Republic of India is an Asian country which is situated in south of Asia and it comes within the 7th largest country in the world and also it has a population of 1.2 billion people. The capital city of India is New Delhi however the biggest and most known city in India is known as Mumbai and it is the biggest city in India. My chosen business Marks and Spencer’s is a UK based business and it’s moving to India I will look into the problems they may face in India.
I will be looking into these factors M&S may face and they as follows:
* Poor infrastructure
Inflation – Is the prices of different goods or service may vary either increase or decrease over time in the economy.
Most businesses in the UK and India, by looking closely at the inflation rate as it could have a big effect on the business and because if the inflation rate increases there could be less sales as the prices of the goods will be high and the customers will spend less on goods and services as the prices are much high than before. Looking at the current inflation rate in India the rate has reached to 6.5% resulting in many Indian banks such as ICCI bank raising their interest rates this will this could have an affect on as inflation rate goes high this will result on the customers spending less on supermarkets on such as M&S and this could only mean that the business is not making enough money or breaking even on monthly bases to afford many employees and also pay the bills and taxes so they need to consider on who they could over come this by maybe having to look into how many staff they hire or even starting the business on different city in India which is economically stable and there many wealthy people who are welling to spend on foreign bases supermarkets.
M&S in the UK will be affected by the inflation as they will have to lower the prices to get more customers buying their products and to attract It customers to come to the store. The inflation rate in the UK is 3.6% this is making a lot of people worried and must of the companies and business within the UK are not making much profit and they make enough just to pay their spending’s such as the wages, bills and the tax. If the inflation rate takes drops and decreases it will be beneficial to M&S because they could drop their good prices but at the same still make profit so therefore they will not be worried as much.
Poor infrastructure –
A company such as M&S moving their business to aboard to India there will be a lot of challenges they could face a lot of problem such as bad transport, in India the roads not as smooth and reliable as it is in the UK therefore for M&S they need to consider the fact that there will be poor infrastructure. However India are trying to compete with china and so therefore they have made it a priority to improve the infrastructure and has pledged to build 14km of new roads every day according to the leading intentional monetary fund. India is looking to attract more business to come and base their business within India and M&S is an English company and if it goes aboard it will have a positive effect to the Indian economy as they would be a very popular and more people will purchases their goods from M&S and that means more money is put into the Indian economy. On the other hand looking at the infrastructure in England, the infrastructure in the UK is rather very good as they have excellent road condition, much organised train and tube transport so therefore M&S has to adapt to the conditions in India more specific in Mumbai as it’s the heart of Indian
India corruption rate is 95 compare to the UK which is 16 which is a massive difference and the business such as M&S need to adopt. Therefore when M&S go to India they will have to pay more money to get small things done it will not be like the UK as in the UK if you like something to be done you do it the legal way. The corruption level is high in India due to the fact that the vast majority of India’s rural population continues to be poor 25% of India’s population still live below the poverty line which is under £1 per day.
According to Most of the communities in India (such as Bengali), are succumbed in ‘Culture of Poverty'(a theory introduced by an American anthropologist Oscar Lewis), irrespective of class or economic strata, lives in pavement or apartment. Nobody is at all ashamed of the deep-rooted corruption, decaying general quality of life, worst Politico-administrative system, weak mother language, continuous absorption of common space (mental as well as physical, both). On the other hand looking at the corruption within the UK is much less in fact not much corruption as there are many laws and law enforcement that prevents the level of corruption within the UK
In India the unemployment rate is 4.1% which is not bad compared to the UK which is 8.0%. M&S moving to India will provide a lot of jobs and this will have a big positive effect on M&S as they will not pay less wages to the staff compared to the UK because in the UK there is law of how much you must pay ( a minimum wage ) £6.08 – the main rate for workers aged 21 and over £4.98 – the 18-20 rate £3.68 – the 16-17 rate for workers above school leaving age but under 18 on the other hand there is no such a thing as minimum wage so therefore M&S can pay much less wages than they would pay in the UK. The population of India is 1.22 billion compared to the UK which is 63.6 million. M&S need to consider in have a lot of branches as the demand will be much higher than what it would be in the UK this is due to the fact seeing that India is a much bigger country in terms of population. The UK law states that at work nobody should be treated differently or unfairly, if they are then legislation exists to protect them. The law makes it a duty of responsible employers to protect their workers from prejudice and discrimination.
* Gender – being male or female
* Sexual orientation
* Religious belief
* Marital status – being married or single
* Race or ethnic background
* Being transgender
But on the other hand there are no such laws which can protect employees from being a victim of such disorder from the above list. In India they do not except homosexuals as they believe it is wrong and this would be one of the biggest problem M&S may face in terms of losing employees through sexist comments. They need to consider all the above points as none of the rules and regulation would be the same as it would be within the UK. There are no such laws that could protect staff from being a victim of sexual abuse or being or gender differences as the population of India is around much higher than the UK.
Lack of appropriate skills:
Outsourcing activities using local labour may be cheaper for foreign firms this basically means that it will be so much cheaper for M&S to base their stores in India in many ways such as employee pay as it will be much cheaper and also in 2007 Lloyds TSB pulled its call centre from India due to the fact that it proved costly failure due to the fact the high number of irate customer preferred speaking to staff with local knowledge therefore M&S could have a positive effect by employee staff from the local region with the right knowledge. Social:
In India the people has a habit of buying fresh food and they try to keep away from frozen food and vegetables, however on the other hand in the UK M&S has a very large freezers that keeps the frozen food aside from the fresh food and also most of the customers within the UK prefer to buy frozen food and as they don’t have enough time to cook fresh food at home due to everyone is busy at work, on the other hand in India its known that families like to set in a table as a family and the women intend to cook at home for their husband as they would come home from work and they prefer to have fresh food rather then frozen so therefore M&S moving to India would need to consider having lots of fresh food but at the same time need to consider how much stock considering the climate is the complete opposite as it much hotter in India and fresh products may go out date sooner then it would in the UK.
Also M&S need to have two sections a smaller section for frozen food and a section for fresh food to over come the problem. The largest concentrations-about 47% of all Muslims in India, according to the 2001 census this could mean that nearly half of the population of India is Muslim religion and therefore they have some religious restriction when it comes to certain types of food such as not allowed eating pork and no alcohol. In the UK the support markets such as M&S have all sort of meat including pork so therefore when M&S moving to India they need to consider having pork for the none Muslims and also they need to consider and respect the Muslim majorities and have a small section which will sell halal meat so they could compete with different supermarkets which has been in the business and experience for many years.