Social Science (087) — AI-generated practice question

When Cargill Foods acquired Parakh Foods, it gained more than just storage silos, processing facilities, and other physical assets. Cargill also secured:

1. Established supply chain networks — Parakh Foods had existing relationships with farmers and suppliers across India, giving Cargill immediate access to raw material sources.
2. Distribution networks — Ready-made channels to reach retailers and buyers across the country.
3. Brand presence and market recognition — Parakh's existing customer base and market familiarity in India.

These advantages were significant because building such networks from scratch would have required years of effort and heavy investment. By acquiring them instantly, Cargill could begin operations and compete effectively in the Indian market without the delays of establishing a new business.

Source: Globalisation and the Indian Economy, Chapter 4

---

The textbook uses the Cargill–Parakh example to illustrate how MNCs prefer buying existing local companies (the most common route for MNC investment) over setting up entirely new units. Examiners expect you to go beyond physical infrastructure and identify the intangible advantages: supply chains, distribution networks, and established market presence. These are the points that earn full marks. Always link your answer to why these matter — i.e., speed and cost of market entry.