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Highly Grateful Enterprises’ Entry in India Essay

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Updated: Jul 4th, 2020

Culture Briefing of India

Location

India is a country located in South Asia. The Indian Ocean is on its southern border, the Arabian Sea on the southwest, the Bay of Bengal on the southeast, and Pakistan on its western border. China, Bhutan, and Nepal are on its north-eastern border and Bangladesh and Myanmar on the eastern border. The country shares a maritime border with several nations, including Thailand, Indonesia, Maldives, and Srilanka. According to Agarwal (2006), the country is the seventh-largest by area. The geographic location of the country makes it very strategic as a business hub. Its large coastal line means that the movement of goods from the parent firm in the United States to this foreign firm will not be complicated. Highly Grateful Enterprise will find it easy to operate in this country because of this strategic location. The country is also a gateway to other East Asian countries. In case the management will consider expanding to other regional markets, then this country is the most appropriate gateway that should be used.

History

India gained independence from British rule in 1947, and Jawaharlal Nehru became its first prime minister. Indian history may not necessarily be relevant to Highly Grateful Enterprise as it seeks to expand its operations to this region. However, it may help in enhancing an understanding of the people of this country. According to Subba (2005), Indians used a unique approach to gain independence from British rule. Under the leadership of Mahatma Gandhi, they adopted non-violent disobedience to the colonial authorities. They never used any weapons or force to fight the colonial masters. The country has generally been peaceful, with very minimal cases of riots. This may be an advantage to this firm. It is an assurance that its business will not be disrupted by civil unrest such as that seen in some of the Arab countries.

Size

In terms of geographical area, India is the seventh-largest country in the world, measuring 3,287,590 kilometer square. In terms of population, India is the second most populous nation in the world only after China, with about 1,276,267,000 people. New Delhi and Mumbai are some of the most densely populated cities in the world. As Marjit (2009) observes, Indian population is about 4 times larger than that of the United States. This massive population is very attractive for Highly Grateful Enterprise in many ways. First, it will be assured of cheap labor needed in its various departments such as marketing, production, finance, and logistics among other areas. The population will also be helpful in terms of creating a huge market for the products offered by the firm.

Political System

According to Patnaik (2011), India is currently the most populous democracy in the world. The constitution of India has created a federal government with a parliamentary system. It has a representative democracy similar to that of the United Kingdom. The parliament is responsible for enacting laws and it is the oversight authority that puts checks and balances to the expenses and other activities of the central government. To a new firm entering this country, it would be important to understand the relationship that exists between the political leaders and the business society. Hildebrand (2009) says that politicians in India have in the recent past participated in activities that may be considered unethical and unfair to the business society. Some politicians have publicly joined trade unions to push the firms to pay their employees higher salaries. This trend has become common during electioneering period. Based on Hofstede’s Cultural Dimensions Theory, the power distance index in this country is high, especially due to the caste system that is still present in this society.

Economic system

Indian economy has experienced massive growth over the recent past. Currently, the country’s gross domestic product is estimated to be $ 8.027, making it the third largest economy in the world after the United States and China. This is largely due to its massive population of over 1.2 billion people. Its per capita gross domestic product on the other hand is $ 1,688, which makes it the 141st richest country in the world. Highly Grateful Enterprise will need to be ready to operate in a market that has a huge population but very low purchasing power. It means that the products must target the people in the middle and low classes. Mass production of cheap products may be the winning formula in this unique market. Hildebrand (2009) says that in India, wealth is held by people, unlike in China where the state has control over a large share of country’s wealth.

Language

In India, there are two official languages that are in active use. They include Hindi and English. Government transactions can be conducted in any of the two languages. However, most business communications are made in English, especially in privately held multinational corporations. Hindu is the widely spoken language, especially among the illiterate Indians. English is also spoken by a considerable number of people, especially those who have attained basic academic qualifications. It means that the problem of language barrier will not be an issue in this country.

Traditions, values, and ethics

The tradition, values, and ethics in India are very different from that of the United States. The caste system that was traditionally practiced in the country is still commonly felt in various contexts. The issue of social status and values that people are expected to hold based on their status still defines the behavioral patterns of many Indians. To achieve success in this market, a firm will need to understand these traditions, values, and ethics held by different demographical groups. Target marketing may be of critical importance in India because of the varying values and practices in this society. As explained in Hofstede’s Cultural Dimensions Theory, most Indians believe in collectivism other than individualism. They have strong family ties, especially among those who belong to the same caste. When targeting each caste, a firm should develop a message that will be appealing to a larger family setting other than individuals within the families.

