8/4/2019 Final 2003 Abha

1/25

SUBMITTED BY:

NAME: ABHA DHAWAN

MBA-IB (2010-12)

SECTION: F

SUBJECT: PGBM

FACULTY: Ms. AREEJ AFTAB

8/4/2019 Final 2003 Abha

2/25

ECONOMY OF BRAZIL

The Economy of Brazil is the world's eighth largest economy by nominal GDP and ninth largest by purchasing power parity. Brazil has moderately free markets and an inward-orientedeconomy. Its economy is the largest among all South American nations and the second largest inthe western hemisphere. Brazil is one of the fastest-growing major economies in the world withan average annual GDP growth rate of 5%. In Reais (Brazilian currency), its GDP is estimated atR$ 2.9 trillion dolars in 2009. The Brazilian economy has been predicted to become one of thefive largest economies in the world in the decades to come, the GDP per capita following andgrowing.

Brazil is a member of diverse economic organizations, such as Mercosul, SACN, G8+5, G20 andthe Cairns Group. Its trade partners number in the hundreds, with 60% of exports mostly ofmanufactured or semimanufactured goods.[14] Brazil's main trade partners in 2008 were:Mercosul and Latin America (25.9% of trade), EU (23.4%), Asia (18.9%), the United States(14.0%), and others (17.8%).[15]

According to the World Economic Forum, Brazil was the top country in upward evolution ofcompetitiveness in 2009, gaining eight positions among other countries, overcoming Russia forthe first time, and partially closing the competitiveness gap with India and China among theBRIC economies. Important steps taken since the 1990s toward fiscal sustainability, as well asmeasures taken to liberalize and open the economy, have significantly boosted the countryscompetitiveness fundamentals, providing a better environment for private-sector development.[16]

The owner of a sophisticated technological sector, Brazil develops projects that range fromsubmarines to aircraft and is involved in space research: the country possesses a satellitelaunching center and was the only country in the Southern Hemisphere to integrate the team

responsible for the construction of the International Space Station (ISS). [17] It is also a pioneer inmany fields, including ethanol production.

Brazil, together with Mexico, has been at the forefront of the Latin American multinationalsphenomenon by which, thanks to superior technology and organization, local companies havesuccessfully turned global. These multinationals have made this transition notably by investingmassively abroad, in the region and beyond, and thus realizing an increasing portion of theirrevenues internationally.

Brazil is also a pioneer in the fields of deep water oil research from where 73% of its reserves areextracted. According to government statistics, Brazil was the first capitalist country to bring

together the ten largest car assembly companies inside its national territory.

Rank 8th (nominal) / 9th (PPP)

http://en.wikipedia.org/wiki/Brazilian_realhttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-BG-13http://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-BG-13http://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-14http://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-weforum.org-15http://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-ISS-16http://en.wikipedia.org/wiki/Brazilian_realhttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-BG-13http://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-14http://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-weforum.org-15http://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-ISS-16

8/4/2019 Final 2003 Abha

3/25

Currency Brazilian real (BRL, R$)

Fiscal year Calendar year

Trade

organisations

Unasul, WTO, Mercosul, G-20 and others

Statistics

GDP$1.574 trillion (2009) (nominal; 8th)

$2.013 trillion (2009) (PPP; 9th)

GDP growth -0.2% (2009)

GDP per capita $9,960 (2009) (nominal; 60th)

$15,280 (2009) (PPP; 75th)

GDP by sector agriculture: 5.5% industry: 28.7% services:

65,8% (2007)

Inflation (CPI) 4.31% (2009)

Population

below poverty line

15.5% (2009)

Gini index 49.3 (June 2009)

Labour force 95.21 million (2009 est.)

Labour force

by occupation

agriculture: 20%, industry: 14% and services:

66% (2003 est.)

Unemployment 7.3% (May 2010)

Main industries airplanes, steel; iron ore, coal; machine

building; armaments; textiles and apparel;

petroleum; cement; chemicals; fertilizers;

consumer products, including footwear, toys,

http://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/Gross_domestic_product

8/4/2019 Final 2003 Abha

4/25

and electronics; food processing;

transportation equipment, including

automobiles, rail cars and locomotives, ships,

and aircraft; electronics; telecommunications

equipment, commercial space launch

vehicles, satellites, real estate, brewing,

tourism

Ease of Doing

Business Rank

129th

External

Exports $158.9 billion (2009 est.)

Export goods transport equipment, iron ore, soybeans,

footwear, coffee, autos, automotive parts,

machinery

Main export

partners

United States 14.0%, Argentina 8.9%, China

8.3%, Netherlands 5.3%, Germany 4.5%,

Japan 3.1% (2008)

Imports $136 billion (2009 est.)

Import goods machinery, electrical and transport

equipment, chemical products, oil,

automotive parts, electronics

Main import

partners

United States 14.9%, China 11.6%,

Argentina 7.7%, Germany 6.9%, Japan 3.9%,

Nigeria 3.9%, South Korea 3.1% (2008)

Gross externaldebt

$216.1 billion (31 December 2009 est.)

Public finances

Public debt $103.2 billion; 6.4% of GDP (2008 est.)

8/4/2019 Final 2003 Abha

5/25

ForeignReserves $285.7 billion

Brazilian Telecom Market

Brazilian telecom market has grown by 16 percent year-on-year to reach 176 million by the endof last year and the sector continues to be dominated by its big four players: market-leaderVivo, America Movils Claro, Telecom Italias TIM Brasil, and local operator Tele Norte LesteParticipacoes (also known as Oi).These four operators were the principle winners of the countrys first WCDMA (3G) auctionsthat took place at the end of 2007. But the future of the so called Big Players does not seem to

be very smooth as there are a number of new competitors all set to enter the telecom sector laterthis year. However, there are possibilities that the existing players will be barred from biddingfor further 3G spectrum when the local regulator (Anatel) sells-off the so-calledH-band WCDMA bandwidth later this year, paving the way for the arrival of the small players.Some of the new comers almost certain to bid at these auctions is Nextel, the iDEN operator,Frances Vivendi, entered the Brazilian market last November via the US$4 billion acquisition offixed-line broadband firm GVT, along with Telefonicas Telesp and America Movils Telmex.Till date, Brazil has only around 130,000 WiMAX subscribers and the WiMAX market isdeemed to be suffering from a persistent shortage of spectrum and around 75 percent of 3.5GHzspectrum has yet to be released, while the use of mobility in 2.5GHz is restricted.MVNOs which are expected to be allowed into the market for the first time this year, can pose

further competition. Carrefour, the Brazilian arm of French retail group has already confirmed itsinterest in entering the market via this route and other big names could follow.But by the time, the small players make their mark in the sector and among the users theestablished players continue to play a dominating role. A 50/50 joint-venture between SpainsTelefonica and Portugal Telecom and the market-leader Vivo surpassed the 50 millionconnections milestone in 4Q09 besides capturing over a third of net additions in the quarter(fourth-quarter additions accounted for 42 percent of Vivos total for 2009). By combining itsMobile and fixed-line assets, second-placed America Movil is looking to ramp-up competitionwith fierce regional rival Telefonica while its Brazilian mobile arm Claro kept pace with Vivoduring 2009.Establishing coverage from scratch and reaching unconnected rural areas will not be easy.

