Question

What are the different ways in which mnc set up production across different countries in the world why is it profitable?

Answer 1

Multi National Company(MNC) interlink their product by numerous ways which are mentioned below:

1) By buying local companies. e.g when "coca-cola" came to India it bought the local company "Thumps-up".

2) By exerting a strong influence on production at distant location.

3)The MNCs also link and control the production of goods. Large MNCs in developed countries often place orders for production with small producers all around the world which are then sold by the MNCs under their brand name. e.g Branches of McDonald's or KFC.

4)By closely competing with the Local Companies, e.g colgate vs Babool