Multinational Corporations (MNCs) are large corporations that have operations in more than one country.
MNCs interlink production across countries through vertical and horizontal integration, strategic alliances, and outsourcing.
They undertake huge, complex projects with a large amount of capital.
This is an advantage as it allows them to distribute their activities all over the world, but it also means that there is a great deal of flexibility when it comes to choosing locations for their operations.
The main advantage of being a multinational corporation is that countries usually offer incentives to attract MNCs as they create jobs and other benefits for the population.
Tax breaks are also offered to encourage MNCs to invest in the country.
They may also provide support services, such as finding land or helping with construction work.
This makes it easier for businesses to set up abroad and helps them grow quickly without worrying about these things themselves.
MNCs can also benefit from low labor costs in developing countries where they have set up factories or offices.
For example, manufacturing costs in China are much cheaper than in other developed countries like the USA and UK so companies such as Apple choose.
Final Answer :
When multinational corporations (MNCs) produce a product, they usually spread the production across different countries to take advantage of economies of scale and specialization.
They also do this because it allows them to market their products in a much wider area.
Economies of scale mean that as the volume of production increases, the average cost per unit decreases.
In other words, when a factory produces more units of a product, it can lower its cost per unit by using its existing resources such as machinery, labor, and facilities more efficiently.
Economies of scale are achieved through specialization since each plant specializes in making one or two components or products and then transfers them to other plants where they are assembled and packaged into final products.
For example, a car company may have factories that specialize in producing engines and chassis parts while another factory specializes in making body panels and interiors.
The engines and chassis parts are then shipped to another plant where they are assembled into complete cars which are then shipped again for packaging before being sold to customers at retail outlets.
Specialization occurs when each country has an advantage over others in producing certain goods but not others, so it makes sense for these countries to specialize in what they do best and trade with each other for.