india entry strategy services for marketing to india / set up buisness in india / do business with...
Post on 07-May-2015
1.092 Views
Preview:
DESCRIPTION
TRANSCRIPT
Population is 1.21 billion (as of 2011 census) India is a republic, governed by a parliamentary system,
consisting of 28 states and 7 union territories India is the 7th largest and 2nd most populous country in the
world India has 18 official languages, with Hindi and English been
predominantly used throughout the country Currency is the Indian rupee Main industries: textiles, chemicals, food processing, steel,
mining, petroleum, machinery, pharmaceuticals and software Major economic Centers: Mumbai (Bombay), Chennai
(Madras), Hyderabad, Bangalore, Delhi, Kolkata One of the youngest countries in the world, average age 25 Each year 19 million students enroll in high school and 10
million in pre graduate degree course across India. 2.1 million Graduates and 0.3 million post graduates pass out of India’s non engineering colleges
The Indian economy is 10th by nominal GDP, and 3rd by purchasing power
India’s GDP grew by 9.7% 2010-11, 6.2% 2011-12 and 5% 2012-13 and is expected to grow by 5.7% in 2013-14 (RBI forecast)
There has been an average annual GDP growth rate of 5.8% over the past two decades
Over 100 of fortune 500 companies have R & D facilities in India
The Bombay stock Exchange lists 6600 companies, only NYSE has more
Labor force of 498.4 million Low cost labor Political Stability and
government policies
Sources: The World Bank, Indian Ministry of Finance Wikipedia,
Rates as the 2nd best destination for manufacturing projects and the most attractive investment destination (IBM)
3rd in UNCTAB report on world Investment prospects (2009)
Rated among most favorite Investment destinations (JETRO, JBIC, EIU, Deutsche Bank, etc)
Operates under English common law and based on English style justice system
Largest democracy in the world
2nd largest English speaking nation in the world after USA
Projected to be 3rd largest economy by 2050
Harmonized IP rights laws 2nd largest pool of
scientists and engineers in the world
Superb banking systems and well developed financial systems
Favorable business policies & political outlook
Route Description
Local Office Create a base in India with limited capabilities
Franchising Parent company allows franchisee to use companies strategies and trademarks
Joint Venture Partnership between host and home firms, in which home firm has an equity and management voice within the firm
Contract Manufacturing Product is produced in India by a local producer.
Licensing Give licensee in India patent and trademark rights, copyrights and know-how on products and process
Direct Export Uses agent, distributor, overseas subsidiary or act via government agency.
Indirect Export The products are exports though trading companies, export management companies.
Wholly Owned Subsidiaries
Buy a company already in India or build a new facility.
Advantages Direct contact with
customers Improved credibility
in market place with customers
Disadvantages Cost of establishing
an office is higher than using an agent and/ or distributor
Don’t have a local partner with contacts and expertise
Advantages Rapid international
expansion Group purchasing and
advertising arrangements
Relatively inexpensive way of expanding
High levels of consumer demand and relatively low levels of competition
Disadvantages Difficulty adapting
franchised chain to local market tastes
Limited revenue growth as only receive a percentage of profits
Advantages Decrease the capital risk
involved Leverage the local
companies facilities, in manufacturing, distribution and retailing
Leverage the local companies managerial capability in the local environment
Leverage the local company’s contacts with the government to get green signals
Disadvantages Complexity in coordinating
policies, decisions and execution with a different company.
Difference in culture Difference in managerial
styles Difference in the motivation
behind the participation Communication problems Selecting right partner Complications at time of exit Safety of intellectual
property
Advantages Low capital required Low managerial Risk Focus on core
activities Less Complicated exit
problems Less Complicated
division of responsibilities
Disadvantages Chance for a lack of
control on certain parameters
Differences in quality Standards, lead to negative initial experience for customers
Scalability of problems Selection of vendors
Advantages Import and investment
barriers Legal protection possible
in target environment Low sales potential in
target country Large cultural distance,
licensee lacks ability to become a competitor
Rapid entry into foreign market
Virtually no capital requirements
Returns realized faster
Disadvantages Control over use of assets
may be lost over manufacturing and marketing
Licensee has to obtain approval from international vendor for product design and specifications, as not a representative of international vendor
Could create future competitors.
Have to reveal secrets, intellectual property
Advantages Most tradition and well
established form of operating in foreign market.
