Blair Entered India Market
Blair Entered India Market
Political legal:
Chaterrjie confirmed that India is attractive to foreign investment through liberalization
Foreign companies were taxed on income arising from Indian operations and pay taxes on any interest, dividends and royalties received
The government offer favourable tax treatment if foreign investors will locate on one of the free zones
Tax rate is higher than the USA, however the return on investment is higher than USA
Trademarks and patents were protected in India
Legislation in India was expensive and protracted that foreign firms prefer arbitration
Our suggested improvements and comments:
He should have analyzed the following:
Monopolies legislation: to hedge against any monopolistic actions that may appear in the future
Environmental protection law
Employment law and this is important if the market entry will be joint venture or acquisition
Economic factors:
Chatterjee analysis completely missing the economic factors, as he didnt analyze the Indian economy in any way
He should have analyzed the following:
Interest rates
Inflation rate
Business cycles
Unemployment rates
Disposable incomes
As these factors are important to give insights about the economic conditions and the economic growth for the next years so as to know whether the market is potential for entry or not
Sociocultural factors:
Chaterjee identified his target market to be around 40 million households and he identified their needs and behaviour, but he missed identifying the whole sociocultural factors from the following perspectives:
Population demographics: population size, age distribution , religion ,social class are important factor to be analyzed by any firm before entering any market
Income distribution
Levels of education
Social mobility
Work and leisure time
These factors are important especially that the target market for him was the rich well-educated high social class so its important to identify this class and its growth
Technological factors:
Chatterjee analysis emphasized that technology was only available in large Indian cities; the lack of adequate distribution and communication infrastructure in rural India meant that any market entry would begin with larger Indian cities most likely in the west coast.
But he should have analyzed many other aspects regarding this issue:
Government spending on research
Government and industry focus on technological efforts
The speed of technology transfer
New discoveries and development
Rate of obsceneness
Step two:
Scanning the internal and external micro environment
In this step we will start by analyzing the internal and external microenvironment then finalize it by the swat analysis, which was missing in chatterjees study. He ignored mainly the microenvironment regarding the suppliers, stakeholders and intermediarys .He only analyzed consumers and competitors.
2-1 internal-environment analysis:
Employees: Blair Company employed over 4000 people with 380 having technical backgrounds and responsibilities
Cash Flow: company sales revenue for 1996 would be almost $400 million with an expected profit close to $50 million
Annual Growth in sales revenue: averaged 12% for the past 5 years
Capital assets: ignored by Chatterjee
Sales in the international division: would reach almost