revenue.

Benefits
‍Low Up-Front Costs - Company enjoy benefits of external growth without committing large investments that risk their cash flow position, and handling operational costs such as salaries and stocks.

‍Cultural Adaptation - Company can enjoy market development without having to expend resources researching to adapt to different cultures when entering new markets, as franchisees have local knowledge and can adapt their own store to the local culture.

‍Passive Income - Franchisors receive royalty payments from the franchisee, unlocking a consistent stream of passive income.

Drawback
‍Quality Assurance - Franchisors do not monitor the daily operations of franchisees, and hence cannot ensure they meet quality standards of the franchise. Unsuccessful franchisees may damage the reputation of the entire franchise.

Benefits
‍Low Risk - Lower risk in starting a franchise than to start an entirely brand new business, as they just have to adapt and apply a proven formula to their local market.

‍Guidance from Franchisor - It is in the best interest of the franchisor that the franchisee succeeds. Therefore, franchisors often offer assistance for functions like marketing and promotion.

Drawback
‍Insignificant Revenue - Franchisee pays a significant percentage of their revenues to the franchisor, and begins the venture with a negative cash flow after paying the licensing fee.

Globalisation - the growing integration and interdependence of the world’s economies as they integrate towards a single global economy.

Opportunities of Globalisation
‍Reach - Increased customer base as businesses are able to easily access foreign markets.

‍Growth - External growth opportunities with businesses in foreign markets allow businesses to easily diversify and enter new markets.

Threats of Globalisation
‍Competition - Globalisation considerably increases the level of competition in the local market, as multinational companies begin to diversify and enter foreign markets.

‍Barriers to Entry - Customer expectations increase due to the quality of products available to them, thereby increasing the barrier to entry of a new business to impacted markets.

Advantages of MNCs on Host Countries
‍Economic Stimulus - MNCs are considered as a major stimulus to economic growth in developing countries. They compensate for inadequate job opportunities by employing the local population, which has a domino effect of increasing consumer expenditure in the community and thereby boosting other local businesses and the local economy.

‍Competition - MNCs intensify competition in the host country, raising the standards of the market for consumers. Governments of developing countries also take initiatives to attract MNCs, such as building infrastructure, which will benefit the local population and businesses.

‍Workforce Development - MNCs build the competence and skill of local workers, who can then apply their experience working for a large company into entrepreneurship and other jobs that boost the local economy.

Disadvantages of MNCs on Host Countries
‍Competition - The intensified competition may force small local businesses into bankruptcy and foreclosure if they are operating in the same or similar industry. This raises unemployment and may cause unrest within the local community.

‍Lack of Accountability - MNCs are notorious for capitalising on the lack of manpower and environmental regulations in developing countries. The exploitation of low-wage workers, as well as the damaging environmental impacts of unregulated activities, adversely affect the local community and standard of living