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China versus India: Market Comparison India The globalisation of a company goes always along with a great amount of opportunities but also with many risks. India and China are both very interesting countries to move into. India became democratic after gaining independence from Britain in 1947. From then, up to the early 1990s India has had a mixed economy, which was identified by a lot of state-owned businesses, centralized planning, and subsidies. This lead to a dramatic constriction of the private sector. During this time it was really hard for the private sector to expand because they needed a permission of the government to do so. Sometimes the companies had to wait for month to get the allowance for normal business activities such as expanding production or hiring a new director. Additional there where high import tariffs, production quotas, very strict labour laws, highly restricted foreign investment and price setting by the government, instead of by the market, which made impossible for the private sector to get stronger and almost very hard and unattractive for foreign investors to go into the Indian market. In 1991, the government recognized that it could not go on like this and created a high-flying economic reform programme. The industrial licensing system got removed and areas which where reserved for the stated-owned companies got opened up to the private sector. Also foreign investors where welcome now. Foreign ownership of 100 per cent was still only allowed under certain circumstances but foreign equity stakes, up to 51 per cent, got permission without any problems. In addition, raw material and a lot of industrial goods could be imported for free and the maximum tariff for imported goods was cut down from... ... middle of paper ... ...ould prefer to move into the Indian market and for manufacturing and electrical businesses the Chinese market would probably be preferable. But considering all the risks and opportunities facing a company moving into either China or India, I would properly prefer to move into India. I think India's economical and political situation is much more stable than the one of China and the risks which come with a communist state like China, as I mentioned before, are very high. Additionally India offers the high skilled labour to low cost prices and among the middle classes, English is the working language therefore language barriers are avoid. This is especially true in the IT sector as this would make it much easier for a company to enter the market. Up to now there is no clear winner between the two countries and in the moment it will be a risk to invest in ether of them.
To globalize means to “to extend to other or all parts of the globe; make worldwide” (Dictionary.com, 2010). While globalization is a fairly ‘new’ term, it is actually as old as our ancestors. The process was longer back then but, as they were discovering new foreign lands, they were bringing commerce and culture with them. Silks, spices and crops were traded along trade routes and opened new worlds of luxury and taste. Today, globalization has influenced our modern world far beyond those predecessors’ wildest dreams. The Western culture has infiltrated almost every corner of the globe. Its capital, infrastructures, knowledge, and talent can be found all over. It has a dramatic impact on India and China. These countries in turn, have also passed on their influence to other countries. It is a never-ending domino effect that circumvents the globe. Some of the Western influence has been intentional and negative but the overall effects are positive on countries economies and cultures.
Reasons why I would like to put my company in china is because the population continues to grow labor and agriculture will grow as well and mass
China experienced large amounts of economic growth after the beginning of the reform in 1978, and has progressively continued to expanded overti...
With a population of 1.357 billion (2013)3, China is the most populated country in the world. Along with the huge population comes a market that is unmatched by any other country of the world. Both domestic companies and foreign companies want to tap into this large market that just recently embraced capitalism and entered into the World Trade Organization.
The Indian Economy is the tenth largest in the world by nominal Gross Domestic Product and the third largest in terms of purchase power parity.
The author supports his argument with concrete and clear details that support it. He started by asking a question of "will politics enable India to achieve its potential or choke it?" (3). He established that India achieved significant results. Less than a third of India's population
According to Teagarden & Cai (2009) Chinese companies have expanded abroad for three reasons. Firstly, ‘to secure natural resources to satisfy the demand of their home costumers for raw and fuel; secondly to identify and secure foreign technology and know-how; finally, to escape home market saturation and ruthless price wars’ (Teagarden & Cai, 2009: 73). In addition, Teagarden & Cai (2009) noted that in order to become multinational firms, Chinese companies followed a pattern of four phases:
In the year 2007, China and India ranked first and second respectively in the list of ideal foreign direct investment (FDI) destinations, according to A T Kearney, a global strategic management consulting firm (The Press Trust of India Limited, 2007a). The two nations, because of their similarities in geopolitical, economic and demographic aspects, are often compared with each other. To determine which one is more attractive for businesses to expand to, this essay will examine the business environment of both countries from the following perspectives: political/legal, economic, socio-cultural and technological.
