Specific TNC (Coca-Cola)
Advantages of being TNC
Positive effects that TNC's have on the host country
Negative effects that TNC's have on the host country
Definition of TNC:
Having a strong bargaining position and can negotiate favourable entry into a country
Governments offer incentives for TNC's to locate there.
Labour costs are lower in LEDC'S (Global shift therefore occurs)
Often raw materials are sourced in the LEDC but for coca-cola this does not apply
Coca-Cola subcontract to preexisting factories to save money.
TNC’s want to have access to high earning large populations such as India, by manufacturing their goods close to their intended market they can save on transportation costs.
Creates jobs
Lots of profit stays in the host country
TNC's offer training and education
TNC's attract other TNC's to the host country
TNC's often run schemes to help the host country
Low paid job stake place in the LEDC while high paid jobs take place in the MEDC
TNC's are very powerful and if they are not happy with the economy in the host country they can pull out leaving many people jobless
Environmental regulations are often less strict in LEDC's , some TNC's take advantage of this.
Much of the profit returns to the shareholders
Working conditions in factories are harsh and hours are long.
Transnational corporations are large companies that operate in more than one country. The headquarters are usually in an MEDC. They often have a large number of factories around the world