A strategy of multilateral exchange among autonomous affiliates of a single enterprise differs from more traditional multinational business operations with the establishment of local production facilities by each participating affiliate to support the respective end market. These facilities range from assembly and finishing lines to full scale manufacturing plants. Each national affiliate supplies specific components to other affiliates according to its comparative advantage, while affiliate production facilities draw upon the resources of the entire enterprise to support the respective local end market. A multilateral strategy is not an expansion of traditional trade relations. It is instead a redirection of international trade designed to enhance the competitiveness of individual national affiliates by capitalizing on those elements where the affiliate enjoys a comparative advantage.
All national affiliates benefit from the optimum utilization of the specific production elements.
In contrast to unilateral imports and exports or to a bilateral exchange of trade, this strategy garners strength from diversity while supplying final products and customer service are tailored for the local end market. Multilateral business organizations have developed internally to only a handful of large corporations based in the United States. One large automobile manufacturer implemented this practice for the production of its highly successful model. This model is assembled at several plants around the world and distributed to many national markets, while the vehicle's components are supplied to each of the assembly plants from a number of different sources. This mode of operation is more common among companies doing business within the European Economic Community where international cooperation is an effective business strategy.