Foreign companies are attracted to India because of low labor costs

Most overseas companies are drawn to India because of low labor costs, but it might be a better if they learn about the rest of costs.

Compared to most other countries the price tag on fees may be higher in India. Energy costs can also be higher: India imports almost all of its gas and olive oil. Electricity costs are higher & most factories and offices require backup power by means of diesel-fired generators, batteries tend to be. While road and rail travelling is boosting, your relative cost of transportation logistics may be greater than other countries. The relative cost of real property can seem astonishingly saturated in major Indian cities.

Many costs besides labor are lower in India. Medical insurance and health benefits don't drain employers as they are doing in the United States. Workers' reimbursement and other insurance is many more affordable as a share of payroll.

While the labor cost in U. A. E. is expensive, they are costly but their efficiency helps it be less expensive. You'll find cheaper labot cost far away but efficiency is the main.

More than 90% of the recycleables come from different countries. And due to the recent economical slump, prices of recycleables lowered by 20% to 40%. And another thing, by producing in U. A. E. , there is no export tax responsibility thanks to the Free Zones in the united states.

There's no personal taxation in the united states, the expense of living is leaner and there's near-permanent sunshine. Which great buzz plus some exciting nightlife. Alcoholic beverages comes in hotels, night clubs and restaurants and people can generally go about their business as they please.

Some of the benefits associated with setting up in the Free Areas include; 100% overseas ownership, assurance of no taxation, no customs duties for import into free area, flexible investment options, useful logistics facilities for carry and distribution, and single windowpane administrative and recruitment support.

b) the likely future economical development of this country

India's overall economy, long repressed by the heavy palm of regulation, will probably achieve sustained growth to the amount reforms are applied. High-technology companies would be the most dynamic providers and can lead the thriving service sector in four key urban centers-Mumbai, New Delhi, Bangalore, and Chennai. Computer software services and customized applications will continue steadily to increase as India strengthens financial ties to key international market segments. Companies such as pharmaceuticals and agro-processing also will compete internationally. Numerous factors provide India a competitive edge in the global market. It has the largest English-speaking human population in the producing world; its education system produces an incredible number of scientific and technical workers. India has an evergrowing business-minded middle income eager to fortify ties to the exterior world, and the top Indian expatriate society provides strong links to key marketplaces around the world.

Despite speedy economic growth, over fifty percent a billion Indians will stay in dire poverty. Harnessing technology to boost agriculture will be India's main concern in alleviating poverty in 2015. The widening gulf between "have" and "have-not" locations and disagreements on the pace and character of reforms will be a source of home strife. Swiftly growing, poorer northern states will continue steadily to drain resources in subsidies and social welfare benefits.

The future of economical development in U. A. E. rests mainly on strategic relationship between the private and public sectors. A get better at plan to grow this collaboration and up grade private sectorefficiency as to play a respected role in the country's current economic climate is the only choice to meet up with the economic challenges. But the sector still has serious structural problems that render it unable to contend effectively in regional and global marketplaces. If quality production is the cornerstone for just about any flourishing economy, public sector efficiency should be improved.

U. A. E. will prosper for the simple reason which it represents an oasis in a intensely populated region beset with all sorts of strife and problems. The wealthy as well as the upwardly mobile in third world countries require a world-class place close by to park their money, enjoy holidays, and plan for exile.

c) business practices

d) business ethics

Time in India is generally flexible, even work time, and Indians are usually appreciative of punctuality although they themselves may not be punctual. Established meetings at least a month beforehand and ensure that you confirm it a few days prior to the commitment. Ideally, appointments should be produced for late in the morning until the evening, with lunches preferred over supper.

Other civilizations may find that decision making in India can be a slow, extensive process that involves a great deal of deliberation, so don't dash deadlines. Impatience may be construed as rude and disrespectful.

Keeping clean, well-maintained associations can be a crucial part of doing business in India so much so these interactions should already be in place before discussions can begin. It is also advisable to determine good working associations most especially with elderly people and leaders available. Because of the great value Indians put on respecting their elders and their tightly hierarchical firm, decisions on almost everything almost always rests with these high-ranking professionals, and keeping good connections with them escalates the likelihood of smooth business ventures.

Business decisions in India aren't arrived at solely on empirical data, statistics or excellent presentations. These highly spiritual people also use their intuition and faith to steer their course in decision making, so present a relaxed, patient existence anchored on good identity and it'll go quite a distance in creating the right business environment for successful discussions.

Attitudes to amount of time in the U. A. E. are a lot more laid back than in many Western cultures. People and interactions are more important than schedules and punctuality. It is not unusual, therefore, for your Emirati counterparts to reach later but foreigners are anticipated to arrive on time.

