Country study Project

On
Of France
w.r.t
Business opportunities in Gujarat
Submitted to
Institute code:839
Graduate School of Management studies (GSMS), GTU

Under the guidance of,

Dr. Krishnaba Vaghela
Asst. professor of GSMS-GTU

In partial Fulfilment of the Requirement of the award of the degree

of
Master of Business Administration (International Business)
Offered By
Gujarat Technological University
Ahmedabad

1
 Student’s Declaration

We, following students, hereby declare that the Country Study

Project titled “France” in (Name of the Country / Province) is a result of our own
work and our indebtedness to other work publications, references, if any, have
been duly acknowledged. If we are found guilty of copying any other report or
published information and showing as my/our original work, or extending
plagiarism limit, we understand that we shall be liable and punishable by GTU,
which may include ‘Fail’ in examination, ‘Repeat study & re-submission of the
report’ or any other punishment that GTU may decide.

Enrollment no. Name of the student Signature

188390593009 Chavada Pooja M.
188390593011 Yadav dharmendra N.
188390593055 Thakkar Tejas D.

Place : ……..

Date : ……..

2
Report Completion Certificate

This is to certify that, following students of Graduate School of

Management Studies (GSMS), GTU (839) has submitted the project. The title of
project is Country study Report on ……………………. of France with respect to
Business Opportunities for Gujarat.

Enrollment no. Name Performance in Internal

Viva – Voce
188390593009 Chavada Pooja M.
188390593011 Yadav dharmendra N.
188390593055 Thakkar Tejas D.

Signature of the Faculty Guide/s

Dr. Krishnaba Vaghela,
Asst. Professor- GSMS, GTU.

Signature of Principal/Director
Dr. Pankaj Ray Patel
Director of GSMS, GTU.

3
1.Overview of France:

Formal name : French Republic

Short Form : France

Term for citizens : Frenchman/ Frenchwomen

Capital : Paris

Independence : July 14, Bastille Day, Is France’s national Holiday

Flag : The French flag features three equal vertical bands of blue (on the
hoist

side), white, and red. Known as the “Le drape au tricolore” (French

Tricolor), the flag dates to 1790, in the era of the French Revolution.

Motto : “Liberte, egalite, Fraternite” ( Liberty, Equality, Fraternity)

National Anthem : “La Marseillaise”

Population : 6.71 crores

GDP : 2.58 lakh crores USD (2017)

GDP Per capita : 38476.66 USD (2017)

Ease of doing business: 32 rank

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Geographical Location:

Metropolitan France. Western Europe, bordering the bay of Biscay

and English Channel, Between Belgium and Spain, Southeast of the UK; bordering the
Mediterranean Sea, Between Italy and Spain.1

Official language : French

Nationality :89.4% French (born)

4.4% French (by acquisition)

6.2% Foreigners

8.9% immigrants (Maghrebis, Africans, Other European, Asians)

Government : Unitary semi-presidential constitutional republic

President: Emmanuel Macron

Prime Minister: Edouard Philippe

Currency & exchange rate: Euro (1 EUR= Rs.81.43)

 CPF franc (Earlier France used Franc as its currency but from
February,2002 Euro replaced Franc entirely)

Religion:

 51.1% Christian
 39.6% Irreligious
 5.6% Muslim
 0.8% Judaism
 2.5% other faiths

1
https://www.indexmundi.com

5
2. Latest news and development in the country

 Apple has agreed to pay 10 years of back taxes to France, marking the latest
victory for European government pushing tech multinational to pay their share in
local markets.2
 3 European nations create Firm to trade with Iran.3
 India, France ink agreement to collaborate for Gaganyaan mission4
 France fuel protest: yellow vest movement5

3. France industries:

 Tourism:
As a country France offers a fabulous historic heritage and
probably the most diversified natural environment of any country in
Europe. In 2016 travel and tourism contributed a total of 189.3 billion
euros to GDP in France, while tourism employment created 2.8 billion
jobs. Every year roughly 200 million internationals visits France.
Tourism industry direct contribution to GDP in France 2017 is 82.7
billion Euro (8.9%).

