Multi National CorporationIn India

By:Deepali Adhana XI C (DAV Public School, Ballabhgarh)

CONTENTSWhat is an MNC?

Multinational corporate structure

SWOT Analysis of MNC

MNC In India

Trends Of MNC’s In INDIA…

Pros & Cons of MNC

Bottlenecks Of MNC in India

India’s Big Dream

Sources Of Information

What is MNC?Multinational corporation (MNC) is

a enterprise that manages production or delivers services in more than one country can also be referred to as an international corporation.

Multinational corporate structure

Horizontally integrated multinational corporations manage production establishments located in different countries to produce the same or similar products. (example: McDonald's)

Vertically integrated multinational corporations manage production establishment in certain country/countries to produce products that serve as input to its production establishments in other country/countries. (example: Adidas)

Multinational corporate structure (Contd..)

Diversified multinational corporations manage production establishments located in different countries that are neither horizontally nor vertically nor straight, nor non-straight integrated. (example: Hilton Hotels)

Micro-multinationals

A new breed enabled by Internet based communication tools.

Employees, clients and resources located in various countries.

Use of internet, cheaper telephony and lower travelling costs.

Internet tools like Google, Yahoo, MSN, EBay, Skype and Amazon make it easier for the micro-multinationals to reach potential customers in other countries.

SWOT Analysis of MNC

Strengths

• Low Cost• Well Developed Infrastructure

Weakness

• Location is often very distant• Lack of Transportation facilities• Relative Inflexibility

Opportunities

• Leverage Government • Create the necessary infrastructure• Attract new industries

Threats

• Emergence of Private companies• Establishment of monopoly

MNC In India

MNC in India are attracted towards:

India’s large market potential

India presents a remarkable business opportunity by virtue of its sheer size and growth

Labor competiveness

FDI attractiveness

MNC In India(Contd…)

India’s vast population is increasing its purchasing power

India is also emerging as the manufacturing and sourcing location of choice for various industries

Trends Of MNC’s In INDIA…(Contd..)

Companies like SingTel of Singapore and Malaysian giant Salem Group are showing huge interest for investment.

Also insurance companies like AIG and Max New York Life Insurance doing business in India.

MNC In India…

MNC in India represent a diversified portfolio of companies representing different nations.

The Indian MNCs ………………

Paints – Asian Paints

Auto & Components – Tata Motors, Bharat Forge

Chemicals – Tata Chemicals, United Phosphorus

Metals – Sterlite Industries, TISCO

Packaging – Essel

Pharmaceuticals – Ranbaxy, Wockhardt, Sun, DRL

Oil & Gas – ONGC

Pros & Cons of MNC

Pros:

Increase investment level

Transferring the technology

It increase host country exports & reduce its imports

Integrating national economy

Implement new innovations

Increase competition

Pros & Cons of MNC (cont.)

Cons:

May acquire monopoly power

Underestimate local culture

Think only about profit rather than host country interest

Inflexibility in terms & conditions

Heavy use of non-renewable natural resources

Bottlenecks Of MNC in India

Socio-economic challenges

Language

Culture

Autonomy to “local” managers – how comfortable are we?

Handling of potential liabilities related to Labour, IPR etc

Difficult operating environment

Weak infrastructure

And ………………Patience !