What are the various ways in which MNCs set up or control production in other countries?


(i) MNCs set up offices and factories for production in regions where they can get cheap labour and other resources.

(ii) This is done so that the cost of production is low and the MNCs can earn greater profits.

(iii) At times, MNCs set up production jointly, with some of the local companies in these countries.


(iv) Its twin benefits are-they can provide money for additional investments like buying of new machines for faster production and MNCs might bring with them the latest technology for production.

(v) The most common route for MNC investments is to buy up local companies and then to expand production. MNCs with huge wealth can quite easily do so.

(vi) Large MNCs in developed countries place orders for production with small producers.

Garments, footwear, sports items, are examples of industries where production is carried out by a large number of small producers around the world.


(vii) The products are supplied to the MNCs which then sell these under their own brand names to the customers.

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