Introduction of competition and establishment of rural 3G coverage having potential to disruptthe current status quo are some of the requirements for stimulating the market in Brazil. Racetowards improving 3G coverage has also emerged as the key to unlocking additional revenue. Towin the race, a clear set of tariffs and a streamlined portfolio will be necessary to enact anydisruption in Brazil. Besides, there is a requirement for network-sharing agreements on a site orinfrastructure level to lessen the financial blow.Four companies dominate the Brazilian mobile phone market: Vivo (Telefnica/PortugalTelecom), Claro (Amrica Mvil), TIM Brasil (Telecom Italia), and Oi (Telemar). Together,

http://wirelessfederation.com/news/tag/francehttp://wirelessfederation.com/news/tag/telmexhttp://wirelessfederation.com/news/tag/wimaxhttp://wirelessfederation.com/news/tag/mvnohttp://wirelessfederation.com/news/tag/francehttp://wirelessfederation.com/news/tag/telmexhttp://wirelessfederation.com/news/tag/wimaxhttp://wirelessfederation.com/news/tag/mvno

8/4/2019 Final 2003 Abha

6/25

these four control 98.3% of Brazils mobile subscriber base. Vivo is the leader, although itsmarket share has been slipping; Claro and TIM Brasil have been vying for second and thirdplace; Oi occupies a close fourth position, having increased its market share through theacquisition of Brasil Telecom. The remaining 1.7% of the market is shared between CTBCTelecom, Sercomtel, trunking network operator Nextel Brasil, and start-up company Unicel

trading as Aeiou.

The country has 173.959 million subscribers in total , or a 90.55% penetration rate.(December2009)Anatel regulates the country's telecommunications.

Rank Operator TechnologySubscribers

(in millions)Ownership

1 Vivo

CDMA2000

1xRTT,

EV-DO

(discontinued)GSM

UMTS, HSPA+

51.74 [18]

(December 2009)Telefnica (100%)

2 ClaroGSM

UMTS, HSDPA

44.40 [19]

(December 2009)Amrica Mvil (100%)

3 TIMGSM

UMTS, HSDPA

41.11 [20]

(December 2009)Telecom Italia and Telefonica

4

Oi

Includes Brasil

Telecom

GSMUMTS, HSDPA

36.05 [21](December 2009)

Oi and Telemar Participaes

5 NEXTEL iDEN1.9389 [22] (March

2009)NII Holdings

6 CTBC [23]GSM

UMTS, HSDPA

0.54 [24] (December

2009)Algar

7Sercomtel Celular

[25]

GSM

UMTS, HSDPA

0.09 [26] (December

2009)

Londrina city (Paran) State-

owned Sercomtel

8 Unicel /aeiou GSM0.02 [27] (December

2009)

Elav Group (Melo da Silva

family).

http://www.anatel.gov.br/Portal/exibirPortalNoticias.do?acao=carregaNoticia&codigo=19546http://www.anatel.gov.br/Portal/exibirPortalNoticias.do?acao=carregaNoticia&codigo=19546http://www.anatel.gov.br/Portal/exibirPortalNoticias.do?acao=carregaNoticia&codigo=19546http://www.anatel.gov.br/Portal/exibirPortalNoticias.do?acao=carregaNoticia&codigo=19546http://phx.corporate-ir.net/phoenix.zhtml?c=137178&p=irol-newsArticle&ID=1279705&highlight=http://www.ctbc.com.br/http://www.anatel.gov.br/Portal/exibirPortalNoticias.do?acao=carregaNoticia&codigo=19546http://www.sercomtelcelular.com.br/http://www.anatel.gov.br/Portal/exibirPortalNoticias.do?acao=carregaNoticia&codigo=19546http://www.meuaeiou.com.br/http://www.meuaeiou.com.br/http://www.anatel.gov.br/Portal/exibirPortalNoticias.do?acao=carregaNoticia&codigo=19546http://www.anatel.gov.br/Portal/exibirPortalNoticias.do?acao=carregaNoticia&codigo=19546http://www.anatel.gov.br/Portal/exibirPortalNoticias.do?acao=carregaNoticia&codigo=19546http://www.anatel.gov.br/Portal/exibirPortalNoticias.do?acao=carregaNoticia&codigo=19546http://www.anatel.gov.br/Portal/exibirPortalNoticias.do?acao=carregaNoticia&codigo=19546http://phx.corporate-ir.net/phoenix.zhtml?c=137178&p=irol-newsArticle&ID=1279705&highlight=http://www.ctbc.com.br/http://www.anatel.gov.br/Portal/exibirPortalNoticias.do?acao=carregaNoticia&codigo=19546http://www.sercomtelcelular.com.br/http://www.anatel.gov.br/Portal/exibirPortalNoticias.do?acao=carregaNoticia&codigo=19546http://www.meuaeiou.com.br/http://www.anatel.gov.br/Portal/exibirPortalNoticias.do?acao=carregaNoticia&codigo=19546

8/4/2019 Final 2003 Abha

7/25

ENTRY IN BRAZIL

Product basket : Telecom services and mobile phones.

Brazil telecom sector is right now growing at a good pace thus it should be targeted. Brazil is the

largest market in Latin America and the region's leading investment destination for international

operators and suppliers.With the country's economic recovery well under way, the spendingpower of Brazilian consumers is on the rise. Demand should remain strong for telecom services,

especially broadband and mobile telephony.

Recently there was a news also on Vodafone entry in brazil.The news was According to the

Brazilian local daily, O Estado de S. Paulo, The UK-based Vodafone Group is resorting to the

services of an investment bank to study the possibility of acquiring a stake in mobile network

operator.

The newspaper stated that Vodafone has already entered in talks with Spanish Telefonica Group,

a shareholder of Telecom Italia which controls TIM Participacoes (TIM Brazil)

There are 4 leading companies in Brazil that are vivo,claro,TIM and Qi.

The mode of entry chosen for that country :

Obviously, the entry mode to enter brazil it can only enter through a joint venture or buying

stake in existing company.

8/4/2019 Final 2003 Abha

8/25

TIM BRAZIL-Telecom Italia Mobile is Telecom Italia's mobile phone brand, and runs a GSM,

EDGE, UMTS and HSDPA network in Italy and Brazil. In Europe, TIM is part of the FreeMove

alliance. Our firm can get into contract with this company.It is clear that only through joint

venture because launching new services getting licenses etc is not very easy plus taking stake in

the exisiting company.