 Fashion:
Revenue in the Fashion segment amounts to $17,344 million in
2019. Revenue is expected to show an annual growth rate of 7.6%
(CAGR 2019-2023), resulting in a market volume of $23,262 million by
2023. In global comparison, most revenue is generated in China
($291,109 million in 2019).6

2
https://www.theguardian.com/technology/2019/feb/05/apple-to-pay-10-years-of-back-taxes-to-france
3
https://www.nytimes.com
4
https://currentaffairs.gktoday.in/tags/india-france
5
https://www.aljazeera.com/indepth/opinion/yellow-vests-protesting-france-181206083636240.html
6
https://www.statista.com

6
  Energy:
The energy sector in France includes primary energy
production and importation, transformation of primary energy into
secondary energy, and transportation to the end-users.
Major players in French energy market: 1) ERDF 2) RTE 3) ELD
4) EDF 5) GRDF 6) Engie
7

 Transportation:
The France is one of the world’s largest economic
sector, Travel & Tourism, Transport sectors. GDP from transport in
France decreased to 22873 Euro in fourth quarter of 2018 from 22928
EUR million in third quarter of 2018.8

 Agriculture:
Agriculture contributed around 1.51% to the GDP of
France. GDP from agriculture in France increased to 7826 Euro million
in the fourth quarter of 2018 from 7814 Euro million in the third
quarter of 2018.9
 Auto mobile:
2018 France automotive industry Emerging dynamics and
future of France passenger cars and commercial vehicles.

 Manufacturing and Technology

 Shipping & ports
 Food Processing
 Beverages (wine)
 Aerospace

7
https://en.selectra.info
8
https://tradingeconomics.com
9
https://tradingeconomics.com

7
Import & Exports :-10

US $
2013 2014 2015 2016 2017
Thousands
France
567,987,697.54 566,656,165.38 493,941,214.22 488,885,072.44 523,385,133.28
Export

France
671,253,553.28 659,872,076.38 563,398,247.56 560,554,862.70 613,132,639.72
Import

Import & Exports with India: -

India 2012 2013 2014 2015 2016 2017

Export (US$ Thousand) 4188634.9 3602607.07 3585143.98 3523264 4326693 6037815

Import (US$ Thousand) 6028307.17 5858774.48 6879908.43 5953196 5177030 6051925

10

8
Top 5 Exports :-

Exports (US$ Thousands)

6,928,334.76

8,687,422.56

40,156,803.54
8,764,355.37

16,295,338.63

Aircraft Medicaments Petroleum oils, Automobiles Parts of turbo-jets

Top 5 Imports:-

Imports (US$ Thousands)

12,230,034.30
23,841,589.97
12,693,293.30

14,857,048.01 18,559,358.56

Petroleum oils and oils from Butenium Petroleum oils

Aircraft parts Automobiles with diesel engine
Turbo-jets of a thrust exceeding 25

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4. Gujarat Industries common: -

 Energy: - 1) Torrent Power

2) Adani Power
 Auto mobile: - 1) Tata Motors
2) Ceat tire
3) Ford
4) Maruti Suzuki
 Agriculture: - 1) GNFC
2) Meghmani Organic

 Shipping & ports: - 1) Adani Port

2) Tata Port
3)Esser Port
 Manufacturing: - 1) Jyoti Pvt. Ltd
2) Laxmi Machinery Ltd.
3) KSB Pvt. LTD
 Food processing: -
1) Amul Dairy Coop. Ltd

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PPR-2

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Selected Industry: FMCG
Overview of selected Industry:
FMCG (Fast Move Consumer Goods) is one of the largest sector of the
business world. FMCG’s are products that are manufactured by organizations such as
Unilever, Procter & Gamble and GlaxoSmithKleine and are typically bought by consumers
frequently. This industry encompasses a large number of job roles.
Following are the characteristics of FMCG:

 Frequent purchases
 Low engagement
 Low price
 Short shelf life
 Rapid consumption
From the marketer perspective:

 High volumes
 Low contribution margins
 Extensive distribution networks
 High stock turnover 11

FMCG industry in France:

In 2016 the French FMCG market grew at its slowest rate in four years.