Investing or venturing into the international market involves critical analysis of the internal and external environment in which the company operates. Usually, a company will decide to venture internationally due to a saturated market or fierce competition in the current country of operation. The demand for a company’s products may have diminished as a result of an economic crisis thus the company will target a foreign market to sustain its sales. In other words, the firms expand internationally to seek new customers for its products. For example, the current Euro zone crisis led to low demand in Europe and many companies extended their businesses to emerging markets where demand was high. A company may also venture in the international market to enhance the cost-effectiveness of its operations especially for manufacturing companies that will benefit from low costs of production in developing world. Global expansion is a long term project as it involves demanding logistics to be successful. Thorough research must be undertaken to ensure that the expansion will create value for share...
...adopted to maintain stability and social ethics for observing law and order (Ash and Greene 61). Through the legislative governance, the investors became free to invest as restrictions for trade were eliminated and this catapulted the revenues in foreign exchange to match that of developed countries. Although it encountered some problems during its transition, the investment opportunities it bore helped project the economic growth to its current position of among the fastest growing economy (Chakrabarti 71).
The main reason is to increase its consumer population, by entering into an international level the firm is now exposed to millions of more potential customers. Also, the firm could seek an international market with intentions of dominating the market. For example, if Alibaba’s services are offered in a country in which no other competitors exist, it is almost certain that the firm will succeed as long as demand occurs. Another advantage to been international competitive capabilities is the shared knowledge of the market among other countries. For example, if an item is popular in one location, it might be wise to launch that product in a location with similar population demographics. This is often seen with big technology corporations, a launch of a new cell phone will not occur worldwide it will be available in specific countries first to test the quality and demand before it is released
Global segment include relevant new global markets, existing market that are changing, important international political events, and critical cultural and institutional characteristic of global market. When company entering the global, it automatically can increasing number of people believe or consumer in the multiple nation and this si...
When the new Chinese Government was set up in 1949, the new government faced a lot of problems. First on their agenda was how to re-build the country. As Communist Party of China (CPC) is a socialist party, their policies at the time were similar to that of the Soviet Union’s. Consequently, the CPC used a centrally planned strategy as its economic strategy when it first began. For a long time, the Chinese economy was a centrally planned economy in which none other than the state owned all companies. In fact, there were absolutely no entrepreneurs. As time went on, the problems of a centrally planned economy started to appear, such as low productivity, which was the key reason for restricting the development of China. With the population growing, the limitations of the centrally planned economy were clear. In 1978 China started its economic reform whose goal was to generate sufficient surplus value to finance the modernization of the Chinese economy. In the beginning, in the late 1970s and early 19...
There are a variety of reason why companies decide to go abroad and expand their business operation. Organization mainly engage in international business in order to establish competitive advantages and efficiently adapt to the ever-changing business environment. Proactive reasons include growth in term of revenue, sales and customer base, cost savings due to economies of scale or low-cost manufacturing, and reduction of dependency on single national market as well as alternative sources of labor, domestic markets could be already saturated or emerging competitors prevent firms form further its market shares and therefore, stay
While these industries made a solid foundation for India’s industrial environment today, these also suffered from several drawbacks. To name a few: lack of modern and efficient technology, slackening productivity, stagnation, corruption and unbalanced industrial development. After the strong economic blow in 1989-90, to help the economy recover from this slowdown, India embarked on the path of Liberalisation, Privatisation and Globalisation, under the initiative of the present Prima Minister of India, Dr. Manmohan Singh. Since then, the Indian economy has been showing a steady increase in its GDP. And, today, the country is viewed as an important emerging economy of the future world.