Brazil is a decent market to enter at this point of time. The entry strategy should be like getting

talks with TIM and try to convince them for a joint venture.the firm should try and get the first

mover advantage by providing mobile phones at cheaper rates, as after recession brazilian

economy is growing now and populations purchasing power parity is good enough.So providing

cheaper mobile phones while entering plus cheap mobile calls will help us alot in making a good

brand image among customers of Brazil.

CHINAS ECONOMY : AN OVERVIEW

China's economy is huge and expanding rapidly. In the last 30 years the rate of Chinese

economic growthhas been almost miraculous, averaging 8% growth in Gross Domestic Product (GDP) per annum.The economy has grown more than 10 times during that period, with Chinese GDP reaching 3.42trillion US dollars by 2007. In Purchasing Power Parity GDP, China already has the biggesteconomy after the United States. Most analysts project China to become the largest economy inthe world this century using all measures of GDP.

http://en.wikipedia.org/wiki/FreeMovehttp://en.wikipedia.org/wiki/FreeMove

8/4/2019 Final 2003 Abha

9/25

However, there are still inequalities in the income of the Chinese people, and this incomedisparity has increased in the recent times, in part due to a liberalization of markets within thecountry. The per capita income of China is only about 2,000 US dollars, which is fairly poorwhen judged against global standards. In per capita income terms, China stands at a lowly 107thout of 179 countries. The Purchasing Power Parity figure for China is only slightly better at

7,800 US dollars, ranking China 82nd out of 179 countries.

Economic reforms started in China in the 70s and 80s. The initial focus of these reforms was oncollectivizing the agricultural activities of the country. The leaders of the Chinese economy, atthat point in time, were trying to change the center of agriculture from farming to householdactivities. At later stages the reforms extended to the liberalization of prices, in a gradual manner.The process of fiscal decentralization soon followed.

As part of the reforms, more independence was granted to the business enterprises that wereowned by the state government. This meant that government officials at the local levels and themanagers of various plants had more authority than before. This led to the creation of a number

of various types of privately held enterprises within the services sector, as well as the lightmanufacturing sectors. The banking system was diversified and the Chinese stock marketsstarted to develop and grow as economic reforms in China took hold.

The economic reforms made in China in the 70s and 80s had other far reaching effects as well.The sectors outside the control of the state government of China grew at a rapid pace as a resultof these reforms. China also opened its economy to the world for the purposes of trade and directforeign investment.

China has adopted a slow but steady method in implementing their economic reforms. It has also

sold the equity of some of the major Chinese state banks to overseas companies and bond

markets during the middle phase of the first half of the 21st century. In recent years the roleplayed by China in international trade has also increased.

THE COSMETIC AND TOILETRIES MARKET IN CHINA:

China represents one of the most dynamic and untapped cosmetics and toiletries markets in theworld. Last six to seven years have proved highly beneficial for the market when it hasundergone rapid transformation and expansion phase. The Chinese cosmetics and toiletriesmarket is the 2nd largest in Asia-Pacific region after Japan and seventh largest in the world.Although the market registered an impressive growth, the country still has high growth potentialwhich is far from its saturation level. Extremely low penetration level and vast consumer baseare two key factors that catch the eyeballs of cosmetic manufacturers.

8/4/2019 Final 2003 Abha

10/25

As per our new research report Cosmetics and Toiletries Market in China, skincare dominatesthe overall cosmetics and toiletries market in China. In 2009, the segment acquired almost 40%share and showed no signs of slowdown despite post recessionary scenario. Other segments likehair care, color cosmetics, fragrances, etc have also experienced double digit growth over therecent years.

The market provides opportunities to both homegrown and international players. However,international companies like P&G and LOreal are currently leading the Chinese cosmetics andtoiletries market. These companies are responsible for generating majority of the industryrevenue and are preferred by the consumers over the local companies. Strong and wide productlines along with aggressive marketing strategies have been considered the success mantraproactively adopted by these international cosmetics giants.

Although the Chinese cosmetics market has become highly competitive, there is still a plenty ofroom for new entrants provided they adopt appropriate market entry strategies, find rightmanufacturing or distribution partners, use effective marketing strategies, and make suitable

products for various customer groups at reasonable price points.

With increasing disposable income, surging working population (especially females) looksconscious approach and strong promotional strategies, we anticipate that the Chinese cosmeticsand toiletries market revenue will surpass US$ 31 Billion by 2013. Besides, the CAGR growthprojected for the market during 2010-2013 will be the highest among the major Asia-Pacificcosmetics and toiletries markets.

The research will help clients to get in-depth knowledge of the current, past and futureperformance of the industry. The segment and sub-segment wise analysis provides cutting edgemarket intelligence and facilitates deep and conceptual understanding of the market in Chineseperspective. The future outlook mentioned in report has been derived by interacting with industryveterans, developers, analyzing information from research papers, journals and our industry-specific in-house developed models.

The product basket of Brazil country:

Essential toiletries and cosmetics : soaps, shampoos, hair oils, face washes, skin care creams etc.

8/4/2019 Final 2003 Abha

11/25

The mode of entry chosen for that country is joint venture with one of the

growing brands like AVON.

Joint Venture: two or more partners own or control a businessCross marketing arrangements,Technology sharing agreements,Production contracting

deals,Equity arrangementsTypes of Joint ventures:Non equity venture : one group providing service for anotherEquity Venture : financial investment by MNC in business of local partner.

The feasibility of the product and the mode of entry chosen

There is a huge demand for cosmetics in China. The market provides opportunities to both

homegrown and international players. Since international companies like P&G and LOreal are

already leading the Chinese cosmetics and toiletries market it is better to enter the market

through joint venture as the risk and the cost of investment will get diversified and will be lesser.

The efficiency of both the firms will increase as large scale production would help them realise

economies of scale and in turn reduce cost of production thus increasing demand and profits.joint

venture would help in getting greater access to knowledge as there would be a pool of resources

like financial and technoligal resources will be shared. Since there are two firms hence, they will

be able to compete with their counterparts more effectively.

8/4/2019 Final 2003 Abha

12/25

Examples of brands that are already competing in chinese markets are:

Unilever China Ltd: Joint venture of Unilever set up in Shanghai in 1986 Product range comprising skin care, hair care, deodorant, detergent,soap, toothpaste and fragrance

Actively acquiring local brands, most notably, Zhong Hua Massive spending in advertising, for example, spent 100 million yuanon promoting the brand, Ponds Established R & D centre in Shanghai in 2001 with initial investmentamounted to US$166 million Working on building a low cost and competitive production base byrelocating and consolidating its production and logistics facilities, andR & D capabilities to Hefei in Anhui in an attempt to lower the overallproduction costs and the product prices

Its products are as follows: Hazeline Ponds Vaseline Pears Zhong Hua Signal Lux Dove

THE RUSSIAN ECONONMY: A BRIEF OVERVIEW

8/4/2019 Final 2003 Abha

13/25

The economy of Russia is the twelfth largest economy in the world by nominal value and the

seventh largest bypurchasing power parity (PPP). Russia has an abundance of natural gas oil,

coal, and precious metals. It is also rich in agriculture. Russia has undergone significant changes

since the collapse of the Soviet Union, moving from a globally-isolated, centrally-planned

economy to a more market-based and globally-integrated economy. Economic reforms in the

1990s privatized most industry, with notable exceptions in the energy and defense-related

sectors. Nonetheless, the rapid privatization process, including a much criticized "loans-for-

shares" scheme that turned over major state-owned firms to politically-connected "oligarchs",

has left equity ownership highly concentrated. The protection of property rights is still weak and

the private sector remains subject to heavy state interference.

