Saturday, July 27, 2019

Explain the structure and operation of TNCs in the Food Industry Essay

Explain the structure and operation of TNCs in the Food Industry - Essay Example The present study would analyse the structure and operations of the Transnational Corporations in the food industry. According to the United Nations Economic and Social Council a Transnational Corporation is defined as an â€Å"enterprises which control assets – factories, mines, sales offices and the like in two or more nations across the globe (Jenkins, p.1). The global food industry comprises farming, production, distribution and retail sectors. The industry is expected to grow at 3.5 percent growth on a compounded basis and is expected to be valued at approximately 7 Trillion US dollars by 2014. Traditionally, Europe has the largest share in this mammoth industry segment but presently Asian giants like India and China are also emerging as potential markets in the food industry (IMAP, 2010, p.4). The figure below represents the composition of the food industry and the percentage of individuals employed by each of the units. It is very clear from the figure that non-residential catering industry employs the highest number of individuals followed by retailing industry. There are two types of value chains that are prevalent in the industry, namely the producer driven value chain and the buyer driven value chain. Producer driven value chains are employed by large multinationals including transnational companies and the product manufacturers who assume leadership and play a major role in coordinating with other market players. On the contrary, buyer driven chains are characterised by the presence of large market players who play the most influential role in managing different decentralised units (United Nations Industrial Development Organization, 2009, p.3). Producers in the food industry constitute of farmers, fishermen etc who use natural resources. The product in this stage is said to be in the input stage where raw materials are used to make the finished product (Kannan, Sivakumar & Gilani, 2010). Transformers

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