International Business or Ideas International - Case Study Example

International business - ideas international Introduction: Film industry is one of the emerging industries globally. The entertainment has become a major factor in the human society. The film industry works as the mass media. It conveys many dialogs and thoughts though the movies. Indian film industry is a particular industry where much diversity is observed. India has been portrayed as the unity in diversity, and that ideology is reflected clearly on the Indian film industry. There are many numbers regional languages in India and at the same time there are many regional films are getting released in India. However, Hindi is the main language in which most of the high budget films are getting introduced in the market, and Bollywood is the front face of the Indian film industry. The Bollywood has earned an international repute for its excellence in the field of film production. The liberalized foreign investment regime has given a tremendous opportunity to the foreign film makers. But, the foreign film production company should remember that the India is a very sensitive market as far as the films are concern. There are many religions, languages and rituals are practiced in India so, before making a film these points should be clarified as the films are one of the main mass Medias in India. The profile of Film World: The Film World is a private limited company. It was found in late seventies in Melbourne, Australia. It is having a vast experience in producing high quality films in the Australia and in the international market. The film world is one of the upcoming films production companies in the Australia. The company is packed with full of talented work force. It believes in producing quality work. It has many successful achievements throughout the journey for more than two decades. In the mid of eighties that is in 1985, the FilmWorld ventured into the film production and distribution in Kuala Lumpur, Malaysia. The early ninety was a great time for the company as it was going through a tremendous success in the Australia and Malaysia. During the last few years the company is producing approximately four films in Australia and three films in Malaysia in a yearly basis. Due to the recent advancement, the company is looking for the opportunities in the Indian film market. Brief History of Indian Film Industry: India has the world’s biggest film industry in terms of number of movies produced in a year; it is almost eight hundred movies yearly. It works efficiently as one of the great sectors for the foreign investment. However, for any foreign investors the background check is very important and there lies the importance of the historic values of the Indian film industry. The Indian film industry put its first step in eighteen ninety six when Lumiere Brothers introduced six soundless short films in Bombay or Mumbai now. India’s first feature film was King Harishchandra”, which was released on nineteen thirteen. India’s film industry started to get a shape from nineteen twenty. The first talkie was the Alam Ara, released in nineteen thirty one. After the late sixties in the twentieth century the Indian film industry took a rapid growth as an upcoming industry. Today India has earned a respectable position in the global film industry. Most of the films are released in Hindi in India. However, Bengali, Tamil, Telegu and Malayalam are the languages in which most of the non Hindi films are made. According to some unofficial estimation the Indian film industry has the annual turnover of approximately 1.33 billion dollar. And the industry employs roughly six million workers. However, most of them are contract bases workers. (The film Industry in India: An IndiaOneStop synopsis). Film Industry as the commercial Venture in India: In India films are the main source of entertainment. And it has a great euphoric value to each and every individual in India. Film industry has become an integral part of the modern human society. The cinema industry is basically the fusion of technology, art and economics. The Indian media and entertainment industry touched the 12.9 billion dollar mark in 2009. It achieved 1.4 percent growth over the last financial year. The industry is expected to grow at a compounded annual growth rate (CAGR) of thirteen percent by the end of 2014. This is a report provided by the Federation of Indian Chamber of Commerce and Industry (FICCI) and a research firm KPMG (India in Business: Media and Entertainment). The enormous advancement in the film and media has given a great pace to the growth of the industry. SWOT analysis of the FilmWorld: For any company the SWOT (Strength, Weakness, Opportunity and Threat) analysis is very important to understand the company’s potential in the respective market. There are many internal and external factors are involved in the in the functional capability of the organization. The internal and external environmental factors are very vital to be focused on for developing the strategic planning. With the proper analysis of the SWOT analysis a perfect market strategy can be applied using corporate strength as well as avoiding the corporate weakness to exploit the market opportunity and to safeguard the future risk in the market (Bohm, 2009, p, 3). The SWOT analysis can be described by two different broad prospective and they are the internal factors related to the company that is mostly the strength and the weakness of the company which are the basic factors within the organization. And another one is the external factors which are available in the external environment of the organization and they are mostly the opportunities and the challenges in the external market. For the company FilmWorld the SWOT analysis is very much important as it would be entering in the market for the first time and that is also in a deferent country. The important SWOT analysis is described below. Strength: As per the company profile