Develop Advanced Security Systems for Aircraft in India - Research Paper Example

?India Research Project Preared For Mr. James M. Gage; Board Members of Flying High Enterprises; Research and Development team of Flying High Enterprises; FHE Employees & Other Information Technology Companies 5600 Wasatch Boulevard Salt Lake City, Utah 84121 Preared By Erica R. Gage December 05, 2012 Letter of Transmittal December 05, 2012 To: James M. Gage, CEO; Board Members of Flying High Enterprises; Research and Development team of Flying High Enterprises; FHE employees & Other Information Technology companies desiring to expand in India From: Erica R. Gage Subject: Assessment on the Proposal to Move Small Team to Develop Advanced Security Systems for Aircraft in India Dear Mr. James and Other Respected Audience, It is my pleasure to present the report regarding the Proposal to Move Small Team to Develop Advanced Security Systems for Aircraft in India by which Flying High Enterprises (FHE) can successfully operate its business in India. This report primarily focuses on recognsing the economic, political and business conditions prevalent in India which is necessary to analyze for FHE in order to settle its operations in India. Moreover, this report depicts potential roadblocks which FHE might face during the entry in India. Through these overall assessments, it would be quite convenient for FHE to understand the Indian business environment in an efficient manner. In this similar context, this report also describes regarding the appropriate location of operations, from where FHE can obtain sustainable advantages regarding Information Technology operations. Contextually, this report also highlights a clear notion regarding the competitors which FHE might face after settling their business in India and subsequently depicts the strategy in order to tackle these rivals and ensure sustainable progress. We strongly believe that moving a small development team to India for FHE will be beneficial for both the company as well as for the India’s economy. This report can provide an effective support to FHE in every aspect of its business activities. Thank your for your kind consideration. Yours Sincerely Erica R. Gage Table of Contents Letter of Transmittal 2 Executive Summary 5 Introduction 6 Reasons behind India being the Best Fit for FHE 7 Economic Consideration 7 7 Political Stability 8 Potential Roadblocks 9 FHE’s Gain From The Indian Market 10 Competitor Analysis 10 FHE’s Needs for Workforce 11 Need for Developing a Perfect Mix 11 Managers for FHE 12 Employees Expectation 12 Expectation of Local Nationals 12 Work Ethics Difference from America 13 Conclusion & Recommendation 14 Works Cited 15 Executive Summary India is considered as a unique nation which comprises attractive cultural heritage as well as which provides ample opportunities regarding establishment of business ventures where several types of commerce can be easily operated by the new entrants. The prime objective of this paper is to provide strategies to FHE regarding the entry and the successfully operations of business in India. This report intends to describe about the economic, political and business environments of India where FHE might face several issues regarding all these aspects during the business operations in India. Moreover, this report provides appropriate location and its benefit which FHE should obtain at the time of operational activities. Contextually, this report provides the information about certain competitors which might provide considerable threat to FHE. Furthermore, it depicts the requirements of FHE regarding the workforce during the business operations in India. By taking into consideration regarding these overall aspects, FHE can successfully launch their business operations in India and the information provided in this report can be extremely beneficial in order to implement appropriate business strategies at the right time. Introduction ‘Flying High Enterprises (FHE)’ has been recently approached by Aerospace Products International in order to evaluate the scope of expansion for the company’s operations regarding information technology in India. The basic problem which has been recognized is that FHE has exhausted all its possibilities in order to remain ahead in terms of information technology. Even though the company has made several attempts in every aspect of operations still they are not capable to compete against their competitors in certain competitive markets. Advanced security systems for aircrafts can provide significant prospects for development in future where the company can obtain significant scope regarding the expansion of its operational activities. In order settle its business in India, it is necessary to analyse the present conditions of the country. India is considered as the second largest nation in Asia and the 7th largest populated nation all over the world. The area covered by India is 3,387,593 square kilometres and according to 2012 estimation its population is about 1,205,073,612 (The Central Intelligence Agency, “The World Factbook: India”). The labour force of this nation is considered to be about 487.6 million people. Moreover, English is recognised as the most significant language for national, political and business communication. In the year 2012, the Indian government took a big set-back in relation to the population in order to deal with the corruption scandals (Woistencroft, Hussain and Varshney, “India: Introduction”; ICRA Limited, “Indian Aviation Industry: Summary”). Reasons behind India being the Best Fit for FHE Economic Consideration In the year 2012, the economic development of India has been sluggish at below 7% and subsequently stock market also received a set-back due to adverse economic conditions but it has recovered in the later part of 2012. The output development of industrial sector has also slipped down into negative percentage and subsequently in terms of demand, the fixed investment as well as consumption improvement also slowed down. However, in later half of the year 2012 the economic scenario has been found to be improving considerably. In the early 1980s, the economy of India developed at an average rate of 6% to 7%, but it was not a continuous trend due to high inflation rate. The