1st Answer

Introduction: Business environment refers to all the internal and external factors
that affect how the company works including employees, customers, and
management, supply and demand and business regulations. An instance of a part of
a business environment is how well customers' expectations are met.

Concept; Location-specific advantage refers to alternative countries and regions

that carry out value-added activities in different locations. Location advantage
includes abundant and skilled labour, special tax discounts or tariffs, low wage
workers with high productivity, and availability of cheap raw materials. A large
number of companies conduct business on the basis of location specific advantages.
Firms choose to augment or exploit their ownership advantages by engaging in
global operations through foreign direct investment. Factor endowments also play a
critical role in this process. In the present globalized era, firms take decisions
regarding their entry into international markets by understanding the factor
endowment of a particular market. Location specific advantages can be divided into
four groups:

(a) Availability of natural resources: Some countries have naturally endowed

resources. For example, Gulf countries are blessed with huge oil and
petroleum reserves that attract oil and gas companies across the globe to
make investments in the oil and gas sector. In a similar manner, countries that
have coastal connectivity are able to sell their products easily in international
markets.

(b) Economic environment advantages: Economic advantage countries have

cheap and well-trained workforces, advanced technology, semi-finished
goods, economies of centralization, low tariff barriers and congenial business
environment. This helps the firms select a specific location for their
investment.
(c) Cultural and social advantages: Countries that share identical value
systems, ethnic groups, language, preference and general attitude gain
preference from an investment viewpoint. Firms consider cultural and social
advantages while deciding upon a preferred location.
(d) Political and legal environment: Countries that provide political stability,
sustainable economy, improved legal and institutional environment, attractive
FDI policies and minimum regulations are likely to attract lucrative global
investment. Political and legal environment are also vital from the investment
viewpoint in international markets.

Business environment in India

India is a multi-faceted country with high potential for unprecedented economic
growth. The corporate visits and my personal observations of local culture in India
and community offer a great insight on the different facets of the Indian economy and
business environment. The main takeaway from the corporate and cultural visits is
that India has a strong potential for economic growth but has many obstacles to
overcome if it wants to catch up fast with the global economy.
Some of these
Hard-to-overcome-obstacles are the following: Socio-economic class division,
pollution/sustainable energy, intellectual property rights, and language barriers. The
corporations and business sector has reflected an emerging economy booming with
start-up companies, innovations, domestic/international relations, and potential for
technological growth. However, the country still has to overcome several socio-
economic and environmental obstacles like poverty, corruption, copyright laws,
pollution, and traffic issues.

India's gross domestic product (GDP) is anticipated to reach US$ 6 trillion by FY27
and achieve upper-middle income status on the back of digitisation, globalisation,
favourable demographics, and reforms. India's revenue receipts are estimated to
touch Rs 28-30 trillion (US$ 385-412 billion) by 2019, due to Indian government’s
measure to build a strong infrastructure and reforms like demonetisation and Goods
and Services Tax (GST). India also focuses on renewable sources to generate
energy. It plans to achieve 40 per cent of its energy from non-fossil sources by 2030
which is currently 30 per cent and also have plans to increase its renewable energy
capacity from to 175 GW by 2022.

India is estimated to be the third largest consumer economy as its consumption can
triple to US$ 4 trillion by 2025, due to shift in consumer behaviour and expenditure
pattern, according to a Boston Consulting Group (BCG) report; and is estimated to
beat USA to become the second largest economy in terms of purchasing power
parity (PPP) by the year 2040, according to reports suggested by Price water house
Coopers.

Business environment in Brazil

Brazil is looked at as a developing nation, and that is often interpreted as a precursor
for ‘high growth levels’. It means that several aspects of the economy remain
underdeveloped. The reform of the laws and regulations for opening and running a
business in Brazil has not been able to adapt at the rapid pace with which the
economy has grown, presenting many hurdles to overseas corporations. Credit risks
in Brazil are growing, and insolvencies are forecasted to increase as financial
conditions in the market tighten. These in turn have a knock-on effect to payment
behaviour trends and the way businesses protect themselves against risks. Brazil’s
diverse and varied economy means that many companies moving into the country
choose to do so in partnership with local companies. This makes the transition less
disruptive for consumers, as well as giving the company essential insight on the local
economy. Brazil’s economy ranks fifth in the world with a GDP of more than $1.8
trillion. The country presents significant export and partnership opportunities for U.S.
businesses, but many challenges as well.

