MNCs can be classified on the basis of several criteria, such as function, control, investment, origin, turnover, products, etc.
On the basis of functional criterion, the MNCs are broadly grouped into:
1. Service MNCs.
2. Manufacturing MNCs.
3. Trading MNCs.
1. Service MNCs:
A service MNCs is defined as a transnational company which derives more than 50 per cent of its revenues from services. Service MNCs are found in areas such as banking, insurance, finance, transport, tourism, etc.
2. Manufacturing MNCs:
A manufacturing MNCs is one which derives at least 50 per cent of its revenue from manufacturing activity. A large number of MNCs has entered into the manufacturing sector. Out of the top 200 MNCs, 118 firms are manufacturing MNCs. They produce a variety of goods. For example, Parry and Cadbury Fry produce Chocolates, Colgate and Palmolive produce soaps and detergents, Ponds – cosmetic goods, Olivetti – Teleprinting equipments, Dunlop, Good Year, Ceat-tyres and tubes.
3. Trading MNCs:
A trading MNCs is the one which derives at least 50 per cent of its revenue from trading activity. These are the oldest form of multinationals. Trading MNCs control about 60 per cent of the world’s export trade. Tatas, Liptons, Brooke Bond, Hindujas etc. are the trading MNCs.