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MNC's in India- an exploitation or a win

win opportunity?

PresentedBy:

Utkarsh Kushwah

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"Indias computer scientists are among theleaders of

companies worldwide."

Bill Gates, Chairman, Microsoft Corporation

In this century India's economy will be larger

than the United States.

Bill Clinton, Former President of the UnitedStates

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Multinational

Corporations

MultinationalCorporation(M

NC) Transitional

Corporation(T

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Types

Multinational corporations (MNC) areoften divided into three broad groups:-

v Horizontally integrated multinationalcorporations

v

Vertically integrated multinationalcorporations

v Diversified multinational corporations

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Examples of MNC in India

ick to edit Master text stylescond levelThird level Fourth level Fifth level

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Multinationals have played an importantrole in globalization. Given theirinternational reach and mobility, many

countries, and sometimes regions withincountries, sometimes compete witheach other to have MNCs locate theirfacilities (and subsequent tax revenue,

employment, and economicactivity)within.

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Organization of MultinationalCorporations

Multinational company can organize itsoperations in different countries througheither of the following alternatives:

Branches

Subsidaries

Joint Ventures Companies

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BPL

BPL is an Indian electronics company. The acronymstands for "British Physical Laboratories". It deals withconsumer electronics (such as refrigerators andwashing machines), mobile networks etc.

The company was started at a time when the

government had reserved many areas of business forthe public sector

BPL, CTVs have been the flagship business

Over the years, BPL's growth has been subject toconstant challenges

Using its experience of the market and the consumer,BPL concentrated on importing technology, improvingproduct quality, innovations and manufacture ofelectronic products that enhanced the quality of life

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Onida

Onida, a leading television brand, is still wellknown for its brand mascot The Onida Deviland its punch line Neighbor's EnvyOwners Pride.

Onida launched its advertising campaign in the1980s when owning a television set wasconsidered a luxury,

The mascot helped Onida gain substantial

market share and brand recall among thecustomers and become one of the top threetelevision brands in the country.

In 1998, Mirc Electronics (the owner of Onida

brand) decided to abandon the Onida Devilin its communication campaigns as the brand

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Samsung

Samsung India is the hub for Samsungs SouthWest Asia Regional operations

Sports Marketing and Entertainment Marketinghave been the key elements of the Companys

Brand Marketing Strategy

Samsungs uses state of the art highlyautomated manufacturing facilities

Samsung has been awarded as the BestRetailer of the year 2005

Samsung India commences exports of 'Made inIndia' Colour televisions to Western Europe

A Second Production Line set up at Noida forthe manufacture of Projection TVs in India

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LG lifes good

LG Electronics India Pvt. Ltd., a wholly ownedsubsidiary of LG Electronics, South Korea wasestablished in January, 1997.

LG has been able to craft out in eight years, a

premium brand positioning in the Indianmarket and is today the most preferred brandin the segment.

In 2003, LG has emerged as the leader inColour Televisions, Semi Automatic Washing

Machines, Air Conditioners, Frost-FreeRefrigerators and Microwaves Ovens.

The company has achieved a turnover of Rs6500 crore in 2004 and aims to touch aturnover of 10 Billion US Dollars by 2010

As on today, LG is the No 1 brand in the CTV

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What india offers

One billion plus population

India ranked 10th largest economy, 4th largest interms of Purchasing Power Parity

250-300 million middle class

Gross Domestic Product (GDP) growing at over 8-9 %,makes it one of the fastest growing economies in theworld.

Opportunities for U.S. exporters with the right products

or services.

Easier access to capital.

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Why Indian companies lost its

market share to MNCs

Primarily because of the following reasons:

They lagged behind in technology

They offered a small range of products

Provided less margin to dealersLess number of outlets.

Poor after sales services

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What Indian companies are

now doing to regain theirmarket share

Better Innovations to productsBetter pricing techniques

Better positioning of the brand

Following an aggressive marketing

Trying to move the after sales service to a newlevel

Segmentation of the product range by creatingspecific sub-brands

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Need of MNC in

underdeveloped countries

Sustaining a high level of Investment.

Technological gap.

Exploitation of natural resources.

Undertaking the initial risk.

Development of basic economic infrastructure.

Foreign exchange gap.

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Benefits from MNC

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Advantages of MNCs

MNCs have become vehicles of technology to thedeveloping countries

Greater employment and career opportunities areprovided by these MNCs.

MNCs make commendable contribution toinventions and innovations in the host country.

Practice of MNCs bring to the host country, thelatest technique in the field of management.

Varity of goods and services produced for localcustomers.

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Problems broughtby MNC

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Disadvantages of MNCs

MNCs create monopolies in the market andeliminate local competitors.

MNCs may create depletion of resources dueto its continues use by these overseascompanies.

MNCs generally carry out their R&D in their

home country and supply to the host country.MNCs generally import huge raw materialsdue to its continuous use by these overseascompanies.

The problem of Dumping

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THANK YOU!!