Conclusion: Analysing the business environment of India and Brazil; we can

conclude that that Brazil is a developing country but there are many challenges to
start any business there with several formalities. However, India is developing fast
and offers best environment for the new corporations. Government has launched
make in India campaign and encouraged many small and new businesses to set up
here. In this scenario, Dassault should set up its new venture in India only.
2nd Answer

Introduction: Entry modes vary in different companies depending upon a variety of

factors as following
:
● Size of the firm and resources– Usually, large companies have more
financial resources and manpower skill to handle international operations in a
competitively better manner.

● Market potential – In markets with considerable size and growth

opportunities, a company enters by way of utilizing more resources and
investment.

● Objectives – Depending on the company’s objectives in the target market,

the firm decides upon the entry mode.

● Commitment– The internationalising company may decide on its commitment

to the market and select the most appropriate entry mode.

● Control – In case of internationalising, company is willing to take greater

control over its international operations, it may choose the investment entry
mode.

● Risk-taking ability – Depending upon the company’s willingness to take risks

in the market, a firm may decide upon the entry mode as exports involve
minimum risks while wholly owned subsidiaries involve the greatest level of
risks.

Concept:
1. Wholly owned subsidiary
To get maximum control over its foreign business operations, a company can
expand by owning the entire operation, called as a wholly owned subsidiary. The FDI
regulations of the country must permit 100% investment in the particular industry
where the company looks to expand. A company retains its technological know-how
and need not share with another partner as in the case of entry modes discussed
earlier. Though wholly owned subsidiaries offers complete control to the parent
company, higher costs and risks of full ownership are involved. The benefits of
wholly owned subsidiaries are:
● Complete ownership gives the firm better market contact and higher control.
● Offers quick access to the local markets when responding to the needs and
wants of consumers of that market.
● As there are no partner companies to worry about, decisions become faster.
● Through a wholly owned subsidiary, a local company can gain access to the
parent’s brands.

2. Franchising
Franchising is not a business in itself but a way of conducting business without
changing your USP and standardizing the products, processes and services. It is a
marketing concept to introduce an innovative method of manufacturing and
distributing goods and services. Franchising is a business relationship in which the
franchisor (the owner of the business providing the product or service) gives an
independent entrepreneur (the franchisee) the legal right to manufacture, market and
distribute the franchisor’s goods or services using the brand name and technique for
an agreed period of time. The International Franchise Association defines franchising
as a continuing relationship in which the franchisor provides a licensed privilege to
do business and also assists the franchisee in organizing training, merchandising
and management.
Franchising is popular as it allows a greater degree of control over the marketing
efforts in the foreign country. In franchising, product lines and customer services are
standardized which are two important features from a marketing perspective though
cultural differences might require adaptation. Franchising offer people, looking at
self-employment, a greater chance of success instead of starting their own
businesses, but many people are unaware and sceptical as it also involves huge
investment in terms of royalty fees. A franchisor’s on-going commitment to his
franchisees is to provide support. A support and training programme must be
Well-defined before joining a given franchise group. It is likely to cover areas such as
staff issues, marketing and system compliance.

International strategic alliances

A strategic alliance is formed when two or more businesses join together for a fixed
period of time agreed during the time of alliance. It is an inter-firm co-operative
relationship to enhance the effectiveness of the competitive strategies of the
participating firms by the trading of mutually beneficial resources such as advance
technologies and manpower skills. The businesses, usually, are not in direct
competition, but have related products or services that are directed towards the
same target audience. Strategic alliances enable businesses to gain competitive
advantage by providing access to a partner's resources which include markets,
technologies, capital and people. Teaming up with others adds complementary
resources and capabilities, enabling participants to grow and expand more quickly
and efficiently. The major benefits of strategic alliances are:
● Strategic alliance gives an opportunity for the internationalizing enterprise to
expand overseas by using of capabilities and competencies from its partner.

● Entering a new market overseas can be complicated and expensive. The

enterprise may face several obstacles such as entrenched competition,
hostile government regulations and additional operating complexity.

● Enterprises use of the strategic arrangement to reduce their individual

company’s financial risk.

● A company may be faced with political challenges and strict regulations

imposed by a foreign government when bringing a product into another
country. In such circumstances, a strategic alliance will enable enterprises to
penetrate the local markets of the targeted country.

● A strategic alliance helps to combine individual strengths of the

internationalizing firm and its foreign partner and enabling it to compete more
effectively. .
Conclusion; To conclude, I have mentioned various entry strategies and company
can choose franchising strategy as good entry option. The company can put together
a package of the ‘successful’ ingredients after it becomes successful in their home
market and then franchise this package to overseas investors. The Franchise holder
may help out by providing training and marketing the services or product. McDonalds
is a popular example of a Franchising option for expanding in international markets.
As the company will be competing with big brand i.e. Starbucks, it should move
ahead with franchising option and try to open few outlets initially in major cities and
expand itself accordingly.

