Course Code Course Name Section Code

BU1233-G6 International Market Entry IBM I-G6

Strategies

Type of Evaluation Percentage Weight of Total

Spring 2021 Assignment #1 Evaluation

15%

Course Instructor Due Date Total Marks

Syeda Rownak Afza June 10, 2021 /15

Group #

Student Name: Anjali Student ID #: 201905962

Student Name: Dilpreet Kaur Student ID #: 201906298

Student Name: Harmanpreet Kaur Student ID #: 201906026

Student Name: Mehak Sharma Student ID #: 201907343

Student Name: Ravneet Kaur Student ID #: 201906780

Student Name: Tarandeep Kaur Student ID #: 201907193

QUESTIONS

1 What are the main market entry barriers that Chateau Camargue faces in entering the

Indian wine market? (5 MARKS)

Ans. The number of barriers the Chateau Camargue will have to tackle are few in numbers because

once they will enter the Indian industry the growing demand for the product will automatically

increase their profit margin. However, as India has a different law system in its different states

therefore it is difficult to ensure an equivalent level of success in its all states. For instance, in

states like Gujrat, Lakshadweep, and in some eastern states the trade of alcoholic products such as

wine is exclusively prohibited.

1. Indian culture is the major factor behind less demand for wine in the Indian market because

being guided by some religious practice and traditions followed by the society people do

not consider it as an edible sort of product for them. Consequently, it is comparatively hard

to convince people to demand this product. Similarly, in the case of Arabian countries, its

demand is equal to none. However, some states like Maharashtra and Rajasthan have

experienced tremendous development in the beverages industry for international traders do

not witness cumbersome restrictions to enter the market.

2. Heavy import duties are another barrier to enter the Indian market for the wine industry

because including basic duties and federal and state taxes it can reach up to 260 percent for

wine. By the time when this industry spreads over other regions of India, the final tariff

can be reached to the level of 500%. The wine companies are seeking liberation in taxes

and duties imposed on it so that they could reduce the MRP to increase their product

demand by appealing that their goods and services are available at economical prices.
2 In your opinion, what would be the best market entry strategy for Chateau Camargue to

overcome their financial difficulties? Explain your reasoning. (5 MARKS)

In my opinion, Strategic alliance can be the best market entry strategy for Chateau Camargue to

overcome their financial difficulties. It is the best market strategy that provides many benefits at a

low cost. There are numerous things that could be achieved through entry strategy: co-marketing

alliances, gaining new clients, reduction of risks, gaining new resources, improving existing

resources, supplier alliances, etc. This way, profits would be maximized at lower operating costs.

If Chateau Camargue has chosen a strategic alliance then it not only share resources like

technical equipment, finances, etc. but also can share market strategies, market skills, management

skills too. This way, when one business collaborates with another then it gets financial assistance

as well as the knowledge of that firm which helps that business to touch heights of success and

overcome all the hurdles coming in its way.

3 Should Chateau Camargue consider a long-term foreign direct investment strategy in

India? Explain your reasoning. (5 MARKS)

There are several reasons why Chateau Camargue should consider investing in India as part of its

long-term global strategy:

Market size: India's consumer market is estimated to have around 300 million individuals. Its

large middle class provides an excellent market for foreign business and products.

Economic policy rationalization: The government has rationalized economic policies in to

make India a more attractive investment destination.

Expectations for greater international capital mobility liberalization: India is fully convertible

on the current account and is on its way to full convertibility on the capital account. This makes it

an extremely appealing investment destination.

Improvements in domestic financial institutions and banks: Over the last few years, India's

banking sector has improved substantially, with FIs and banks aiming for universal banking.

Cheap Labour: It can be beneficial to consider a long-term foreign direct investment strategy in

India as the labour is readily available at cheap wage rates.

Provision of finance and technology: Businesses who receive funds have access to the most up-

to-date finance instruments, technology, and operating methods from around the world.

Exchange Rate Stability: A consistent flow of FDI into a country equals a continual flow of

foreign exchange. This aids the country's Central Bank in maintaining a healthy foreign

exchange reserve. As a result, exchange rates remain constant.