Multinational Corporations Class
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Transcript of Multinational Corporations Class
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MultinationalMultinational
CorporationsCorporations
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MeaningMeaning
MNCs, also known as TNCs are hugeindustrial organizations which extend their
industrial and marketing operationsthrough a network of their branches ortheir majority owned foreign affiliates(MOFAs).
There are now 40,000 MNCs with 2,50,000overseas affiliates throughout the world.
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A multinational company can organize itsoperations in different countries either ofthe following five alternatives
y Branches
y Subsidiary Companies
y Joint venture companiesy Franchise holders
y Turnkey Projects
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REASONS FORGROWTHREASONS FORGROWTH
The manifold reasons are
1. Expansion of market territory2. Marketing Superiorities
3. Financial Superiorities
4. Technological Superiorities
5. Product Innovation
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Features of MNCFeatures of MNC
1.Big size
2.Huge intellectual capital
3.Operates in many countries
4.Large number of customer
5.Large number of competitors
6.Structured way of decision making
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Why are MNCs in IndiaWhy are MNCs in Indiay Huge market potential of the country
y FDI attractiveness
y Labor competitiveness
y
Macro-economic stability
y One billion plus population
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ContCont
y India ranked 10th largest economy, 4th largest interms of Purchasing Power Parity
y 250-300 million middle class
y Gross Domestic Product (GDP) growing at over8-9%, makes it one of the fastest growing economies in
the world
y Lucrative and diverse opportunities for U.S. exporterswith the right products or services
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Top Ten Brands in the WorldTop Ten Brands in the World
IBMMicrosoftLGToyota
SamsungNokiaHyundaiFiat
NikeFordSony
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Some Indian MNCsSome Indian MNCs
1. Asian Paints
2. Bharat Forge
3. Essel Propack
4. Hindalco
5. ICICI bank
6. Infosys
7. Tata Motors8. TCS
9. Larson & Toubro
10. Aptech / NIIT
1. Microsoft
2. Nokia3. Toyota
4. Intel
5. Coca-Cola
6. Sony7. IBM
8. General Electric
9. Nike
10. Citigroup
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Major Companies operating inMajor Companies operating inIndiaIndia
1. British Petroleum2.
Vodafone3. Ford Motors4. LG5. Samsung6.
Hyundai7. Accenture8. Reebok9. Skoda Motors
10.ABN Amro Bank
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Merits of MNCsMerits of MNCs
y Increase investment level
y
Transferring the technologyy It increase host country exports & reduce its imports
y Integrating national economy
y Implementing new innovations
y Increase competition
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DeDe--merits of MNCsmerits of MNCs
y May acquire monopoly power
y
Underestimate local culturey Think of about profits rather than host country
interest
y Inflexibility in terms & conditions
y Heavy use of non-renewable natural resources
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MERITSOF MNCMERITSOF MNC
y MNCs create employment opportunities in the hostcountries. It helps to create a pool of managerialtalent in the host country.
y Helps removal of monopoly and improve the qualityof domestic made products.
y Promotes exports and reduce imports by raisingdomestic productions.
y Goods are made available at cheaper price due to
economies of scale.y Job and career opportunities at home and
abroad in connection with overseasoperations.
y Encourages the world unity and all resulting in worldharmony.
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DEMERITSOF MNCDEMERITSOF MNC
y The host county is likely to lose its
economic sovereigntyy The host nation may also experience
some loss of control over its own economy
y Feeling that labour is being exploited by
the MNC/ Outsourcingy The problem of Dumping
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y 1 Reliance Industries
y
2 Oil & Natural Gasy 3 State Bank of India Group
y 4 Indian Oil
y 5 National Thermal Power
y 6 Icici Banky 7 Steel Authority of India
y 8 Tata Steel
y 9 Tata Consultancy Services
y 10 Tata Motors
y
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y 11 Bharti Airtel
y
12 Wiproy 13 GAIL (India)
y 14 ITC
y 15 Infosys
y 16 Punjab National Banky 17 Bharat Petroleum
y 18 Canara Bank
y 19 Hindustan Lever
y 20 Sterlite Industries (India)