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MANAGING ACROSS
BORDERS
INDIAN RETAIL INDUSTRY
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CONTENTS:
1. India Retail Industry
2. Macro-Environments
3. Increasing complexity in internationalbusiness
4. Implications for business managers
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INDIAN RETAIL INDUSTRY
History Started from stores in villages
Retail stores for convinience
The concept has changed
Forecast Bright future, increase 42% in 2008
Expect to grow 45 billions $ and create 10-15 mil jobs inthe next 5 years
Trends is changing
Increase in young working population
Increase of female power
Alternative spaces or channels for retailers
Changing in shopping habit
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INDIAN RETAIL INDUSTRY
Trends Low share of organized retailing
Falling real estate prices
Increase in disposable income and customer
aspiration Increase in expenditure for luxury items
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MACRO-ENVIRONMENT
Geographic environment
Economical environment
Social and cultural environment
Political and legal environment
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GEOGRAPHIC ENVIRONMENT
Location Southern Asia, bordering the Arabian Sea and the
Bay of Bengal, between Burma and Pakistan
Area and Board Total: 3,287,263 sq km
country comparison to the world: 7
land: 2,973,193 sq km
Natural Resources coal (fourth-largest reserves in the world), iron ore,
manganese, mica, bauxite, titanium ore, chromite, naturalgas, diamonds, petroleum, limestone, arable land
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2147rank.html?countryName=India&countryCode=in®ionCode=sas&rank=7https://www.cia.gov/library/publications/the-world-factbook/rankorder/2147rank.html?countryName=India&countryCode=in®ionCode=sas&rank=78/9/2019 Managing Across Borders-Indian retail industry
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GEOGRAPHIC ENVIRONMENT
Climate Winter: very cold, but bright and pleasant, with
snowfall in the northern hills (Nov Mar)
Summer: very dry, hot and humid (Mar Jun)
Monsoon: heavy rainfall (Jun Nov)
Natural and environmental hazards Natural: droughts; flash floods, flooding from
monsoonal rains; severe thunderstorms; earthquakes
Environmental: deforestation; soil erosion;overgrazing; desertification; air pollution; waterpollution; tap water is not potable; huge and growingpopulation is overstraining natural resources
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ECONOMICAL ENVIRONMENT
Second fastest growing major economy
Members of WTO in 1995, World Bank andsouth Asian association for Regional
Cooperation (SAARC)
Main Industries: textiles, chemicals, foodprocessing, steel, transportation equipment,
cement, mining, petroleum, machinery,software
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ECONOMICAL ENVIRONMENT
GDP stood at 6.7 per cent in 2008:
Agriculture: 17.2%
Industry: 29.1%
Services: 53.7%
Labour force: 523.5 million
Agriculture: 60%
Industry: 12%
Services: 28%
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ECONOMICAL ENVIRONMENT
Labour force: 523.5 million
Agriculture: 60%
Industry: 12%
Services: 28% (2003)
Unemployment: 6.8%
Exports: Petroleum products, Textile goods, Gems andJewelry, Engineering goods, Chemicals, Leather manufactures
Imports: Crude oil, Machinery, Gems, Fertilizer, Chemicals
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SOCIAL AND CULTURALENVIRONMENT
Social Changing towards satisfying the different hierarchy of
needs of customers.
Who have the language and social cultural as well asthe communication skills to function well in the
international business. Democracy at work.
International business will be diversity.
Cultural Great diversity of religious practices, languages,
customs, and traditions
Culture is defined by relatively strict social hierarchy.
Strict social taboos have governed these groups
Some of these lines have blurred . Nuclear family isbecoming central to Indian culture.
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SOCIAL AND CULTURALENVIRONMENT
Changing towards satisfying the different hierarchyof needs of customers.
Who have the language and social cultural as well as
the communication skills to function well in theinternational business.
Democracy at work.
International business will be diversity.
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POLITICAL AND LEGALENVIRONMENT
Political Limit on FDI in retail industry
Government has share in local retailers
Under pressure from US, open retail market
LegalRetail is the prohibited sector for FDI
Need approval from Central Government for FDI
Approval from State government, Local authority..etc
Need license to locate within 25 km of urban in 25 cities, non-polluting industry doesnt need license
Can own up to 51% shares
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General: Free Trade : Globalization.
Capitalism:The switch of many nations to market-based economies and capitalism has advanced
globalization's reaches. Democracy : More open societies.
Internet:The Internet aided in the rapid spread ofideas and has helped in the formation of global
society.
PopularCulture:The popularity of movies, music,actors, musicians and television and the availability ofthem across the globe expanded globalization.
INCREASING COMPLEXITY IN INTERNATIONALBUSINESS PAST FACTORS
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INCREASING COMPLEXITY IN INTERNATIONALBUSINESS PAST FACTORS
Economic: Boom industry
Low share of organized retailing
Falling real estate prices
Increase in disposable income and customeraspiration
Increase in expenditure for luxury items
young working population increasing working-women population and emerging opportunities in theservices sector
development of retail space
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INCREASING COMPLEXITY IN INTERNATIONALBUSINESS-PAST FACTORS
Political & Legal:
Government supports local retailers, unfaircompetitions
Limit on shares can own, less control from
foreign investors
More red tapes, more license and approval
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Future Factors: Reducing physical contact with employees (on-line meetings,
working at home, ...)
Multilingual team (Chinese, American, Indian, ...)
Increasing on on-line purchasing
High cost when combined with physical stock as the price of landshall increase at India
Not peaceful region: With the growing Muslim population in India,religious conflicts can occur
Extremely overpopulation
Wide range of ageing employees
More retails channels Multi-specific retail stores
Overseas purchases
INCREASING COMPLEXITY ININTERNATIONAL BUSINESS
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IMPLICATIONS FOR BUSINESSMANAGERS
Upgrade understanding of local law and consultantfirm
Choose the right entry model
Clear commitment with local authorities
Create special fund to solve all unwritten lawsproblems
All red tapes are solved by local managers
Choose the right economy scale and standard of
products Choose the right products for each states with
different culture and religion
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Thanks for your attention!
Rafael DYM0817
Joy AOM3000
Luna AES3048
Dai BCP3000