Economy of Russia

Rank 12th (nominal) / 7th (PPP)

Currency Russian ruble (RUB)

Trade organizations CIS,APEC, EURASEC, G-20, G8 and others

Statistics

GDP$1.229 trillion (2009) (nominal; 12th)[1]

$2.109 trillion (2009) (PPP; 7th)[1]

GDP growth -7.9% (2009)[2]

GDP per capita$8,693 (2009) (nominal; 52nd)[1]

$14,919 (2009) (PPP; 52nd)[1]

GDP by sector agriculture: 4.6%, industry 39.1%, services 56.3% (2007 est.)

Inflation (CPI) 8.8% (2009 est.)[3]

Population

below poverty line15.8% (2007 est.)

Labour force 75.81 million (2009 est.)

Labour force

by occupationagriculture 10%, industry 31.9%, services 58.1% (2007 est.)

Unemployment 8.9% (2009)

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)http://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/Soviet_Unionhttp://en.wikipedia.org/wiki/Planned_economyhttp://en.wikipedia.org/wiki/Planned_economyhttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/Globalizationhttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)http://en.wikipedia.org/wiki/Russian_rublehttp://en.wikipedia.org/wiki/Commonwealth_of_Independent_Stateshttp://en.wikipedia.org/wiki/Asia-Pacific_Economic_Cooperationhttp://en.wikipedia.org/wiki/EURASEChttp://en.wikipedia.org/wiki/G20_major_economieshttp://en.wikipedia.org/wiki/Group_of_Eighthttp://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)http://en.wikipedia.org/wiki/Economy_of_Russiahttp://en.wikipedia.org/wiki/Economy_of_Russiahttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)http://en.wikipedia.org/wiki/Economy_of_Russiahttp://en.wikipedia.org/wiki/Economy_of_Russiahttp://en.wikipedia.org/wiki/Economy_of_Russiahttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capitahttp://en.wikipedia.org/wiki/Economy_of_Russiahttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capitahttp://en.wikipedia.org/wiki/Economy_of_Russiahttp://en.wikipedia.org/wiki/Inflationhttp://en.wikipedia.org/wiki/Consumer_price_indexhttp://en.wikipedia.org/wiki/Economy_of_Russiahttp://en.wikipedia.org/wiki/Economy_of_Russiahttp://en.wikipedia.org/wiki/Poverty_linehttp://en.wikipedia.org/wiki/Unemploymenthttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)http://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/Soviet_Unionhttp://en.wikipedia.org/wiki/Planned_economyhttp://en.wikipedia.org/wiki/Planned_economyhttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/Globalizationhttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)http://en.wikipedia.org/wiki/Russian_rublehttp://en.wikipedia.org/wiki/Commonwealth_of_Independent_Stateshttp://en.wikipedia.org/wiki/Asia-Pacific_Economic_Cooperationhttp://en.wikipedia.org/wiki/EURASEChttp://en.wikipedia.org/wiki/G20_major_economieshttp://en.wikipedia.org/wiki/Group_of_Eighthttp://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)http://en.wikipedia.org/wiki/Economy_of_Russiahttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)http://en.wikipedia.org/wiki/Economy_of_Russiahttp://en.wikipedia.org/wiki/Economy_of_Russiahttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capitahttp://en.wikipedia.org/wiki/Economy_of_Russiahttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capitahttp://en.wikipedia.org/wiki/Economy_of_Russiahttp://en.wikipedia.org/wiki/Inflationhttp://en.wikipedia.org/wiki/Consumer_price_indexhttp://en.wikipedia.org/wiki/Economy_of_Russiahttp://en.wikipedia.org/wiki/Poverty_linehttp://en.wikipedia.org/wiki/Unemployment

8/4/2019 Final 2003 Abha

14/25

Main industries

coal, oil, gas, chemicals, and metals; all forms of machine building

from rolling mills to high-performance aircraft and space vehicles;

defense industries including radar, missile production, and advanced

electronic components, shipbuilding; road and rail transportation

equipment; communications equipment; agricultural machinery,

tractors, and construction equipment; electric power generating andtransmitting equipment; medical and scientific instruments; consumer

durables, textiles, foodstuffs, handicrafts

Ease of Doing Business

Rank120th[4]

External

Exports $295.6 billion (2009 est.)

Export goods

petroleum and petroleum products, natural gas, wood and wood

products, metals, chemicals, and a wide variety of civilian andmilitary manufactures

Main export partnersNetherlands 11.2%, Italy 8.1%, Germany 8%, Turkey 6%, Ukraine

5.1%, Poland 4.5%, China 4.3% (2008)

Imports $196.8 billion (2009 est.)

Import goods

vehicles, machinery and equipment, plastics, medicines, iron and

steel, consumer goods, meat, fruits and nuts, semifinished metal

products

Main import partnersGermany 13.5%, China 13.2%, Japan 6.5%, Ukraine 6%, US 4.5%,

Italy 4.3% (2008)

Gross external debt $369.2 billion (31 December 2009 est.)

Public finances

Public debt 6.9% of GDP (2009 est.)

Revenues $205.3 billion (2009 est.)

Expenses $306.6 billion (2009 est.)

