International Business & Globalization - India - Case Study Example

International business and globalisation. Student’s Name Institution Professor. Date Introduction. India is one of the most potential emerging markets in the world.The geography of India allows people to settle in rural and urban centers.the rural areas have low density of people than the urban areas. Rural areas allows only primary activities while urban areas facilitate secondary and tertiary business activities. For large scale operations it is better to focus on urban areas with more people. Such factors are very important. This can help them make sound and informed decisions on whether or not, to start their operations in that country, Dawson (2000). The micro environment in India is mainly composed of the customers and the competitors. A business has to provide high quality goods and services at a lower price to attract the customers. The competitors can beaten by improving on the weakness of other companies, doing a lot of advertisements and being innovative. The company also has to select the regions in India that best match their objectives and available resources, Johanson (1997). One of The macro factors that will affect a business in India include, demographic forces. Education system in India provides cheap skilled labour for companies .This is a great boost. The economic factors in India will affect a company a lot since it will be forced to lower prices as the majority of the people are poor. This will affect a business since the cost of production in India is high due to lack of sufficient power and poor infrastructure in many parts of the country. Technology will enable a company reach out to more customers through social media, advertisements and in the production of high quality goods and services. This is a key factor to consider in the marketing strategies of the company. Keywords. Emerging markets, government policies, intellectual property, target group, marketing strategies, foreign investors. Though India looks very attractive to foreign organisations there are a few factors that need to be taken into consideration, Buckley, (1998). There are advantages and disadvantages to encounter. Sourcing for potential markets involves the ability to withstand the risk of drastic change, poor infrastructure, limited managerial resources, distribution systems and cultural diversity and differences, Dunning (1997).Every organisation in a foreign country has new lessons to learn and cope with the situation. India has a number of strengths as well as weaknesses. Strengths: 1. India has come up with a very strong industrial base and a well organised financial sector. 2. The middle class level is growing fast giving it a reliable domestic market. 3. There is a high population of educated people, highly skilled and provide cheap labour. 4. The political system in India creates a conducive environment for business to thrive. Weaknesses: 1. The social and political instability has been fuelled by corruption and the government has not been able to effectively put it under control. 2. There has been a systemic weakness in India’s development strategies, created by the government’s import and substitutions. 3. Presence of many unproductive private sectors that are debt-ridden. Due to this they limit the private sector opportunities, to develop their own interests. 4. There is presence of sanitation problems in most cities, this factors highly deter investors Opportunities: 1. Foreign organisations are reaping great profits in India due to its low per capita income and rapid economic growth. This has greatly attracted investors to the country. 2. Many sectors are now opening to the private sector, these areas include the civil aviation, banking, telecommunication, accounting and medical service field. This sectors where previously the exclusive domain of the public sector. 3. India is developing globally competitive services due to its advanced technology opening up the borders .these services include medical care,IT,legal and accounting. 4. Many Indian companies are seeking partnership with foreign companies due to problems in investing in sectors such as mining. This has created an open door for foreign investors to step in and partner with such companies. Threats: 1. India’s infrastructure is not fully developed, sectors such as communications, transport and power slow down economic development of the country. 2. There is an increased pressure in India’s balance of payment created by volatile capital flows which has resulted to a large account deficit. 3. Land acquisition for foreign organisation is very hard and involves lengthy and tiring procedures. 4. Many government agencies are facing poor policy co-ordination. This has greatly affected both local and foreign investors in India. 5. The cost of investment in India can actually be higher than originally thought .this is due to judicially and regulatory challenges in the country. The political factors affecting organisations in India are made by changes in government policies. The changes are legal, social and economic. These changes are due to increase or reduce taxes .International organisations operating in India and having an income of less than INR 10 million are required to pay a corporate tax of 41.2%.Considering this factor an organisation needs to make proper marketing strategies to avoid huge losses and the high taxation rates that are there in India. The society in India is changing rapidly. There is a rapid growth of popularity in the social media among the younger generation. The young generation who are the majority opt to shop online, therefore a foreign organisation has to put this in mind when formulating their marketing strategies. The older generation seems to stick to their tradition ways of shopping, this is crucial depending the target group of the organisatgion.Due to these organisations have been forced to employ environmental analysis, Arnold (1998). India previously had a bad image when it came to protection of intellectual property. It is no longer the worst in the world but now second worst according to a research conduct by the U.S lobby group. India is now better than Thailand in the rankings .This was mainly due to its decision to exempt the private sector from the set rules of purchasing domestically–made electronic equipment. There is also a very big concern in India’s restriction on the ever greening of patents. New patents are applied to products whose patent protection is due to expire. Patent protections are usually applied for pharmaceutical industries. The number of shortcomings to invest in India are fewer compared to the benefits to reap from that country. India is ranked among the highly potential emerging markets in Asia and also in the world. References: Arnold, D.J. and Quelch, J.A. (1998), “New strategies in emerging markets”, Sloan Management Review, Vol. 40, Buckley, P.J. and Casson, M.C. (1998), “Analysing foreign market entry strategies: extending the internalization process”, Journal of International Business Studies, Vol. 29, Dawson, J.A. (2000), “Retailing at century end: some challenges for management and research”, International Review of Retail Distribution and Consumer Research, Vol. 10. Dunning, J.H. and Bansal, S. (1997), “The cultural sensitivity of the eclectic paradigm”, Multinational Business Review, Vol. 5. Johanson, J. (1997), Global Marketing, Foreign Entry, Local Marketing and Global Management, McGraw-Hill, Chicago, IL. Read More