STRATEGIC BUSINESS PLAN

Market Entry into South India

2012

NGM Team 1 Shannon Rushe James Dellinger Patrick Greene Stephanie McGreehan

TABLE OF CONTENTS
Page

Executive Summary................................................................3 Section

1. 2. 3. 4. 5. 6. 7. 8. 9. Strategic Focus............................................................................ 4 Regional Analysis........................................................................6 Market Analysis.......................................................................... 8 Products.................................................................................... 16 Marketing.................................................................................. 20 Strategy................................................................................25 Recommended Strategy.............................................................27 Risk Factors and Regulatory Compliance..................................30 Plan Improvement.....................................................................33

Appendices..............................................................................34 Bibliography............................................................................54

EXECUTIVE SUMMARY
There is a great business opportunity for First Touch Technology (FTT) to extend its unique desk

designs into other regions. India has a large market, a growing middle class with substantial purchasing power and a massive amount of existing and developing academic institutions. It has a long established legal and accounting system, an independent judiciary, a free and vibrant press, and a strong tradition of entrepreneurship. The use of English is widespread in business and commerce. Indian engineers, scientists, technicians, managers and skilled personnel are widely regarded as among the best in the world. Procedures are being simplified and streamlined to help global companies like FTT to do business in India. Real Estate in India shows every sign of emerging as one of the fastest growing sectors, second only to agriculture in terms of employment generation. This Market Entry Strategy outlines a marketing analysis based on regional and product assessments. A number of strategies are considered and the marketing plan recommends entering the market independently with assistance from Enterprise Ireland, who has an office in New Delhi. The risk factors and regulatory compliance are also considered.

SECTION ONE STRATEGIC FOCUS

The Business
Joe Griffin is Head of First Touch Technology (FTT). The company was registered in 2000, but the business name was not registered until 2005 (Companies Registration Office). FTT currently is situated in two locations: Meath, Ireland and Lincoln, UK. FTT were recently part of the BETT show in London 2012 with Hewlett Packard. They have worked with clients across a range of industries including government and universities. In 2008 they made enquiries to Enterprise Ireland about entering the India market but this was not progressed further.

The Aim of this Plan

First Touch Technology wants to assess to attractiveness and potential of the market in South India.

Our Mission
First Touch Technology is dedicated to transforming the office environment by providing solutions driven by the application of our core values. Clients range from large corporations, including government departments, and schools to the home office user; each is provided with a product tailored to their needs. At the centre of out product range is the e-space space management system, the solution for creating

office spaces that are more productive, cost effective and healthier. FTT provides solutions to enable cost saving, space saving, and a healthier working environment.

Core Organisational Competencies

Unique e-space desk designs, which are patent and design protected. FTT personnel can allow you to re-use your existing furniture and retrofit e-space designs to fit around your current space; refurbish your current workspace with new worktops or design an entirely new office space for you.

Organisational Values
Core values: innovation through design, user focused and environmentally friendly.

SECTION TWO
REGIONAL ANALYSIS
(See Appendix 2.0 for detailed analysis by region) Geography Kerala, Karnataka, Tamil Nadu and Andhra Pradesh are the four regions, which make up the whole of Southern India. Some parts of all these regions make up the southern coastline. Each region is made up a number of districts and all displaying a diverse geology, which includes vast plains, desserts and numerous mountain views. The line created by the Narmada River and Mahanadi River is the traditional boundary between northern and southern India (South India Tours.com). The three major rivers within South India are the Kaveri, the Godavari and the Krishna, are located along the Bay of Bengal. With these brings ports, which enable imports and exports through cargo and thus distribution made easier. Population The approximated population of South India is 233million people. With a population as big as this there are a vast amount of religious, cultural and ethic outlooks. The main religions followed are Hinduism, Buddhism, Jainism and Sikhism. 60% of the population lives in permanent housing. Life expectancy is from the age of 64-68 years of age. India's high population growth results in increasingly impoverished and sub-standard conditions for growing segments of the Indian population. (About.com/Geography) Education The education system throughout Southern India has reached new heights in recent times with Government initiatives, public private partnerships. (Digital Learning.in, 2009) As Karnataka is one of the main regions for IT development the skills and expertise which students acquire benefits the economy further. Teaming up with IBM for certain initiatives this is a real area of opportunity for the population of South India and further contributing to the growing economy. Infrastructure Infrastructure within Southern India is adequate they have a selection of airports, which see international airlines avail off, a rail system, which connects most major towns and cities throughout. There are also a number of ports, which again enable the ease of export and imports