THE ELECTRONICS INDUSTRY IN RUSSIA

http://en.wikipedia.org/wiki/Coalhttp://en.wikipedia.org/wiki/Oilhttp://en.wikipedia.org/wiki/Gashttp://en.wikipedia.org/wiki/Chemicalhttp://en.wikipedia.org/wiki/Metalhttp://en.wikipedia.org/wiki/Aircrafthttp://en.wikipedia.org/wiki/Space_vehiclehttp://en.wikipedia.org/wiki/Defense_industryhttp://en.wikipedia.org/wiki/Radarhttp://en.wikipedia.org/wiki/Missilehttp://en.wikipedia.org/wiki/Electronic_componenthttp://en.wikipedia.org/wiki/Shipbuildinghttp://en.wikipedia.org/wiki/Roadhttp://en.wikipedia.org/wiki/Rail_transporthttp://en.wikipedia.org/wiki/Communicationhttp://en.wikipedia.org/wiki/Agricultural_machineryhttp://en.wikipedia.org/wiki/Tractorhttp://en.wikipedia.org/wiki/Construction_equipmenthttp://en.wikipedia.org/wiki/Electric_powerhttp://en.wikipedia.org/wiki/Medicalhttp://en.wikipedia.org/wiki/Scientific_instrumenthttp://en.wikipedia.org/wiki/Consumer_durableshttp://en.wikipedia.org/wiki/Consumer_durableshttp://en.wikipedia.org/wiki/Textilehttp://en.wikipedia.org/wiki/Foodstuffhttp://en.wikipedia.org/wiki/Handicrafthttp://en.wikipedia.org/wiki/Ease_of_Doing_Business_Indexhttp://en.wikipedia.org/wiki/Ease_of_Doing_Business_Indexhttp://en.wikipedia.org/wiki/Economy_of_Russiahttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Turkeyhttp://en.wikipedia.org/wiki/Ukrainehttp://en.wikipedia.org/wiki/Polandhttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Japanhttp://en.wikipedia.org/wiki/Ukrainehttp://en.wikipedia.org/wiki/UShttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Coalhttp://en.wikipedia.org/wiki/Oilhttp://en.wikipedia.org/wiki/Gashttp://en.wikipedia.org/wiki/Chemicalhttp://en.wikipedia.org/wiki/Metalhttp://en.wikipedia.org/wiki/Aircrafthttp://en.wikipedia.org/wiki/Space_vehiclehttp://en.wikipedia.org/wiki/Defense_industryhttp://en.wikipedia.org/wiki/Radarhttp://en.wikipedia.org/wiki/Missilehttp://en.wikipedia.org/wiki/Electronic_componenthttp://en.wikipedia.org/wiki/Shipbuildinghttp://en.wikipedia.org/wiki/Roadhttp://en.wikipedia.org/wiki/Rail_transporthttp://en.wikipedia.org/wiki/Communicationhttp://en.wikipedia.org/wiki/Agricultural_machineryhttp://en.wikipedia.org/wiki/Tractorhttp://en.wikipedia.org/wiki/Construction_equipmenthttp://en.wikipedia.org/wiki/Electric_powerhttp://en.wikipedia.org/wiki/Medicalhttp://en.wikipedia.org/wiki/Scientific_instrumenthttp://en.wikipedia.org/wiki/Consumer_durableshttp://en.wikipedia.org/wiki/Consumer_durableshttp://en.wikipedia.org/wiki/Textilehttp://en.wikipedia.org/wiki/Foodstuffhttp://en.wikipedia.org/wiki/Handicrafthttp://en.wikipedia.org/wiki/Ease_of_Doing_Business_Indexhttp://en.wikipedia.org/wiki/Ease_of_Doing_Business_Indexhttp://en.wikipedia.org/wiki/Economy_of_Russiahttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Turkeyhttp://en.wikipedia.org/wiki/Ukrainehttp://en.wikipedia.org/wiki/Polandhttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Japanhttp://en.wikipedia.org/wiki/Ukrainehttp://en.wikipedia.org/wiki/UShttp://en.wikipedia.org/wiki/Italy

8/4/2019 Final 2003 Abha

15/25

Electronics manufacturing in Soviet Union was mostly concentrated in science and productionassociations, which united R&D institutions with a number of specialised plants. The mostfamous were Rubin (TV sets producer), Minsk enterprise for computer techniques, Svetlana,Krasnaya Zariya (telecommunication equipment), etc.

The electronics industry suffered greatly from the collapse of the Soviet Union and Perestroika.The transition resulted in a break down of the traditional production connections, decrease of thestate military orders and shortfall of state R&D spending. Some science and productionassociations fell apart, as some departments were located in the other Soviet Republics. As aresult, the development of the sector was frozen and it gradually lost its position.

Table 1. Production dynamics of consumer electronic devices

Equipment1990 1995 1996 1997 1998 1999

Computers, 313 62.3 118 132 62 27

Radio receivers, 5748 988 477 342 235 332

TV sets, 4717 1005 313 327 329 281

Source: Goscomstat

Nowadays the share of electronics manufacturing in Russian GDP does not exceed 0.12%. Thetotal output of the sector accounts for USD 300 million while the whole market of civilelectronics goods in Russia reached USD 20 billion in 2000. Russian manufactures have lostalmost all positions on the consumer electronics market - the share of imports is nearly 100% inall the main segments (computers, monitors, TV sets, audio devices, telecommunicationequipment, etc).

Not all Soviet electronics plants managed to survive in the new economic environment and in2000 only 257 companies were operating in the industry

As a result of Soviet industrial policy, the electronics sector had only a few competitive productsat the world markets, most of which were military equipment. With opening of the Russianmarket for the foreign companies, local manufacturers of consumer electronics and componentslost their market.

The main competitive advantage of the Russian electronics industry is educational infrastructureand science. Russian scientists have always been famous for fundamental research. Here onecould mention Jores Alferev, who received a Nobel Prize for progress in research insemiconductors technologies. Many Russian universities keep on training specialists for theelectronics industry, providing the sector with a qualified labour force.

8/4/2019 Final 2003 Abha

16/25

The Russian electronics industry has been considered as a high-risk sector for investments.However, stabilisation and growth in the industry has already attracted the first foreign investors.

The product basket of the country

Electronic items: video camera, television sets, portable audio etc.

Entry mode chosen: Wholly owned subsidy

A subsidiary whose parent company owns 100% of its common stock. In other words, theparent company owns the company outright and there are no minority owners. Firms can

establish a wholly owned subsidiary in a foreign market:

setting up a new operation in the host country acquiring an established firm in the host country

The feasibility of the product and the mode of entry chosen

1. Since the domestic market of Russia is incapable to fulfilling the entire demand of thecountry its better to set up a subsidy in Russia and capture a huge market share.

2. The main competitive advantage of the Russian electronics industry is educationalinfrastructure and science thus, establishing a wholly owned subsidy would be beneficial

as there will be inflow of new talent and innovation.3. Since the subsidy is a wholly owned subsidy there will be no risk of losing technicalcompetence to a competitor.

4. The company can have a tight control of operations.5. The company can realize learning curve and location economies which will in turn

reduce the cost of production and thus the products can be made available at cheaperprices in turn increasing demand and thus profits.

8/4/2019 Final 2003 Abha

17/25

Although the company would have to bear huge initial investment costs to set up thebusiness in the country but the huge demand and market available, the company would beable to soon recover them if it succeeds in developing a brand name for itself.

Example: Sony Moved Into Russia With Its Wholly Owned Subsidiary Sony MusicEntertainment Russia (SMER).

8/4/2019 Final 2003 Abha

18/25

UNITED ARAB EMIRATES (UAE): AN OVERVIEW

The United Arab Emirates (UAE) is a rapidly diversifying, highly developed economy, based onvarious socioeconomic indicators such as GDP per capita, energy consumption per capita, and

the HDI.

