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SMII 19P101 PuneetGarg

Foxconn is expanding its operations from China to India to take advantage of India's large consumer market and lower costs. This move helps diversify Foxconn's supply chain due to ongoing trade tensions and COVID-19 disruptions. The expansion provides political and economic risks, but India's business environment is seen as supportive. The move benefits Foxconn management, Indian consumers through lower prices, future Indian employees through new jobs, and the Indian government through investment and tax revenue.

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44 views2 pages

SMII 19P101 PuneetGarg

Foxconn is expanding its operations from China to India to take advantage of India's large consumer market and lower costs. This move helps diversify Foxconn's supply chain due to ongoing trade tensions and COVID-19 disruptions. The expansion provides political and economic risks, but India's business environment is seen as supportive. The move benefits Foxconn management, Indian consumers through lower prices, future Indian employees through new jobs, and the Indian government through investment and tax revenue.

Uploaded by

Puneet Garg
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Answer 1:

Foxconn has been planning to expand its operation in India in a move to shift from China to India.

Although this strategy is necessitated because of disruption from trade war between Beijing and
Washington along with Coronavirus crisis.

The expansion into India provides support to the firm’s efforts to use an international business-level
strategy for the purpose of establishing a competitive advantage in international market.

Here is an analysis of determinants of national advantage for Apple Inc. based on Porter’s factors.

Factors of Production Demand Conditions


1.Already accounts for about 1%
1. Cheap Labour
samrphone sales in India
2. Increasing supplier base in India 2.Iphones as Status Symbols

Related and supporting industries


Firm Strategy, Structure
1. Prior availability of various tech giants
1. Saving on impport taxes to further lower
the costs 2. High chances of expansion by competitors
also in Indian economy

There are mainly two types of risks associated with this kind of expansion into international markets
which are as follows:

1. Political Risk:
These risks denote the disruptions caused to business due to political forces and events
associated.
Also, India being a developing country and its image as particularly notorious for
implementing political changes to target specific corporations, put Foxconn at a various
political risk revolving around political instability in the country.

2. Economic Risk:
Economic risks include fundamental weaknesses in a country or region’s economy with the
potential to cause adverse effects on firms’ efforts to successfully implement their
international strategies.
Only fluctuations in the value of currencies is the main economic risk ahead of Foxconn as
business environment is pretty conducive for Foxconn in India
Implication to various stakeholders

1. Company Management: Along with the introduction of new market to leverage the national
advantages it provides, the move of shifting to India is more to be categorized as a social
move by management during the coronavirus to avoid political and economic disruptions.

2. Consumers: Customers available in Indian market will be directly affected owing to local
production which will help in reduction of costs mainly due to fall in import related taxes.

3. Prospective Future Employees: The expansion will create employment opportunities for
various Indian citizens along with additional sales opportunities for supplier of various
product ranges used in manufacturing.

4. Indian Government: Indian Government welcomes the move of expansion by Apple Inc.
with both hands as the new factory is expected to create job opportunities, additional tax
income, Foreign direct investment and positive sentiment for other players to invest in India

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