the internal strength of the particular company is pretty much impressive. The company is in the film producing industry for more than two decades. It has a many years of experience in the film production. It has existence in two countries and that is Australia and Malaysia. The internal bonding of the company is strengthening with huge number of talented work force. It has a perfect harmony within the organization to deliver high quality work. It is equipped with state of art infrastructure and many more advanced technologies related to the film production industry. Among all of these points the talented work force and advanced technologies are the main strength of the company as the Indian film industry is still in the developing mode as far as the technologies are concern. The modernization of India is helping the development of the film industry (Gupta and Omoniyi, 2007. P, 201). The advanced technologies will save time and money for the company and that would help to generate proper revenue. Weaknesses: Weaknesses are the factors which can be nullified but, cannot be ignored. Weakness is an internal factor which is there within the organization. The FilmWorld is basically a film producing company from Australia, even though they have offices in Kuala Lumpur with is in Malaysia, most of the employees in the respective organization speak Australian English. They have some regional languages but not highly diversified like India. It is very important to understand the Indian languages at least it is very important to understand the Hindi language to understand the emotional feeling of the Indian viewers. Language would be a great barrier for the company. Cultural differences would also be a great barrier for the company. The Australia is having a literacy rate of ninety-nine percent which is far higher than the India, more that Eighty five percent of the households live in the urban areas of the country. In India most of the people live in the rural area. Australia is a cosmopolitan continent where approximately ninety-two percent of the Australian descend from Dutch, Estonian, French, German, Greek, Italian, Latvian, polish etc. and most of these origins are from European countries. (Harris et al. 2004. p, 358). This implies that most of the Australians are habituated with the western cultures which far more different than a Indian Culture. The above mention points are very much important as the films in India work as the mass media and Indian people expect many things from a film mostly the lower middle class people as while they spend money for a film they expect their spending towards the film is worthwhile. And to provide that feelings to the Indian audiences it is very important for a foreign film producing company to understand the cultural factors of the country Opportunity: Indian film industry is flourishing in fast manner. The performance of the Indian film industry is monitored by the FICCI. According to the research company Price-Waterhouse-Cooper’s report the figures were very much exciting for the Indian film industry. The Indian film industry had a growth of seventeen percent during 2004 to 2007. Many experts think that the mixing of ancillary income sources and the increasing acceptance of the Hindi cinema in the global prospective has given a tremendous opportunity to the Indian film industry. During the 2004 to 2007 the foreign box-office share stands at an increasing pattern of nine percent and at the same period the domestic video market had shown a promising growth of thirty percent. According to the well known film maker Yash Copra of Yash Raj Film Production Company many overseas markets are gradually opening for the Indian film industry (Indian film industry shows 17% growth- a report). The opportunity in the Indian film production market is enormous. The good relation between the Australia and India is also a great opportunity for the particular film production company. However, some disturbances have shown up in the recent time between the two countries but, that is not sustainable for the longer time. Australia strongly supported the joining of India in the ASEAN Regional Forum. The government gives a greatest weight to Australia’s relationship with the Asian Countries but, Australia like India has a great global interest to pursue the excellence in every field (Rao 2003 p, 333). There are many other opportunities are there in the in the Indian film industry. India is a large exporter of films. Indian films earn lots of money from the international market. Indian films are exported to the countries where Indians or Asians live in a large numbers. It is very interesting know that the improvement of the Indian film industry has started. The revolutionary improvements in the Indian film industry have given the opportunity to participate in many national and international prestigious film festivals. These participations are helping the Indian film industry to rectify their mistakes and fine tune their talents (Prasad. 2005. P, 317). There is a big opportunity in the animation films. The market of the animation films are over whelming in India. The basic concept is to provide happiness to the children and also to educate them be few animation films in an innovative manner. The Disney is eager to partner with some Indian film production company to create the magic of animation. In order to grab the large portion of the global animation business the animation production companies formed an association called Animation producers association of India in late 2003 to promote the India s the outsourcing hub for the animation. According to Deepa Sahi, CEO of Maya Entertainments Ltd, the animation industry is about to be the next big export out of India, India can become the global hub for the animation industry. With a little government’s help India can put itself as the supreme position holder in the world animation industry. The international animation size was expected to be at a size of