cause of this improvement is the change in thinking regarding the adoption of innovative strategies which motivated trade operations as well as minimized the amount of internal barriers (The CityUK, “India Economic Report”). Figure: India’s Exports And Imports Rate From 2007 To 2011. Source: (The World Bank, “India Economic Update”). Operating cost is one of the important aspects which should be considered if FHE operates in India. This is one of the significant decisions that FHE can face during the business operations in India. FHE should fulfill the nation’s individual standards regarding tastes and styles and subsequently meet the government needs as well as budget. By taking into consideration regarding the economic condition of India, the operating cost can be quite high for FHE. This can happen due to the fluctuation of oil prices and constrained pricing capacity which has been faced by the airline industry in India. The major challenges which are faced by Indian airline operating companies which are considered as same for FHE comprise huge debt burden and liquidity restriction. Most of the airline companies face equity infusion which may effect upon their balance sheets. However, in India FHE can get ample scopes regarding the improvement of financial condition which might facilitate FHE for enhanced long-term viability and brand recognition by providing differentiated customer services. It has been also observed that in India, the maintenance cost of aircraft is quite low rather than other certain countries such as the United States which is significantly beneficial for FHE to operate within Indian industrial sector (Horde, “Airline Operating Costs”; ARGUS International, Inc, “Aircraft Operating Cost Report”). Political Stability India is considered to be possesing an official form of government as well as constitution which is known as ‘Sovereign, Socialist, Democratic and Republic’. The aspect of corruption is considered as an extensive aspect in India which is increasing day-by-day. According to Transparency International’s Corruption Perceptions Index the status of India is 85th out of 179 nations. Hence, it can be observed that political condition of the country is quite unstable, due to which political system of the country faced certain troubled scenarios for some period of time. From these overall aspects, it is viewed that government of India requires to make considerable efforts to maintain its stability (Abdulraheem, “Corruption in India: An Overview”). At present, the aspect of corruption in India is quite critical which creates an impact not only on the airline industry but on other business sectors as well. If FHE desires to settle its business in India then it might face high borrowing costs, low value of stocks and ineffective corporate governance. In order to deal with offical level corruption FHE needs to prepare certain strategies to settle its operations in India. FHE might be required pay bribes to government officials in order to run its business successfully. India is considered as a unique nation because there are ample opportunities to expand varied kinds of business activities. If FHE initiates its operations in India then it is beneficial not only for the company but for India as well (Stanford Graduate School of Business, “Corruption Hurts Business as Well as a Nation’s Reputation” ; Bajaj, “Indian Court Cancels Contentious Wireless Licenses”). Potential Roadblocks Efficient business operations in India can face certain critical roadblocks that are required to be dealt with tactfully such as corruption, volatile political system and fluctuating economic condition. During the initiation, FHE might face certain barriers related to licensing, high taxation, government authorization, high competition and trade barriers in terms of export and import. In order to settle its business, FHE should pay electronic tax and value added tax which are mandatory for every business organization. Moreover, Indian government also imposes certain restrictions regarding foreign equity ownership which can impact upon FHE’s operational activities. Apart from these, a few of the key challenges that FHE might face while doing business in India are foreign investment, real estate, labor and employment, intellectual property, delays in court, corruption and insufficient infrastructure (HSBC Group, “Doing Business In India”; The Navhind Times, “Impact Of Corruption On Economy And Business”). FHE’s Gain From The Indian Market Location In India, Bangalore city can be considered to be one of the most suitable locations for FHE to initiate its operations related to prepating advanced security systems for aircrafts. Bangalore is considered as a well facilitated IT services destination in India. Bangalore city is also known as Silicon Valley due to the emergence and functioning of a huge number of leading IT companies. Bengaluru International Airport is one of the most famous airports which is spread in an area of about 4,050 acres and subsequently maintains international standards in every operational activity. Within the last few decades the initiations of advanced technologies within Bangalore have led to the successful development of IT in India. Several IT companies in Bangalore provide effective services not only in India but also all over the world. By taking into consideration these pertinent aspects, Bangalore is the most suitable location for FHE to initiate its businesses where the company can get ample scopes as well as facilities regarding IT-related technologies (Stylusinc, “Doing Business in India: A Cultural Perspective”). Competitor Analysis In order to settle business in any part of the world, it is necessary to analyze potential competitors that might provide sustained threats for new entrants. With regard to FHE, there are certain competitors in India such as Tata Advanced Systems Limited (Tata Advanced Systems Limited, “Aerospace”). However, there are not many competitors present in the Indian market which can signifcantly provide a major scope for FHE that requires to be explored. The prevalent competiitors can provide threat to FHE in terms of facilities, prices and customer services. In order to compete against these rivals, FHE should understand Indian airline security systems