Introduction
In this line, P&G has an understanding of the religiosity issues, gender dynamics, cultural differences, and the lack of stability of the currencies (Roy, 2020). For instance, P&G, an American consumer product company, can be successful in India when it moves into a sustainability direction. As such, the MPI notes that it is becoming a more competitive environment during the increasing markets and expanding social classes. It assesses various modes of entry in exporting, strategic partnerships, and its subsidiaries. Moreover, P&G should consider culture as it expands into the Indian market through the use of its powerful global powers. Nevertheless, where there is no market expansion, a comprehensive risk analysis has to be done and fit for the global environment.
Company Selection
Investment opportunities in India seem to be viable considering important factors, including the religious beliefs of Indians, gender concerns, the movements associated with changes in currency exchange rates between the Indian rupee and the US dollar, and significant festivals and holidays that matter in India. The complexity of the Indian market, given that P&G works in the consumer goods sector and has different products, should not be an issue for P&G as a company. Other than those stated above, the firm’s commitment to ethical business conduct and corporate sustainability further endears customers.
Country Attractiveness
To understand whether there is a potential Indian market for investment, the eight indicators constitute the Market Potential Index (Paul & Mas, 2020). The size of a big country like India makes it among the biggest consumer markets across the world. The second is typically regarding market expansion rate or speed, which measures the pace of the economy’s development. Market intensity, which determines how competitive the market is, is referred to as the third dimension. Fourthly, market consumption capacity is within the fourth dimension. In the fifth dimension of commercial infrastructure, they evaluate the state of their infrastructure. The sixth dimension that foreign investments take into account includes economic freedom coupled with country risk. The seventh dimension, known as ‘Market Receptivity,’ measures how well the market welcomes foreign enterprises into it. The last dimension relates to testing different cultures’ business compatibility. Therefore, India’s cultural diversity necessitates that foreign companies adapt their products and approaches in accordance with local preferences. Therefore, knowing how India ranks on the market potential index would shed light on whether India’s trading environment is supportive.
Entry modes
It is crucial to properly assess different entry modes and their correlation with India’s conditions when evaluating P&G’s entry into the Indian market. The first viable approach is exporting it directly or through existing global channels like Unilever’s export of personal care products. Control can be exercised through direct exporting, while it is better to conduct limited testing of markets, initially opting for indirect exporting. They have relatively low risk and investments, yet they could lower P&G’s control over brand standards, so it might be considered part of P&G’s strategy for some of their product lines and with trusted local partners.
Working in a partnership with a foreign company provides good chances through FDI for jointly creating new markets. Nevertheless, it comes with the requirement of dealing with various management styles. On the contrary, fully-owned subsidiaries require significant investments while guaranteeing complete control and a deep understanding of the local market. It is essential to embark on a phased process from exporting and gradually embracing alliances in line with an overall market entry strategy. In selecting an entry mode, P&G’s long-term goals, risk level, and dedication to India’s unpredictable nature are to be considered.
Final Recommendations
P&G should focus on expanding the firm into India as it presents a considerable consumer market supported by steady economic growth (Chapman, 2018). This two-step process starts with direct exporting to test the market, after which there is licensing and later franchise for various products. In order to achieve maximum control, a wholly-owned subsidiary should be set up using FDI as the long-term objective. For a successful performance in the Indian market, P&G needs flexible approaches to altering a product for the particular context, leveraging cultural events, and focusing on sustainability.
References
Chapman, G. (2018). The Geopolitics of South Asia: From Early Empires to India, Pakistan and Bangladesh: From Early Empires to India, Pakistan and Bangladesh. Routledge. https://doi.org/10.4324/9781315185637
Paul, J., & Mas, E. (2020). Toward a 7-P framework for international marketing. Journal of Strategic Marketing, 28(8), 681-701. https://doi.org/10.1080/0965254X.2019.1569111
Roy, D. (2020). Formulation of Hofstede’s global cultural dimension index (HGCDI): A cross-country study. Journal of Transnational Management, 25(3), 195-224. https://doi.org/10.1080/15475778.2020.1765715
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