GROUP 09

The advantages and disadvantages of

MNCs
impact on countries
 CONTENTS
Theory of multinational
01
corporations

02 Nestle overview

03 Case study
01
Theory of

MULTINATIONAL
COPORATION
Definition
A multinational corporation (MNC) is a company that
has business operations in at least one country other
than its home country. By some definitions, it also
generates at least 25% of it revenue outside of its home
country.

Characteristics
Worldwide business presence
Large and powerful organizations
Corporate social responsibility, and political influence.
A complicated business model and structure
Direct investments in foreign countries
Jobs created in foreign countries
Types
 A Decentralized Corporation
 A Centralized Global Corporation
 An International Division Within a
Corporation
 A Transnational Corporation
 ADVANTAGES
- Production cost can be reduced
- Good quality products
- Increase employment rate
- Lower Labor Costs
- Technical Development for host
country
- Promotes Competitions
DISADVANTAGES
- The exploitation of laborers:
- Dominate the host country’s
supremacy
- Increase pollution in host
country
- Import skilled labourers
- Build legal monopolies
 02
NESTLE OVERVIEW
Nestle's management organization model:

Top management and domestic sales At lower levels, Nestle applies a

department operate according to a horizontal hierarchy model
decentralized strategy
NESTLE’S
SWOT
 STRENGTHS

S
- Strong research and development capacity
- World-famous brands
- Wide distribution system
- Diversified brands and products
- Large workforce
- Brand Value
- Striving for green industry
 WEAKNESSES

W - Criticism from society

- Contaminated product recall
- Misunderstanding and contradictory advertising
- Relying too much on the media
 OPPORTUNITIES

O
- Clear and accurate labeling of product
ingredients
- Transparency in the source of production
materials
- Increasing number of small food startups
- Development of the ready-to-drink tea and coffee
market.
 THREATS

T - Scarcity of clean water

- Increasing competition in the beverage and food
industry
- Coffee prices may be pushed up in the near future
 03
CASE STUDY
CASE STUDY SUMMARY

000 000
The proud Coffee famers
Baduvandra Laxhipathi Gowda

111 111
in 2012 on the foothills of
the Western Ghats

222 222
CASE STUDY SUMMARY
He brought along 85 farmers for the Nestlé Better Farming Practices training sessions

Sustainable approach to
coffee cultivation Community development
 Results of the Nescafe plan

- Total number of farmers trained - 1227

- Global Partners - 4C Association

ADVANTAGES and DISADVANTAGES
that Nestle India brings to its countries
 For the Host country - India

ADVANTAGES DISADVANTAGES

1. Boost the Indian economy 1. Lack of sense of Corporate

2. Job creation
3. Environmental balance
4. More tax revenue for Indian
governments
5. Bringing new skills and
technology
Social Responsibility (CSR)
2. The Indian workers don’t
receive the benefits they
deserve
 For the Home country - Switzerland

ADVANTAGES DISADVANTAGES
1. Marketing opportunities for the 1. Loss of the resources for the job.
products produced in the home 2. Loss of tax revenue
country.
2. Nestle India helps the Holding
Company in Switzerland strengthen its
position as a global leader in Nutrition
through the results of R&D activities.
3. It also helps in increasing the trade
of Switzerland with other countries
4. Repatriation of Nestle India’s profits
to Switzerland.
CONCLUSION
 CONCLUSION

Liberalisation has paved the way for the growth of MNCs in different
countries

They also act as agents of development by helping the host countries to

increase domestic investment...

The extent of technology and management of know-how transfer by the

MNCs depend to a large extent on their corporate strategy.
Thank
s for