Multi National Companies


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Multi National Companies

  1. 1. Multi National Corporation In India Presented By:- Harshil Shah - 82 Meet Sanghavi - 77 Khelan Shah- 84 Rikin Shah - 86 Hiren Thakkar -112 Neha Gupta -34
  2. 2. CONTENTS <ul><li>What is an MNC? </li></ul><ul><li>Multinational corporate structure </li></ul><ul><li>SWOT Analysis of MNC </li></ul><ul><li>MNC In India </li></ul><ul><li>Trends Of MNC’s In INDIA… </li></ul><ul><li>Pros & Cons of MNC </li></ul><ul><li>Bottlenecks Of MNC in India </li></ul><ul><li>India’s Big Dream </li></ul><ul><li>Sources Of Information </li></ul>
  3. 3. Definition <ul><li>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. </li></ul>
  4. 4. Multinational corporate structure <ul><li>Horizontally integrated multinational corporations manage production establishments located in different countries to produce the same or similar products. (example: McDonald's ) </li></ul><ul><li>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 ) </li></ul>
  5. 5. Multinational corporate structure (Contd..) <ul><li>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 ) </li></ul>
  6. 6. Micro-multinationals <ul><li>A new breed enabled by Internet based communication tools. </li></ul><ul><li>Employees, clients and resources located in various countries. </li></ul><ul><li>Use of internet, cheaper telephony and lower travelling costs. </li></ul><ul><li>Internet tools like Google, Yahoo, MSN, EBay, Skype and Amazon make it easier for the micro-multinationals to reach potential customers in other countries. </li></ul>
  7. 7. SWOT Analysis of MNC <ul><li>Strengths </li></ul><ul><li>Low Cost </li></ul><ul><li>Well Developed Infrastructure </li></ul><ul><li>Weakness </li></ul><ul><li>Location is often very distant </li></ul><ul><li>Lack of Transportation facilities </li></ul><ul><li>Relative Inflexibility </li></ul><ul><li>Opportunities </li></ul><ul><li>Leverage Government </li></ul><ul><li>Create the necessary infrastructure </li></ul><ul><li>Attract new industries </li></ul><ul><li>Threats </li></ul><ul><li>Emergence of Private companies </li></ul><ul><li>Establishment of monopoly </li></ul>
  8. 8. MNC In India <ul><li>MNC in India are attracted towards : </li></ul><ul><li>India’s large market potential </li></ul><ul><li>India presents a remarkable business opportunity by virtue of its sheer size and growth </li></ul><ul><li>Labor competiveness </li></ul><ul><li>FDI attractiveness </li></ul>
  9. 9. MNC In India(Contd…) <ul><li>India’s vast population is increasing its purchasing power </li></ul><ul><li>India is also emerging as the manufacturing and sourcing location of choice for various industries </li></ul>
  10. 10. Trends Of MNC’s In INDIA… <ul><li>First MNC in INDIA is EAST INDIA Co. in 1600. </li></ul><ul><li>American companies accounts for around 37% of the turnover of the top 20 firms operating in India. </li></ul><ul><li>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. </li></ul><ul><li>Finnish mobile handset manufacturing giant Nokia is the largest Multinational Corporation In India. </li></ul>
  11. 11. <ul><li>A host of automobile companies like Fiat, Ford Motors, Piaggio etc from Italy have opened shop in India with R&D wing attached. </li></ul><ul><li>Oil companies, Infrastructure builders from Middle East are also flocking in India to catch the boom. </li></ul><ul><li>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. </li></ul>Trends Of MNC’s In INDIA…(Contd..)
  12. 12. Trends Of MNC’s In INDIA…(Contd..) <ul><li>Companies like SingTel of Singapore and Malaysian giant Salem Group are showing huge interest for investment. </li></ul><ul><li>Also insurance companies like AIG and Max New York Life Insurance doing business in India. </li></ul>
  13. 13. Success factors for MNCs operating in India … <ul><li>Commitment at global level </li></ul><ul><ul><li>Raise the profile of India </li></ul></ul><ul><ul><li>Formulation of bold long term targets </li></ul></ul><ul><li>Empowered local Management </li></ul><ul><ul><li>More cost effective, enhances continuity, leverages understanding of local environment </li></ul></ul><ul><li>Localized product / market business models : create customized products and services in response to unique environment in India </li></ul><ul><ul><li>Deliver the right product at the right price with right positioning for India </li></ul></ul>
  14. 14. MNC In India… <ul><li>MNC in India represent a diversified portfolio of companies representing different nations. </li></ul><ul><li> </li></ul>
  15. 15. The Indian MNCs ……………… <ul><li>Paints – Asian Paints </li></ul><ul><li>Auto & Components – Tata Motors, Bharat Forge </li></ul><ul><li>Chemicals – Tata Chemicals, United Phosphorus </li></ul><ul><li>Metals – Sterlite Industries, TISCO </li></ul><ul><li>Packaging – Essel </li></ul><ul><li>Pharmaceuticals – Ranbaxy, Wockhardt, Sun, DRL </li></ul><ul><li>Oil & Gas – ONGC </li></ul>
  16. 16. Pros & Cons of MNC <ul><li>Pros: </li></ul><ul><li>Increase investment level </li></ul><ul><li>Transferring the technology </li></ul><ul><li>It increase host country exports & reduce its imports </li></ul><ul><li>Integrating national economy </li></ul><ul><li>Implement new innovations </li></ul><ul><li>Increase competition </li></ul>
  17. 17. Pros & Cons of MNC (cont.) <ul><li>Cons: </li></ul><ul><li>May acquire monopoly power </li></ul><ul><li>Underestimate local culture </li></ul><ul><li>Think only about profit rather than host country interest </li></ul><ul><li>Inflexibility in terms & conditions </li></ul><ul><li>Heavy use of non-renewable natural resources </li></ul>
  18. 18. Bottlenecks Of MNC in India <ul><li>Socio-economic challenges </li></ul><ul><li>Language </li></ul><ul><li>Culture </li></ul><ul><li>Autonomy to “local” managers – how comfortable are we? </li></ul><ul><li>Handling of potential liabilities related to Labour, IPR etc </li></ul><ul><li>Difficult operating environment </li></ul><ul><li>Weak infrastructure </li></ul><ul><li>And ………………Patience ! </li></ul>
  19. 19. India’s Big Dream <ul><li>Harnessing the global trends by encouraging the MNCs to engage in product innovation for local consumers represents a big challenge in India. </li></ul><ul><li>Policy-makers, industry leaders and academic institutes need to work together to create and disseminate a list of &quot;dream innovations&quot; that will inspire people. </li></ul><ul><li>The development of Tata Motor's Rs 1 lakh car provides a powerful example </li></ul>
  20. 20. Sources Of Information <ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li>Reference:- </li></ul><ul><li>Business Environment By </li></ul><ul><li>Francis Cherunilam </li></ul>