It is important to have associations to someone in the U. A. E. who are able to introduce you before trying to do business there on your own. Emirati people opt to work with those they know, so having someone to introduce you will be of

immense advantage to your method of trading.

People in the U. A. E. would prefer to do business personally. Relationships and common trust are paramount for just about any successful business connection and can only just be developed through face-to-face conferences. It is important to invest time with your Emirati business counterparts and ensure future conferences take spot to continue cultivating the partnership.

The Emirates are a significantly modern state in relation to all of those other Middle East. Therefore, many traditional behaviour and business methods are changing towards a more Westernised way. Nevertheless, it continues to be important to be aware and respectful of a few of the differences that might exist.

CASE 3

3. 1) Think about you will be the marketing director for a U. S. company of disposable diapers. Your company is considering coming into the Brazilian market. Your CEO believes the advertising subject matter that has been effective in the United States will suffice in Brazil. Outline same possible objections to this. Your CEO also feels that the costing decision can be delegated to local professionals. Why might he be incorrect?

Entering the Brazilian market is a good decision for all of us manufacturers. The Brazilian market is an extremely attractive market for diapers. As of 2010, there remain 53 million people aged 0-14 (around 8 million are 0-30months old) and around 12 million aged 65 and above. And the consumption of baby diapers from 1995-2000 increased by 18. 7% with sales up to $760 million. $24 million is from brought in diapers in 2000, which usually comes from US. Brazil is good for investors since it has a strong growth and high interest rates. US is the Ёthe biggest transfer partner of Brazil with16. 12%.

When small inexperienced All of us manufacturer will try to go into the Brazil market, the competition is very tight because of the big and more developed US suppliers that already are there, Johnson & Johnson for example already has 70% of the market, and the other 100 small and medium-sized Brazilian companies.

Standardizing the marketing advertising is not highly recommended because of the cultural difference between the two countries. And since the company is merely starting it is advisable to consider the Brazilian market in doing the advertisement. Only experienced big and global companies can pull off similar ad and even still sometimes are unsuccessful in it. Even in the discussion of some that the countries are homogenizing, which could be observed in the use of diapers, everyone has the same use and functions in suing it, but promoting it to different countries must still be diversified. A different country might see a male person changing a baby's diaper, for example.

Pricing decision is not appropriate to be kept for the neighborhood managers since the competition is small and if it was for the kids they will lower the price to be able to compete which will affect the business's profit. As of this beginning stage, getting a damage in the Brazil market is not going to be good and can in the end force you to definitely withdraw on the market.

Theodore Levitt said that the globe markets have become more similar which it needless to localize the marketing mix

In addition, trade obstacles and differences in product and technical standards also limit the ability of firms to market a standardized product to a global market

https://www. cia. gov/library/publications/the-world-factbook/geos/br. html

During the 1970s and 1980s, P&G just presents products from US not considering the cultural variety between both the countries. Benefit of this strategy is that it is cheaper because there is no need to research the marketplace that well. You just introduce the product and see how the market reacts to it. That is why at the first launch of the throw-away diapers possessed 80% of the market maybe since it was new and impressive for these people. Although the merchandise life cycle for this is very short especially that overtime they pointed out that it generally does not really fit their needs. That is also why by the end of 1980s their market show went down to 8 percent.

They just developed the product after noticing that it is not working on the market so they differentiated the products for your market. Yet another drawback in their strategy is they did not segment the marketplace; they just presented the merchandise and expect it to work for the whole market.

According to Hollensen, in the product/communication mode, P&G used the right extension wherein they unveiled a standardized product with the same campaign strategy across the world market (one product, one note worldwide). Although in the end, when they noticed that it was not working they do the product version wherein they modified the product but they still maintain the core products. In ways, they also used benchmarking, wherein they viewed the competitor's successful product and designed it and managed to get better to become more competitive.

4. 2) How might you characterize the strategy since the early 1990s? What exactly are the benefits of this strategy? What exactly are the potential downsides?

In the 1990s, P&G started out general market trends, they know that they must research the marketplace first before introducing any products.

According to Porter's generic strategies, they used the product differentiation strategy wherein they identify their products, although price is not actually mentioned in this specific article, they might be able to charge a little bit higher price but to compete with the competitors, and they might not do this. They provide better product to provide better service to the marketplace and also compared to their competitors.

In the marketing mixture, they generally just concentrate on the product, corresponding to this article anyways, neither on the purchase price nor the campaign.

In the 1990, they considered the dual version, wherein by adapting both the product and promotion for each market the organization is adopting a completely differentiated approach.

Advantage includes knowing the marketplace beforehand, being able to produce a competitive advantage prior to the competitors. Among the downsides includes the high price because of extensive research and development used to set-up the merchandise.

4. 3) Which strategy has been more lucrative? Why?