through the use of cargo ships. Political Structure The regions are made up of different constituencies. They all adhere to rules and regulations of the National Government. India's independent judicial system began under the British, and its concepts and procedures resemble those of Anglo-Saxon countries. (Global Edge) Internationally India is held with high stance, due to its size population and growth prospects, foreign direct investment here has a lot of potential. Economic Structure Despite the global downturn India has had growth yet in recent times it has seen a slight reduction in their economic growth rate. The expected annual growth is 9%. Although Southern India has quite a rich economy, the north of the Country is the poorest part with a high percentage living off less than US$2 per day. This highlights the huge discrepancies within India and the reason why social class is often the topic of some political agendas. Corruption, rising fuel and food cost, and inequality can be witnessed within this economy, yet over all they are still quite productive.

SECTION THREE
MARKET ANALYSIS
Market Size & Attractiveness Cavusgil et al.s (2004) assessment of the attractiveness and potential of markets ranked India 21st out of 88 countries (Appendix 1.0), ahead of EU countries Portugal and Italy and other growing developing markets such as Brazil and Russia, highlighting the increased appeal for foreign investment there. Although India is ranked 42nd in terms of Risk, it is also favorably ranked in terms of Market Growth and is the highest ranking of the developing nations to be listed. Furniture Market India The Italian Trade Commissions Report (2009) states that Indias furniture industry is growing (currently 25-30% per annum and set to rise) due to the large and increasing middle class (population 400m) whose purchasing power is growing also. Indias furniture sector makes a marginal contribution of 0.5% to Indias GDP. It is worth US$8bn and employs 30,000 people. Although it is a growing market, it is highly unorganized, with just 15% classified as organised (mainly imports and a few Indian manufacturers who are mostly into the office furniture segment). The office furniture segment boasts of better companies from the point of view of better size as well as technological innovations. Malaysia External Trade Development Corporation (Matrade) announced earlier this year that Indian furniture market is highly promising for the Malaysian furniture segment apart from the expanding middle class, a boom in the construction industry and growing demand for office space in major cities offer good market potential for Malaysian furniture industry players.

Internal Marketing Strategy Analysis Value Chain

External Marketing Strategy Analysis PESTEL Analysis Political: Transparency International ranked India at 95 out of 182 countries (with 1 being the least corrupt) (www.guardian.co.uk, 2011). Doing business in India is still fraught with difficulties as it is such a large country with governance coming from a central government and there are uniquely different state and local governments and political power players in each state. Economic: A 2011 report from the Economist Intelligence Unit said that India's real GDP grew by 7.7% year on year in April-June, the slowest pace of expansion in six quarters, and down marginally from growth of 7.8% in January-March. Although growth has dropped slightly, it is still growing and so, is still a highly attractive market. Socio-Cultural: India's population is estimated at more than 1.1 billion and is growing at 1.55% a year. It has the world's 12th largest economy, large numbers of well-educated people skilled in the English language to become a major exporter of software services and software workers, but more than half of the population depends on agriculture for its livelihood (GlobalEdge Report).

