Heidelberg Cement – India

Introduction
HeidelbergCement
HeidelbergCement is the largest multinational building materials brand. It is founded in 1874 in
Heidelberg, Germany, by Johann Philipp Schiferdecker. The company started its operation with
Portland cement. According to Wikipedia, it is the number one producer of construction
aggregates, number two producer of cement, and number three in ready-mixed concrete and
asphalt worldwide.
Market
HeidelbergCement is operating in Western and Southern Europe, Northern and Eastern Europe-
Central Asia, North America, Asia-Pacific, and Africa-Eastern Mediterranean Basin. Lehigh
Cement, SA Cimenteries, Scancem, Indocement, Hanson are the successful acquisition of
HeidelburgCement, which drives them to become the leader of building material
companies[ CITATION Com \l 1033 ].
Market Analysis
1. Globalization of Market and Globalization of Production
HeidelbergCement has an advantage in both the globalization of the market and the globalization
of production. HeidelbergCement is now operating in 60 different countries in the world. So, it is
already taking advantage of merging into the global marketplace. The company is not a German
company anymore. It is a global company now. HeidelbergCement’s products are more natural
to sell, as they already established the same preference in the world. The globalization of
production helps to implement this. HeidelbergCement separates its market into several
geographical locations, which drives them sourcing factors of production in an economical way.
2. Political Environment
The Indian government system is the world’s most extensive democracy system. It runs by a
federal government. In that view, India faces different political issues. The government imposed
a strong taxation system, and the union government sets most of them. Indian political system
influence privatization. It also encourages free trade and business through a variety of programs [
CITATION PES14 \l 1033 ].

On the other hand, India has a robust economic relationship with the United States. It focuses
mainly on foreign direct investment with the United States [ CITATION Pri \l 1033 ]. India has
membership in various international organizations. United Nations, G-20, ASEAN, International
Monetary Fund, World Bank, World Trade Organization, and Indian Ocean Rim Association.
3. Economic Environment
India has $10.5 trillion in GDP. Per capita income is $7874. Interestingly, India has $42.3 billion
in foreign direct investment. HeidelbergCement can grab the opportunity of foreign direct
investment facilities of the Indian government. Recently India started promoting new businesses
within its border so it would be easier to start a business, deal with construction permits, get
electricity, obtain credit, pay taxes, and trade across borders. Considering economic freedom, in
the Asia Pacific region, India ranked 28th among 42 countries. The negative side is that the
overall score is lower than the regional and world averages. However, the score is better than in
previous years. Almost 43.1% of Indian GDP comes from exports and imports of goods and
services. So, it is another opportunity to start production there. Moreover, the average tariff rate
is 5.8%, which makes India an investment-friendly economy.
4. Legal Environment
Indian legal system is similar to the English Legal system. India was ruled by the British
government for more than 200 years, and still, they are following the old rules [ CITATION Ezy \l
1033 ]. Common law is established in India. The current legal system laid down by the Indian
Constitution (supreme law of the country) and the judicial system. Foreign direct investment is
allowed in every sector. International companies can enter the Indian market through the
Automatic route or Government route. Administrative ministry deals with the government route
for foreign direct investment. Lottery business, chit fund, trading in transferable development
rights, cigar manufacturing, gambling, Real Estate Business are the prohibited sectors for foreign
direct investment in India[ CITATION Ezy \l 1033 ].HeidelbergCement can efficiently operate the
Indian market as the constitution follows the same regulations as Europe follows.
5. Cultural Environment
According to Hofstede’s cultural dimension, India scores 77 for Power distance [ CITATION ncr \l
1033 ]. India has a high level of inequality regards to power and wealth in society. Here,
managers expect juniors and team members to be obedient all the time. Team leader expected to
be dominated and authoritarian personality. The majority of Asian countries have high power
distance. HeidelbergCement is already operating in multiple Asian countries. So, it is an
advantage for them.
In individualism versus collectivism, India’s culture scores 48. India is an entirely collective
society. It is expected to make decisions based on the whole family’s choice. Individuals can not
make decisions on their own. Someone’s action ultimately depends on family, neighbors,
workgroups, and other social variables. In the organization, hiring and promotion decisions are
based on relationships[ CITATION ncr \l 1033 ]. Asian countries like India are almost collectivist,
which is an advantage for HeidelbergCement.
Masculinity versus Femininity scores 56 which indicates that masculinity is preferable in
India[ CITATION ncr \l 1033 ] . Indian people are a success and achievement-oriented. For this
reason, India displays success and power or masculinity. For a new business, the employee
should be achievement-oriented to gain success. India can help HeidelbergCement in that case.
The uncertainty avoidance rate is low (40) in India[ CITATION ncr \l 1033 ]. Indian people love
changes. They embrace uncertainty. It is expected to face an uncertain situation in India because
they love risk-taking seek challenges instead of avoiding it. Management level employees can
help HeidelbergCement to take risks in the competitive market to gain high profit.
In long term orientation, India scores 61, which means they are future-oriented [ CITATION ncr \l
1033 ]. It is good for doing business. A successful business requires the implication of a long-
term goal. HeidelbergCement can take advantage of the future-oriented culture, which helps the
company to operate for a more extended period.
Conclusion
The Indian market is overall attractive. First of all, the geographical location and raw materials
are available in India, which makes HeidelbergCement get the optimum advantage of operation
there. Indian economy opens the door for foreign direct investment, and the political and legal
support is in favor of the foreign companies as India is connected with top tier international
organizations. The substantial opportunity of the globalization of market and production and
business-friendly culture makes HeidelbergCement chose the Indian market.

References
Companies History. (n.d.). HeidelbergCement. Retrieved from Companies History:
https://www.companieshistory.com/heidelbergcement/
Ezy Laws. (n.d.). Doing Business in India. Retrieved from Ezy Laws: http://ezylaws.com/doing-business-
in-india/
Incredible India Cayla. (n.d.). Hofstede's Cultural Dimensions - India. Retrieved from Incredible India
Cayla: https://incredible-india-cayla.weebly.com/hofstedes-cultural-dimensions.html
PESTLEanalysis Contributor. (2014, October 1). PESTLE Analysis of India in five Steps. Retrieved from
Pestle Analysis: https://pestleanalysis.com/pestle-analysis-india/
Privacy Shield. (n.d.). India - Political Environment. Retrieved from Privacy Shield:
https://www.privacyshield.gov/article?id=India-Political-Environment