Multinational corporation (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)
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 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

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Attract new industries

Threats

Emergence of Private companies

Establishment of monopoly

MNC in India are attracted towards:

Indias large market potential
India presents a remarkable business opportunity by virtue of its sheer size
and growth
Labor competiveness
FDI attractiveness
Indias vast population is increasing its purchasing power
India is also emerging as the manufacturing and sourcing location of choice
for various industries
Trends Of MNCs 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.
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 represent a diversified portfolio of companies representing
different nations.
Paints Asian Paints
Auto & Components Tata Motors, Bharat Forge
Chemicals Tata Chemicals, United Phosphorus
Metals Sterlite Industries, TISCO
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 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
Increase investment level
Transferring the technology
It increase host country exports & reduce its imports
Integrating national economy
Implement new innovations
Increase competition
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

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