PRAN (Programme for Rural Advancement Nationally) was established in 1981 by retired Major

General Amjad Khan Chowdhury, which has become one of the largest food and beverage brands in

Bangladesh. PRAN Foods Ltd., a sister concern of PRAN-RFL Group, pioneered agro-business in

Bangladesh produces a number of agro products. It is currently producing more than 400 food

products under 10 different categories i.e. Juices, Drinks, Mineral Water, Bakery, Carbonated

beverages, Snacks, Culinary, Confectionery, Biscuits & Dairy. From the very beginning, PRAN tried

to go to the source of production than the purchasing from the intermediary agent for some of its

products. They directly contracted to the large farmers, provided technical assistance and financial

support so that they can purchase the fresh product directly before handing over many agents. They

provided farmers with guaranteed prices. Besides, they have started cultivating agro-products for their

product along with establishing value adding factories nearby in many districts. This ensures them the

high quality as well as the relatively lower cost production than the rival companies.

PRAN established a subsidiary company in UAE in 2003. In 2008, the company announced plans to

open a production facility in Tripura, India, after the Indian government lifted the ban on direct

investment from Bangladesh in 2007. Its exports had reached 10 billion taka value by 2016, the

biggest markets for the company was India, Saudi Arabia, UAE, Malaysia, and Oman. The same year

the revenue for PRAN exceeded 500 million USD. It started exporting potatoes in March 2016. In

April 2016, PRAN started to export cassava and New Zealand. It has 80 thousand direct employees

and 200 thousand indirect employees. Now, the company exports regularly to 118 different countries.

Answer the following questions:

i) Is PRAN Foods Ltd. company a multinational company? Explain why or why not?

ii) Why are the agency costs lower for PRAN foods Ltd. than the world's largest food processing

companies like Nestl?

iii) How product life cycle theory relates to the growth of PRAN Foods Limited? Explain

iv) Suppose, the PRAN Foods Ltd. has no further plan to conduct direct foreign investment other

than existing one. However, it might consider other less costly methods of establishing its

business in foreign markets. What methods might PRAN use to increase its presence in

foreign markets? Which alternative is likely to have more risk? Why?