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What is Mnc’s? :

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.

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Multinational Corporations (MNCs) is a business unit which operates simultaneously in different countries of the world. In some cases the manufacturing unit may be in one country, while the marketing and investment may be in other country.


1 st MNC in world Dutch East India Company 1 st MNC In India IBM Infosys 1 st Indian MNC’s

Features of MNC :

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:

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:

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:

SWOT Analysis of MNC Strengths Low cost Well Developed infrastructure Weakness Opportunities Threats Location is often very distant Lack of transportation facilities Relative inflexibility Leverage Government Create the necessary infrastructure Attract new industries Emergence of private companies Establishment of monopoly

Top Ten Brands in the World:

Top Ten Brands in the World IBM Microsoft LG Toyota Samsung Nokia Hyundai Fiat Nike Ford Sony

Some Indian MNC’s:

Some Indian MNC’s Paints – Asian Paints Auto & Components – Tata Motors, godgeg,Bharat Forge Chemicals – Tata Chemicals, United Phosphorus Metals – Sterlite Industries, TISCO,tata Packaging – Essel,kingfisher Pharmaceuticals – Ranbaxy, Wockhardt, Sun, DRL Oil & Gas – ONGC ,relaince

Merits of MNC’s:

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 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.

De-merits of MNC’s :

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 They are interested more on mergers and acquisitions and not on fresh projects. They have raised very large part of their financial resources from with in the country. 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

Role of MNc in India :

Role of MNc in India 1.) Profit Maximisation. 2.) International Network of marketing. 3.) Diversification Policy. 4.) Concentration in Consumer goods. 5.) Location of central control offices. 6.) Techniques to achieve Public Acceptability. 7.) Existence of Modern & Sophisticated Technology. 8.) Business but not social Justice. 9.) MNCs & Process of planned Economic Development in India. 10.) Cultural Explosion.


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.

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