Simple with low cost/investment and risk
Can obtain knowledge of foreign market
Increased utilization of domestic plant
Disadvantages Significant investment in
marketing strategy High transport costs Tariffs Problems with local agents Less controls of distribution Exchange rate fluctuations Customs duties and taxes Costs to gain exposure, set
up sales and distribution networks
Product might need to be modified or redesigned to meet local requirements or customer preference
Advantages Full ownership Greater control over
operations Higher profits Can keep company
secrets (patents) to yourself
Able to dictate quality in brand
Disadvantages Larger investment Higher risks Harder to exit
Market Assessment •Market size, growth rate and trends•Regulatory framework•Barriers to entry•Location and distribution channels•Possible exit strategy
Competitive analysis •Intensity of competition•Key players and their positioning•Competitive strategies and benchmarking of key parameters
Consumer Analysis •Consumer segmentation•Consumer Behavior•Identification of un-met needs
Option Generation •Exhaustive option generation•Option evaluation•Shortlist potential opportunities to suit individual
G0-to-market Strategy •Detail financial modeling•Go-to-market strategy covering value proposition, product detailing, pricing, target customer, operating model and mode of entry.•Detail implementation roadmap
Obtain PAN number from Income Tax department
Open a current account Register a Limited Liability
Partnership Register Your Company Register for service tax Register for VAT/Sales tax Excise Duty (if applicable) Customs duty File entrepreneurship
Memorandum at DIC Apply for TAN Find State Specific guidelines &
Procedures Obtain DSC (Digital Signature
Certificate)
Form No.1 - it states that all the requirements of the incorporation have been complied with
Form No. 18 – Notifies the address of the registered office of the proposed company
Form No. 29 - This is a consent obtained from all the directors of the proposed company to act as directors of the proposed company. (Not required for pvt ltd company)
Form No. 32 – This states the appointment of the proposed board of directors from the date of incorporation of the company and is signed by any of the acting directors
The major regulations of law in India affecting foreign investment are:
The Foreign Exchange management Act of 1999 ("FEMA") – regulates foreign collaboration and equity participation in India
The Companies Act of 1956 – regulates corporations and their management in India
The Industries Act of 1951 – governs industrial regulations
The Monopolies and Restrictive Trade Practices Act of 1969 – governs restrictive and fair trade practices
The New Industrial Policy of 1991 – lays down the policy and procedure for foreign investment
The corporate income tax effective rate for domestic companies is 35% while the profits of branches in India of foreign companies are taxed at 45%. Companies incorporated in India even with 100% foreign ownership, are considered domestic companies under the Indian laws
India has entered into tax treaties with a number of countries including, Australia, Belgium, Canada, Denmark, France, Germany, Indonesia, Japan, Korea, Mauritius, Singapore, the United Kingdom and the United States. These treaties endeavor to avoid double taxation and attract know- how and technology. In many treaties the withholding tax on royalties and fees for technical services coming from India is lower than the general tax rate
The New Export-Import Policy of 1992 provides substantial tax incentives for investments in Export Oriented Units ("EOU's")
Concessional rent for lease of industrial plots Preferential power allocation and supply Exemption from import duty for capital goods and raw
materials for power sector industries as well as for trading companies primarily engaged in export activity
And industries located in the Export Processing Zones ("EPZ's")
Import duty exemption Complete tax holiday Decentralized "single window clearance”
Remain Competitive High Performance Management and
Benchmarking Management Audit & Review Joint Ventures, Partnerships & Strategic Alliances Assistance in Private Equity
Investments Identification of Key Managerial
Personnel Market Research & Feasibility studies
M&A advisory Acquisition Infusion of Private Equity Investments, HNI’s, Venture Capital Funds Due Diligence, Post-Merger Integration
Build Conceptualization Market Sizing India Entry Strategy, find which is
best route. Startups Strategic/Business planning
(Formulate business Growth Plan and Business Strategy for 3-5 years)
Feasibility studies Identification of Local partner,
representative
Grow Corporatization & Professionalization
of Entrepreneurial firms Sales and Marketing Strategy Generate capital raising alternatives Prepare investment kit for fund
raising Management support for startup
ventures
Commencement •Understand vision•Missions and goals•Discuss assumptions and plans
Industry Analysis •Current industry status•Future opportunity•Market, consumer and competitor analysis
Business Unit analysis
•Corporate structure•Culture•Processes and operations
Validation •Validation of key findings
Strategy Formulation
•Use multiple techniques to be future ready
Delivery •Presentation and delivery of the report
Implementation •Assistance in implementing the strategies
Senior partners involved in every assignment
Specialized expertise Higher degree of confidentiality Less bureaucratic, more flexible thus
faster delivery and turnaround times Identify key personnel Review of current business model
D’Essence
Investment Banks
Venture Capitalists
Banks
Private Equity Funds
Senior Corporate Leaders
Entrepreneurial Firms
International Network
Associates
Domain Specialists – CA’s
Lawyers, CS
Trade Associates
Our strong network of relationships woven over years of associations enables us to provide you with best market access, and growth options.We work with reputed VC’s Private Equity Funds, Corporates and HNI’S”
D’Essence Consulting,303, Aar Pee Centre
11th Road, Gufic CompoundMIDC, Andheri (East)
Mumbai – 400093India Fax- +91-22-2822 8142 / Tel- +91-22-2834
7425www.dessenceconsulting.com
Email: chandni@dessenceconsulting.comTel direct +91-22-28228142
.
top related