The strategy they have used following the 1990s is the one that is successful, given that they already know that they have to differentiate their products before releasing it to the general public. They also have research and developed the product to suite the targeted market. They created a competitive gain before the competitors. Also, the trust of the marketplace to the brand is higher because they're more likely to gratify them in the first try.

P&G was required to maybe have a study and development site in Japan to have the ability to understand the marketplace better. Also not only using the direct expansion strategy made them realize that the product in US or internationally does not necessarily mean that it'll work in Japan. They maybe have had Japanese staff member in their company as well. Since US and Japan are extremely diverse in making business, P&G may have made an modification to change both culture to meet halfway.

Specifically for example, in getting a business in Japan, Japanese personnel when appointed are be prepared to stay in the company until they retire, on the other hand US workers are incredibly adventurous and wishes variety so they aren't really expected to stay in the company especially if they are not satisfied. Japanese also wants to are an organization while Americans tend to be more individualistic, in cases like this, P&G could maybe have developed teams to serve the market.

In this case, it clearly shows that markets remain heterogeneous and still on its way in homogenizing. If the marketplace is actually converging into becoming homogenous, the product and promotion of P&G would have worked all over the world. Though it has changed a lot likened before, the fact that they receive a major market show in the united states clearly implies that the countries are moving to become homogenous. However they still have to adjust to each country and culture at this time.

CASE 5 Royal Dutch/Shell

5. 1) What were the great things about the matrix structure at Shell? What were the disadvantages? Does the matrix structure fit the environment of the global essential oil and chemical industries in the 1980s?

Reporting to two bosses, which is the geographic region and London Chemical Division, in two different locations made the work of the working company more complicate because satisfying them is a continuous consensus building since both have perspective and decisions. This made the decision making a poor and cumbersome controversy. Though it is also considered a good thing because decisions made here are big decisions that happen to be long-term that needs in depth decision making process. And since it is slow-moving, it was only the important decisions which are made here and instead the operating company was given the modest decisions such as costs and online marketing strategy. The matrix structure used at that time fit the surroundings since at that time there are not so many competition and long term decision making was viewed as an advantage.

5. 2) What shift took place in Shell's operating environment in the 1990s?

The competitiveness of other big essential oil companies

The rapidly bringing down of the price of oil by rivals by cutting overhead costs and consolidating production in successful facilities.

The opponents start portion with smaller amount of large size refining facilities and shutting down smaller facilities, which lowered their costs as well.

How performed this shift influence the financial performance of the firm?

The organization was required to restructure due to the rising competitive market, the lower demand for petrol, and price reduced amount of oil possessed made Shell's profit margin a bit shaky.

What does indeed this suggest about the fit between strategy and structures?

The strategy of saving money to be able to lower the price of olive oil and increase profit margin made shell restructure their company to work more successfully since it was plainly not working at the moment.

5. 3) The type of structure did Shell take up in 1995? In what ways did the architecture of Shell's business after 1995 change from that before 1995?

Before the operating company has to are accountable to two bosses, now they made a specific line between your responsibility of the top of geographic region and the chemical substance department in London. And the top of geographic region is working below the chemical department. The restructuring also made an obvious line between your governance and executive responsibility for each and every level. Five main global product divisions are also made- exploration and production, essential oil products, chemicals, gas and coal. It made the planning and control more effective and it got removed the bureaucracy that was a burden for the business enterprise before. The restructuring of the business created a greater earnings value for the company. They also scale back on their labor force which provided them lower costs. Decentralization of decision making from commercial to divisional levels and from divisional to business product levels at the same time as offering divisions and business units full income and loss responsibility.

5. 4) Comment on the fit between operating environment, strategy and organizational architecture at Shell after 1995 reorganization. Performed the change lead to increased fit?

The restructuring made was best for the business and it could be seen for their continues upsurge in income and efficiency.

The most evident short-tem impact of the reorganization was a substantial reduction in Service

Company staffs. Towards the end of 1995, Shell began shrinking its brain office buildings in London and

The Hague in anticipation of the benefits of the new organizational framework at the

beginning of 1996. During 1996, the downsizing of central services and administrative functions

within the Service Companies accelerated. During 1996, one of both towers at the London

Shell Centre was sold and was converted into residential apartments rentals.

The quest for cost reductions didn't visit the Service Companies but expanded to the

operating companies as well. Between 1995 and 1997, device costs were reduced by 17 percent in

real terms, and between 1994 and 1997, personal savings in procurement costs amounted to $600 million

each year. A priority for the Group was rationalization of capacity and reductions in operating

costs in its downstream business. To help this, Shel

sources

Robert M. Grant Organizational Restructuring within the Royal Dutch/Shell Group http://www. blackwellpublishing. com/grant/docs/07Shell. pdf

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