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Why should we care about China or India

Why should we care about China or India. or other developing economies?. Here are some reasons:. Of the world’s 6+ billion people, 36% live in India (1 billion) and China (1.2 billion)

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Why should we care about China or India

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  1. Why should we care about China or India or other developing economies?

  2. Here are some reasons: • Of the world’s 6+ billion people, 36% live in India (1 billion) and China (1.2 billion) • These nations have rapidly growing economies (8.5% in China in 2003 and 6.7% in India vs. 2–3% in advanced economies) • They are more open to foreign business than in the past • Both are regularizing business activities, improving transparency • Growth in advanced economies is stable or declining • Many of the companies you study see great potential in China and India or are there already • Rapid industrialization threatens the natural environment we all share

  3. A comparative look at business opportunities • What percentage of people • Own an automobile • Have running hot water • Have electricity • Own a color television • Own a refrigerator • Have a telephone • Own a cat • U.S. China India

  4. What do these data suggest for • Future for business in general? • Challenges for management? • Understanding how this information applies to firms you will study?

  5. Opportunities for Business in India and China • U.S. and Western European firms like Unilever and Colgate-Palmolive have been a dominant force in India • All Nippon Airways resumed service after a four year break • Mitsubishi Chemical Corp lead an Indian/Japanese jv in West Bengal to produce a chemical for textile polyester and food packaging • Suzuki Motors has a joint govt venture with Maruti Udyog Ltd that dominates the car market (since 1983) • YKK Corp wholly owned Indian subsidiary in zipper manufacturing • Honda is investing $240 million to assemble cars locally Itochu Corp will develop Marriott hotels and offer financial services to car buyers

  6. A Comparative Look at China and India as Competitors • China’s world-wide exports grew 125% from 2000–4 • Toys and games (about 80% of world production) • Power generation equipment • Furniture • Textiles • Footwear • India exports • Pharmaceuticals • Business services • Firms from China and India increasingly invest in other nations (FDI)

  7. Challenges for management in emerging, fast growth economies • Growing competition in India and China with firms from all over the world • Chinese and Indian firms are using knowledge gained on home turf to become globally competitive • Causing all to question “traditional” assumptions: • the Indian consumer is a frugal consumer, does not like to waste and cannot conceive of throwing away a product (prefers to reuse) • More joint ventures that cross cultures • Growing range of processes for buying, selling, e.g., using video vans as well as television to market products

  8. The self-interest answer • Look at how/if your firms are positioned in China/India • Connect your examples to one or more of the six environments we are studying • An example: toothpaste industry now developing rivalries in China—included are Chinese firms who have learned from Western firms and the former are also going global

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