How do MNCs selling their finished product and spreading their market globally?
Answers
MNCs not only sell their finished products globally, but more importantly, the goods and services are produced globally.
As a result, production is organised in incr-easingly complex ways.
The production process is divided into small parts and spread out across the globe.
For example, China provides the advantage of being a cheap manufacturing location. Mexico and Eastern Europe are useful for their
closeness to the markets in the US and Europe.
India has highly skilled engineers, who can understand the technical aspects of production.
Answer:
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Explanation:
(i)MNCs set up production where it is close to the markets; where there is skilled and unskilled labour available at low costs; and where the availability of other factors of production is assured. In addition, MNCs might look for government policies that look after their interests.
(ii)MNCs set up production jointly with some of the local companies of these countries. The benefit to the local company of such joint production is two-fold.
(iii)First, MNCs can provide money for additional investments, like buying new machines for faster production. Second, MNCs might bring with them the latest technology for production.
(iv)Large MNCs in developed countries place orders for production with small producers. Garments, footwear, sports items are examples of industries where production is carried out by a large number of small producers around the world.
(v)The products are supplied to the MNCs, which then sell these under their own brand names to the customers. These large MNCs have tremendous power to determine price, quality, delivery, and labour conditions for these distant producers