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.
... British had colonized India for approximately 200 years, there were lasting effects on the country in terms of many sectors, specifically the economical and industrial sectors. Due to India’s non-participation and manipulation of agriculture by the British, some would argue that the British obliterated the economy. Others would argue that the British instead helped due to the creation of the railroad, improved communication and created the beginnings of an industry. The British harmed the economy and industrial sector more than they helped it, and effectively caused the destruction of the economy both in the short term and the long term. The growth rate directly after the independence was less than 1% for almost 5 years (BIC 4). It was necessary for India to rebuild the economy if they ever wanted to be on the same playing field as the other countries at the time.
The Indian government is corrupted and makes promises it is unable to keep. In The White Tiger, Balram describes that the government is “...the world’s greatest democracy. What a fucking joke.” (Adiga 145). When Balram lived in Laxmangarh his right to vote for the prime minister was taken from him, due to the fact that running candidates pay the current government to make sure they are elected. The government system also enables the rich to get richer. They do this by immensely taxing the poor and enforcing the caste system on the poor. The caste system is a labeling system you were born into and of what you are expected of in life. For example Balram had the caste of Halwai, which is derived from “sweet-maker”. This meant Balram was expected to work...
It has a free-market economy that has a combination of traditional and modern agriculture and industry (Miller, 2015). The economy is also interesting being dominated by the private sector due to the welcoming conditions that are favorable to investors. State protectionist policies and regulation were the norm before the 1980s. However, privatization, internationalization, and deregulation have occurred which has improved the economy (Gallo, 2016). The number of parastatals has also decreased, from a high of 1000 in 1982 to less than 200 by 1998. Economic restructuring was also backed by international and national groups in responding to the financial and economic crises that were occurring in the late twentieth century.
China and India both have extremely rigid social structures. They have noticeable similarities of individuals being considered higher than another. In India, the caste system was created by the higher class to restrict the lower classes by their amount of education, freedom and way of thinking (Dushkin Scheduled Policy in India). China's social system varied from India by not creating as a strict social ladder. It had a simple structure with only four social classes compared to the 25,000 sub castes India had at one point. Even though China did not have such a strong social structure, there were still people considered “higher” than others. Bureaucrats and landowners were considered to be of a higher class than traders, farmers and peasants.
With the proliferation of the internet international Business transactions are more common today than ever. Globalization is now a key factor when creating a business strategy for most companies whether they are small family own businesses or huge corporations. Globalization however does not just involve selling a product in other countries. There are legal and cultural concerns that must be addressed. The legal aspects are fairly simple because in most places the laws are spelled out. It's the local customs, and regional way of doing things that can be tricky. Research on globalization has shown that it is not an omnipotent, unidirectional force leveling everything in its path. Because a global culture does not exist, any search for it would be futile. It is more fruitful to instead focus on particular aspects of life that are indeed affected by the globalizing process. (1). In this new economy, as it has been in the past, it will be the people not the machines who will determine a company's success. Having an effective Human Resource Management team that effectively analyze your company's current and future personnel needs is key in any business organization.
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...
Since its independence in 1947, political stability has been a key factor which has ensured that India is the largest democracy in the world today. In spite ...
Labor laws, wage disparities, intense competition and fluctuating currency values are the challenges that are making organizations worldwide to compete in marketplace with products requiring a great deal of labor, and it is now getting harder for some of these organizations to maintain employees abroad. As Mello (p. 610) mentioned that a greater percentage of United States workforces are moving their operations abroad to developing nations like China and leaving an increasing number of United States domestic workers without employment. The foreign markets for the products and services are not the only things enticing these organizations to enter these global marketplaces. There are other reasons these companies are joining the global market arenas. For example, the foreign labor markets, this has attracted interest in many organizations to expand globally (Gersten, 1991). The labor force growth rates in developing nations alone will continue expanding by approximately 700 million people by the year 2010, while the United States labor force will continue to grow by only 25 million. This shows that United States’ growth rate will drop and the opportunities for productivity growth rate will increase in developing countries.
Expansion across seas can be very advantageous and lucrative for many companies; however, there are many risks associated with doing business overseas, and companies that intend to expand internationally should be careful and strategic when doing so. Not only do companies run the risk of experiencing a product fail due to differences in cultures, they also face severe political and economic risks as well.
There are many different pros and cons in life. Regardless of what someone is trying to compare. It is very interest when doing research on new country that an individual does not know much about that particular topic. What are the most important qualities in a country that help us function as a society. They are economic growth, strong structural system with government so the people can have a leader to follow in the right path.
My advantage is my language skill. I can fully use that skill to develop new marketing for the company. Nowadays, many companies aimed to develop new marketing for new customers and earn money. China has a great amount of citizen and a super strong buying power. I can speak fluent Mandarin and I have known the pattern of how Chinese communicate which is quite complex.
A globalizing business sector advertises viability through rivalry and the division of the work it permits individuals and economies to keep tabs on what they specialize in. It also allows people to go globally. Globalization has stretched the assets, items, administrations and markets accessible to individuals. The increasing set of reliable connections around individuals from distinctive parts of a world that happens to be separated into countries.
Nowadays EMNCs have more advantages than even 10 years ago. I think that it is even easier for EMNCs to grow because of few reasons. Firstly, developing countries have more hidden opportunities and less competition. Mostly countries with emerging markets have big development potential which EMNC can use accordingly to its needs. Also, because opportunities are “hidden” and the risk is high – company does not need as investments as in developed markets. In the same time, usually if company can develop own industry, the gain is faster and bigger than in developed countries. Secondly, the population and territories often are big so it gives company a chance to experiment and try their products in many areas. Especially we can unite many developing counties in groups with similar characteristics.
With the globalization of a product, a company might benefit in many ways. First, by sifting its production or services overseas, the company can reduce its overall production costs due to availability of low-cost labor. Second, working collectively with other companies overseas allows companies to access technical knowledge or resources that are either unavailable or are too expensive at home.