International business
Introduction
This essay discusses the emerging market for MNC in India by analyzing the opportunities and threats for the organization. This paper selected Infosys which is India based company (MNC) has successfully developed itself in the international emerging market by using innovative strategies and technologies. In addition, globalization also played a significant role in developing an opportunities and threat for the organization in today’s competitive and emerging market (Dunning, 2014). In a similar manner, this paper will also highlight how Infosys identified opportunities and threats in emerging global market and for that different factors and forces will be considered for analyzing both external and industrial opportunities and threats. Further, this essay will also help an international business manager to contrast the difference in interplay between home and host country for establishing a market. Thus, different macro factors will help the international business manager to understand the home and host countries significantly (Stromquist & Monkman, 2014).
Infosys is Indian Multinational Corporation which provides business services like related to consulting services, information technology services and outsourcing services. Presently, Vishal Sikka is CEO and MD of Infosys who joined Infosys in the year 2014 (Infosys, 2017). The company also has its subsidiaries and along with that company provides business information technology services and also provides independent validation and infrastructure development and business process management, etc. The Company’s is divided into various segments such as Financial Services and Insurance (FSI), Energy & utilities, Communication and Services (ECS), Manufacturing and Hi-tech (MFG & Hi-TECH), Life Sciences and Healthcare (LSH) and Retail Consumer packaged goods and Logistics (RCL) (Kapoor & Sandhu, 2010). In addition to it, the Infosys Company operates its business in different countries like North America, Europe, India and Rest of the World.
The main product of Infosys is Finacle which is a banking solution as it caters different retail banking solutions and also working on different modules in different corporate sectors (Infosys, 2017). In all over the world, Infosys is a most admired company (MNC) of India, and for software professional, it is a dream company to work or contribute for benefits of organizations as well as for themselves.
Analyzing opportunities and threats which globalization created for decision makers
Globalization is a process by which businesses or organizations develop their international market by operating their business at an international level. The opportunities and threats for an organization are developed by globalization as it influences the decisions of decision maker directly or indirectly. So, for proper analyzing the opportunities and threats, different factors are analyzed like political factor, legal factor, social factor, and economic factor and so on. These factors can help an international business manager to understand the challenges and threat which Infosys faced in the Indian market (Stone & Deadrick, 2015). Political factor is a factor which includes government policy structure of India and also helps in determining that political structure of the country is stable in the economy. The government owned companies, and public sector companies always focus on giving more IT projects to the top IT firms.
On the other hand, an economic factor also helps in determining the positive aspects of economic demand on the domestic market by growing and developing the business by 20%. The economic factor involves a decline in prices of real estates, drop in rental expenditure due to a recession and lay off (Boström, et al., 2015). These economic factors also affected the Infosys performance to a large extent. In India, communication industry is rapidly increasing in comparison to other countries by implementing new technology in order to improve the network to some extent. In addition to it, the technological environment of India is effective as a country is focusing on developing new technology in IT sector. While studying about the economic and political factor, social factor is also considered for understanding the social environment of India.
The social environment of India is very different in terms of culture, values and working age group population (Payne & Askeland, 2016). The social environment is constructive in nature as there is IT education hub which trains the employees to gain and become IT professional and develop new technology for development or growth. Before globalization, India was not performing well in IT sector as there was no support for any essential technique which country can use for developing their IT communication network. However, globalization offers extensive opportunities to organizations in terms of the worldwide development of their business like Infosys also got an opportunity to develop and offer its business services globally. In other words, globalization provided opportunities to the firms to a large extent like free entry and exit to a new market, establishing a business in a new country or developing new substitute of an existing product.
In contrast to above study, there is various other challenges and threat which globalization developed for decision maker regarding IT technology adoption and implementation. The major threat which is observed in India for IT firms is that there is always the threat of substitute in the market as globalization develops free entry and exit policy in which any firm can enter or exit the India market easily. In respect to this Meyer, et al., (2011) stated that globalization had created an impact on business forces which include the key drivers like bargaining power of both buyers and suppliers and threat of new entrants, intensive rivalry and many more. In India, competitive pressure has increased on firms to a large extent due to globalization.
Naturally, globalization has provided countries to easily access to the new market as it developed restriction to trade and non-trade barriers by developed countries. The major threat which globalization developed in an economy is increasing inequalities which influenced directly on economic and social environment policies in developing countries like India. According to Schuler, et al., (2011), multinational corporation (MNC) has the advantage to obtain the cheap labor from developing countries, and this affects their social environment and workers are provided with the effective working condition. Due to globalization, there is a rise in inequality observed in India by MNC as worker s is not provided with good social environment to work. In context to it, globalization also developed problems for MNC like Infosys in terms of managing their workforce to a large extent as globalization developed more opportunities in developing countries due to which workforce have large opportunity to perform their skill and knowledge. On the other hand, there is always threat for the MNC that there professionals and experts have an ease to switch from one place to another in order to achieve best in the field of professional skill and experts (Deresky, 2017). Due to globalization, MNC are facing problem in developing countries as there are shortage of experienced and well-professional and qualified staff who run local institutions. This threat is because of globalization as IT professional are moving towards the developed countries for learning more and using their kill and knowledge in best and efficient manner.
