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Group Discussion for MBA: Indian MNCs are a threat to western MNCs

Do Indian MNCs pose a threat to western MNCs? Read to know more.

Sep 5, 2014 12:45 IST
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MNC stands for Multinational Corporations. The concept behind MNC is to extend the presence of a company in more than one nation besides its core presence in a parent nation.

MNCs operate with some basic ideas like:

1) Increasing the wealth and profitability of the firm by being multinational.

2) Creating need in the mind of customers for the products that they generate i.e Forcing Buying behavior.

3) Dominance of the Market so as to make a hold in the market.

4) Pushing their own Economies of Scale.

And ideas, as such, also help in the attainment of some positive aspects in the host nation where the set ups are established for MNCs like:

1) Increased employment opportunities.
2) Ensuring minimum standards.
3) Large profits eyeing on Research and Development process.
4) Raising expectations of people as well as the government.

The concept of MNCs was first incorporated by the Western Nations and soon by other nations as well seeing the scope, interest and huge returns on investments. But then now the Indian MNCs are posing a threat to the Western MNCs as due to the reasons that follows:

a) Tough Global competition: The MNCs from India probe tough Global competition to Western MNCs as the product range, service quality and reliability on Indian products is more than the Western based and so they are at an edge ahead of Western MNCs.

b) Quality diferences: Indian MNCs adopt separate and unique styles of working and raising productions with better quality inputs and stronger sustainable quality which sometimes aren’t seen in the products and services offered from the Western MNCs and henceforth the products and services produced by Western MNCs are often withdrawn which ultimately affects them adversely.

c) Raising funds for profit as well as social and national welfare: As the Western MNCs basically work for the personal profit and for that they even underpay the skilled and semi-skilled labor force and also don’t care for the losses incurred on the part od society, government and nature of the host nation which is not the case with Indian MNCs. Indian MNCs work for wealth development and simultaneously takes all good care of the host nation and the employees very well.

But if we scoop to the other side we can also say the opposite of the statement that Indian MNCs aren’t a threat to Western MNCs reason being as follows:

a. Separate Entity: Competition pertains everywhere as the market is open for all and the world has really shrunk where everything has come on a global convergence. So whether it be an Indian MNC or a Western MNC what matters is their strategic plans for sustainance and survival in the long run. In this context neither poses a threat to either. Both being separate work separately on individual visions and missions.

b. Product and segment differentiation: There are always huge set of difference in the qualities and breed of products and services for both Indian MNCs as well as the Western MNCs and that make ups for their market hold. They don’t threat each other practically but rather themselves. Improvement and improvisation is their biggest asset and challenge.

c. Global Acceptability: Everything depends upon how well they get acquainted and accepted Globally by the common people who are the ultimate target customers and so irrespective of how the two pose threat top one another it’s more a game of market holding.

In a nut-shell, we may see a very lucrative fact that MNCs are basically established with some real motives by different firms in which profitability and earning huge revenue tops the chart whether it be Indian MNC or the Western but the soul lies in the fact that how and where they are headed to? If their entire motive is accepted globally? If they can grab and hold the market? So, a matter of self-sustainance and survival is above all and threats can be from either sides as well since every firm wants to move ahead of the other this is how the world runs today.

 

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