Question

Production of MNC explain in points

Answer 1

The various ways in which MNCs set up or control production in other countries are

(a) Buy up a local production company.

(b) Place orders for production with small producers, i.e., contract manufacturing.

(c) By setting up a partnership (joint venture) with a local company.

(d) Setting up their wholly owned subsidiary in the other country.

(e) By licensing or franchising their brand to a local company.

Answer 2

Answer:

A multinational company is a company that control production in more than one nation.

The ways in which MNCs produce across countries are -

➸ Multinational companies set up production jointly with some of the local companies of the countries.

➸ Most common route for multinational companies investments is to buy up local companies and then to expand production.

➸ Large multinational companies is developed countries place orders for production with small producers.

➸ The large multinational companies have a lot of power so that they can determine price and the quality along with labour conditions of the distant producers.

➸ Hence, setting a partnerships with local companies, by using the local companies for supplies, by closely completing with local companies or buying them, multinational companies are spreading markets.

Note — The investments done by multinational companies are called foreign investment.