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 EXECUTIVE SUMMERY

In this case, I have chosen India as the nation of study for the purpose of examining
macroeconomic variables and marketing entry strategies. In South Asia, India is bordered by the
Arabian Sea and the Bay of Bengal. India is a large country. Bangladesh, Bhutan, Burma, China,
Nepal, and Pakistan are among the nations that border the country directly to the south. Prices for
products and services are freely set in India's market economy. South Asian Association for
Regional Cooperation (SAARC) and the Asia-Pacific Trade Agreement (APTA) both include
India (SAARC).

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 TABLE OF CONTENTS

TASK 1
1. Macro Environmental Analysis – PESTEL Analysis ................................................................ 4
1.1 Political Factors ....................................................................................................................... 4
1.2 Economic Factors .....................................................................................................................5
1.3 Social Factors ...........................................................................................................................6
1.4 Technological Factors ..............................................................................................................6
1.5 Environment Factors ............................................................................................................... 7
1.6 Legal Factors ........................................................................................................................... 7
2. Opportunities and Threats ......................................................................................................... 8
2.1 Opportunities ........................................................................................................................... 8
2.2 Threats.......................................................................................................................................8
3. Cultural factors ………………………………………………………………………………...9

TASK 2
4. Entry Strategies .........................................................................................................................11
4.1 Direct Exporting ......................................................................................................................11
4.2 Licensing and Franchising ......................................................................................................12
4.3 Joint Venturing ....................................................................................................................... 12
4.4 Best Suitable Strategy ............................................................................................................ 13

References .................................................................................................................................... 15

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Task 1

1. MACRO ENVIRONMENTAL ANALYSIS – PESTEL ANALYSIS

A PESTEL analysis may help a business assess the

effect of external factors on its operations. PESTEL stands for
Political, Economic, Social, Technological, Environmental,
and Legal. A PESTEL research in India examines all of these
macro-environmental factors. This program helps assess an Indian
company's growth and profitability prospects in order to attract
foreign investors and companies. India used a pestle. India is a
South Asian country. Alternatively, India is the world's 7th largest
country by area (1,269,219 square miles). She is the world's second-largest democracy. India's
capital is New Delhi. Indian civilization is one of the world's oldest, going back 55000 years. Many
empires have ruled India, from the Gupta to the British. After a lengthy battle against the British
Empire, the country gained independence in 1947.

1.1 Political Factors

Political stability is critical for businesses

since it affects their profitability. PESTEL analysis's
political metrics include government regulations and
legislation that have a direct impact on an industry's
finances. Some examples of these things include
international trade policy; taxes; labor law; tax
policy; environmental legislation; corruption; and a whole lot more
 A country's capital market is directly affected by political problems. Due to a disagreement
with one of its neighbors, India has been in a state of political turmoil for quite some time.
The state's well-being is influenced by political problems, such as conflicts of interest
among politicians, ideological disagreements, and so on. The political element is still a
worry, even if things have improved a bit over the past several years.

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  Politically, India is a stable place to do business. India is a democratic republic and the
world's biggest democracy, according to the United Nations. They should, however, be
prepared to deal with corruption's problems. Only after that can the economy of the nation
begin to develop.
 Government and political involvement in businesses and start-ups has been reduced via
privatization many times by the nation. It'll aid small companies in becoming self-
sufficient.

1.2 Economic Factors

A company's profitability is determined by

these variables, which also aid in setting short- and
long-term objectives. Factors such as economic
growth, inflation, employment and unemployment,
and customers' buying power determine the financial
success of the business. After analyzing these
variables, companies determine their supply-demand
model.
 Increased gross domestic product (GDP) bodes well for companies.
 India's open industrial policies have guaranteed a rise in foreign investment in the nation
since the 1991 economic reform, particularly following the establishment of FIBP.. It's
given the economy a lift.
 Analysis by PESTEL suggests India's government's tax policies are helpful for expanding
businesses there. In addition, the large domestic market offers many new business
possibilities.

