Strategic Business International Marketing – Analysis And Opportunity For A Telecommunication SME In India’s Wireless Technology Market

Economic overview

Discuss about the Strategic Business International Marketing.

The report focuses on the analysis of an Asian country suitable for market expansion for a telecommunication organization implementing wireless technology solution. Before expanding business through invading a new market, the organizational management should undertake a proper analysis of the business environment of the newly invading market, whether there is scope or opportunity for the organization or not. In this report, an Australia based SME has shown interest for expanding its market through Asia. Asia is the largest and most populous continent in the world (Jobber and Ellis-Chadwick 2012). Thus, to expand through this continent, an SME should begin its market expansion through such a country that has a wide range of opportunity for the organization. India is one of the second most populous and developing countries. Telecommunication is one of the largest parts of India’s business industry, contributing significantly to its economy. However, a thorough analysis of its business environment along with the external environment is needed. This report will include an in-depth analysis of political, economic, demographic and business market along with the opportunity for a telecommunication SME to expand its market based on wireless technology. Finally, recommendations for required action should also be provided based on the current market in the country.

India has been ranked seventh-largest country in terms of economy throughout the world, which is considered by nominal GDP and it is the third-largest country by purchasing power parity (PPP). Terpstra et al. (2012) reported that, India is considered as a newly industrialized country. The country has its average growth rate approximately 7 % through last two decades. India has a positive long-term economic growth prospective due to health savings and investment rates, its young population and related low dependency ratio along with increasing integration of the country into the global economy. Main industries that contribute in Indian gross economy include software, telecommunication, chemicals, petroleum, chemicals, mining, textiles, steel, pharmaceuticals, agriculture, machinery, cement, lather, construction and transportation equipments.

India’s economy development was based on socialist-inspired policies after achieving independence. It has been argued by Rosenbloom (2012) Indian political economy was changed rapidly with economy liberalization in 1990s. The political economy of this country has transformed into a market based system. India is the second fastest growing major economy after china. New restructured forms led to simplification of international trade and investment, inflation control and tax reforms.

Political environment analysis

While analyzing current economic situation in India, a growth rate or GDP for 2016-17 has been estimated to be 7 to 7.5%, representing a good indication for Indian economy. Best (2012) revealed that India has a significantly high percentage gross saving per capita, approximately 31% of total GDP (Ferrell and Hartline 2012). India is considered as one of the largest domestic consumers for self consumption. However, one of its major concern areas is trade balance gap. However, “Make in India” initiative and low fuel price manage this gap in near future. On the other hand, interest rate in India is higher, when compared to other developed countries. Indian currency Rupees is important, as it is highly preferable currency in international trade. Moreover, it is a technically rich country with the second largest pool of scientist and engineers throughout the world. Thus, there is no doubt that the country has a high desire to develop further with a lot of opportunities.

Telecommunication is such a sector in India that is considered as leading contributors to flourishing economy of the country. Indian Ministry of Communications and Information Technology reported that since last 3 years, the telecom opportunities in India have grown 20 to 40 % every year, having fourth rank in telecom industry (Meissner 2012). Thus, it can be a suitable opportunity for the SME to explore the growing telecom market.

The basic structure of Indian government involve three different level, central government, state government and local government, each of these three levels has three different roles, which are legislature, executive and judiciary. India is a multiparty democracy, with 29 states and 7 union territories. States have own laws governing the state based on the requirements. At centre, executive include president, vice-president and council of minister, which is directed by the prime minister (Griffin and Pustay 2012). The parliament, Union Legislature has two houses Rajya Sabha and Lok Sabha and the judiciary is powered by Supreme Court of India. Indian politics is rougher compared to Europe and North America. The political parties are either a National party or a state party. Separation of powers in different levels ensures that no one can abuse power.

Indian government is generally stable instead of corruption and diversity in politics. The economic boom is raising regional stability by boosting living standard. Currently or in near future Indian government is not under any threat to be collapsed.

Economic and business environment analysis

However, foreign investors should look into some challenges or risks of doing business in India. Business foundations revealed local social and cultural barriers to direct selling. A number of foreign investors have reported that several external events negatively affect the commercial feasibility of asset and future business plan of India. Corruption and bureaucratic inefficiency are a key challenge, fluctuation in inflation, interest and currency rates, unexpected delays and cost overruns as a result of overlapping governmental jurisdiction. Lack of preparation and understanding of the Indian culture can be a significant hindrance. Patience is required for the employers to start business in India. Another common risk is changing or unpredictable regulations (Lee et al. 2012). The economic risk for the organization to do business in India involves inflation and lack of economic discipline at government level. Thus, foreign company should look into exchange rate risk and interest rate risks in India.

