Global Expansion Opportunity Of India Case Study

This report aims to analyse the global expansion opportunity in the India. In this regard, it considers the ease of doing business in India, its infrastructure, pestle analysis, comparative advantages of India against USA, and entry modes. The company functions in USA and keen to spread its business in India and company manufactures tires and it wants to establish a manufacturing facility in India.

Doing business in India

The legal environment of Indian country is favorable for investment. The government has offered many benefits to investors. GDP growth of India is 7.4 percent and it is higher in the world and similar to the growth of china GDP growth (Dhamsana, 2016). The per capita income is 74,930 and the big economy consisting 1.7 trillion.

But the problem is the lack of suitability of Indian roads. The threat from the cheap tires from Chinese companies is also looming large (Singh, 2016). The price volatility regarding the raw materials is also an issue that has to be dealt with. For this the tire company can develop good understanding of Indian roads to improve the quality of radial tires. The second risk factor of cheap tires can be addressed by convincing customers about the quality of company tires as well as establishing a value chain network of buyers and suppliers. To deal with the price volatility, company must predict correctly the purchase requirement of raw material.

The description of market of rubber in India

The rubber tire demand is good in India (Malik, 2016). The process of rubber and carbon prices are low in the country. The crucial factor related with the demands of tires is its dependency over the good agriculture, transportation facility and industrial performance. The development of infrastructure is increasing rapidly and there are many works to be done to develop basic infrastructure in many parts of country but as India is a huge country therefore the demand for the products are also high.

Pestle analysis of

India does well in attracting the foreign investment. The industry cap of light manufacturing is more than Indonesia, china and other countries. The starting business takes less time in India then in china or Brazil. The economic environment provides promising results for the company. The GDP growth is good and the global recession does not affect the Indian market due to robust domestic demand. The social environment of India suggests a heterogeneous society with many kinds of customs and religious practices. It is also identified that Indian people are price sensitive. The reference marketing still plays a crucial role to choose the products therefore the company must consider to choose a local name to promote its brand. Demography of India is very attractive. The political environment is friendly to the exporters and investors. The technological environment of country witnessed rapid development in technology and this is evident in the quality and technology of rubber tires in India. The natural environment also offers promising benefits to company as India is found to be the fourth largest producer of the natural rubber in the world and this opportunity can be exploited by the company.

The legislation demands that import of retreaded tires must not take place and import of new tires are freely allowed for but the radial tires cannot be imported in the bus and truck segment. The liberal legislation favours the importers because