Answer to the question 02.

“The benefits of doing business in country are a function of the size of the market
(population), its present wealth (purchasing power), and its future growth prospects.”

In order to doing business in India or China, I have to do analysis some factors or

functions, which are very important to find out whether it’s a good decision or bad
decision to doing business and is it possible to taking benefit by doing business over
there or not. Those functions are:

 Market Size
 Present wealth or purchasing power
 Future Growth of that country

Let’s say I am a manager of a multinational company in Bangladesh and I want to

expand my business in India and China. Here firstly I have do analysis whether those
countries are following demographic regimes and market based economic policy or not
and is there have strong property right on not, because a country’s economy growth
depends on this items. And the benefits cost and risk of doing business on that
country depends on countries political, economical and legal system.

Now in India and China, if I want to get the benefit of doing business, then I have to
check some functions which I have already stated above;

Market Size: How much big the market size or the population in India & china. As we
know the market size of India and china is huge compare to the Bangladesh. Now, if I
select a country with a huge market size, then my profit will be high, I will go for a huge
production by which I can take the advantages of economic of scale and I can earn a
huge amount of profit from that country. Therefore, In India & China combindly having
36% (approximate) population of total world population.

Present wealth or purchasing power: Present wealth or purchasing power in an

another issue that I have to do analysis of the host country, because If I am wanting to
sell luxury product there, and if they don’t have the capability of purchasing that, then I

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might face difficulties to doing business there. In India & China, both are developing
country, and their purchasing power is better enough than any African country.

Future Growth of that country: In that points I have do analysis, the country that I have
been chosen for doing business is economically doing good or bad. Like how much
better their economy, how much efficient their resources, because if the country’s
economy is not doing well then my business will face difficulties over there. So I will
chooses those countries for my business which are economically developed or
developing like India and China.

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