Multi National CorporationsIn IndiaPresented By:-

ROHIT DAS SANJAY ACHARYA SRADDHA M

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)

SWOT Analysis

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 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