2. MNCS
• MULTINATIONAL CORPORATIONS (MNCS) ARE HUGE
INDUSTRIAL ORGANIZATIONS HAVING A WIDE NETWORK OF
BRANCHES AND SUBSIDIARIES SPREAD OVER A NUMBER OF
COUNTRIES. THE TWO MAIN CHARACTERISTICS OF MNCS
ARE THEIR LARGE SIZE AND THE FACT THAT THEIR
WORLDWIDE ACTIVITIES ARE CENTRALLY CONTROLLED BY
THE PARENT COMPANIES.
3. FEATURES OF MNCS
1. MNCS HAVE MANAGERIAL HEADQUARTERS IN HOME
COUNTRIES, WHILE THEY CARRY OUT OPERATIONS IN A
NUMBER OF OTHER (HOST) COUNTRIES.
2. A LARGE PART OF CAPITAL ASSETS OF THE PARENT
COMPANY IS OWNED BY THE CITIZENS OF THE COMPANY'S
HOME COUNTRY.
3. THE ABSOLUTE MAJORITY OF THE MEMBERS OF THE BOARD
OF DIRECTORS ARE CITIZENS OF THE HOME COUNTRY.
4. DECISIONS ON NEW INVESTMENT AND THE LOCAL
OBJECTIVES ARE TAKEN BY THE PARENT COMPANY.
5. MNCS ARE PREDOMINANTLY LARGE-SIZED AND EXERCISE A
GREAT DEGREE OF ECONOMIC DOMINANCE.
4. CONTI…
• 6. MNCS CONTROL PRODUCTION ACTIVITY WITH LARGE
FOREIGN DIRECT INVESTMENT IN MORE THAN ONE DEVELOPED
AND DEVELOPING COUNTRIES.
• 7. MNCS ARE OLIGOPOLISTIC IN CHARACTER. IT IS SUSTAINED
BY MODERN TECHNOLOGIES, MANAGEMENT SKILL, PRODUCT
DIFFERENTIATION AND ENORMOUS ADVERTISING.
• 8. MNCS ARE NOT JUST PARTICIPANTS IN EXPORT TRADE
WITHOUT FOREIGN INVESTMENTS
5. ROLE OF MNC’S
• MULTINATIONALS HAVE PLAYED AN IMPORTANT ROLE IN
GLOBALIZATION. GIVEN THEIR INTERNATIONAL REACH AND
MOBILITY, MANY COUNTRIES, AND SOMETIMES REGIONS
WITHIN COUNTRIES, SOMETIMES COMPETE WITH EACH
OTHER TO HAVE MNCS LOCATE THEIR FACILITIES (AND
SUBSEQUENT TAX REVENUE, EMPLOYMENT, AND
ECONOMIC ACTIVITY)WITHIN.
6. ORGANIZATIONAL OF
MULTINATIONAL CORPORATION
MULTINATIONAL COMPANY CAN ORGANIZE ITS OPERATIONS IN
DIFFERENT COUNTRIES THROUGH EITHER OF THE FOLLOWING
ALTERNATIVES
• BRANCHES
• SUBSIDIRIES
• JOINT VENTURE COMPANIES
• FRANCHISE
• TURN KEY PROJECT
7. WHY ARE MULTINATIONAL COMPANIES IN
INDIA?
• HUGE MARKET POTENTIAL OF THE COUNTRY
• FDI ATTRACTIVENESS
• LABOR COMPETITIVENESS
• GDP
8. WHAT INDIA OFFERS
• ONE BILLION PLUS POPULATION
• 250-300 MILLION MIDDLE CLASS POPULATION
• GROSS DOMESTIC PRODUCT GROWING OVER 8-9%, MAKES
IT ONE OF THE FASTEST GROWING ECONOMIES IN THE
WORLD
• EASIER TO ACCESS CAPITAL
10. BPL
• BPL IS AN INDIAN ELECTRONICS COMPANY. ITS STANDS FOR "BRITISH
PHYSICAL LABORATORIES".
• IT DEALS WITH CONSUMER ELECTRONICS (SUCH AS REFRIGERATORS
AND WASHING MACHINES), MOBILE NETWORKS ETC.
