Multinational Corporation In India

Ihr Logo

What is a Multinational Corporation???

It is a corporation that:

Manages production

And/or

Delivers services

In more than one country

Your Logo

 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.

Your Logo

How Is A Company Classified As An MNC?

Subsidiaries in foreign countries; Operations in a High proportion of number of assets in or/ and countries; revenues from global operations; Stakeholders are from different countries.

Your Logo

Multinational corporation structure:

Your Logo

Multinational corporate structure

Horizontally integrated multinational

corporations manage production establishments located in different countries to produce the same or similar products. (example: McDonald's)

Your Logo

 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)

Here comes your footer Page 7

Your Logo

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)

Your Logo

Organization of Multinational Corporations

Subsidiaries

Joint Ventures Companies

Franchise Holders Turn Key Project.
Your Logo

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 traveling 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. Service sector micro-multinationals, like Indigo Design & Engineering Associates Pvt. Ltd.
Your Logo

Fortune Global 500 List 2013: Top 10

RANK
1 2 3 4 5 6 7 8 9 10

COMPANY
Wal-Mart Stores Royal Dutch Shell Exxon Mobil BP Sinopec China National Petroleum State Grid Toyota Motor Japan Post Holdings Chevron

COUNTRY
United States Netherlands United States United Kingdom China China China Japan Japan United States Your Logo

FIELD
Retail Petroleum Petroleum Petroleum Petroleum Petroleum Power Automobiles Diversified Petroleum

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

Your Logo

Advantages of MNC in India

Your Logo

Advantages

To the Host Country

To the Home Country

Your Logo

Advantages of MNCs to the Host Country:

Transfer of technology, capital and entrepreneurship. Increase in the investment level and thus, the income and

employment in the host country.

Greater availability of products for local consumers. Increase in exports and decrease in imports. MNCs generate jobs &income Technology transfer Cost reduction

Your Logo

Advantages of MNCs to the Home Country.

Acquisition of raw materials from abroad.

Technology and management expertise acquired from

competing in global markets.

Export of components and finished goods for assembly

or distribution in foreign markets.

Inflow of income from overseas profits, royalties and

management contracts.

Your Logo

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
Your Logo

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

Your Logo

MNC In India
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
Your Logo

MNC In India
vast population increasing

its

purchasing

power
emerging as the

manufacturing and sourcing location of choice for various industries

Your Logo

MNC In India
MNC in India represent a diversified portfolio of

companies representing different nations.

Your Logo

Indian companies in fortune global 500 list 2013:

COUNTRY RANK
1
2 3 4 5

COMPANY
Indian Oil
Reliance Industries Bharat Petroleum State Bank of India Hindustan Petroleum

GLOBAL 500 RANK

98
134 272 292 336

CITY
New Delhi
Mumbai Mumbai Mumbai Mumbai

REVENUE ($ millions)
68,837
58,900 34,102 32,450 28,593

6 7
8

Tata Motors Oil & Natural Gas

Tata Steel

359 361
370

Mumbai Dehradun
Mumbai
Your Logo

27,046 26,945
26,065

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

Your Logo

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 !
Your Logo

International powers of MNCs

International - Large MNCs influence

in international relations
Tax competition- Tax breaks, pledges

of govt. assistance etc.

Market withdrawal-Eg. Pharmaceutical

companies
Lobbying & Patents

Here comes your footer Page 25

Your Logo

Threats to MNC
Nationalization

Lack of Govt. assistance

Opposition by local traders.

Here comes your footer Page 26

Your Logo

THANK YOU

Here comes your footer Page 27

Your Logo