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Before making any investment decision, it is critical to conduct various analysis of the region, the culture of people, among other factors which could contribute to the failure or the success of the business, such as entry regulations, cost of doing the business, competition rivalry, access to the customers which is contributed to the effectiveness of the infrastructure. Collecting and obtaining such details or data regarding the target market will play a fundamental role in setting the appropriate strategies to attain a competitive edge and boost its success. Therefore this paper will focus on analyzing one of the target market (India), where an investor wishes to set up a manufacturing facility for Generic accessories for cellular phones and tablets out of plastics. The primary aim is to ascertain how India is an effective investment center for the business, and based on the analysis, make the final decision on where it will be worthwhile to invest in the country.
Presentation of the Country
Located in Asia, India occupies the more significant part of South Asia. India is the second-most populous country with over 1.3 billion people. The median age for the India population is at 27 as compared to the one in China and the USA which is 37 and 38 respectively. In comparison to the past statistics for the India demographics, it is expected that the population will continually grow at a faster rate, compared to the population in China and U.S.
Also, the country is considered to be the most populous democracy in the world, in which it is a federal republic governed under a parliamentary system and also consists of 29 states and even 7 union territories (Misra, & Puri, 2011). On the other hand, the India Economy has been rated high over the years, in which in 2017, its economy was ranked as the world's sixth largest by nominal GDP and also the third largest by purchasing power parity. Although different challenges faced the economy over the past years, the market-based economic reforms which were done in 1991 contributed to the growth of the country’s economy since India have become one of the fastest-growing major economies and also, the Country is considered to be the newly industrialized country (Bosworth et al. 2007).
For example, in the fourth quarter (FY 2017-18), the Indian grew at a rate of 7.7 percent, according to the statistics by the second Advance Estimates of National Income by Central Statistics Office (CSO). Further, India is ranked at the 130th economy in the world in the 2018 index for its index economic freedom score is at 54.5. Such advancements in the economy, India has witnessed several improvements in judicial effectiveness, government integrity, fiscal health and also business freedom (Holt, 2002). In addition, India is developing in becoming an open-market economy, although the country upholds its autarky policies which indicates that the country remains self-sufficient, whereby the country can survive or continue its activities without external assistance or the international trade.
There are some factors which have contributed to the accelerated growth of India’s economy. Some of these factors include the economic liberalization measure, including the industrial deregulation privatization of the state-owned enterprises, and also reduced controls on foreign trade and investment (Malhotra, & Malhotra, 2007). Many organization has taken advantage of the market in which they have invested heavily in India. For example, the world's fastest-growing high technology centers and also the most of the world's dominant information technology and also software companies have offices or centers in India. Other industries which have grown tremendously in India include the Textile Company, telecommunications, pharmaceuticals, food processing, transport equipment, mining, petroleum, and cement.
In addition, the telecommunication industry in India has become the world’s fastest-growing in which in 2017, India has surpassed the US to become the second largest smartphone market in the world after China (Middlemiss, 2017).
But on the other hand, the Indian Market is faced by different challenges which affect its economic growth as well as failure to attract investors. One of the fundamental challenges facing India is the socio-economic challenges, whereby despite the high economic growth over the past years for the company, there is high poverty rate in India, where it contained the most significant number of people who are living below the world's bank international poverty line in of US$ 1.25 per day (Holt, 2002). Also, there is economic inequality between the rich and the poor. Further, the high rates of corruption in India affect doing business and derail the growth of the country. Other factors include the underdeveloped infrastructure, inadequate financial and budget management and the restrictive and burdensome regulatory environment have contributed to undermining the overall development (Jain, & Kaur, 2006). Lastly, the fast-growing countries such as India have one challenge, that is, the market is volatile, and thus it is risky to invest in some markets.
Based on the various facts about the Indian Country, the country is attractive for investing due to various factors. For example, the presence of the increasing and younger population is more attractive; economically the younger generation will spend more on the products as compared to the older generations since the demographics play a critical role in driving consumption.
The younger generation will be the appropriate ready market for business hence creating a conducting business environment for investors (Bhagwati, & Panagariya, 2013). On the other hand, the culture of the Indian Country of autarky promotes and attracts investors. This is because, this culture fosters independence, where the country can survive without depending on external forces or countries, concerning aids, imports among other factors. This means that there are low imports in India because they depend on the locally produced or manufactured products. Therefore, for the business to invest in India, they need to set up their subsidiary in the country to enhance its success, since the consumers depend on the locally manufactured products. In addition to the same concept, the Indian country has implemented a comprehensive foreign direct investment (FDI) policy which allows the company to set up a subsidiary, where the company can have a 100% control of the strategic business direction (Bhagwati, & Panagariya, 2013). This will give an investor to set an industry or company in the company, though the FDI policy which enhances effective entry in the India market. In addition, the Indian government has announced a reduction of the corporate tax from 30% to 25%. Also, the Country has also introduced a comprehensive Goods and Services Tax (GST), which will help in reducing complexity and eliminating multiple taxations (Sabarinathan, 2014).
Based on the information collected on the India country, it is worthwhile for the investor to invest in the manufacturing company for the Generic accessories for the cellular phones and tablets out of the plastics. The country offers a conducive environment since there is a ready market.
For example, the telecommunication industry has grown in India, and therefore, there is a high demand for the cellular phones and tablets accessories. For that reason, establishing the accessories industry will be successful, thus being worthy to invest in the market. In addition, the young age of the median 27 years increases consumption because this is the age which uses mobile phones or tablets more as compared to older age. Therefore, at this age, the accessories demand will be high in India. Lastly, with the high level of unemployment, the company will be in a position to acquire a low-cost labor force, and therefore, lowering the cost of production and maximizing on its profits (Gautam, & Singh, 2010).
Lastly, it is fundamental for the business to observe the environmental laws on waste management especially of the plastics. The organization has to set strategies on how to recycle plastics and embrace the concept of plastics manufacture and Usage rules (Pandey, 2000). Therefore, in the manufacture of the plastic accessories, the company must set policies to control waste and enhance recycling plans.
Bhagwati, J., & Panagariya, A. (2013). Why growth matters: How economic growth in India reduced poverty and the lessons for other developing countries. Hachette UK.
Bosworth, B., Collins, S. M., & Virmani, A. (2007). Sources of growth in the Indian economy (No. w12901). National Bureau of Economic Research.
Gautam, R., & Singh, A. (2010). Corporate social responsibility practices in India: A study of top 500 companies. Global Business and Management Research: An International Journal, 2(1), 41-56.
Holt, G. (2002). Extension, poverty, and vulnerability in India: Country study for the Neuchatel Initiative (Vol. 154). Overseas Development Institute.
Jain, S. K., & Kaur, G. (2006). Role of socio-demographics in segmenting and profiling green consumers: an exploratory study of consumers in India. Journal of International Consumer Marketing, 18(3), 107-146.
Malhotra, S., & Malhotra, N. (2007). Investing in an emerging market: evidence from US firms investing in India. Competitiveness Review: An International Business Journal, 17(1/2), 47-55.
Middlemiss, L. (2017). The telecommunications industry in India: State, business and labor in a global economy. Routledge.
Misra, S. K., & Puri, V. K. (2011). Indian economy (p. 174). Himalaya Publishing House.
Pandey, B. K. (2000). Investing in India. Contemporary South Asia, 9(2), 229.
Sabarinathan, G. (2014). Understanding angel investing in India: an exploratory study based on publicly available data.
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