Lifestyle

The lifestyle of the Indians, just like that in other places around the world, is not universal. People in different social classes have different lifestyles based on what their income can afford. However, Hildebrand (2009) notes that Indians, unlike Americans, are always keen on savings because of the uncertainty of what tomorrow may bring. Highly Grateful Enterprise will need to understand this lifestyle to achieve success in this market. It will need to develop promotional campaigns that will reassure the target customers that buying its products will help them increase their savings.

Characteristics of the culture

The Indian culture is unique. According to Kim and Mauborgne (2015), Indians have one of the strongest family ties in the world. They treasure family ties as much as they treasure friendship. Major decisions are rarely made by individuals. People must consult with their family members and seek for their approval before making a decision that is important. Although men are considered the head of their families, some decisions cannot be made without the approval of women. As a marketer, it will be very important to understand this system. The buyer decision-making process is influenced by so many factors. A promotional campaign must be designed in a way that is appealing to many people.

Business practices

Indians are known to be very enterprising. They have entrepreneurial spirit that is suppressed by lack of financial resources. Highly Grateful Enterprise will stand to benefit from this enterprising business environment. It will have highly enterprising individuals as its employees. This will enable it to hire the locals to work in various managerial positions because they know what should be done without being pushed around by the top managers.

Tips for leading in this country

To succeed in this country, a firm will need to understand its cultural practices and factors that influence buyers’ decisions. It will need to understand the power of family ties and how this can influence the purchasing pattern of the citizens. Another important factor that Highly Grateful Enterprise will need to understand is the need to develop products that are less expensive. The country is ranked 141 in terms of purchasing power of its people. This makes it one of the poorest in the world. However, this low purchasing power is neutralized by the huge population in the country. Mass production of cheap products may help the firm achieve success in this market.

Conclusion and recommendations

Indian market offers a very attractive market for Highly Grateful Enterprise. The management will need to keep in mind a number of fundamental factors about this market. The massive population will offer it cheap and relatively talented employees who will be able to deliver the expected results within the market. The huge market will also be a source of market for the products of this firm. The country’s numerous and strategically located harbors will make it easy for this firm to manage its cargo that is headed to other countries from India in case it can manufacture more products for export purposes. However, it must realize that most of the citizens of the country have low purchasing power. It is recommended that the products should have low prices to enable more people to purchase them. This way, this firm can capitalize on the huge Indian population.

Launching a Business in India

Plans and Reasons Why India Was Chosen

The main reason for choosing India as the country to expand the operations was due to a number of factors. The first factor was its massive population. With a population of over 1.2 billion people, this country would offer a huge market for the firm’s product. It will also assure this country of cheap labor. The country has also been relatively stable politically, which is an assurance of the security that is needed for any business to flourish. The plan of Highly Grateful Enterprise is to expand its operations globally, starting with the countries considered to pose least possible challenges. India will be a gateway to other major regional markets in Asia, including the Chinese market. Successful entry into the Indian market will increase chances of making another successful entry into the other regional markets.

Steps to Be Taken to Launch This New Business in India

The management of Highly Grateful Enterprise will need to answer some fundamental questions about the Indian market before launching the business. This will inform it of the specific steps that should be taken to launch the business in the new market. The critical analysis of the Indian market done in the section above has helped in answering most of these questions. At this stage, it will be necessary to look at the specific issues before the firm can start its operations.

Analysis of the market

This firm will be selling electronic products, especially mobile phones, USB cables, broadband, and personal computers. A market survey reveals that Indians have a low purchasing power. However, the demand for the electronic products that this firm is offering is in high. Competition is expected to be very stiff, especially given the fact that the neighboring China is known to produce very cheap products. This firm plans to lower the prices of its products in the market to compete favorably with the Chinese brands. The management believes that it will be successful because the locals do not trust Chinese products due to their poor quality.

The main competitors

The main competitors in this new market will include Lenovo, HTC, and other unbranded products from China. These Chinese firms are expected to offer very stiff competition to this firm, especially given the proximity between China and India. This firm will have to rely on the good name of its country of origin to convince the locals that its products are of very high quality.