market situation. The company should conduct a market research for evaluating Indian consumers’ wants and needs regarding airline securities and services. The company must implement innovative strategies in order to provide better services than its competitors. It should attempt to fulfill the demands of its potential customers and offer low cost better quality services than its rivals. At initiation stage, the company should implement low cost pricing strategy of its security systems in order to grab more number of customers. FHE’s Needs for Workforce Need for Developing a Perfect Mix To operate a business successfully an organization should comprise highly qualified employees for every level of business which should be considered as a perfect mix. Regarding FHE, the perfect mix should be highly qualified IT staff, research and devlopment related qualified employees to make innovative regarding security solutions, expertise operational employees to prepare the systems and experienced employees who will provide better services than competitors. Managers for FHE In order to operate successfully in India, FHE needs highly qualified and experienced managers, who can effectively control, plan, organize and direct the overall operational activities of FHE. CEO of FHE i.e. James M. Gage would have the main authority to control the overall operations of FHE, but for Indian operations FHE needs a regional manager who should direct entire activitiy of FHE. Employees Expectation Employee satisfaction is a major aspect for every organization by which they can successfully maintain long-term profitable business. Employees always expect to obtain good remuneration package, reward & recognition and effective priority from the organisation regarding health & safety. All these aspects should be considered by FHE in order to fulfill the expectations of its employees during the business operations in India. Apart from these, FHE always should focus on maintaining an efficient work environment which is suitable and comfortable for every employee. Moreover, employees also expect mutual understanding among every level of staff in every aspect of business operations. Expectation of Local Nationals After initiation of business in India, FHE should provide sufficient job opportunities for local nationals in the field of developing advanced security systems for aircrafts as India is observed to be posseisng substantial number of techinically sound employees amid its labor force. Job opportunities should be based on qualification and experience by which FHE can obtain popularity in the eyes of Indian communities. In this way, the company can be regarded as a popular business entity within a short period of time. Moreover, the company should deliver high quality services with affordable prices by which it can attract more number of customers towards their offerings (The Washington Times, LLC, “Linguistically speaking – English becomes India’s 'Numero-Uno' language”). Work Ethics Difference from America The work culture of India is significantly different from America because the working environment of America is quite distinct than India in terms of punctuality, timeliness, behavior and attitude. Most of the American organizations follow their traditional work environment where they effectively maintain high quality work culture. American work culture aims to ensure effectively following of deadlines which is considered as an essential part of their work life. In accordance with good work ethics, American people tend to work based on properly developed schdules which facilitate them to complete the taks within stipulated time period. With regard to Indian work ethics, people are at times found to be not providing significant considerations towards meeting the schedule of assigned tasks which might hamper the overall work process (Easton, “America's New Work Ethic”). Conclusion & Recommendation From this overall discussion, it can be concluded that FHE can achieve desired success from its operations in India. The company can obtain ample oppurutnity to expand its business within India and can gain significant profit in a short periode of time especially due to presence of a limited number of competitors. However, in relation to political, economic and business conditons in India, FHE might face a few issues during the operations but it can tactfully deal with the anticipated difficulties to attain desired success. Moreoever, in order to operate sucessfully, FHE should understand the airline security systems market condition in India and execute appropriate stategies. At the time of commencing its operations FHE should adopt low cost pricing strategy along with which it can offer excellent quality of facilities and services in order to grab the attention of a large number of consumers. Works Cited Abdulraheem, A. “Corruption in India: An Overview”. Social Action 59 (2009): 351-363. Print. ARGUS International, Inc. Aircraft Operating Cost Report, 2003. Web. 05 Dec. 2012. Bajaj, Vikas. Indian Court Cancels Contentious Wireless Licenses. The New York Times Company, 2012. Web. 05 Dec. 2012. Easton, Nina. America's New Work Ethic. Cable News Network, 2012. Web. 05 Dec. 2012. Horde, Peter. Airline Operating Costs. International Air Transport Consultancy, 2003. Web. 05 Dec. 2012. HSBC Group. Doing Business In India, 2012. Web. 05 Dec. 2012. ICRA Limited. Indian Aviation Industry: Summary, 2012. Web. 05 Dec. 2012. Stanford Graduate School of Business. Corruption Hurts Business as Well as a Nation’s Reputation, 2012. Web. 05 Dec. 2012. Stylusinc. Doing Business in India: A Cultural Perspective, 2004. Web. 05 Dec. 2012 The World Bank. India Economic Update, 2012. Web. 05 Dec. 2012. The CityUK. India Economic Report, 2012. Web. 05 Dec. 2012. The Navhind Times. Impact Of Corruption On Economy And Business, 2011. Web. 05 Dec. 2012. The Washington Times, LLC. Linguistically speaking – English becomes India’s 'Numero-Uno' language, 2012. Web. 05 Dec. 2012. The Central Intelligence Agency. The World Factbook: India, 2012. Web. 05 Dec. 2012. Tata Advanced Systems Limited. Aerospace, 2012. Web. 05 Dec. 2012. Woistencroft, James A, S.A. Hussain and C.K. Varshney. India: Introduction. International Water management Institute, 2012. Web. 05 Dec. 2012. Read More