In the search for profits, U.S. corporations have been forced to look beyond our country’s borders. This movement was spurred on by the collapse of communism and the acceptance of the free market system in Third World countries. All this has taken place at a time when information technology has experienced a revolution brought on by the personal computer and the Internet. Concurrently, the United States went through an unprecedented period of deregulation of industries. These changes resulted in the opening of new international markets, and U.S.

firms experienced a period of price competition here at home that made it imperative that businesses look across borders for investment opportunities. The end result is that many U.S. companies, including IBM, Walt Disney, and American Express, have restructured their operations to expand internationally. The bottom line is that what you think of as a U.S.

firm may be much more of a multinational firm than you would expect.

For example, Coca-Cola earns around 60 percent of its profits from overseas sales, and this is not uncommon for numerous U.S. firms.

Just as U.S. firms have ventured abroad, foreign firms have also made their mark in the United States. You need only look to the auto industry to see what effects the entrance of Toyota, Honda, Hyundai, BMW, and other foreign car manufacturers has had on the industry. In addition, foreigners have bought and now own such companies as Dr. Pepper, Snapple, Brooks Brothers, Budweiser, Ben & Jerrys, Burger King, Trader Joe’s, 7-Eleven, and Sunglasses Hut. Consequently, even if we wanted to, we couldn’t keep all our attention focused on the United States, and even more important, we wouldn’t want to ignore the opportunities that are available across international borders.

Concept Check 1. What has brought on the era of the multinational corporation?
2. Has looking beyond U.S. borders been a profitable experience for U.S. corporations?