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SUBJECT- ECONOMICS OF GLOBAL TRADE AND FINANCE

TOPIC- STRATEGY OF MULTINATIONAL COMPANIES ININDIAN MARKETS

-JUGAL SHAH

ROLL NO. 66

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INTRODUCTION

Multinational corporations are business entities that operate in more than one country. The

typical multinational corporation or MNC normally functions with a headquarters that is based in

one country, while other facilities are based in locations in other countries.

MULTINATIONAL COMPANIES IN INDIA

WHY ARE MNCS IN INDIA ?

India has got a huge market.

It has also got one of the fastest growing economies in the world.

Besides, the policy of the government towards FDI has also played a major role in attracting the

multinational companies in India.

Indias large population is increasing its purchasing power. India is also emerging as the manufacturing and sourcing location of choice for various industries.

TRENDS OF MNCS IN INDIA

OBJECTIVES

PROFIT

MARKET DOMINANCE

INNOVATION EXPANSION

SUCCESS FACTORS FOR MNCS IN INDIA

COMMITMENT AT GLOBAL LEVEL

EMPOWERED LOCAL MANAGEMENT

LOCALISED PRODUCT/MARKET BUSINESS MODELS

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ADVANTAGES OF MNCS

Initiating a higher level of investment.

Reducing the technological gap as there is a transfer of technology.

The natural resources are utilized in true sense.

The foreign exchange gap is reduced.

Boosts up the basic economic structure. It increases the host country exports and reduce its imports.

There is increase in competition.

More scope for innovation.

DISADVANTAGES OF MNCS

Competition to SMSI.

Pollution and Environmental hazards.

Some MNCs come only for tax benefits only.

Exploitation of natural resources.

Lack of employment opportunities.

Diffusion of profits.

Working environment and conditions.

Slows down decision making.

Economical distress.

May acquire Monopoly power. Think about Profit only and no welfare motive.

Inflexibility in terms and conditions.

CASE STUDY-MCDONALDS

THE SUCCESSFUL JOURNEY OF AN EXTREMELY POPULAR

INTERNATIONAL BRAND IN INDIA

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THE BRAND-MCDONALDS BEGINNING TWELVE YEARS OF MCDONALDS IN INDIA

PHASE I - LAUNCHING THE BRAND PHASE II BRAND ADVERTISING PHASE III

APPEALING TO BOTH ENDS OF THE AGE SPECTRUM

CONCLUSION OF THE CASE STUDY The journey of MCDONALDS has not been easy.

However, due to extensive marketing and advertising strategy, it has been established itself very

successfully and has become a success story for other MNCs to follow.

OVERALL CONCLUSION

MNCs have had mixed results in India.

Many MNCs who were remarkably successful elsewhere, have failed or are yet to succeed. Indian

markets poses special challenges due to its heterogeneity , in terms of economic development,

income, religion, cultural mix and tastes.

Success in India will not happen overnight; companies need to have an open mind.

MNCs have to invest substantially financial and managerial resources to understand customers

needs and come up with suitable products.