.
3rd Answer:

3 a)

Introduction;
Various pricing strategies are as follows:
● Market penetration strategy – Under this strategy, exporters offer a very low
introductory price to speed up their sales, thereby widening the market base.
It aims at capturing a sizeable share in the market, especially if the quality of
the product is proved with its wide acceptance.
● Probe pricing strategy – Fixing a low price for a product may have an
adverse effect on the image of the firm and of the product. It may raise doubts
in the minds of the buyers about the quality of the product if it is lower than the
price of competitors or if it is reduced subsequently later.
● Follow the leader pricing strategy – In a competitive world market or where
adequate market information is not available, it may be useful to follow the
leader in the market. The exporters can compare their products with that of
the leader and then fix the prices accordingly.
● Skimming pricing strategy – Under this strategy, a very high introductory
price is fixed to skim the cream of the demand at the very outset. This policy
is generally introduced when there is no competition in the market.
● Differential trade margins strategy – Variation in trade margins may be
adopted by the exporter as the pricing strategy in export market. This strategy
allows various types of discounts on the list price. Quantity discounts
encourage in procuring huge orders.
● Premium pricing strategy – Premium pricing is a marketing tool to set higher
prices for certain goods in the hope that the higher price will give the
impression the good is of a higher quality. Premium pricing may be applied to
similar goods, where there is a slight increase in quality.
● Value based pricing - Value based pricing is the practice of setting the price
of a product or service at its perceived value to the customer. This approach
tends to result in very high prices and correspondingly high profits for those
companies that can persuade their customers to agree to it. It does not take
into account the cost of the product or service, nor existing market prices.
Value based pricing is usually applied to very specialized services.

Concept: Lemon tree is doing well in India and now entering in European market, as
per my view, it may go for value based pricing and believe on providing value based
service rather than earning more money. Value-based pricing is a strategy of setting
prices primarily based on a consumer's perceived value of a product or service.
Value pricing is customer-focused pricing, meaning companies base their pricing on
how much the customer believes a product is worth.

(3b)
Introduction: Positioning is the process by which a company establishes an image
for its product in the minds of customers relative to the image of the products offered
by competitors. Global positioning is far more complicated than positioning in the
domestic market. The importance of product attributes may vary from market to
market. Opportunities for global positioning may also be constrained by the different
degrees of sophistication in the local marketing infrastructure such as electronic
media. Well-entrenched local brands can also cause problems by creating
competitive pressures that demand a different positioning. However, the
opportunities for global positioning are expanding due to the convergence of tastes.
Global communication media and frequent travel across countries are creating a
degree of homogeneity in consumer tastes across the world. In general, global
positioning is recommended
(1) when similar customer segments exist across countries,
(2) similar means of reaching such segments are available,
(3) the product is evaluated in a similar way by customers across the world and
(4) competitive forces are comparable.

Concept: In general, a company must avoid four major positioning errors.

● Under positioning: Some companies discover that buyers have only a vague
idea of the brand. The brand is seen as just another entry in a crowded
marketplace.
● Over-positioning: Buyers may have too narrow image of the brand.
● Confused Positioning: Buyers might have a confused image of the brand
resulting from the company’s too many claims or changing the brand’s
positioning too frequently.
● Doubtful Positioning: Buyers may find it hard to believe the brand claims in
view of the product’s features, price or manufacturer.

Various positioning strategies are as follows:

● Attribute Positioning: A company positions itself on an attribute such as size
or number of years in existence. For example, Sunfeast positions its snacky
brand as bigger lighter and crisper.
● Benefit Positioning: The product is positioned as the leader in a certain
benefit.
● Use or Application Positioning: Positioning the product as best for some
use and application. For Example, Kenstar positioned its product as
unexpectedly cold.
● User Positioning: Positioning the product as best for some user group.
● Competitor Positioning: The product claims to be better in some way than a
particular competitor.
● Product Category Positioning: The product is positioned as the leader in a
certain product category.
● Quality Positioning: The product is positioned as offering the best value.

Conclusion: The company can follow Quality Positioning to position their product in
international market. Under this positioning, Consumers want to know your products
and services are reliable, durable, and worth the cost. I have mentioned in the first
part that Hotel should follow value based pricing, so to go ahead with the same line,
quality positioning would be appropriate in this case.