 FMCG value growth slow rate in four years

 French consumers consume less, but consumes smarter
 Health and beauty is deprioritized as consumers opt for natural options
 Retailer price wars enable French consumers to upgrade to premium products
 Big name retailers battle for market share gains
 Lidl achieves fastest share growth, but Group E. Leclerc continues dominate with
21% market share

The largest figures from Kantar World panel show that in 2016 the
French FMCG market grew at its slowest rate in four years. Last year FMCG value
increase by just 0.2%, compared to a high of 1.5% value growth in 2015. The sluggish
growth of 2016 comes despite a successful festive season, which saw FMCG value
increase 1.5% in December 2016.

11
Ramanuj Majmdar (2004), product managent in India

12
 List of top FMCG companies:

France India
L’Oreal HUL
Always Colgate-Palmolive
Garnier ITC ltd.
Gilette Nestle
Oral-B Parle Agro
Philips Britannia Industries Limited
Nivea P&G
Signal The Godreg Group
Pampers Amul

Justification for selecting FMCG industry in France:

After implementation of Goods and Service Tax(GST) and demonetization,
the Indian FMCG industry is managing its way through disruptive post festive months
recording a higher demand led growth. Large players such as makers of grocery products
like biscuits, Juices, Toothpaste and snacks are going to increase their consumer promotion
spends by 15-20% in 3Q -2017.
This is the interesting phase in Indian FMCG industry growth where the
rural consumption has superseded industry expectation, size of modern retail is estimated
to grow 3 times in the next 5 years.

India-France Trade relations in FMCG industry:

India France trade relations aim at forging ties for the development of
the Agribusiness and food processing and FMCG sector. The Indian Food processing sector
produces around 50 million tons of fruits and 90 million tons of vegetables. But inadequate
food processing infrastructure in India could only process 6% of the perishable products
available in India. The Indian Agribusiness and Food processing sector aims to increase the

13
percentage of processed food available in India to 20% over the next 10 years. A huge future
demand for processed food is expected with changing socio- economic situations.12

India France trade relations envisage investment in the environmental

sector is well acclaimed throughout the world, especially its success in implementing Clean
Development Mechanism projects according to the Kyoto Protocol for reducing emission
levels of greenhouse gases.

 Agreement of French Agricultural Ministry and Indian Export Inspection Council (EIC)
for export of Indian fisheries and agricultural products.
 Development of SME in India
 Investment in Financial and retail market in India
 Promotion of Indian whiskey amongst the European countries

12
https://business.mapsofindia.com/trade-relations/india-france/

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PPR -3

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 France, officially the French Republic, is a sovereign country in Western Europe
that includes overseas regions and territories. Metropolitan France extends from the
Mediterranean Sea to the English Channel and the North Sea, and from the Rhine to the
Atlantic Ocean. France is a developed country and has the world's fifth-largest economy by
nominal GDP and seventh-largest by purchasing power parity. French citizens enjoy a high
standard of living, with the country performing well in international rankings of education,
health care, life expectancy, civil liberties, and human development. According to OECD,
about 73% of the top 20% of the adult population in France rated their health as good or very
good, compared to about 60% for the bottom 20%, and the top 20% of the population earn
$45,292/ year, and the bottom 20% live on $23,069/ year. It is one of only three countries-
besides Morocco and Spain, to have both Atlantic and Mediterranean coastlines. France
remains a great power with significant cultural, economic, military, and political influence in
Europe and around the world. It has the world's sixth-largest military budget, and third-largest
stockpile of nuclear weapons, along with second-largest diplomatic corps, after the US.
France’s economic growth is expected to remain at 1.06% in 2019 before
coming down to 1.50% in 2020. Business investment in France is expected to improve despite
lowing external demand due to favourable financing conditions and business tax cuts. Job
creation in France is expected to improve due to lower labour taxes, a more flexible labour
market and improved training opportunities, notably for low-skilled workers, supporting
household consumption. In World Bank’s ease of doing business ranking France was ranked
32 out of 190 countries in 2018. France’s ease of doing business ranking slipped from 31st
position in 2017.