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1.3 Social Factors

Social factors are those that influence how

consumers behave. Traditions, values, beliefs,
population growth, health issues, a person's way
of life, and professional attitudes are all part of a
place's socio-cultural norms. It aids businesses in
gaining insight into the tastes and preferences of
their customers.
 A country as diverse as India is home to many cultures. To do business in the country, the
firm must be familiar with local culture, beliefs, acceptance, and other factors. The
company should also be aware of the local labor market's availability and product demand.
 Businesses profit from the country's population. Because the bulk of the population is
employed, companies have an easier time finding workers with low labor costs.
 Another reason why multinational corporations prefer this country for commercial
development is the large local market. The causes for this include an improved living
standard and a shift in lifestyle.

1.4 Technological Factors

The development of new technologies is

critical for the economy's expansion. Technological
awareness, automation, and innovation all have an
effect on how a company operates. Production,
distribution, and consumer communication are all
impacted.
 The IT sector in India is expanding at a rapid pace. Because the country's IT industry is so
strong, software is always being upgraded and improved.
 India's technical development has attracted an increasing number of international IT firms.
 A PESTEL study shows that India's economic development will benefit from investments
in technology progress in the future.

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1.5 Environmental Factors

Because sustainability is the key to long-term

development, companies in India may benefit from an
increase in environmental consciousness. Raw resource
shortages, pollution, climate change tec, and carbon
footprints are just a few examples. The continuing
ecological problems are causing an increase in
environmental awareness and concern. When it comes to combating it, companies must come up
with fresh ideas.
 Environmentally friendly goods and processes have altered the demand-supply paradigm,
and businesses must adapt their strategy to meet the new demands.
 Since Indian weather is so unpredictable, it poses particular risks to businesses and their
infrastructure.
 The rise in pollution and bad impact on health and safety that has come with
industrialization has been a source of worry for the nation. Companies must have a
sustainability strategy that includes measures such as recycling and improved waste
management.
 Many visitors are drawn here by the area's natural beauty. It has the potential to have a
positive impact on the economy and companies of the nation.

1.6 Legal Factors

PESTEL India's legal limits often

intersect with the country's political
variables. Among the topics they address are issues like
equal opportunity in the workplace and the legislation
governing discrimination in advertising. These are
realistic options, particularly for businesses from outside India seeking for a trading partner.
 Every nation and area has its own set of rules and regulations that businesses must follow.
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  New recycling, employment and discrimination laws may have an impact on the price and
labor costs of a business.
 The country's flexible rules on international commerce provide foreign brands with
development possibilities.

2. OPPORTUNITIES AND THREATS

2.1 Opportunities

In 2012, most Indians lacked basic needs. Many fundamental needs should be available to
everyone. There's also sanitation and nutrition. Prior to economic liberalization, most citizens
couldn't afford even the most basic necessities. Liberalism, which began almost two decades ago,
enabled the country to become global. If the government wants to help more Indians, it must focus
on bridging the gap between the impoverished and the working class. Agricultural investments
and job development for the country's growing population are examples. According to current
estimates, India's major cities will have a million residents by 2025. A clean water supply, clean
air, and dependable utilities are some of the issues people face. The growing population is at danger
if these cities lack essential facilities. The nation's growth and development is more likely to
regress than to progress. Buying businesses is another possibility. Because labor is so cheap,
investment opportunities abound. As a consequence, international companies may consider
moving or establishing operations in India. Thus, the country's efficiency should increase.

2.2 Threats

India's huge number of people aged 35 and under is a positive. Except for individuals with
hypertension. More than 40% of Indian teenagers have hypertension. This disease's frequency has
increased by 150 percent in a decade. Each year, hypertension kills almost a third of all Indians. A
growing population is another problem. According to current estimates, India's population will
exceed China's by 2023. As a consequence, most of the country's current population lives in rural
areas where essential services are scarce. Some have proposed that the government adopt a two-

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child policy to limit population increase (a la China). Then there's extreme poverty. To be rich,
one needs earn Rs 125 ($1.9) per day. Sadly, most individuals do not.

