Global & International Business Contexts in India Assignment

Global & International Business Contexts in India - Assignment Example The paper throws light on India, the land of potential because of its growing population therefore it is economically beneficial to evaluate its national market. Porter’s National Diamond framework allows country specific analysis so that a firm may decide to expand into a suited country. The four pillars of the model are factor conditions, demand conditions, related and supporting industries, firm structure, strategy and rivalry. Using these four factors PND model aims to evaluate national competitiveness and to study a firm’s ability to operate in a national market. It is therefore a very relevant tool for country specific analysis. Below each of the four factors of the model will be explained with respect to India. Factor conditions entail those factors in a country that can be of advantage to the firm. Basically all the conditions that a firm can exploit in an economy are included in factor conditions. India has an abundance of labor. Given the high population of th e country it can be safely assumed that the firm will not face any labor shortages. 42 percent of the population is living below the poverty line in India according World Bank. This points to the fact that labor is not only in abundance in the country but it is also very cheap. The labor force is both skilled and unskilled in the country so the firm can benefit a lot with regards to labor in their business. Another advantage of working in India is that there is not a language barrier like in China. Official language of India is Hindi but English is widely understood and used in the business (Kapur & Ramamurti, 2001). This is why the firm will find no language barrier to deal with. It is located near the Arabian Sea which will be beneficial when setting up business in the country. The country has a developed technological base with its software industry growing rapidly. This can also give the firms a huge boost when operating in India. Complicated technology will be at the disposal o f the firm in India. Demand Conditions The demand conditions factors in the local market conditions of a particular country. A strong and demanding domestic market can have a positive effect on technological growth and innovation in the market. The economy of India is mainly export oriented therefore international markets are also an important part of the country’s economy. Due to the sophistication of international markets, local industries have also developed in order to meet the demand of foreign buyers. This trend has brought many advantages to the local firms. They have enhanced their production and capabilities by innovating on a regular basis as a result of complex foreign markets. The effect of international markets has also impacted the local markets because they have also developed as a result. Domestic markets are now demanding higher quality of products and services. This is a sign