forty billion dollars within two years from 2003. And the Indian talent with vast knowledge of art and Maths can create a revolution in the global animation market. The production cost of an animation film is very high but Indian market is much cheaper than that of any other market like USA or UK. The cheap labor cost and talented workforce is attracting many foreign players in the Indian animation segment (Raju, 2009 p, 390). The FDI (Foreign Direct Investment) Policies of Indian government towards the media and film industry is very much liberal and beneficial for the foreign investors. The FDI policy is given below: Adverting and Films: 100% FDI under the automatic route is permitted in the advertising sector. Same in the film production and financing, that is 100% FDI permitted. (India in Business: Media and Entertainment). Cable Network: 49% permitted in the cable network under the government route. (India in Business: Media and Entertainment). Another very prominent opportunity in the Indian film industry for the foreign players would be the demographic profile of the India. The demographic composition is very much beneficial for the foreign investors in the film industry. Seventy percent of the population falls under the age of thirty five, which ensure an attractive market potential for entertainment industry. (India in Business: Media and Entertainment). Threats: Threats are always there in the market and the threats are the factors which force the company to upgrade its strategy and development to sustain in the highly competitive market. One of the biggest threats is the steady competition, for any new comer the Indian film industry would be a battle field where the survival of the fittest would be judged. There are many big players and they dominate the Indian film industry. Another threat is the censorship. According to the National Film Policy the overall objective of the censorship is to safeguard the morality and the decency of the Indian culture in each and every film. For this reason all the films have to go through the pre-release screening process. The films can be shown in the movie halls after it is been certified by the Central board of Film Certification (Mittal 1995 p, 35). These pre release screenings sometimes create a big problem for the release of the movie and the delay cost a huge amount of loss. Taxation and ever-changing policies in the media industry from the government is another big threat for the foreign players as well as for the Indian film maker. The burden of tax is pretty high. Entry mode: For any foreign players it is very important to recognize the best possible entry mode in the Indian film industry. For sensitive market like India the entry mode should be moderate for a company like FilmWorld as it will be the first time for them in India. There can be many kinds of entry mode and they could be partnership, export films to India, sole proprietorship, and many more. But for the entry level it is better to start from low profile as that would help the company to understand the Indian market. The best option would be to make partnership with some big brand. So, the company would get the secure position as well as it can learn from the experience of the big company. It is better to start with the animation industry as the FilmWorld will be having the best possible technology and with the proper partnership it would get the best talents in the animation industry in India. Animation Industry is growing in a very fast manner. It is known to very few that the popular animation series Jakers! The adventure of the Piggley Winks on PBS is having an Indian touch. The adorable Pig and his friends in the animation series have been created in India. (Hill. 2008 p, 143). The animation industry is the safest way to enter the Indian film market as it is always been entertained by the Indian children. Conclusion: With the help of this study report it has been monitored that Indian film industry is very much diversified and it has lots of talents in it. It has a great potential in the global prospective as far as the international film industry is concern. However, the effect of rich culture and ethics play a very vital role in the Indian film industry. For any foreign film production company it is very important to understand the need and expectation of the Indian viewers as it is a very much sensitive market. The strength of the particular company is very much important but in this context the opportunity plays the vital role as the internal strength has to go through a tough test in the Indian market but, the opportunity is enormous. Proper step with proper entry mode would make the company successful in the Indian film industry. References Bohm Anja. (2009) “The SWOT Analysis” Munich: GRIN Verlag. Gupta S and Omoniyi T, (2007). “The cultures of economic migration: international perspectives”. Surrey: Ashgate Publishing, Ltd. Harris Philip Robert, Moran Robert T and Moran Sarah Virgilia. (2004). “Managing cultural differences: Global leadership strategies for the 21st century” Massachusetts: Butterworth-Heinemann. Hill. (2008) “International Business 6E (Sie)” New Delhi: Tata McGraw-Hill. Mittal Ashok. (1995). “Cinema industry in India: pricing and taxation”. New Delhi:Indus Publishing. Prasad B. K. (2005). “Media and social life in India”. Delhi: Anmol Publications PVT. LTD. Raju, (2009). “Marketing Management, 2E” New Delhi: Tata McGraw-Hill. Rao P. V. (2003) “India and Australia: new horizons” New Delhi : Mittal Publications. “Indian film industry shows 17% growth- a report” http://www.topnews.in/light/indian- film-industry-shows-17%25-growth-%E2%80%93-report-29042 accessed on 1/10/2010. “The film Industry in India: An IndiaOneStop synopsis” Nd. http://www.indiaonestop.com/film.htm accessed on 1/10/2010. “India in Business: Media and Entertainment”. Nd. http://www.indiainbusiness.nic.in/industry-infrastructure/service-sectors/media- entertainment.htm accessed on 1/10/2010/ Read More