RELATIVE CAR (COUNTRY ATTRACTIVESNESS SCORE) OF INDIA AND CHINA Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

RELATIVE CAR (COUNTRY ATTRACTIVESNESS SCORE) OF INDIA AND CHINA CASE SOLUTION

OVERVIEW – ECONOMICAL TRENDS IN INDIA:

India is the home to a diverse population belonging to a broad array of religious, cultural and ethnic background that present a lot of opportunities for rapidly expanding economic growth. A number of factors had led the changing dynamics of India as compared to previous years.
The factors are rising consumer confidence about the future economy, the rising use of Internet and digital technology that is taking a diverse set of functions to cater to niche and mass markets across India, especially e-commerce that is driving the consumer markets and likely to brighten the prospects of fast increasing convenience-oriented Indian population that is transitioning from low-income to high-end lifestyle.

Consumer spending has increased by 5% in 4Q 2014, propped up by GDP growth rate of 7.5%. Efficiency and automation leading to increased productivity will also boost Indian profits by minimization and control on cost, however there are fewer incentives for automation due to tempting low-cost incurred in hiring labor and their low wage rate.

The increasing volatility in the developed countries, due to some reasons has led people to invest in India, bolstered by 100% FDI and relatively more ease of doing business in India.
A wave of privatization and openness of the economy in the early 1990s has paved the way for incremental investment in India. Among one of the few reasons for increased volatility is the variance in the input costs caused by the exchange rate risk which is due to the fluctuations of the Indian currency against foreign currency especially the US dollar.The relaxation of federal policies causing easy entry of businesses and approval of 51% of foreign direct investment in multi-brand and 100% in single-brand retail are some of the growth drivers for the consumer markets.

INDUSTRY ANALYSIS OF INDIA:

The consumer durables sector witnessed growth of 10.8% over the time period of 2005-15 and it is expected to grow by 14.7% to reach $125 billion. Overall, India is the largest consumer market (growth rate wise) registering a CAGR of 21.97%, world’s third largest television industry with a growth rate of 16.6%.

The recent implementation of National Electronics policy is also favorable for India.FMCG sector has registered growth of 11% over the last decade and it is set to increase by CAGR of 14.7% to reach$110.4 billion during 2015-2020 with rural FMCG set to expand at a rate of 17.7% to reach $100 billion during the same tract. The largest segment comprises of foods, which is accounting for 43% of the entire market, personal care (22%) and fabric care (12%) with respect to the market share.Snack food industry is also exhibiting bright prospects with CAGR of 8.8% (IBEF, 2015).

The urban population prospects are also bright as in that the consumer products consumed there are 75% to 25% in rural areas. In India, there exists a hybrid of urban and rural population called ‘rurbans’ who per se rural inhabitants but had developed urban taste and they are willing and able to afford for certain items that are typically owned by urban populace. These breed can be witnessed in towns where the population is below 50,000. 10,000 to 20,000 towns and people are entering in this category. In soaps and cleanser industry, since year 2010, the CAGR of India is not comparable to China however in 2015 it was more as compared toChina with a growth rate of 6.9%.
As compared to China, India has a CAGR of 10.4% in soaps, toiletries and other products since the brand loyalty is high and unlike the firms that are well entrenched in India, like Hindustan Unilever and Lakme, which exist China. In India, luxury items can be advantageous but even wealthy people are price sensitive and retain a preference for traditional apparel like Saris...............

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