Small Business Frock India - Assignment Example

Small Business Frock India Insert Institution Insert Name Date Introduction India is the most populous country in the world. The country is also ranked amongst the top five richest countries in the world despite their population. The country has a stable political and economic system. India has a good infrastructure and has 70% of its population actively involved in production of goods and services. India attracts most foreign investors due to increased trend in economic value. Question 1 Leethal fashions accessory can face various external environmental factors as it tries to venture in outsourcing in India. One of the various factors is the language barrier. India has a culture and religion, which they respect and would prefer to preserve rather than follow the western culture. This reason is likely to influence the involvement Leethal accessories in India. Due to preserved cultures, it will be difficult to penetrate the Indian market with foreign goods and products therefore these factors are most likely to affect the investment of Leethal fashions accessories (Nambiar, 2006). Another external force that is likely to affect the company from venturing into manufacturing industry is also the stiff competition in India. India is one of the fastest growing economies in the world with both stable and political policies on economy. India has also many industries venturing in production in variety of products. This poses a threat to foreign investors in the country. There are also stiff competitors from outside the country who are also interested in investing within Indian economy. Slackened regulatory policies in India are an external factor that will affect Leethal fashion accessories in outsourcing in India. The lack of regulation leads to exploitation of investors. Small businesses are also likely to be wiped out if not protected. The small businesses are also likely to be involved in paying higher tax rates. Employee’s rights may also be infringed and this will result in scaring away investors like Leethal fashion accessories. Market demand is another external factor that will have an impact on Leethal accessories as they try to venture into India’s economy. The forces of demand and supply will have positive and negative effects depending on the market condition. Higher costs of production are some of the external factors that may affect the Leethal organization as they try their manufacturing business in India. The costs may rise from longer production processes faced by most of the foreign investors in India (Green, 2006). Despite India enjoying lot investors in their country, the business ministry has ensured protection of some of its industries by limiting access to raw resources to some of the foreign investors. India has policies restricting importation while encouraging many exports. Question 2 Many Australian manufacturers are faced with major manufacturing problems ranging from increased labor costs, rise in costs of production, lack of raw materials, unstable currency value and stiff competition from other foreign industrial companies. Many Australians are interested in outsourcing in India and can now enjoy many advantages. The first advantages they are likely to experience are the high quality standards. Australia has lower standards and low regulation policies. Low regulatory services have an impact of leaving employees with longer working hours. The employees are also likely to face infringement of their rights with low payments. The payments are also likely to come late. This will lead to negative impact on the quality of the products. Due to rampant cases of corruption, Australian investors have turned their interests in outsourcing in India. Manufacturing are faced with longer lead times on their products. Manufacturing using three shifts have been shifted to be using only two shifts for production thereby reducing the quality of the goods. Most of the manufacturers use the final shift for production of counterfeit goods. This leads to negative impact on the quality of goods produced. Most of the production process is also taking long due to the changes made during the production process (Schaaf, 2005). Manufacturers in Australia are faced with challenges of unexpected costs. This has made many Australian investors to outsource better services in India. The costs are believed to be arising from unscrupulous middle-men and unnecessary chains of trade. The costs are also expected to rise while training new staff about the new skill or technology. The staff can also leave for higher paying jobs after acquiring the skills. Rising and unstable costs of fuel may also lead to unexpected costs. India enjoys a wider labor force and has skilled technical expertise. Customer service problems have been linked to outsourced ventures in India. One of the major reasons leading to poor customer care services are due to language barrier. Most of the calls are never answered and most of the requests are not followed up always leading to negative feedback. Cases of continued billing even after customers have requested for cancellation of the purchase requests are some of the complaints related to outsourcing in India. Most of the Australian’s outsourcing in India has complained about their security. Most of the information related to payrolls, credit cards, and medical information has left investors uneasy due to incidences of theft on their bank accounts and impersonation. The sudden rise in cases of outsourcing in India has a got a negative impact on the Australian economy since job opportunities are offered to Indians. The technical expertise and massive development of technology will be offered only to the Indians as opposed to the Australians. Faster exportation and delivery service provided by the Indians has led to the rush in outsourcing in India. The economy is fast growing and the population is high therefore cheaper labor services. High level of technology and has made production faster and efficient. Stiffer competition and lack of raw materials are some of the reasons why most investors have sought to invest in India. Due to stiff competition, the manufactures are forced to produce goods at higher costs, which in turn affect the consumer prices. If this occurs, most of the consumers will tend to shift their consumption to cheaper products. Question 3 Outsourcing from China has many advantages compared to other countries like China and the US. The first advantage related to outsourcing in India is the readily available labor. India is one of the most populous countries in the