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STEEPLED ANALYSIS OF FRANCE COUNTRY’s FMCG SECTOR13
France is 5th worldwide in GDP, with almost $3 trillion, and 3rd (why?) in
military expenditure with $61.6 billion, and 22nd in population, with 61 million.France is the
best-positioned of all the countries we will look at here todeal with the economic crisis facing
the world. Their ingrained habit of dirigisme will bail out their industry, their nuclear power
plants will protect them from energy shortages, while giving them all the street cred they
need for global action against greenhouse gases. They have a beautiful geographic location,
brilliant public transportation, excellent education and one of the few growing populations in
Europe, thanks to generous subsidies for mothers. France has just rejoined NATO, which
should help them militarily and may give them cover to reduce defense spending. Their
foreign policy is essentially to work behind the scenes maintaining covert control of the
DomToms, their former colonies. Suspicions abound that they were heavily involved in the
recent coup in Madagascar, as only the latest example. But they are pretty ham- handed
about it all, and what would in a more congenial climate be a source of international Nicolas
Sarkozy is fortunate in his choice of enemies, as the left has formed a circular firing squad.
There has been some high level corruption in France, and continued disclosure may prove
embarrassing for the government, although not for Sarkozy. Embarrassment for him tends to
be purely personal, as the hot rabbit has ex-lovers all over the place and word gets around.

1. Political factor 14
The political landscape impacts how FMCG sectors of France implements
strategies that satisfy policies and governmental requirements on business development.
This element of the PESTEL/PESTLE Analysis framework evaluates the influence of
governments and related organizations or institutions on the remote or macro-environment.
FMCG sector of France must address the effects of the following political external factors on
its consumer goods business performance:

 Rising governmental support for e-commerce (threat & opportunity)

 Stable overall governmental support for globalization (opportunity)
 Governmental support for higher energy efficiency (opportunity)

Rising governmental support for e-commerce is a threat against FMCG sector,

increasing competitive rivalry in the consumer goods industry. However, this political external
factor also creates opportunities for the company to generate more revenues through its
online store. This opportunity is significant because limited online market presence is a
weakness. On the other hand, stable overall governmental support for globalization is an
opportunity for firms to increase their penetration in various markets around the world. Also,

13
panmore.com/unilever-pestel-pestle-analysis-recommendations
14
www.directhit.com/Industry analysis/Look no further

17
stable governmental support for higher energy efficiency presents the opportunity to
improve FMCG’s environmental footprint by accessing such support in the remote or macro-
environment. For example, the company can benefit from government programs for cost-
effective energy solutions for business. In this element of the STEEPLED analysis, FMCG has
opportunities for improving its business performance.

2. Technological factor
The FMCG sector depends on technologies to support its consumer goods
business. Also, technological advancements affect consumers’ behaviors and purchases
decisions. Such effects of technological tools, changes and trends are identified in this
element of the STEEPLED Analysis framework. The following technological external factors
are significant FMCG’s remote or macro-environment:

 Growing online market (opportunity)

 Business automation (opportunity)
 Increasing fuel efficiency in transportation (opportunity

FMCG sector has opportunity to increase its revenues from online sales, based
on a growing global online market. In addition, the sector can improve its business efficiencies
through automation. This technological external factor should influence strategic decisions in
P&G, HUL etc. For example, the company’s operations managers can include business
automation in solutions to maximize productivity. On the other hand, the increasing fuel
efficiency in transportation supports Procter & Gamble’s efforts to minimize the costs
involved in its supply chain and consumer goods distribution network. This external factor
promotes cost-effectiveness in P&G’s remote or macro-environment. Based on this element
of the STEEPLED analysis, technological trends can support Procter & Gamble’s growth.

