How local companies keeps MNC'S at BAy??

3. GROUP MEMBERS
Ahmad Hassan
Anam Naveed
Mavra Siddiq
Arslan Aslam

5. HOW LOCAL COMPANY
KEEPS MNC’S AT BAY?

6. MULTINATIONAL CORPORATIN
 HISTORY
Multinational is the form of
trading companies started in the 17th or
18th centuries. The Hudson bay company,
East India company & French Leant
company were the major transitional
companies established those days.

7.  In the early 20th century British
petroleum, standard oil Ana coda copper
and international Nickel were the major
MNCs investing mainly in mining
petroleum industries.
The 1st multinational business
organization was the Knights Templar
founded in 1120.

9. MULTINATIONAL CORPORATION
DEFINITION
According to
ILO(international labor organization)
MNC’s is any corporation that has its
management head quarters in one
country i.e Home country and operates
in another countries i.e host country.

11. How local companies keeps MNC at
bay?
1) Customized products or services.
2) Develop business models to overcome
key obstacles.
3) Latest technologies.
4) Low cost labor.
5) Scale up quickly.

12. Customized product and services:
 Local companies know people’s
preferences, income level, age .
They understand the market in which
they operate .
Offer large variety of products and
services
Deep understanding of the consumers in
their countries.

13. GOODBABY GROUP OF CHINA

14. Develop business model to overcome
key obstacles
Identifying the key challenges like lack of
distribution channel and infrastructure.
Example:
SHANDA Games (china) VS Microsoft.

15. SHANDA GAMES VS MICROSOFT
SHAND GAMES (China) MICROSOFT

16. Latest technologies
New technologies keep operating costs
low and enable companies to deliver
good-quality products and services.
 Example:
Brazil’s GOL purchase the new and
big plane.
Bigger planes increase the capacity
per flight.
New technology reduce the cost per
seat.

18. Low cost Labor
Local companies are using local cost
traditional labor and in housing training
instead of relying on technology from
abroad.
Example:
 Apollo hospital in India has invested in
its own training facilities.

19. APOLLO HOSPITAL IN INDIA

20. SCALE UP QUICKLY
Go national as soon as possible
Scaling up quickly.
Example:
GOODBABY group of china

21. GOODBABY
35 companies in
different china
cities
300
distributors
Marketing and
sales network
1,600 stores

22. WHY FIRMS BECOME
MULTINATIONAL COMPANIES
Reasons:
1. Diversify themselves against risk
2. Growing world market for goods and
services
3. To increase the foreign competition
and a desire to protect their home
market by using competitors market by
using “competitors strategy”

23. This approach serves dual purpose
Takeaway business from their
competition by offering customers other
choices.
Competitors knows if they attack MNEs
home market, the response will be
similar.

24. Reduce cost
Eliminate transportation cost
avoid overhead associated with
middlemen, respond more rapidly and
accurately to customers needs and take
advantage of local resources.

25. This process is known as
internationalization of control with in the
MNEs
Overcome protective devices such as
tariffs and non tariff barriers.
 NAFTA for example, eliminating tariffs
between Canada, Mexico, and US.
Take advantage of technological expertise
by manufacturing goods, directly by FDI
,

26. Nature of Multinational Enterprises:
In US over 60000 MNEs ; but only 500
largest accounts for 80% of all Foreign
Direct Investment (FDI).
Majority owned by trait 430 companies .
Total annual sales of these 500 firms in
excess of $12.5 trillion collectively
employee 43 million people

27. WIDE VARIETY OF OPERATIONS
Autos , computers, chemicals, consumer
goods ,financial services, industrial
equipment, oil and steel production.
Large MNEs have a significant impact
on international business and the world
economy.

28. CHARACTERISTICS OF
MULTINATIONAL COMPANY’s:
Tow Major Areas Concern
 Home country of its headquarters
 Host countries which it does
business
CHARACTERISTICS
Affiliates responsive to a number of
important environmental forces,
including

29.  competitors
 customers
 supplies
 financial institutes and
 government
Common Pool Resources including,
 Assets
 Patents
 Trademarks
 Information and
 Human resources.
Link together the affiliates and business partners
with common strategic vision