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India Is Not an Easy Market to Understand and Operate in.

Decent Essays

1. “India is not an easy market to understand and operate in.” Why is the Indian market untenable for Multinational Companies, yet at the same time attractive to global businesses? Discuss.

It is true that India is not an easy market to understand and operate in. MNCs have realized this the hard way as their expectations have remained unfulfilled, and many have either suffered reverses or have had to wrap up their operations. Unable to figure out the reason for their failure, they have chosen to blame the market as erratic and fickle in its behavior.
But this is not true as there is more to India than meets the eye. This country came under the global spotlight only in 1991 when it embraced economic reforms and allowed FDI. Before that …show more content…

Therefore, Coca-Cola and Pepsi ran up loses and were unable to understand why the Indians have not taken to cola like fish to water as seems to be the case with Americans. They are, however, unable to understand that cola will never replace water which has a pride of place over all other beverages and is viewed as an elixir of life in India, not to mention the fact that the Indians are aware that cola is just carbonated water which rots ones teeth and that there is a move to ban it in the US schools–-information that the Indians have acquired from the satellite TV boom.
Similarly, when Nestle introduced iced tea in India, they were confident of their strategy which rested on the research data which pointed out that this was a country of the highest number of tea drinkers in the world and would embrace iced tea in the natural course of things.
What their strategy missed out on and what their research did not inform them was the fact that Indians like their tea hot––even on a hot summer day! They would reach out for a cold drink if they wanted something cold but it was simply alien to their conditioning and upbringing to be able to relate with the concept of having tea any other way than hot.
Hence, the global strategies don’t suit India as the nature of emerging market economies is fundamentally different from

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