How MNCs expand their business:

Advertisement

 

1.         International Licensing: MNC permits the domestic company to use its trademark, brand name or technical know-how for manufacturing and marketing purpose. The license is given against payment of fee, which acts as source of income to the MNCs. E.g. Brand 555 is the licensed user of British American Tobacco company. In India it is manufactured by ITC (the licensee). It has the market of 600 cr. And company pays 5% of the total sales to BAT (licensor) as license fees. The BAT does not provide any raw material but just the brand name is given. This company took 45 years to establish. The licensor generally keeps supervisor in the plant of licensee.

 

2.         International Franchising: the licensor not only provides the brand name but also the raw material. E.g. McDonalds. (Syrup – pharmaceutical companies, printed circuit boards to electronic items, essence – cold drink companies (Pepsi gives its essence to Punjab Agro).

 

3. Turnkey projects: MNCs undertake to complete the whole project and handover the same when ready to the host country. Such project may be supplied on tender basis. Such projects provide new opportunity to expand the business activities.

 

4.         Joint Ventures: “Like marriage, binding between home country representative and host country representative, to set up a project either in home country or host or 3rd country with a commitment of joint risk taking and joint profit sharing.”

 

E.g. Modi Luft – Modi and Lufthansa

Successful JVs:

Indo Gulf fertilizer – Birla group

Taj group of hotels with Russian government.

 

5.         Collaborations: It deals with any one part of management function, either finance or technology collaboration. (it is not possible to have collaboration in consumer products and FMCG. It happens generally with medicines, technological products.)

E.g. Bajaj – Kawasaki

Hero Honda

Shree ram Honda (generators)

Kinetic Honda

Collaborations are time bound and not permanent.

 

Advertisement
The following two tabs change content below.
We, at BMS.co.in, believe in sharing knowledge and giving quality information to our BMS students. We are here to provide and update you with every details required by you BMSites! If you want to join us, please mail to [email protected]
0 Comments
  1. qq 3 months ago

    … [Trackback]

    […] Read More Info here to that Topic: bms.co.in/how-mncs-expand-their-business/ […]

  2. rehab 3 months ago

    … [Trackback]

    […] Read More to that Topic: bms.co.in/how-mncs-expand-their-business/ […]

  3. 카지노사이트 3 months ago

    … [Trackback]

    […] Read More Information here on that Topic: bms.co.in/how-mncs-expand-their-business/ […]

  4. warnetqq online 3 months ago

    … [Trackback]

    […] There you can find 80385 more Info to that Topic: bms.co.in/how-mncs-expand-their-business/ […]

  5. 놀이터추천 3 months ago

    … [Trackback]

    […] There you can find 11559 additional Information to that Topic: bms.co.in/how-mncs-expand-their-business/ […]

  6. scr888 download 2 months ago

    … [Trackback]

    […] Read More on to that Topic: bms.co.in/how-mncs-expand-their-business/ […]

  7. … [Trackback]

    […] Read More here on that Topic: bms.co.in/how-mncs-expand-their-business/ […]

  8. 바카라 2 months ago

    … [Trackback]

    […] Read More on to that Topic: bms.co.in/how-mncs-expand-their-business/ […]

  9. daftar poker online 2 months ago

    … [Trackback]

    […] Find More on that Topic: bms.co.in/how-mncs-expand-their-business/ […]

  10. google 2 months ago

    … [Trackback]

    […] Find More to that Topic: bms.co.in/how-mncs-expand-their-business/ […]

  11. https://codos.pl/ 1 month ago

    … [Trackback]

    […] Find More on to that Topic: bms.co.in/how-mncs-expand-their-business/ […]

  12. ignou synopsis 1 month ago

    … [Trackback]

    […] Information to that Topic: bms.co.in/how-mncs-expand-their-business/ […]

  13. fake tag heuer ebay 1 month ago

    … [Trackback]

    […] Read More to that Topic: bms.co.in/how-mncs-expand-their-business/ […]

Leave a reply

Your email address will not be published. Required fields are marked *

*

*

BMS.co.in is aimed at revolutionising Bachelors in Management Studies education, also known as BMS for students appearing for BMS exams across all states of India. We provide free study material, 100s of tutorials with worked examples, past papers, tips, tricks for BMS exams, we are creating a digital learning library.

Disclaimer: We are not affiliated with any university or government body in anyway.

©2020 BMS - Bachelor of Management Studies Community 

A Management Paradise Venture

Ask Us On WhatsApp
or

Log in with your credentials

or    

Forgot your details?

or

Create Account