MNC's in India - an exploitation or a win win opportunity? Presented By: Utkarsh Kushwah
"India’s computer scientists are among the leaders of companies worldwide." Bill Gates, Chairman, Microsoft Corporation “In this century India's economy will be larger than the United States.“ Bill Clinton, Former President of the United States
Multinationals have played an important role in globalization. Given their international reach and mobility, many countries, and sometimes regions within countries, sometimes compete with each other to have MNCs locate their facilities (and subsequent tax revenue, employment, and economic activity)within.
Organization of Multinational Corporations Multinational company can organize its operations in different countries through either of the following alternatives:
BPL BPL is an Indian electronics company. The acronym stands for "British Physical Laboratories". It deals with consumer electronics (such as refrigerators and washing machines), mobile networks etc. The company was started at a time when the government had reserved many areas of business for the public sector BPL, CTVs have been the flagship business Over the years, BPL's growth has been subject to constant challenges Using its experience of the market and the consumer, BPL concentrated on importing technology, improving product quality, innovations and manufacture of electronic products that enhanced the quality of life
Onida Onida, a leading television brand, is still well known for its brand mascot ‘The Onida Devil’ and its punch line “Neighbor's Envy Owner’s Pride”. Onida launched its advertising campaign in the 1980s when owning a television set was considered a luxury, The mascot helped Onida gain substantial market share and brand recall among the customers and become one of the top three television brands in the country. In 1998, Mirc Electronics (the owner of Onida brand) decided to abandon the “Onida Devil” in its communication campaigns as the brand mascot no longer appealed to the Indian consumer.
Samsung Samsung India is the hub for Samsung’s South West Asia Regional operations Sports Marketing and Entertainment Marketing have been the key elements of the Company’s Brand Marketing Strategy Samsung’s uses state of the art highly automated manufacturing facilities Samsung has been awarded as the Best Retailer of the year 2005 Samsung India commences exports of 'Made in India' Colour televisions to Western Europe A Second Production Line set up at Noida for the manufacture of Projection TVs in India
LG life’s good LG Electronics India Pvt. Ltd., a wholly owned subsidiary of LG Electronics, South Korea was established in January, 1997. LG has been able to craft out in eight years, a premium brand positioning in the Indian market and is today the most preferred brand in the segment. In 2003, LG has emerged as the leader in Colour Televisions, Semi Automatic Washing Machines, Air Conditioners, Frost-Free Refrigerators and Microwaves Ovens. The company has achieved a turnover of Rs 6500 crore in 2004 and aims to touch a turnover of 10 Billion US Dollars by 2010 As on today, LG is the No 1 brand in the CTV market.
What india offers One billion plus population India ranked 10th largest economy, 4th largest in terms of Purchasing Power Parity 250-300 million middle class Gross Domestic Product (GDP) growing at over 8-9 %, makes it one of the fastest growing economies in the world. Opportunities for U.S. exporters with the right products or services. Easier access to capital.
Why Indian companies lost its market share to MNC’s Primarily because of the following reasons: They lagged behind in technology They offered a small range of products Provided less margin to dealers Less number of outlets. Poor after sales services
What Indian companies are now doing to regain their market share Better Innovations to products Better pricing techniques Better positioning of the brand Following an aggressive marketing Trying to move the after sales service to a new level Segmentation of the product range by creating specific sub-brands
Need of MNC in underdeveloped countries Sustaining a high level of Investment. Technological gap. Exploitation of natural resources. Undertaking the initial risk. Development of basic economic infrastructure. Foreign exchange gap.
Advantages of MNC’s MNC’s have become vehicles of technology to the developing countries Greater employment and career opportunities are provided by these MNC’s. MNC’s make commendable contribution to inventions and innovations in the host country. Practice of MNC’s bring to the host country, the latest technique in the field of management. Varity of goods and services produced for local customers.
Disadvantages of MNC’s MNC’s create monopolies in the market and eliminate local competitors. MNC’s may create depletion of resources due to its continues use by these overseas companies. MNC’s generally carry out their R&D in their home country and supply to the host country. MNC’s generally import huge raw materials due to its continuous use by these overseas companies. The problem of Dumping
Example – Chinese low quality products in Indian market