3. CULTURAL FACTORS

However, many businesses have already

shifted their attention to India, recognizing the
promise of a rapidly growing labor force and a
convenient location for their headquarters and
manufacturing facilities. In India, why can't
businesses overcome information shortages,
political unrest, vast geographic range, regional
differences, and cultural complexities? That requires first grasping the culture. Regions of India
have their own unique languages, traditions, and festivals. The population is rapidly increasing.
70% of people still live and work in rural areas. The South's population is almost literate. But just
around 45% of northerners are literate.
Religion is vital in every society. 80% are Hindu, 14% Muslim, and 2% Christian or Sikh.
Few follow Buddhism, Zoroastrianism, or Judaism. Holi (spring) and Diwali (October/November)
are renowned celebrations. Vacations are breaks. Like other nations, India does business subtly.
Indians like Americans, Brits, and Germans. Hollywood has influenced many people's perceptions
of foreigners. Many western businessmen arrive in India with preconceptions based on media
stories and first experiences. When entering a new cultural environment, it's essential not to be
swayed by first impressions.
Surnames are preferred above first names in politeness. Young people often use titles like
Mr./Ms. with their given names to show respect. One must ask often for a foreign businessman's
Christian name. Understanding Indian patriarchy is critical. Working with Indian companies
involves understanding power dynamics. So those at the top have a lot of power. Managers are
hierarchical. A local manager must comprehend the boss' subordinates' reliance culture. Most
junior employees ask for assistance when it isn't needed. Indian timekeeping is plagued by
tardiness. Working on Indian Standard Time requires flexibility (IST). Fixed deadlines in the West

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are based on standards and enforcement, which may need stringent rules and enforcement. The
Indian head-rolling motion has numerous benefits. Not to be offensive, but to be respectful.
In India, many businesses postpone important decisions until the "good and auspicious"
days of the week. Businesses may need to consider superstitions. Prepare for unforeseen expenses.
In India, everything takes longer and costs more. Bureaucracy may be tough to deal with owing to
monetary restrictions and regulatory processes. Consider exit plans early on. Before entering India,
create a paper trail. Indian contract law is limited to the Indian Contract Act of 1872. This law
concerns letters of intent and agreements. Intent letters/MOUs have a murky legal status.
Preliminary agreements should be documented if enforced. In India, a "contract to agree" is void.
Select the right legal entity. crucial Many Indian firms currently operate globally. Caution is
advised here. Foreign branches of Indian enterprises (for example, a UK branch of an Indian
company) have previously taken businesses off surprise. The agreement did not identify the parent
business, thus it was difficult to compensate.
Indians' tax consequences must be handled. Foreign businesses often ignore the legal and
fiscal implications of permanent presence in India. The Indian Reserve Bank still regulates the
foreign exchange market. Protecting IP is part of conducting business in India (intangible property
rights). Planning ahead for IPR saves time and money. It is recommended to safeguard IPRs early
in the negotiating process and register them. Although not required by law, trademark and
copyright registration helps enforce rights in case of infringement. It varies by nation. If you are
willing to study and appreciate the many cultures involved, you can succeed. Business success in
India requires long-term partners hips.