In addition to it, globalization also developed threat for the organization like MNC as new firm are entering to Indian market or other emerging market where they can target with new products and raise competition in the market. For instance, Infosys also faced a threat from its other competitive IT firms who can target the Indian market by their new substitute product as globalization welcomed new firms to enter or invest in Indian market. Thus, each country like India develops its own policy and decision in order to maintain its position in the market by minimizing the challenges of globalization (Singh et al., 2011). By analyzing the opportunities and threats, it is identified that both opportunities and threats of the organization affects the company like Infosys in both positive and negative manner.
Main lessons international business manager can learn about interplay between home and host countries
The International business manager can learn a new lesson from the above analysis as well as by comparing the difference in the emerging market of home and host countries. The international business manager can also determine that the difference in the culture, a structure of the organization which is established in a different international market (Sorrells, 2015). For understanding the international market culture and environment, macro factors like social environment, political environment, economic environment and technological environment is used by international business manager for determining the interplay of both host and home countries. From the above analysis, international business manager learned that home country and host country role in achieving a success and leading position in the market. Under this study in depth understanding is done related to linkage between home and host countries by comparing the challenges and opportunities which developing and developed countries are facing due to globalization (Stromquist & Monkman, 2014).
The international business manager can learn from the above analysis part is that Infosys’s performing well in the home country before the globalization as there is a stability in the political structure. At the same time, manager can also learn that with the positive economic factors, company able to perform their best (Lu et al., 2014). Likewise, Infosys in the home country like India able to contribute high because of easily available of labor at cheap cost and proper availability of the raw materials. But with the implementing of globalization, there are various factors that emerge which affect the Infosys both in a positive or negative manner. The positive factors are that Infosys’s get the opportunity with globalization to explore the new market and to expand its business operations in the new market (Beamish, 2013).
On the other side, the biggest threat that faced the Infosys is the high competition, low bargaining of suppliers, increasing rivalry in the both home or host country (Infosys, 2017). On the other side, the international business manager can learn that the biggest threat that the IT companies is facing is the threat of substation as India has flexible policy in the entry or exist system of the companies. But at the same time, there are various opportunities that occur for the international IT companies in the home country (Buckley et al., 2012). These are availability of large number of workforces and qualified staff as well as low cost investment. Such increases the competition in the home market. In a similar manner, Infosys’s also faced threats in the home market because of the increasing substituent products after the implementation of globalization. In addition to this, the manager can also learned about the culture factor that also plays significant role for the companies (Hitt et al., 2016). Likewise, before globalization Infosys develop its own technology and system as per the culture of the India. But with the globalization, the Infosys get the opportunity to avail the new technology and get the chances to work in new culture. These factors indicate the managers that both threats and opportunities have positive as well as negative influences on the business operations. By studying these factors, the international business manager could learn about the several threats and opportunities which company like Infosys faced before and after globalization (Schmiele, 2012).
For determining the market trend of both host and home country, international business manager is required to develop an strategy which help in understanding the market and also help in determining the market trend of both home and host country for MNC. The foreign direct investment is one factor which helps in contrasting the emerging market for both home and host country (Kling, et al., 2014). The foreign direct investment develops the market value and increases market trend for home country as direct investment creates influence on the large production and demand of the product.
While studying interplay of the home and host country emerging market, it is identified that home county has more influencing power in comparison to host country because culture and structure of organization affects the market situation and also help in achieving a organizational success efficiently. However, the implication of globalization over emerging market is also high because this help international business manger to use the international business strategy to meet the emerging market demand simultaneously (Buckley & Casson, 2016). In other words, international business manager also learned that standardization and uniformity also develops interconnection between home and host countries to a large extent by developing and considering the international policies and trade system efficiently.
From the above discussion, it can be concluded that Infosys is successfully managing its services by using effective strategies and technology. In addition, globalization provides huge support to the company in achieving the leading position in the emerging market by providing the various opportunities to company, i.e., opportunity to enter a new market area or opportunity to achieve the organizational goals effectively. Moreover, MNC also faces threat from new substitute or new entrants which affects their business performance to a large extent. Through this, all opportunities and threats are analyzed with the help of different macro factors which help in understanding the actual market trend. At last, it can also be summarized that international business manager can easily develop its business in the international market by considering the differences in host and home country in order to achieve the success in emerging market.
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