India as a country is ripe for foreign investment. In 2009 it ranked as 12th in the world in gross output (De Vita, 2009). India contains approximately a billion potential and affluent consumers. Within the country there are 1.17 billion people, of which about 13.7 million expected to enter the workforce. This is something that should not be ignored by businesses that are ready to expand into the global marketplace. There are many attractions to the Indian market. However, there are factors that should be considered when considering entering into this market. This paper will analyze various components of India and evaluate both positive and negative factors.
Culture plays a significant role in how business is conducted in countries. It will define the practices and organization practices of businesses investing in India. India is a complex melting pot. The large countries religious beliefs need to be considered. In the opening case study found in chapter 2 it discusses what happened when McDonald’s failed to disclose that there was a minuscule amount of beef extract in its vegetable oil. The Indian population consists of both Hindu’s and Muslim’s. The small amount of beef oil went against Hindu dietary practices. In the Hindu religion cows are sacred and are not consumed. McDonald’s suffered some backlash for this failed disclosure. Food service industries need to consider the nations religious practices before franchising into this area. A vegetarian style menu will need to be introduced and foods cannot be prepared with either beef or pork products in order to show respect for religious preferences.
Another cultural influence that will influence expansion into this market is India’s caste system. Though the caste syste...
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Indian society was patriarchal, centered on villages and extended families dominated by males (Connections, Pg. 4). The villages, in which most people lived, were admini...
The caste system of India originated from the “strict societal class distinction between the nobility and the common people” that the Aryans brought to the Indus Valley in the early 1500s BCE (Cunningham, Reich, Fichner-Rathus 163). The Aryans, who migrated from Europe, invaded and imposed their will upon the indigenous people of the Indus valley in order to build a control system that would keep them at the top and their blood line untainted. This social ranking system that they implemented has been a staple in Indian society ever since and has undergone many changes over the last thirty-five hundred years. A person’s rank in society was acquired through birth rites and was permanent. It was believed that a person’s rank could only be changed in the next life after death. “Movement from one rank to another was believed to be connected to good or bad deeds during one’s lifetime” (163).
The current manifestations of the caste system are now far more generalized across the Indian subcontinent than was the case in former times. Caste as we now recognize has been endangered, shaped and perpetuated by comparatively recent political and social developments. This is evident even i...
India is one of the countries that this report will cover. Power distance is rather high in India this is evident when observing the rather extreme levels of inequality amongst individuals. It is also apparent in the work place, managers expect their team members to be obedient. Employees also count on being clearly directed when it comes to their tasks and what is expected out of them. Top down communication is employed and negative feedback rarely moves up the ladder. In this society there is no need for justification of an individuals position in the social hierarchy. (Cultural tools, n.d.)
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.
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Owing to India’s diversity, these identities are determined by caste, ancestry, socioeconomic class, religion, sexual orientation and geographic location, and play an important role in determining the social position of an individual (Anne, Callahan & Kang, 2011). Within this diversity, certain identities are privileged over others, due to social hierarchies and inequalities, whose roots are more than a thousand years old. These inequalities have marginalized groups and communities which is evident from their meagre participation in politics, access to health and education services and
Aditya Birla Group is one of the first multinational corporations in India. Its headquarter is located in Mumbai with many others operations in different parts of the world such as in Asia (Thailand, Singapore, Myanmar, Laos, Indonesia, Philippines, China…), Europe (UK, Germany, Hungary, Italy, France, Luxembourg, Switzerland…), America (US, Brazil…). Throughout their growing, Aditya Birla have become well known in many sectors that they get involved in not only in India but also around the world. Back to the earlier day of the corporation, when it first founded, the group has focused on critical sector such as textiles and fibre, aluminum… and become one of the largest participant in those areas. Later on, in the 1960s, the company had expanded their business into cement and chemicals. Also, they expanded their business across the border of India into many other countries. This “revolution” has brought the name of the group into the international business map and become bigger than ever (Aditya Birla Group 2007). Today, ABG is a corporation with the consolidate revenue of 30bil with the affiliates in 45 countries and 60% of their revenue come from internationally and become one of the largest private company in the world (Aditya Birla Nuvo Limited, 2011).
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India is a nation that is on the move towards becoming one of the leaders in the global economy. While the country still has a long way to go, it is making significant strides towards competition with nations such as the United States and England. Indian leaders have been moving towards "a five-point agenda that includes improving the investment climate; developing a comprehensive WTO strategy; reforming agriculture, food processing, and small-scale industry; eliminating red tape; and instituting better corporate governance" (Cateora & Graham p. 56, 2007). These steps are geared to begin India's transformation from a third world nation into a global economic leader. The current marketing environment in India is in transition, with both similarities and differences in comparison to the marketing environment in the US.
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In each society, there are different types of rules and ideologies that are used in order to help govern its people. Within these communities, these rules create a social hierarchy developed through a ranked system based on either economic value or religious beliefs. A type of ranked system that most people are familiar with is the Caste System in India, which is a system of classification in a society based on birth. This complex social structure is most prevalent in India, where social hierarchy is in affiliation with Hinduism. It recognizes two concepts known as Varna and Jati. Varna is a word in Sanskrit meaning color and includes four main groups: the Brahmans, Kshtriyas, Vaishyas, and Shudras. The fifth group, the most segregated caste in the system, is the Untouchables. Within each Varna contains an array of sub-caste called Jatis, which are also based on birth. The rules of the cases are governed through religious ideas of purity and pollution. These two socially constructed ideologies determine whether or not you were respected in the community. Caste assignments in India are predestined at birth rather than a personal choice. Individuals act and dress like those of their own caste in public, due to strict caste laws. Pressures of these rules tend to brainwash people into conforming into what society considers pure, as we’ll see in Kakar & Kakar’s reading. As human nature takes precedent, caste rules become less relevant. Indulging in one’s own desires or needs, especially during times of hardship, outweighs any types of rules that we’ll see in Freeman’s reading and the movie Distant Thunder. Though the caste system is such an intrinsic part of life, when faced with needs to survive, it becomes nothing more than just a...
Stonehouse, G., Campbell, D., Hamill, J. & Purdie, T. (2004). Global and Transnational Business (2nd ed.). Chichester: John Wiley & Sons.
I selected an international business article from The Wall Street Journal titled “McDonald’s, Pizza Hut Cook Up New Plans for India” for my article summary assignment. This article is relevant to our course because it covers American fast food companies expanding in India. In order to be successful in foreign markets, it requires adjusting to the foreign country’s culture and customs in order to be successful in a global market. It also requires innovation and adaption to serve the local people in foreign countries, and they need strategies and a vision to address current trends and local competition.