MNC’s

Presented By
Simarjot Singh Gujral- RS38E1A31
 What is Mnc’s?
 When a company operates in a home nation established its subsidiary in
other nation it becomes an MNC and there starts the process of
globalization where in a local company serves the entire worlds with its
products and services.

 India has experienced a dramatic increase in the presence of

multinational corporation having a tremendous expansion in the amount
of foreign direct investment inflows to the Indian economy.

 Internet tools like Google, Yahoo, MSN, E-Bay, Skype, Amazon make
it easier for the MNC’s to reach their potential customers in the country.
 1st MNC in world 1st MNC In India 1st Indian MNC’s

Dutch East India

Company IBM Infosys
 Features of MNC
1.Big size

2.Huge intellectual capital

3.Operates in many countries

4.Large number of customer

5.Large number of competitors

6.Structured way of decision making

 Why are MNC’s in India
 Huge market potential of the country

 FDI attractiveness

 Labor competitiveness

 Macro-economic stability

 One billion plus population

 Cont……
 India ranked 10th largest economy, 4th largest in terms of
Purchasing Power Parity

 250-300 million middle class

 Gross Domestic Product (GDP) growing at over8-9 %,

makes it one of the fastest growing economies in the
world

 Lucrative and diverse opportunities for U.S. exporters

with the right products or services
 Impact on India
 Large amount of tax collection thru MNC’s

 Increased revenue

 Economic health improved

 Employment increased

 Foreign relation increased

SWOT Analysis of MNC
Low cost
Strengths
Well Developed infrastructure

Location is often very distant

Weakness Lack of transportation facilities
Relative inflexibility

Leverage Government
Opportunities Create the necessary infrastructure
Attract new industries

Emergence of private companies

Threats
Establishment of monopoly
 Top Ten Brands in the World
IBM
Microsoft
LG
Toyota
Samsung
Nokia
Hyundai
Fiat
Nike
Ford
Sony
 Some Indian MNC’s
 Asian Paints
 Bharat Forge
 Essel Propack
 Hindalco
 ICICI bank
 Infosys
 Tata Motors
 TCS
 Larson & Toubro
 Aptech / NIIT
 Merits of MNC’s
 Increase investment level
 Transferring the technology
 It increase host country exports & reduce its
imports
 Integrating national economy
 Implementing new innovations
 Increase competition
 De-merits of MNC’s
 May acquire monopoly power
 Underestimate local culture
 Think of about profits rather than host country
interest
 Inflexibility in terms & conditions
 Heavy use of non-renewable natural resources
 CONCLUSION
 Due to these MNC’s, competition increase and
more employment opportunities are available.
 Gives advantages to domestic companies thru
purchasing of raw material & resources.
 New company having network to expand their
business.
 MERITS OF MNC

 MNCs create employment opportunities in the host countries. It

helps to create a pool of managerial talent in the host country.
 Helps removal of monopoly and improve the quality of domestic
made products.
 Promotes exports and reduce imports by raising domestic
productions.
 Goods are made available at cheaper price due to economies of
scale.
 Job and career opportunities at home and
abroad in connection with overseas
operations.
 Encourages the world unity and all resulting in world harmony.
 DEMERITS OF MNC

 The host county is likely to lose its economic

sovereignty
 The host nation may also experience some loss of
control over its own economy
 Feeling that labour is being exploited by the
MNC/ Outsourcing
 The problem of Dumping