3.Environmental factor
The situation of the natural environment impacts how Procter &
Gamble satisfies its consumer goods business goals and objectives. In this element of the
PESTEL/PESTLE Analysis framework, ecological changes and issues are considered. The FMCG
sector needs to develop suitable approaches to address the following ecological external
factors in its remote or macro-environment:

 Growing opposition to forest conversion to oil palm plantations (threat)

 Changing weather patterns and linked effects on farming (threat)
 Increasing availability of recyclable materials (opportunity)

The growing opposition to forest conversion to oil palm plantations is a

potential threat to FMCG’s supply chain. For example, this ecological external factor affects
the availability of palm oil used in some company’s consumer goods. In addition, the changing
weather patterns and linked effects on farming can disrupt Procter & Gamble’s supply chain,
particularly the supply of vegetable oils and other raw materials used for producing soaps,
detergents, and other consumer goods. On the other hand, FMCG sector has the opportunity

18
to improve its environmental footprint by using existing recyclable materials. Including this
effort in FMCG’s corporate social responsibility strategy can improve brand image and
consumer perception and loyalty. Such effort can also encourage a general improvement of
corporate responsibility in the remote or macro-environment of the consumer goods
industry. This element of the STEEPLED analysis of the FMCG Companies highlights threats
that require strategic consideration.

4.Social Factors
Social trends and changes affect FMCG in terms of the behaviors of customers
and workers, among other considerations. This element of the STEEPLED Analysis framework
deals with the influence of sociocultural conditions on business opportunities and threats in
the remote or macro-environment of firms. FMCG sector must include the following
sociocultural external factors in its strategic formulation for the consumer goods market:

 Increasing preference for high-quality consumer goods (opportunity)

 Increasing preference for healthful products (opportunity)
 Declining population growth rate in developed countries (threat)

As countries develop, consumers are increasing their preference for high-

quality products from firms like Procter & Gamble. This social external factor creates
opportunity for business growth in the remote or macro-environment of the consumer goods
industry. For example, P&G can expect potential revenue increase by enhancing the quality
of its products. On the other hand, the increasing preference for healthful products presents
another growth opportunity for Procter & Gamble. The company can improve the health
impact of its consumer goods accordingly. Despite such opportunities, Procter & Gamble
experiences the threat of a declining population growth rate in many developed countries.
This sociocultural external factor reduces long-term business growth potential in developed
markets. In this element of the STEEPLED analysis of FMCG sector, strategies must account
for growth opportunities, especially in developing countries.

5.Economic Factor
The FMCG sector’s performance in the consumer goods industry is directly based on
the economies where the business operates. The effects of economic trends and issues on
the remote or macro-environment are determined in this element of the STEEPLED Analysis
framework. The following economic external factors are most notable in the case of Procter
& Gamble:

 High growth rate of developing markets (opportunity)

 Improving disposable income levels (opportunity)
 Economic stability of the majority of developed markets (opportunity)

The opportunity linked to the high growth rate of developing markets

supports sector’s potential growth. For example, increasing penetration into developing
countries can drive the company’s overall global growth. The company also has the
opportunity to grow based on improving disposable income levels. This economic external
19
factor corresponds to customers’ rising purchasing capacity for consumer goods from firms
like Procter & Gamble and HUL. Moreover, the stability of the majority of developed markets
contributes to the considerable stability of FMCG SECTOR’s remote or macro-environment.
These conditions indicate that the FMCG Companies has growth opportunities based on this
element of the STEEPLED analysis.

6.Legal Factor
The FMCG’s strategies include measures to ensure legal compliance of its
consumer goods business. The impact of rules and regulations on firms and the remote or
macro-environment are evaluated in this element of the STEEPLED Analysis framework. The
following legal external factors shape the strategies of FMCG sector:

 Increasing product safety regulations (opportunity)

 Expansion of environmental protection regulations (threat & opportunity)
 Increasing business sustainability regulations (threat & opportunity)

The FMCG sector has the opportunity to grow by addressing increasing product
regulations relevant to the consumer goods industry. For example, the company can enhance
its product safety standards, leading to higher quality output. On the other hand, the
expansion of environmental protection regulations is a threat that could impact FMCG’s
supply chain and business practices. However, this legal external factor also makes the
remote or macro-environment more supportive of sector’s efforts to contribute to
environmental protection. In relation, the sector has the opportunity to strengthen its
corporate and brand image by improving its business sustainability status, addressing
increasing business sustainability regulations. Nonetheless, this legal external factor is also a
threat to FMCG in terms of potential restrictions on business operations. Thus, the companies
must continue its sustainability initiatives. In this element of the STEEPLED analysis of FMCG,
a proactive approach to compliance can address opportunities and threats.

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STEEPLED ANALYSIS OF GUJARAT

21