Unique benefits that the firm’s products offer to the clients

According to Hildebrand (2009), when communicating to the clients through promotional campaigns, it is always necessary to inform them about the unique features of one’s products that others do not have. One of the unique features of the mobile phones sold by this firm is their battery life. They can last for 14 days without recharge. This cannot be compared to the Chinese phones that need recharge for almost on a daily basis. The clarity and large size of the screen of the phones also offer the clients a unique experience. The phones can also support so many applications, especially those that are popular among the youth. They have large memory of 24 GB to support numerous files that the users may have. The laptops also have long battery life, beautiful and large screens, and great speed. In terms of quality, the products of this firm outsmart those offered by the Chinese firms.

Distribution channels to be used in the country

The researcher will use specialty shops to carry its products. The distribution channel will, therefore, be very short. It will be moving from the manufacturer to the agent, and finally to the specialty store. The decision to shorten the distribution channel was informed by a research which revealed that the purchasing power of the Indians is relatively low. Using a long distribution channels will increase the cost of delivering the products to the customers. This would translate to high prices of the firm’s products. This must be avoided at all cost because of the stiff competition in the Indian markets. Most of the competitors focus on the pricing strategies as a way of gaining an edge over other market rivals. This means that the products offered by Highly Grateful Enterprise must be of relatively low prices to attract many clients.

The country’s laws that regulate the business

The management of Highly Grateful Enterprise will need to conduct a thorough investigation in order to find out the laws and regulations that govern the operations of an electronic firm within the Indian market. The management will need to know about the market entry laws. For instance, it will determine all the procedures that a foreign firm needs to follow before it can be allowed to start its operations in the country. It will also need to know more about the law regarding repatriation of the profits earned within the country. Some countries have strict regulations about the amount of profits that a firm can repatriate. The management will need to learn about what the Indian law says about this issue.

Another important regulatory concept that the firm will need to understand is the employment policies, especially the minimum wage policy. Regulatory policies about competition in the market will also be important. For instance, the country may have laws that prohibit mergers of the leading rivals in the market as a way of promoting competition in the local market. This is one of the strategies that Highly Grateful Enterprise intends to use once it starts its operations in India. However, this must be done in accordance with the law. Understanding these laws will help this firm to avoid litigations or even closure of its operations in this great market.

Employment strategies that will be used in the country

According to Rosenberg (2012), one of the most important decisions that a firm moving to a new country has to make is the employment strategies to be used. A firm can choose to hire the host country nationals, parent country nationals, or third country nationals based on a number of factors. Factors that influence the type of employees to hire include the cost of hiring them, the skills they have in addressing specific tasks, and the level of their commitment. Based on these factors, this firm intends to hire the host country nationals in most of the positions. All the junior employees and mid-managers will be Indians. They have a better understanding of the local market and the main factors that influence buyers’ decisions.

At the top management level, this firm may have one or two parent country nationals to ensure that the vision and mission of the parent firm is observed in the operations of this firm. The chief executive officer and the finance director may be the parent country nationals. However, other positions such as finance director, human resource director, and operations manager will have to be local Indians. These local managers will be in a better position to understand the local dynamics and advise the top managers about the best course of action to take when addressing various issues. All activities that involve interacting with the locals will be assigned to the host country nationals.

References

Agarwal, N. (2006). Indian Economy: Retrospect and Prospects. Indian Journal of Industrial Relations, 41(3), 458-460.

Hildebrand, D. (2009). The role of economic analysis in the EC competition rules. Austin: Wolters Kluwer Law & Business.

Kim, W. C., & Mauborgne, R. (2015). Blue ocean strategy: How to create uncontested market space and make the competition irrelevant. Boston: Harvard Business Review Press.

Marjit, S. (2009). Global Recession and the Indian Economy: Myth and Reality. Economic and Political Weekly, 44(9), 15-17.

Patnaik, P. (2011). Growth and Poverty in the Indian Economy. Social Scientist, 39(10), 19-34.

Rosenberg, M. A. (2012). Business advantage. Cambridge: Cambridge University Press.

Subba, R. (2005). RBI Database on Indian Economy. Economic and Political Weekly, 40(42), 4509-4512.

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