 Population is 1.21 billion (as of 2011 census)
 India is a republic, governed by a parliamentary system,
consisting of ...
 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...
 Rates as the 2nd
best
destination for
manufacturing projects
and the most attractive
investment destination
(IBM)
 3rd
...
Route Description
Local Office Create a base in India with limited capabilities
Franchising Parent company allows franchis...
Advantages
 Direct contact with
customers
 Improved credibility
in market place with
customers
Disadvantages
 Cost of e...
Advantages
 Rapid international
expansion
 Group purchasing and
advertising
arrangements
 Relatively inexpensive
way of...
Advantages
 Decrease the capital risk
involved
 Leverage the local companies
facilities, in manufacturing,
distribution ...
Advantages
 Low capital required
 Low managerial Risk
 Focus on core
activities
 Less Complicated exit
problems
 Less...
Advantages
 Import and investment
barriers
 Legal protection possible in
target environment
 Low sales potential in
tar...
Advantages
 Most tradition and well
established form of operating
in foreign market.
 Simple with low
cost/investment an...
Advantages
 Full ownership
 Greater control over
operations
 Higher profits
 Can keep company
secrets (patents) to
you...
Market Assessment •Market size, growth rate and trends
•Regulatory framework
•Barriers to entry
•Location and distribution...
 Obtain PAN number from Income
Tax department
 Open a current account
 Register a Limited Liability
Partnership
 Regis...
The major regulations of law in India affecting foreign
investment are:
 The Foreign Exchange management Act of 1999
("FE...
 The corporate income tax effective rate for domestic
companies is 35% while the profits of branches in
India of foreign ...
The New Export-Import Policy of 1992 provides substantial
tax incentives for investments in Export Oriented Units
("EOU's"...
Remain Competitive
 High Performance Management and
Benchmarking
 Management Audit & Review
 Joint Ventures, Partnershi...
Commencement •Understand vision
•Missions and goals
•Discuss assumptions and plans
Industry Analysis •Current industry sta...
 Senior partners involved in every
assignment
 Specialized expertise
 Higher degree of confidentiality
 Less bureaucra...
D’Essence
Investment
Banks
Venture
Capitalists
Banks
Private
Equity Funds
Senior
Corporate
Leaders
Entrepreneurial
Firms
I...
D’Essence Consulting,
303, Aar Pee Centre
11th Road, Gufic Compound
MIDC, Andheri (East)
Mumbai – 400093
India Fax- +91-22...
INDIA ENTRY STRATEGY SERVICES FOR MARKETING TO INDIA / SET UP BUISNESS IN INDIA / DO BUSINESS WITH INDIA
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INDIA ENTRY STRATEGY SERVICES FOR MARKETING TO INDIA / SET UP BUISNESS IN INDIA / DO BUSINESS WITH INDIA

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Indian Economy is the third largest Economy by Consumption. India also has the largest pool of technically qualified professionals outside of USA.
There are many ways an International Organization can make an Entry into the Indian Market. These include Local Office, Franchising, Joint Venture, Master Franchisee, Contract Manufacturing, Licensing, Direct Exports, Indirect Exports, and Wholly Owned Subsidiaries.
Conceptualization
Market Sizing
Startups
Strategic Planning
Business planning (Formulate business Growth Plan and Business Strategy for 3-5 years)
Feasibility studies
Site Analysis
Identification of Local partner, India Representative
Recruitment of Senior Talent and Country Managers
Competition Analysis and Benchmarking
Product Testing,
Channel Strategy and Distributor Negotiation
Corporate Structure, Taxation, Subsidies

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INDIA ENTRY STRATEGY SERVICES FOR MARKETING TO INDIA / SET UP BUISNESS IN INDIA / DO BUSINESS WITH INDIA

  1. 1.  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
  2. 2.  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,
  3. 3.  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
  4. 4. 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.
  5. 5. 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
  6. 6. 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
  7. 7. 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
  8. 8. 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
  9. 9. 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
  10. 10. 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
  11. 11. 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
  12. 12. 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
  13. 13.  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
  14. 14. 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
  15. 15.  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
  16. 16. 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”
  17. 17. 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
  18. 18. 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
  19. 19.  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
  20. 20. 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”
  21. 21. D’Essence Consulting, 303, Aar Pee Centre 11th Road, Gufic Compound MIDC, Andheri (East) Mumbai – 400093 India Fax- +91-22-2822 8142 / Tel- +91-22-2834 7425 www.dessenceconsulting.com Email: chandni@dessenceconsulting.com Tel direct +91-22-28228142 .

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