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Task 2
4. ENTRY STRATEGIES

If you sell your product or service globally, you may increase your company's market
reach, revenue and reduce the risk of operating in a single area (due to economic or seasonal
fluctuations). Others may not have a goal in mind. Make a wish list of nations. Consider whether
your product is suitable for any of the countries mentioned. Culture, religion, and law must be
considered. Exporting products like clothes or alcohol may be problematic to certain countries.
Hindus, for example, do not eat meat. Examine each country's international business laws once
you've chosen. Before exporting your products or services, check with locals about local laws and
customs. You'll also need to conduct your usual market research to ensure your target market will
really buy your product! The first to market has two options: either be the first to market or wait
and see how successful they are. Trying to be first to market has numerous drawbacks. First, no
amount of market research can guarantee customer purchases. Second, depending on your market
entry plan, you may need to invest significantly or face local partner resistance. That there is a
need for your product or service will make local companies more willing to work with you. But
you risk losing local customers loyal to your competitors' brands. Cost is clearly a problem. Large-
scale market entrance needs a lot of money. This may attract both customers and local businesses,
but it may be financially risky if your business fails. This may assist business owners learn about
new markets and minimize risks, but it is unlikely to get much attention.

4.1 Exporting

Exporting is the process of transferring products produced in one nation to another one in
order to sell them elsewhere. The low-risk approach of exporting is appealing to companies for a
variety of reasons. First and foremost, mature goods in a local market may discover fresh growth
possibilities in foreign markets. The second reason is that some businesses believe it is less risky
and more lucrative to export current goods than than creating new ones. Third, businesses that
experience seasonal domestic demand may decide to promote their products internationally in
order to counterbalance the effects of seasonal demand on their income streams. Finally, some
businesses may choose to export because there is less competition in foreign markets. Because it

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provides a degree of control over risk, cost, and resource commitment, small businesses often
choose exporting over alternative methods. It is not uncommon for smaller businesses to only
export in response to an unsolicited foreign request, which is regarded as a low-risk venture.

4.2 Licensing/Franchising

In a licensing arrangement, a company (licensor) gives a product to a foreign company

(licensee), in exchange for which the licensee receives the right to utilize the licensor's production
method, brand name, patents, or sales expertise. The licensee has a competitive advantage as a
result of this agreement, while the licensor benefits from the low cost of entry into a new market.
Limited financial resources, import limitations, and government regulations often prevent a
company from expanding its overseas marketing efforts. There are certain dangers associated with
this technique. When it comes to entering a foreign market, this is usually the least lucrative
approach since it requires a long-term investment. A further risk is that, if a licensee (franchise)
fails to properly replicate a licensed product, or if the licensee promotes the licensed product in an
ineffective manner, it will damage the brand image of the original product in question. Holiday
Inn, Hertz Car Rental, and McDonald's are just a few of the companies that have franchised their
way into international markets.

4.3 Joint Ventures

The term "joint venture" refers to a collaboration between a local and international
company. Both partners contribute money to the business, as well as share ownership and control
over it. Most of the time, the foreign partner brings knowledge of the new market, business contacts
and networks, and ties to other aspects of the company that take place in the host nation, such as
real estate and regulatory compliance. Because they are riskier and less flexible than other
techniques, joint ventures require a higher level of commitment from companies than other
approaches. A number of nations, especially those where foreign-owned companies are taxed at a
higher rate than domestically held businesses, may allow joint ventures to provide tax benefits to
shareholders. Some nations demand that all company endeavors be at least partly owned by
domestic business partners before they can be considered legitimate. Joint ventures may also span

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several nations if they are multinational in nature. This is most frequent when business partners
join forces to do business in a foreign country or area of the globe.

4.4 Best Suitable Strategy

Following an evaluation of the benefits and drawbacks of different entry strategies, joint
ventures were determined to be the most appropriate way of entering the Indian market. Then, in
order to successfully join the Indian market, it is necessary to follow the essential procedures
outlined below. In addition to being the world's second-largest market in terms of population, India
is also one of the most difficult markets to penetrate for a business with no prior expertise in the
area. Based on my own experience, I'd want to offer you some suggestions that will give you a
competitive edge as you begin your journey towards success in India.

Select the most appropriate companion.