Corruption is a significant challenge for companies investing in India. However, India has significant regulatory structure for fighting corruption. Prevention of Corruption Act (PCA) is governing corruption in India; facilitation payment is illegal under PCA in India.

India has a population of 1.3 billion, achieving the second rank as most populous country in the world, which is approximately one fifth of entire world’s population. Population growth rate of the country is 1.2%. 50 % of the population is below 25 years with a dependency ratio of 0.4. Within the entire population, 31.2 % 0-14 years old, 63.6 % 15-64 years old and 5.3 % constitute the population 65 years or more, showing a developing country (Singh 2012). Life expectancy is 68.89 years with 19.3 birth rate and 7.3 death rates. Instead of rapid urbanization in this country, approximately 70 % Indian lives in rural area. A survey revealed within 1.2 billion people, 68.84 % is rural and 31.16 % is urban population with 31.16 % urbanization level in 2011.

21.2% population below the poverty line earns $1.9 per day. The average GDP per capita income is $5138, with variation in different territories. In terms of rupee, per capita income increased by 10.4% in 2013-14 period (Goyal and Tripathy 2012). However, there is a significant gap in rural and urban wealth distribution and income rate. It has been seen cities and towns make two-third of GDP. However, government undertook steps for bridging urban-rural gap. The country exports $272.4 billion in software, pharmaceuticals, textile, chemicals, leather, jwellery, transportation, petrochemicals, agriculture and other commodities. Key export partners are EU, US, UAE, China and Hong Kong. India has an inflation rate of 5.05% and labor force of 502.1 million. Average gross salary is $1.46 per hour (Goyal and Tripathy 2012). The country has 74.03 % literacy rate, but males are dominant in this context. India has 130 ranks in ease-of-doing-business. Currency exchange rate of INR to AUD is 0.01961.Total labor force is 502.1 million. There is significant level of skilled labors available in India.

Indian telecommunication industry has a growing prospect with growing sales figure and a flourishing telecommunication market with the use of wireless products. Indian government is continuously giving efforts for boosting up Indian electronic industry and attracting foreign investors in this sector. Wireless technology has a wide range of prospect in Indian market, as it is becoming more popular in every sector and it is making things easy to perform. The product has a significant role in rural development in India. India consist a world-class wireless network and it is continuously evolving. There is a wide scope if innovation in Indian telecommunication services, which is attractive to foreign investors. Wireless technology is one of the most popular technologies in India, with wider availability and usage, however, innovative technology such as Lifi can be a significant competitor, as it much faster than wireless technology, but implementation rate is lower as it is highly expensive (Meissner, 2012). Mostly digital media, television, radio, asocial media and news are the chief advertising media used in India for promoting a product. The telecommunication network of India is world’s second largest network. The product has significant potential in the market, as it has significant usage in India, compared to its competitive products. The product will be targeted on especially the young generation, though it is used irrespective of age or functional area. The target market will be government sectors initially and private organizations later. Initially, the product will be adopted by government and then local retailers will be involved in distribution channel.

Finally, after researching the Indian market for telecommunication network, it is recommended to the Australian employer to get knowledge about Indian culture and not to mix it with China culture. In addition, it is recommended that as the market for telecommunication is evolving, as a beginner, it may take some time for the Australian SME to be familiar with Indian market, thus patience is needed. In addition, the company should follow international and national regulations for foreign business. For understanding the market, in-depth training should be provided to the host country based employees, which is very important for business success. Before starting the business, a risk analysis should be done and evaluation is necessary in each step for getting success.

Reference List

Jobber, D. and Ellis-Chadwick, F., 2012. Principles and practice of marketing(No. 7th). McGraw-Hill Higher Education.

Terpstra, V., Foley, J. and Sarathy, R., 2012. International marketing. Naper Press.

Rosenbloom, B., 2012. Marketing channels. Cengage Learning.

Best, R., 2012. Market-based management. Pearson Higher Ed.

Ferrell, O.C. and Hartline, M., 2012. Marketing strategy, text and cases. Nelson Education.

Meissner, H.G., 2012. Strategic international marketing. Springer Science & Business Media.

Griffin, R.W. and Pustay, M.W., 2012. International business. Pearson Higher Ed.

Lee, K., Mani, S. and Qing, M.U., 2012. Explaining divergent stories of catch-up in the telecommunication equipment industry in Brazil, China, India, and Korea. Economic Development as a Learning Process: Variation Across Sectoral Systems, p.21.

Singh, S., 2012. Digital Divide in India: Measurement, Determinants and. Digital Economy Innovations and Impacts on Society, 11(20.1), p.106.

Goyal, D. and Tripathy, M.R., 2012, January. Routing protocols in wireless sensor networks: a survey. In 2012 Second International Conference on Advanced Computing & Communication Technologies (pp. 474-480). IEEE.