Biology Forums - Study Force

Analyze the market opportunities of India. Use examples to illustrate your analysis.

The principal market opportunities in India stemmed from domestic demand. Exports also represented an opportunity, with Indian companies being leaders in the outsourcing movement.
The economy was the 10th largest in the world, and it was projected to be the third largest by 2030. Michigan State University developed a Market Potential Index for emerging markets taking into account factors such as market size, growth rate, market intensity, market consumption capacity, commercial infrastructure, economic freedom, market receptivity, and country risk. India lagged behind on the commercial infrastructure index and market receptivity, a measure of international trade. In terms of competitiveness, India was 32nd of 59 countries in 2011.
The rapid economic growth had produced a large and growing middle class in India. The middle class generated demand for products similar to those in developed countries, providing opportunities for foreign companies. For example, the market for mobile telecommunications had exploded, resulting in some 700 million cellphone users. The growth was stimulated by low prices for handsets and for service, but the available networks were only 2G. The potential for 3G and 4G networks was enormous, but intense competition had left the mobile communications companies without the resources to build faster networks.
E-commerce was relatively underdeveloped, and business models faced the risk of liability for information provided or posted on a Web site. India's constitution established the right to free speech, but that right was subject to reasonable restrictions to protect public order, decency, or morality. Web sites were required to take down objectionable material, and a company that hosted Web sites could be required to take down a Web site.
Opportunities were substantial in the food and household products markets. The food market was complex because of ethnic differences and religious traditions across the country.
Household products such as refrigerators and cleaning supplies had more homogeneous demand.
Both Nestl and Unilever, for example, had operated in India for many years, and both had developed the local market knowledge necessary for success in the country. Other foreign companies sought to obtain market knowledge through joint ventures or acquisitions.