The correct option is 1 and 3 only
Explanation
The question pertains to the operational dynamics of Global Value Chains (GVCs) and the role of Multinational Corporations (MNCs) in integrating world markets. It highlights the relationship between large global buyers and dispersed small-scale producers (often MSMEs) in developing countries.
Statement-wise Analysis:
- Statement 1 is Correct.
Modern industrial production is often fragmented across borders. An MNC may design a product in one country, source raw materials (like fabric or buttons) from multiple other nations, and assemble the final product in a different country (e.g., Thailand). Consequently, a "Made in..." tag usually indicates the location of final assembly, not necessarily the origin of all components.
- Statement 2 is Incorrect.
MNCs typically do not concentrate manufacturing in a single location. Instead, they disperse production to various locations globally to take advantage of specific benefits such as cheap labor, proximity to markets, or availability of raw materials. This strategy reduces overall costs and maximizes efficiency, despite the logistical complexities involved.
- Statement 3 is Correct.
In industries like garments, footwear, and sports goods, production is often carried out by a large number of small producers (MSMEs) around the world. Large MNCs act as buyers and wield immense power in these buyer-driven supply chains. They determine the price, quality standards, and strict delivery schedules, which the small producers must adhere to in order to retain the business.
Key Takeaway:
MNCs integrate global markets by dispersing production to low-cost regions while retaining centralized control over design, quality, and pricing, often exerting significant dominance over small-scale local producers.