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A Global Business Plan in India

Analyzing International Competitors

Potential Competitors

To assess international competitors, one must investigate multinational corporations (MNCs). The top Indian companies that operate in the ICT industry are Tata Consultancy Services (TCS), Infosys, HCL Technologies, and Wipro (GlobalEDGE, n.d.-a). All these companies have large revenues and market values of billions of USD, and all of them have exhibited a notable jump in market values in 2020-2021 (GlobalEDGE, n.d.-a). All four enterprises operate globally in IT consulting and providing business service processes (GlobalEDGE, n.d.-a). Their effect on the market is highly significant: for instance, TCS has one of the highest market values in India, of 158.90 billion USD (GlobalEDGE, n.d.-a). A large share and an increasing market value point to the successful operations of these enterprises, thus rendering them to be powerful competitors.

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Competitive Advantages

The advantages described in this section may aid in shaping a successful strategy for the proposed business plan. One competitive advantage of the listed MNCs may be their physical and digital access to an enormous skilled youth workforce due to India’s focus on education and literacy (GlobalEDGE, Hult, n.d.). Another advantage pertinent to all discussed enterprises may be the diversified approach to providing services: instead of focusing on a single service or product, these companies provide a wide variety. Lastly, the key to success may be the companies’ focus on hiring proficient English speakers since successful communication facilitates global business.

Assessing the Economic-Geographic Environment

Geographic Influences

India’s coastal location and proximity to Africa and Southeast Asia tie it to various trade networks to this day. However, India’s high prevalence of rural areas focusing on agricultural productivity, its frequent floods, and frictions in labor mobility compromise the physical and digital connectedness required for global businesses (GlobalEDGE, Michigan State University, n.d.). Overall, the geographic conditions in India influence the state of infrastructure, which may significantly impact the proposed business.

Major Products and Industries

India has put a large accent on technical advancement, which is reflected in its products and industries. The main natural resources in India are oil and minerals and precious stones and metals that get actively traded across the border (GlobalEDGE, n.d.-d). The top industries in India are textiles, chemicals, food processing, and steel (GlobalEDGE, n.d.-d). India’s major imports are oil and mineral fuels, precious stones and metals, and electrical machinery (GlobalEDGE, n.d.-d). India’s major exports are oil & mineral fuels, precious stones & metals, and industrial machinery (GlobalEDGE, n.d.-d). Overall, India’s accent on technical components provides a suitable business environment in the ICT sector.

Current Economic Conditions

The recent COVID-19 pandemic has affected many economies worldwide, including India. In 2020, India’s GDP ranked third globally, with an international GDP per capita of $6,502; however, one has to note a negative growth rate of 7.252% (GlobalEDGE, n.d.-b). However, India is still one of the fastest-growing economies globally, and it is expected to recover in the future due to government policy measures to protect businesses (World Bank, n.d.). According to the Doing Business Report (World Bank, 2020), for the past three years, India has been in the top ten economies that improved the most in the ease of doing business after implementing regulatory reforms. Among others, India implemented reforms that made it easier to start a business and trade across borders, supporting the proposed business plan (World Bank, 2020). Recent campaigns focused on attracting foreign investment, boosting the private sector, and enhancing the country’s overall competitiveness (World Bank, 2020). Therefore, India is supportive of foreign stakeholders willing to start their businesses.

In addition to structure and policy, other indicators present a mixed picture. The official exchange rate was 74.1 INR per 1 USD in 2020, with severe declines explained by the trade deficit (World Bank, 2020). The average income constituted 6,440 USD in 2020, declining for the first time in recent years (World Bank, 2020). Furthermore, the inflation of consumer prices constituted 6.623% in 2020, nearly doubling since 2019, which ranks India as worse than most countries (GlobalEDGE, n.d.-b). However, inflation is likely to decrease and meet the 2-6% target range after the 2020 peak due to disorganized supply chains, floods, domestic taxes, and a surge in gold prices (GlobalEDGE, n.d.-b). Moreover, there are approximately 472,000,000 people in the labor force in India, which, despite a 7.11% unemployment rate, still presents an incredible investment opportunity (GlobalEDGE, n.d.-c). Lastly, India’s real interest rate was 4.338% in 2020, which is relatively lower than many other developing nations, thus showing some entrepreneurial potential (World Bank, n.d.). Overall, while the Indian economy was, like the rest of the world, hit by the COVID-19 pandemic, it nonetheless presents hopeful prospects for foreign investors.

Infrastructure

Power outages represent a significant obstacle to doing business in a digital world. Electricity shortages have affected input choices, revenue, and productivity in Indian enterprises (World Bank, 2020). India’s electricity supply quality is rated at 4.7 out of 7, placing it at 80th place out of 137 investigated countries, a subpar rating for the IT-reliant country (World Bank, 2018). Public transportation is deficient on the state and national level, with highways connecting only major cities; further, civil disturbances and protests disrupt transport operations periodically (GlobalEDGE, Michigan State University, n.d.). Overall, the lack of adequate infrastructures like poor-quality power and unreliable transportation renders India a mediocre business environment (GlobalEDGE, n.d.-c). However, with the onset of new technology initiatives, alternative methods of adding energy to the grid may be found. For instance, renewable energy projects aim to strengthen local entrepreneurial capacity in rural areas (UN DESAF, n.d.). Therefore, there is a reasonable expectation for the upward trend to continue in the future years.

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References

Case studies of market transformation: Energy efficiency and renewable energy. (n.d.). United Nations Department of Economic and Social Affairs Sustainable Development.

Hult, T. (n.d.). The BRIC countries (No. 4). GlobalEDGE: Your source for global business knowledge.

India: Corporations. (n.d.-a). GlobalEDGE: Your Source for global business knowledge.

India: Economy. (n.d.-b). GlobalEDGE: Your Source for global business knowledge.

India: Overview. (n.d.). [Text/HTML]. World Bank.

India: Risk assessment. (n.d.-c). GlobalEDGE: Your source for global business knowledge.

India: Trade statistics. (n.d.-d).

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Michigan State University. (n.d.). Doing business in India. GlobalEDGE: Your source for global business knowledge.

World Bank. (n.d.). Real interest rate (%)—India. The World Bank: Data.

World Bank. (2018). 2.07 Quality of electricity supply. World Bank.

World Bank. (2020). Doing business 2020: Comparing business regulation in 190 economies. World Bank. Web.

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