MNCs

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 MNCs to reach their potential customers in the country.

1st MNC in world

1st MNC In India

1st Indian MNCs

Dutch East India Company

IBM

Infosys

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

Huge market potential of the country FDI attractiveness

Labor competitiveness
Macro-economic stability One billion plus population

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

Large amount of tax collection thru MNCs Increased revenue

Economic health improved

Employment increased Foreign relation increased

Strengths

Low cost Well Developed infrastructure

Weakness

Location is often very distant Lack of transportation facilities Relative inflexibility

Opportunitie s

Leverage Government Create the necessary infrastructure Attract new industries

Threats

Emergence of private companies Establishment of monopoly

IBM Microsoft LG Toyota Samsung Nokia Hyundai Fiat Nike Ford Sony

Asian Paints Bharat Forge Essel Propack Hindalco ICICI bank Infosys Tata Motors TCS Larson & Toubro Aptech / NIIT

Increase investment level Transferring the technology It increase host country exports & reduce its imports Integrating national economy Implementing new innovations Increase competition

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

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.

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

Due to these MNCs, 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.