world with stronger economy and therefore many investors interested in outsourcing are likely to enjoy cheap labor with better standards. India being one of the economic giants in the world has a capacity of producing goods of higher quality. Due to their strength in the economy, most of their produced products fetch higher prices as compared from other countries like the US where labor is expensive. Beside labor being expensive, countries like US have tight regulatory measures, which discourage many investors from outsourcing from such countries (Modwell, 2010). India enjoys economic stability and political stability. These factors encourage foreign investors in outsourcing in this country. Compared to other countries like the US, outsourcing becomes a risk due to the instability of the dollar. The Indian currency is much stable as compared to the US $ therefore, many investors will prefer to outsource in India as compared to other countries. India has a good transport and communication system with good infrastructure. These factors encourage investors in venturing into investment in this country. Processing and delivery of goods during exportation is also done faster due to the efficient railway transport. Processing procedures are also short and done faster ensuring that goods are ready for transport at the required time. The security level and lack of discrimination is one of the reasons why many investors prefer to outsource in India. Despite their deep cultural and religious values, Indians are friendly and would prefer to learn a new idea from a foreigner. Security levels and confidentiality while conducting business transactions are highly considered and assured. However, language barrier pose a great threat to most people outsourcing in India. India’s export and import regulatory body provides special rates for different countries. This policy ensures equity and preference given to small businesses first. The regulatory body also announces prohibited and non-prohibited exports within and outside its country therefore providing market reports to the interested investors and exporters effectively. Online application procedures are also available making the import and export a quicker and efficient affair (India Customs, 2012). India ensures that its exports are of high quality and ensures that they are environmentally friendly. For this purpose, most of the investors prefer investing in India mostly due to the recent threats of environmental degradation. India also ensures that their exports are as cheap as possible to encourage foreign investors. Compared to other countries like the US, outsourcing in India is cheaper and faster due to the low costs of taxes charged on exports. India has a wider range or raw materials available on their country and this encourages outsourcing since the overall cost of production will be cheaper. Other countries like Pakistan and China provide higher prices for raw materials in their country and therefore many people prefer to trade in India. India has also been in negotiation free trade agreements with many countries. The treaties signed by this countries provides a wider range of market in terms of current technology and sales and it is for this reasons that many investors prefer outsourcing in India than in other countries. Question 4 Leethal Fashion accessories are likely to face many problems as they invest and outsource in India. The most common challenge they face is the language barrier. Indian economy comprises a population with low level of education and this creates a barrier for effective communication. Because India has signed a lot of treaties and free trade agreements outsourcing in India is becoming competitive as most countries try to invest with one of the world’s economic giant’s economy (Khan, 1997). Leethal fashions accessories are also at threat of incurring extra costs. The costs can be attributed to training of employees new labor skills and improve their technology. The firm is also likely to engage in training the employees a language that they will be well conversant with in order to affect communication. The costs could be as a result of inflation and unstable currency values. The stiffer competition in the market could also lead to depreciation of products value and this mean an extra cost on production. Leethal fashion accessories may face production of low quality products in India due to the slackened regulatory laws. Due to this, many manufacturers are involved in production of counterfeit goods, which are of low quality. Lack of regulatory rules means small businesses and companies are likely to face stiffer competition and higher taxes imposed on them. Leethal accessories employees are at risk of losing their jobs if the Indians decide to venture into other jobs. This may be as a result to sudden interests and changes in innovativeness and technology. Leethal fashions accessories can turn the disadvantages to their advantages by selling their goods directly in India instead of transporting them back home. This means reduced level of risks and transportation costs. The goods are also are at higher sales chances because of the enormous market available in India. Leethal fashions accessory has the viability of exploiting the free trade agreements in India by tapping into the wider range of technology and innovation. Since Indiapossesses a god transport and communication system, Leethal accessories can upgrade their sales by introducing new technology (Rollins). For the case of corruption and embezzlement, Leethal accessories can obtain patents and copyrights to protect their businesses from stiff competition. The business can also buffer their products against inflation by selling their goods using the present and the most stable currency value. The firm can also improve its sales by opening some of their branches within India. This could have a positive effect on their production costs and reduction on corruption. References India Customs. (2012). Retrieved from India Customs: www.indiacustoms.com Green, W. (2006). Weaknesses in businesses outsourcing in India. Growth in services outsourcing in India, 2 of 78. Khan, N. (1997). Outsourcing in India. Outsourcing to India, 25 of 203. Modwell, S. (2010). Outsourcing in India. Outsouring in India, 13 of 98. Nambiar, B. (2006). Outsourcing and India. Outsourcing and India, 6 of 24. Rollins, P. (n.d.). India outsourcing problems. Retrieved 2012, from India outsourcing problems: www.ehow.com/aboutinias outsourcing problems Schaaf, J. (2005). Offshore outssourcing the engine of growth. Outsourcing to India, 1 of 46. Read More