At $270 billion in 2008, the GDP of the UAE ranks second in the CCASG (afterSaudi Arabia),third in the Middle EastNorth Africa (MENA) region (after Saudi Arabia and Iran), and 38thin the world). [4]

There are various deviating estimates regarding the actual growth rate of the nations GDP,however all available statistics indicate that the UAE currently has one of the fastest growingeconomies in the world. According to a recent report by the Ministry of Finance and Industry,nominal GDP rose by 35 per cent in 2006 to $175 billion, compared with $130 billion in 2005.

Although the United Arab Emirates is becoming less dependent on natural resources as a sourceof revenue, petroleum and natural gas exports still play an important role in the economy,especially in Abu Dhabi. A massive construction boom, an expanding manufacturing base, and athriving services sector are helping the UAE diversify its economy. Nationwide, there iscurrently $350 billion worth of active construction projects. The UAE is a member of the WorldTrade Organization.

STARTING A BUSINESS IN UAE :

Whatever type of business you are setting up, you will need a license to do business in theUnited Arab Emirates. The three types of licenses are -

1. Commercial license (all kinds of trading)

2. Industrial license (manufacturing or industrial)

3. Professional license (professions, services and craftsmen)

Before starting to setup a company, you need to decide how the ownership of the company willbe.

Sole Ownership

In order to start up a company that is solely owned by you, requires that you setup one at one ofthe free trade zones throughout the UAE. The majority of IT companies have setup their middleeastern branches in the Dubai Internet City (DIC), while many media related companies havesetup their branches in the Dubai Media City (DMC). A list of the various free zones in the UAE

http://en.wikipedia.org/wiki/United_Arab_Emirateshttp://en.wikipedia.org/wiki/GDP_per_capitahttp://en.wikipedia.org/wiki/Human_Development_Indexhttp://en.wikipedia.org/wiki/GDPhttp://en.wikipedia.org/wiki/CCASGhttp://en.wikipedia.org/wiki/Saudi_Arabiahttp://en.wikipedia.org/wiki/MENAhttp://en.wikipedia.org/wiki/Iranhttp://en.wikipedia.org/wiki/Economy_of_the_United_Arab_Emirates#cite_note-3http://en.wikipedia.org/wiki/Petroleumhttp://en.wikipedia.org/wiki/Natural_gashttp://en.wikipedia.org/wiki/Abu_Dhabihttp://en.wikipedia.org/wiki/Constructionhttp://en.wikipedia.org/wiki/World_Trade_Organizationhttp://en.wikipedia.org/wiki/World_Trade_Organizationhttp://www.dubaiinternetcity.com/http://www.dubaimediacity.com/http://en.wikipedia.org/wiki/United_Arab_Emirateshttp://en.wikipedia.org/wiki/GDP_per_capitahttp://en.wikipedia.org/wiki/Human_Development_Indexhttp://en.wikipedia.org/wiki/GDPhttp://en.wikipedia.org/wiki/CCASGhttp://en.wikipedia.org/wiki/Saudi_Arabiahttp://en.wikipedia.org/wiki/MENAhttp://en.wikipedia.org/wiki/Iranhttp://en.wikipedia.org/wiki/Economy_of_the_United_Arab_Emirates#cite_note-3http://en.wikipedia.org/wiki/Petroleumhttp://en.wikipedia.org/wiki/Natural_gashttp://en.wikipedia.org/wiki/Abu_Dhabihttp://en.wikipedia.org/wiki/Constructionhttp://en.wikipedia.org/wiki/World_Trade_Organizationhttp://en.wikipedia.org/wiki/World_Trade_Organizationhttp://www.dubaiinternetcity.com/http://www.dubaimediacity.com/

8/4/2019 Final 2003 Abha

19/25

can be found here. Alternatively, expats can have a company setup by a UAE national and signlegal documents at the courts that the actual ownership of the company is for them. This

agreement normally involves paying the UAE national an agreed amount of money each monthor year.

FURNITURE INDUSTRY IN UAE

Furniture production in the UAE is very limited, and most of the domestic demand, which grew

dramatically during the recent economic boom, is satisfied by imported products. Import demand for

furniture has been rising steadily during the last decade (particularly between 2006 and 2008), driven by

increasing oil revenues, the construction boom and expanding population.

By the end of 2010 the UAE economy was hit by both external and domestic shocks. The country is now

starting to recover from these shocks, even though prospects between the main Emirates appears to be

different

Local and international experts and analysts anticipate that the furniture market in the UAE will grow by

40% this year, owing much to the real-estate and tourism projects, which are estimated to reach several

Billion of Dirhams in 2010.

Further, the increase in size of local and expatriate families in the UAE, has seen a considerable rise in the

demand for furniture and interior design solutions, giving the UAE a unique position amongst the GCC

countries, as the most important furniture and design related industry in the region.

As per recent studies and research, it is further anticipated that more than 500 furniture companies in the

UAE will rake in revenues of 700 Billion Dirhams in 2010, owing to the launch of recent real-estateprojects estimated at 96 Billion Dirhams.

The studies also expect that the cost of the real-estate construction and tourism projects will reach 300

Billion Dirhams in the UAE and 450 Billion Dirhams in GCC, during the 2 coming years.

Currently, real-estate projects worth 50 Billion Dollars are undergoing annual studies in the Gulf region,

54% of these projects is owned by the UAE market, ranging between construction works in the airports,

islands, houses, commercial complexes, hotels and many others. The UAE leads the GCC market in

relation to the number of projects under execution, estimated at 820 projects since June 2005, out of 1,785

projects in the GCC region.

The experts confirm that the real-estate and tourism boom will positively effect other sectors like

furniture, interior design, and lighting in the UAE and the Gulf region.

http://www.theemiratesnetwork.com/dir/Government/Free_Zones/http://www.theemiratesnetwork.com/dir/Government/Free_Zones/

8/4/2019 Final 2003 Abha

20/25

Product basket: Wooden Furniture

CABINET MAKERS ,CARPENTERS & JOINERS ,DOORS ,FURNISHERS - CONTRACT

,FURNITURE MANUFACTURERS ,HOTEL & MOTEL FURNITURE SUPPLIERS ,INTERIOR

DECORATORS ,SHOPFITTERS & SHOPFITTING EQPT SUPPLIERS

Mode of entry: Wholly owned subsidiary

1. Since the domestic market of UAE is incapable to fulfilling the entire demand of thecountry its better to set up a subsidy in UAE and capture a huge market share.

2. Since the subsidy is a wholly owned subsidy there will be no risk of losing technicalcompetence to a competitor.

3. The company can have a tight control of operations.4. The company can realize learning curve and location economies which will in turn

reduce the cost of production and thus the products can be made available at cheaperprices in turn increasing demand and thus profits.