India has a population of 1.3 billion people and is the world's sixth biggest economy in
terms of gross domestic product (GDP). It is a difficult market for even the finest Indian businesses,
and it is much more difficult for foreign companies to succeed in. The commerce culture in India
may be too daunting for businesses that have a predetermined mentality and have had little
exposure to foreign marketplaces. When it comes to effectively negotiating the intricacies of the
local business climate, finding the appropriate partner is critical for every new entry into the Indian
market. Local partners can offer invaluable help in knowing the Indian market, which is very
important. It is possible that this partner may provide you with useful market insights on topics
such as competition, regulation, and other relevant concerns.

Customize your goods to suit the requirements and tastes of your target market.
India is a large and varied nation that encompasses a wide range of identities, languages,
cultures, and religious traditions. It is critical to avoid making broad generalizations or assumptions
about customer behavior since local practices and consumer behavior may differ significantly from
one area to the next. A one-size-fits-all strategy does not work in India since the country is
characterized by a diverse and multilingual society. Even a worldwide behemoth like McDonald's
has to adapt its food offerings to meet the needs of vegetarian Indians, who account for half of the

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population. Due to the religious sensitivities of the Indian community, they are also unable to sell
their most popular item, beef burgers, on the premises.

Keep in mind the very high degree of price sensitivity

It is critical for a new entry into the Indian market to get its pricing strategy right, especially
if the product or service is aimed at those with low and medium incomes. With a rising economy
and a growing middle class, there is no disputing that India remains a low middle-income country,
with a per capita income of about $2,000 and a large proportion of the population still living below
the poverty line. The bulk of the people is forced to pay for education and healthcare out of their
own pockets since the government cannot afford to supply these needs. With little discretionary
income left over after paying for basic necessities, a large part of the population does not have
much money in their possession.

Enter the Indian market with an eye on long-term growth rather than short-term profits.
India is not a country where companies can expect to earn fast profits; instead, they must
be prepared to invest for the long term. Despite the fact that it is a massive market with a population
of 1.3 billion people, including 400 million middle-class customers, it presents a number of
difficulties for new entrants to the marketplace. The fact that India is such a large and appealing
market means that there is no shortage of competition. More often than not, you will see businesses
attempting to gain market share at the expense of possible short-term profits in order to establish
themselves more solidly in that market.

Be prepared to negotiate a very different legal and regulatory environment.

It is "common law" that governs the Indian judicial system, and the constitution establishes
a single integrated system of courts to administer both union and state legislation. Before signing
into a formal agreement, it is important to pay close attention to the details, which may include
obtaining expert counsel. Because of the large number of pending cases in the courts, court
decisions are often delayed; thus, every agreement should include provisions for alternative
conflict resolution methods.

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References

2021. PESTEL analysis of the macro-environment. [online] Available at:

<https://frrl.files.wordpress.com/2010/04/pestlanalysis.pdf> .

2021. Pestle Analysis Strategy Skills. [online] Available at: <http://www.free-management-

ebooks.com/dldebk-pdf/fme-pestle-analysis.pdf>.

Besthospitalitydegrees.com. 2015. What Exactly is the Hospitality Industry?. [online] Available

at: <http://www.besthospitalitydegrees.com/faq/what-exactly-is-the-hospitality-industry/>.

Free-management-ebooks.com. 2015. PESTLE Analysis - Advantages and Disadvantages.

[online] Available at: <http://www.free-management-ebooks.com/faqst/pestle-09.htm> [Accessed
21 September 2021].

Ibef.org. 2015. Hospitality Industry, Development of Tourism in India, Indian Hotel Industry.
[online] Available at: <http://www.ibef.org/industry/tourism-hospitality-india.aspx> [Accessed
20 September 2021].

Makos, J. and Makos, J., 2015. An Overview of the PESTEL Framework. [online] PESTLE
Analysis. Available at: <http://pestleanalysis.com/pestel-framework/> [Accessed 19 September
2021].

Makos, J. and Makos, J., 2015. PESTLE Analysis of Marriott International. [online] PESTLE
Analysis. Available at: <http://pestleanalysis.com/pestle-analysis-of-marriott/> [Accessed 20
September 2021].

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