Winning Global Markets: How Businesses Invest and Prosper in the World's High-Growth Cities

Chapter 4How Multinational Companies Target Global City Markets for Expansion

Given that multinational companies (MNCs) are the true powers affecting the rate at which major cities grow, we have to examine how these companies decide where to expand to and what characteristics they look for in a potential metropolitan (metro) area.

MNCs that hope to do well must look far ahead into the future to determine which areas they will enter and grow. Take for example, General Motors (GM). GM is strong in the United States and Canada, has operations in Latin America, and has one of its strongest positions in China, but has been weakening in Europe.¹ Clearly GM faces this question: Should it put even more resources into the areas where it is strong or into areas where it is present but weak, or should it put resources into new areas to start its presence there?

GM will expect its regional and country managers to make a best case for more money to be given to each of their operations. GM's chief officers will have to determine which opportunities have the best chance of yielding an acceptable return on investment. These GM officers will need to compile a lot of information to make their final decisions. In the end, GM will be giving more money to some of its regions and less money to other regions.

Suppose GM is trying to decide whether to allocate funds for increasing its number of dealerships in different cities. What does GM need to know about these cities? GM would want to know, among ...