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Analysis of the opportunities for a MNC to expand its international operations on Chinese and Indian markets

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  1. Pest analysis
    1. Political and legal environment
    2. Economical environment
    3. Social environment
    4. Technological environment
  2. Differences between China and India
  3. The choice

With the biggest two populations of the world, China (1.3 billion inhabitants) and India (1.1 billion inhabitants) became two major participants in the global economy. With the late evolution of their populations, China and India have evolved as the two most important emerging markets and they represent a decisive stake for any MNC looking for geographic expansion in order to expand its international operations. We will try to evaluate the opportunities and the threats, the advantages and the disadvantages of both the markets in order to determine which market is worth entering. To carefully study these two giants, there are a lot of different aspects to take into consideration for any MNC. The following points will enable a MNC to determine the major market opportunities to implement a sustainable growth strategy.

[...] The Chinese principle of equal access to education and social progress is rather well established, even if the growing gap between rich city and poor peasants is a problem. Concerning the religion, a lot of Chinese people are atheist but the major religion is Buddhism and there is a minority of Christians. In India Hinduism is largely the most important religion (around but there are also a lot of Muslims. The most important social and cultural aspect in China is the strong communist power which is difficult to imagine for a Western person (no individual or press freedom, collective spirit). [...]

[...] The solution for a company which wants to extend its international operations on new markets is to contact Export Assistance Centers such as the ?Missions Economiques? which will be able to inform you about all the necessary points: Services to locate and evaluate overseas buyers and representatives International trade opportunities abroad Foreign markets for French products and services Foreign economic statistics Export documentation requirements U.S. export licensing and foreign nation import requirements Export trade financing options International trade exhibitions Export seminars and conferences Regarding the legal environment, the company has to take into consideration all the following points: The company must obtain an import license in order to import the goods on the Chinese or Indian Territory. [...]

[...] So a majority focused on the national market (which is largely big enough), that's why the Chinese market is very competitive and difficult to successfully enter for a Western brand. In 2006, the Foreign Direct Investments in India reached billion and Exports represent 12% of the GDP which was about $880 billion in 2006. Until the 90's it was difficult to set up a company in this country because of the official dogma which controlled the economy and the companies. [...]

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