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Answer 1: Factors supporting India as a high potential market: Administrative reforms: Delicensing of Industrial investments. Reduction of import duties. Deregulation of industries reserved for public sectors. Encouragement to FDI (Foreign Direct Investment). Exchange rate reforms such as rupee convertibility. Capital market reforms including free pricing of equity and access to off shore equity and debt. Tax reforms. Economic trends: Stable GDP growth since last four years from 0.8 in 1991-92 to 6.3 in 1994-95 (Table 3). Industry growth grows to 8 times in last four years (Table 3). Manufacturing increasing to 9 times in last four years (Table 3).
Political environment: States increasingly competing for foreign investments with each other. Investment climate: New policy for increase in FDI to 51%. Liberal plant location policies, special incentives for plants setup in export processing zones.
Penetration of TVs in India The Color Television, black and white television penetration in rural India has doubled in last 5 years.
This would give Samsung the following advantages: The local market knowledge of the partner would come in handy as the existing companies have better information regarding the market and customer behavior. The existing local service network and logistics would give Samsung to understand the Indian market along with providing the much needed service advantage.