India is among the fast emerging economies that has attracted interest of Multi National Co-operations (MNCs) for investment. The main driver of this is basically the growing population in India, which makes India the second most populated country, this coupled with its growing economy makes India a lucrative venture for Multi National Enterprises (MNEs) .
The population of India presents an opportunity for MNCs to put the McCarthy’s four marketing mix model as well as Potter’s 5 competitive forces to the test as this promise profitability. Rathore (2008, p. ii) observes that the opportunities that India presents for MNE investors are 3 folds; first is its low costs of labor, secondly the quality pool of knowledge that promises professionalism in business and thirdly, the ability of labor to focus on competencies and talents to strengthen and expand existing business.
MNCs are cognizant of the fact that India has potential in its highly educated workforce, management talent, the rule of law, transparency, and cultural affinity as its strengths in attracting investments into the country. The challenges, on the other hand, are in the bureaucracy, lack of infrastructures, and ambiguous policy framework that stifle the establishment and development of MNCs in India .
Similar sentiments furthered by Gautam and Singh (2011, pp. 30-31) denote that the main impediment to MNCs in India lies in competition that is poised by small scale local industries in the region. Evidently, these companies are taking advantage of opportunities that MNCs also have an interest. According to Sundar this is attributable to the fact that India has since 1991 been confounded by the need for self-reliance hence making it very difficult for international companies to establish in India. Further, the move towards self-reliance has seen the development of local companies that poise stiff competition for MNCs .
This also means that MNCs have an opportunity to develop their products and services beyond the level that local firms have in turn ensuring quality products and service delivery for the Indian market. Yet another driver that is making small companies major competitors for MNCs in India is the diverse and insurmountable occurrence and pace of innovations in the country. MNEs are finding it quite a challenge, as well as an opportunity to invest in India due to the innovation it promises to deliver .
Other studies find that the challenges and opportunities for MNCs in India can be drawn from green marketing where pollution is an issue that has had many MNCs see development opportunities as well as challenges relating to pollution. Likewise, standardization of products also presents a challenge to MNEs as most companies have had to strategize by adopting their products and services to the unique needs of the Indian market. Nonetheless, other MNCs have found that globalization favor the profitability of their product/service in the Indian market. Essentially, the MNCs have to juggle with the opportunities/challenges standardization presents for them in the Indian market .
Generally, the main opportunities that India presents for MNCs are the low cost of labor and reforms in legislation that favor the entry of MNCs into the country. On the other hand, the greatest impediment stands to be the dilapidate state of the infrastructure coupled by competition from local industries in India. Notwithstanding all the issues discussed also present challenges and opportunities for MNCs investing in India as deliberated.
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