• THE COMPANY WAS STARTED AT A TIME WHEN THE GOVERNMENT
HAD RESERVED MANY AREAS OF BUSINESS FOR THE PUBLIC SECTOR
• BPL'S GROWTH HAS BEEN SUBJECT TO CONSTANT CHALLENGES USING
ITS EXPERIENCE OF THE MARKET AND THE CONSUMER, BPL
CONCENTRATED ON IMPORTING TECHNOLOGY, IMPROVING PRODUCT
QUALITY, INNOVATIONS AND MANUFACTURE OF ELECTRONIC
PRODUCTS THAT ENHANCED THE QUALITY OF LIFE
11. ONIDA
• ONIDA, A LEADING TELEVISION BRAND, IS STILL WELL
KNOWN FOR ITS BRAND MASCOT ‘THE ONIDA DEVIL’ AND
ITS PUNCH LINE “NEIGHBOUR'S ENVY OWNER’S PRIDE”.
• ONIDA LAUNCHED ITS ADVERTISING CAMPAIGN IN THE
1980S WHEN OWNING A TELEVISION SET WAS CONSIDERED
A LUXURY
• THE MASCOT HELPED ONIDA GAIN SUBSTANTIAL MARKET
SHARE AND BRAND RECALL AMONG THE CUSTOMERS AND
BECOME ONE OF THE TOP THREE TELEVISION BRANDS IN
THE COUNTRY.
12. SAMSUNG
• SAMSUNG INDIA IS THE HUB FOR SAMSUNG’S SOUTH WEST
ASIA REGIONAL OPERATIONS
• SAMSUNG’S USES STATE OF THE ART HIGHLY AUTOMATED
MANUFACTURING FACILITIES
• SAMSUNG HAS BEEN AWARDED AS THE BEST RETAILER OF
THE YEAR 2005
• SAMSUNG INDIA COMMENCES EXPORTS OF 'MADE IN INDIA'
COLOUR TELEVISIONS TO WESTERN EUROPEA SECOND
PRODUCTION LINE SET UP AT NOIDA FOR THE
MANUFACTURE OF PROJECTION TVS IN INDIA
13. LG
• LG LIFE’S GOOD ELECTRONICS INDIA PVT. LTD., A WHOLLY
OWNED SUBSIDIARY OF LG ELECTRONICS, SOUTH KOREA WAS
ESTABLISHED IN JANUARY, 1997.
• LG HAS BEEN ABLE TO CRAFT OUT IN EIGHT YEARS, A
PREMIUM BRAND POSITIONING IN THE INDIAN MARKET AND
IS TODAY THE MOST PREFERRED BRAND IN THE SEGMENT.
• IN 2003, LG HAS EMERGED AS THE LEADER IN COLOUR
TELEVISIONS, SEMI AUTOMATIC WASHING MACHINES, AIR
CONDITIONERS, FROST-FREE REFRIGERATORS AND
MICROWAVES OVENS.
• LG IS THE NO 1 BRAND IN THE CTV MARKET.
14. ADVANTAGES OF MNC’S
• MNC’S HAVE BECOME VEHICLES OF TECHNOLOGY TO THE
DEVELOPING COUNTRIES
• GREATER EMPLOYMENT AND CAREER OPPORTUNITIES ARE
PROVIDED BY THESE MNC’S.
• MNC’S MAKE COMMENDABLE CONTRIBUTION TO
INVENTIONS AND INNOVATIONS IN THE HOST COUNTRY.
• PRACTICE OF MNC’S BRING TO THE HOST COUNTRY, THE
LATEST TECHNIQUE IN THE FIELD OF MANAGEMENT.
• VARITY OF GOODS AND SERVICES PRODUCED FOR LOCAL
CUSTOMERS.
15. DISADVANTAGES OF MNC’S
• MNCS CREATE MONOPOLIES IN THE MARKET AND ELIMINATE
LOCAL COMPETITORS.
• MNC’S MAY CREATE DEPLETION OF RESOURCES DUE TO ITS
CONTINUES USE BY THESE OVERSEAS COMPANIES.
• MNC’S GENERALLY CARRY OUT THEIR R&D IN THEIR HOME
COUNTRY AND SUPPLY TO THE HOST COUNTRY.
• MNC’S GENERALLY IMPORT HUGE RAW MATERIALS DUE TO ITS
CONTINUOUS USE BY THESE OVERSEAS COMPANIES.
• THE PROBLEM OF DUMPING EXAMPLE – CHINESE LOW QUALITY
PRODUCTS IN INDIAN MARKET