5. Although the company would have to bear huge initial investment costs to set up thebusiness in the country but the huge demand and market available, the company would beable to soon recover them if it succeeds in developing a brand name for itself.

8/4/2019 Final 2003 Abha

21/25

Entry strategy

All kind of designer furniture which will be produced and sold at united arab emirates.As the demand of

furniture is very high and most of it is imported it will be cheaper to produce furniture there only. Wood

can be imported at a cheaper rate with comparison with the rate of readymade furniture. Settling up a

wholly owned subsidy is not a problem at UAE.

Evidence for entry strategy undertaken

UAE-based Leader Furniture and Joinery Craftsmen Ltd, part of the Juma Al Majid Group, began life as a

small joinery shop 25 years ago, and the factory it established in 1994 is today the biggest facility of its

kind in the Gulf region.

First-time exhibitors, Standard Carpets Industries, manufacturers of wall to wall carpets and BCF yarn,

expects its appearance at The Hotel Show to reinforce its drive to grow its business annually from $10

million at present to $15 million by the end of next year.

The company plans to expand capacity at its UAE manufacturing facility to produce woven and printed

carpets in the next 12 to 18 months, and says it can offer Middle East hotel industry customers the benefit

of reduced transportation costs, faster delivery and enhanced service.

Another new name at The Hotel Show, UK-based Sico Europe Ltd, manufactures hospitality products

used and specified by major hotel chains worldwide, including stages, tables and portable dance floors.

Regional sales manager, Graham Dimond, says the Middle East currently accounts for 15% of the

company's annual turnover, but the launch in Dubai of new products such as The Lite Step illuminated

portable dance floor could help bring a major expansion of business in a region showing dynamic hotel

growth.

8/4/2019 Final 2003 Abha

22/25

THE INDIAN ECONOMY : AN OVERVIEW

The economy of India is the eleventh largest economy in the world by nominal GDPand thefourth largest by purchasing power parity (PPP).Following strong economic reforms from thesocialist inspired economy of a post-independence Indian nation, the country began to develop a

fast-paced economic growth, as free market principles were initiated in 1990 for internationalcompetition and foreign investment. India is an emerging economic power with a very large poolof human and natural resources, and a growing large pool of skilled professionals. Economistspredict that by 2020. India will be among the leading economies of the world.

India was under social democratic-based policies from 1947 to 1991. The economy wascharacterised by extensive regulation,protectionism, public ownership,pervasive corruption andslow growth. Since 1991, continuing economic liberalisation has moved the country toward amarket-based economy.A revival of economic reforms and better economic policy in 2000saccelerated India's economic growth rate. In recent years, Indian cities have continued toliberalize business regulations. By 2008, India had established itself as the world's second-fastest

growing major economy. However, the year 2009 saw a significant slowdown in India's GDPgrowth rate to 6.8%as well as the return of a large projected fiscal deficit of 6.8% of GDP whichwould be among the highest in the world.

India's large service industry accounts for 55% of the country's Gross Domestic Product (GDP)while the industrial and agricultural sector contribute 28% and 17% respectively. Agriculture isthe predominant occupation in India, accounting for about 52% of employment. The servicesector makes up a further 34%, and industrial sector around 14%.The labor force totals half a billion workers. Major agricultural products include rice, wheat, oilseed, cotton, jute, tea,sugarcane,potatoes, cattle,water buffalo, sheep, goats,poultry and fish. Major industries includetelecommunications, textiles, chemicals, food processing, steel, transportation equipment,

cement, mining, petroleum, machinery, information technology enabled services andpharmaceuticals.

India's per capita income (nominal) is $1,030, ranked 139th in the world, while its per capita(PPP) of US$2,940 is ranked 128th. Previously a closed economy, India's trade has grown fast.India currently accounts for 1.5% of World trade as of 2007 according to the WTO. According tothe World Trade Statistics of the WTO in 2006, India's total merchandise trade (counting exportsand imports) was valued at $294 billion in 2006 and India's services trade inclusive of export andimport was $143 billion. Thus, India's global economic engagement in 2006 covering bothmerchandise and services trade was of the order of $437 billion, up by a record 72% from a levelof $253 billion in 2004. India's trade has reached a still relatively moderate share 24% of GDP in

2006, up from 6% in 1985.

INDIAN GOLD INDUSTRY

India is the largest consumer of gold in the world to be followed by China and Japan. Thoughglobal consumption of gold witnessed a sharp fall in 2002 in last five year -- from 3770.1 tonnesin 1997 to 3067.4 tonnes in 2002 -- India maintained its lead with 575.7 tonnes against 688

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)http://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)http://en.wikipedia.org/wiki/Economyhttp://en.wikipedia.org/wiki/Free_markethttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Social_democratichttp://en.wikipedia.org/wiki/License_Rajhttp://en.wikipedia.org/wiki/Protectionismhttp://en.wikipedia.org/wiki/Corruption_in_Indiahttp://en.wikipedia.org/wiki/Hindu_rate_of_growthhttp://en.wikipedia.org/wiki/Economic_liberalisation_in_Indiahttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/Economic_development_in_Indiahttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(real)_growth_ratehttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(real)_growth_ratehttp://en.wikipedia.org/wiki/Agriculture_in_Indiahttp://en.wikipedia.org/wiki/Service_(economics)http://en.wikipedia.org/wiki/Industrial_sectorhttp://en.wikipedia.org/wiki/Labour_in_Indiahttp://en.wikipedia.org/wiki/Labour_in_Indiahttp://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Ricehttp://en.wikipedia.org/wiki/Wheathttp://en.wikipedia.org/wiki/Oilseedhttp://en.wikipedia.org/wiki/Cottonhttp://en.wikipedia.org/wiki/Jutehttp://en.wikipedia.org/wiki/Teahttp://en.wikipedia.org/wiki/Sugarcanehttp://en.wikipedia.org/wiki/Potatohttp://en.wikipedia.org/wiki/Cattlehttp://en.wikipedia.org/wiki/Water_buffalohttp://en.wikipedia.org/wiki/Sheephttp://en.wikipedia.org/wiki/Goatshttp://en.wikipedia.org/wiki/Poultryhttp://en.wikipedia.org/wiki/Fishhttp://en.wikipedia.org/wiki/Telecommunicationshttp://en.wikipedia.org/wiki/Textileshttp://en.wikipedia.org/wiki/Chemicalshttp://en.wikipedia.org/wiki/Food_processinghttp://en.wikipedia.org/wiki/Steelhttp://en.wikipedia.org/wiki/Cementhttp://en.wikipedia.org/wiki/Mininghttp://en.wikipedia.org/wiki/Pharmaceuticalhttp://en.wikipedia.org/wiki/Per_capita_incomehttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capitahttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capitahttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)http://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)http://en.wikipedia.org/wiki/Economyhttp://en.wikipedia.org/wiki/Free_markethttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Social_democratichttp://en.wikipedia.org/wiki/License_Rajhttp://en.wikipedia.org/wiki/Protectionismhttp://en.wikipedia.org/wiki/Corruption_in_Indiahttp://en.wikipedia.org/wiki/Hindu_rate_of_growthhttp://en.wikipedia.org/wiki/Economic_liberalisation_in_Indiahttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/Economic_development_in_Indiahttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(real)_growth_ratehttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(real)_growth_ratehttp://en.wikipedia.org/wiki/Agriculture_in_Indiahttp://en.wikipedia.org/wiki/Service_(economics)http://en.wikipedia.org/wiki/Industrial_sectorhttp://en.wikipedia.org/wiki/Labour_in_Indiahttp://en.wikipedia.org/wiki/Labour_in_Indiahttp://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Ricehttp://en.wikipedia.org/wiki/Wheathttp://en.wikipedia.org/wiki/Oilseedhttp://en.wikipedia.org/wiki/Cottonhttp://en.wikipedia.org/wiki/Jutehttp://en.wikipedia.org/wiki/Teahttp://en.wikipedia.org/wiki/Sugarcanehttp://en.wikipedia.org/wiki/Potatohttp://en.wikipedia.org/wiki/Cattlehttp://en.wikipedia.org/wiki/Water_buffalohttp://en.wikipedia.org/wiki/Sheephttp://en.wikipedia.org/wiki/Goatshttp://en.wikipedia.org/wiki/Poultryhttp://en.wikipedia.org/wiki/Fishhttp://en.wikipedia.org/wiki/Telecommunicationshttp://en.wikipedia.org/wiki/Textileshttp://en.wikipedia.org/wiki/Chemicalshttp://en.wikipedia.org/wiki/Food_processinghttp://en.wikipedia.org/wiki/Steelhttp://en.wikipedia.org/wiki/Cementhttp://en.wikipedia.org/wiki/Mininghttp://en.wikipedia.org/wiki/Pharmaceuticalhttp://en.wikipedia.org/wiki/Per_capita_incomehttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capitahttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita

8/4/2019 Final 2003 Abha

23/25

tonnes in 1997 followed by China (202.3 tonnes) and Japan (141.5 tonnes). India is emerging asworld's largest trading centre of this commodity with a target of US$ 16 bn set for 2010.India consumes nearly 800 tonnes of Gold Bullion, accounting for about 20% of world goldconsumption. Nearly 600 tonnes of it goes into making jewelry. The Indian jewelry market,estimated to be worth $13.5 billion in fiscal 2006-07, accounts for 8.3% of world jewelry sales

by value according to a study by KPMG.The industry is well supported by Government policies and the banking sector. Around 50 banksprovide nearly $3 billion credit to the Indian diamond industry. In addition, India is expected tohave a diamond bourse soon. Indian jewelry demand rose by 70% during the first half of 2007compared with the same period in 2006. Jewelry demand increased to 387 tonnes from 227tonnes during the period.Gold consumption, meanwhile, grew by 70% to 528 tonnes during the first six months of 2007,compared to 307 tonnes in the same period last year. India's total gold consumption in 2006 including Gold Investment demand was slightly over 700 tonnes. While jewelry accounted foraround 73% of gold demand, investments in the forms of coins and bars accounted for the rest.

The product basket of the country:

Gold jewellery

THE ENTRY MODE CHOSEN IS FRANCHISING :

Franchising is the practice of using another firm's successfulbusiness model.

Franchising has been around in one form or another since man first began to engage in

commercial enterprise. It has evolved from a simple grant of a right or privilege in the middle

ages to the sophisticated business format franchise concept of today.

http://gold.bullionvault.com/How/GoldBullionhttp://gold.bullionvault.com/How/GoldInvestmenthttp://en.wikipedia.org/wiki/Business_modelhttp://gold.bullionvault.com/How/GoldBullionhttp://gold.bullionvault.com/How/GoldInvestmenthttp://en.wikipedia.org/wiki/Business_model

8/4/2019 Final 2003 Abha

24/25

India is the largest consumer of gold in the world to be followed by China and Japan. India isemerging as world's largest trading centre of this commodity with a target of US$ 16 bn set for2010.

A detailed plan of the entry strategies undertaken with evidence :

Under Franchising :

Fanchising's primary benefit is risk minimization. Starting a new business is risky. Moststudies show that over 90 percent fail within three years. The primary reason that the failurerate is so high is because the owners have to go through the learning curve of operating thatspecific type business. Franchising reduces that curve substantially.

Another reason to buy a franchise is that a franchise investment can be thoroughly researched

before any significant expenditures are made. Existing franchisees offer a wealth ofinformation about the business so that new franchisees can try the business on before theybuy to make sure it's a good fit for them.

Franchisers sell a defined, proven business format or method of operation, offering a productor service that has sold successfully. An independent business is based on both an untriedidea and operation.

The experience of the franchiser's management team increases the potential for success. Thisexperience is often conveyed through formal instruction and on-the-job training.

Franchisees can often buy lower-cost goods and supplies through the franchiser, resultingfrom the group purchasing power of all the franchises.

Established franchisers offer national or regional name recognition. While this may not be

true with a new franchiser, the benefit of starting with one is the potential to grow as its business and name recognition grow.

Franchising provides a uniform system of operation, so that consumers receive uniformquality, efficiently and cost-effectively. A uniform system brings with it the advantages ofmass purchasing power, brand identification, and customer loyalty, capitalizing on theproven format.

A franchiser also provides management assistance, including accounting procedures,personnel and facility management. An individual with experience in these areas may not befamiliar with how to apply them in a new business. The franchiser helps a franchiseeovercome this lack of experience.

Franchisors help franchisees develop a business plan. Many elements of the plan are standardoperating procedures established by the franchisor. The most difficult part of a new businessis its start-up, since even experienced managers lack the knowledge to set up a new business.

One of the biggest benefits to franchising is marketing. The franchiser can prepare and payfor the development of professional advertising campaigns. Regional or national marketingdone by the franchiser benefits all franchisees. In addition, the franchiser can provide adviceabout how to develop effective marketing programs for a local area through a cooperativemarketing fund, to which the franchisees contribute a percentage of their gross income.

8/4/2019 Final 2003 Abha

25/25

It's possible to receive assistance in financing a new franchise through the franchiser, whooften makes arrangements with a lending institution to lend money to a franchisee. Thefranchisee must still accept responsibility for the loan, but the franchiser's involvementusually increases the likelihood that a loan will be approved.

A franchiser also provides training for the franchisee. This is especially important if the

concept is complex. The best training combines classroom or one-on-one training at thefranchiser's facility with field training at the franchisee's place of business.

Example : D'damas

One of the predominant forces in the jewellery retail franchise sector, D'damas offers Indians avast array of world class gold, diamonds and other jewels.