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Multi National CorporationIn IndiaPresented By:-
Harshil Shah - 82Meet Sanghavi - 77
Khelan Shah- 84Rikin Shah - 86
Hiren Thakkar -112Neha Gupta -34
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
DefinitionMultinational 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…• First MNC in INDIA is EAST INDIA Co. in 1600.
• American companies accounts for around 37% of the turnover of the top 20 firms operating in India.
• The scenario for 'MNC in India' has changed a lot in recent years, since more and more firms from European Union like Britain, Italy, France, Germany, Netherlands, Finland, Belgium etc have outsourced their work to India.
• Finnish mobile handset manufacturing giant Nokia is the largest Multinational Corporation In India.
• A host of automobile companies like Fiat, Ford Motors, Piaggio etc from Italy have opened shop in India with R&D wing attached.
• Oil companies, Infrastructure builders from Middle East are also flocking in India to catch the boom.
• South Korean electronics giants Samsung and LG Electronics and small and mid-segment car major Hyundai Motors are doing excellent business and using India as a hub for global delivery.
Trends Of MNC’s In INDIA…(Contd..)
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.
Success factors for MNCs operating in India …
• Commitment at global level – Raise the profile of India – Formulation of bold long term targets
• Empowered local Management – More cost effective, enhances continuity, leverages
understanding of local environment • Localized product / market business models : create
customized products and services in response to unique environment in India – Deliver the right product at the right price with right
positioning for 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 !
India’s Big Dream
• Harnessing the global trends by encouraging the MNCs to engage in product innovation for local consumers represents a big challenge in India.
• Policy-makers, industry leaders and academic institutes need to work together to create and disseminate a list of "dream innovations" that will inspire people.
• The development of Tata Motor's Rs 1 lakh car provides a powerful example
Sources Of Information
• www.wikipedia.com
• www.mapsofindia.com
• www.maddan.com
Reference:-
Business Environment By
Francis Cherunilam