Technological: There are 39 million Internet users in India and this figure is growing in line with increased access to broadband. India is now ranked as the seventh-largest global market for social networking. The total Indian social networking audience has grown by 43% in the past year, more than tripling the rate of growth of the total Internet audience in India (Euromonitor Report, 2010). Educational: Southern Indias educational capacity is growing, with existing campuses expanding and new universities being developed to cater for the growing number of students there (Lewin T., 2012). With 150+ universities and growing, there is massive potential for FTT to maximise on the need for modern desk design. Legal: A recent EconomyWatch (2010) analysis states that legislation on various ways of setting up business and on intellectual property rights exists as well as a lot of advantages for foreign companies to establish business alone or with partners in India. Indian government is continuously taking steps to minimize entry-exit barriers for foreign companies and government is facing pressure to liberalise the duty structure. The e-space range of fittings is patent protected, but the regions that are covered by this patent are not mentioned. FTT should ensure that products and logos are patent protected in India before entering the market. FTT have used the trademark symbol alongside their logo on their site but it is unclear whether they have trademarked their logo or name, and they should also ensure these are protected in India also.

10

PORTERS FIVE FORCES Suppliers First Touch Technologies are not heavily reliant on suppliers; the most valued asset is the design capability of the team and the e-space designs that they have patented. The materials needed to build can be sourced from any country, many different suppliers: timber, glass, handles, locks. Buyers Educational: There are numerous universities and schools in South India. Corporate/Office: There are numerous multinational companies with offices in South India. Domestic: Indias rapidly growing middle class are yielding increasing buying power New Entrants L3p recently launched the D3sk a casemod which hides away cables and ... computer parts into a sleek, thin desk, attached to the wall (Fish, 2011). This high level of design would appeal to domestic users, and is expensive, but shows the direction desk design is moving towards.

11

Substitutes In terms of smart design, there are many companies offering improved space management and working environment. One such company is Dornob. Their corner standing computer stand would be ideal for the classroom or office, and the 3D touch screen computer and desk design shows how working at a desk is changing rapidly.

12

Competition First Touch Technologies believe that they have competitive advantage over other current desk designs in the market. They are dismissive of the benefits of other desks, however, and the ergonomic benefits of other desks. There are quite a few competitors for office furniture in Southern India, both domestic and foreign companies such as Dubai-based Al Reyami (see Competition section below).

13

SWOT Analysis Strengths: 1. Increasing demand in modern, clean, minimalist designs 2. Educated and skilled workforce 3. Good track record with clients in Ireland and England 4. Innovative design patented Weaknesses: 1. Lack of experience in market 2. Lack of awareness of our products Opportunities: 1. Big potential market in growing education and corporate market segments 2. Lower labour costs in outsourcing 3. Premium office furniture segment growing 4. Large market in southern India and potential to expand Threats: 1. Attractive market to other larger foreign organizations, such as the Al Reyami Group 2. Corruption common in Indian business and politics

Competition FTTs competition in Southern India is made up of existing Indian business and the many external companies that have entered the market, or are planning to. The massive international corporation, Tata - now designing and manufacturing office furniture (Agrwal 2009) and dedicated national office furniture manufacturers and retailers Durian, Godrej & Boyce and Featherlite have the ability and experience to reach top-level decision-makers and get top contracts and understand the unique obstacles to doing business in India. Other key competitors in the premium office furniture market are outlined below. Al Reyami Group

14

The Dubai-based Al Reyami Group announced in 2010 that they were going to set up three office furniture facilities in Southern India (The Economic Times, 2010). They are now well-established. Al Reyami Office Furnishings & General Trading (ROF) is the flagship company of the Al Reyami Group, which consists of 27 companies with more than 5,000 employees, and offices in India and China, employing over 800 people. The Reyami team in India designs and installs quality office furnishings, operating from offices and showrooms in Bangalore, Chennai, Hyderabad, Madurai, Coimbatore, Kochi and Mumbai; planning to open in New Delhi soon also. JMLifeStyle Based in Cochin/Kochi, premium office and home interiors, South India. Dedicated team of creative designers and experienced work force. ERGOMAXX Corporate furniture solutions provider based in Chennai, Tamil Nadu, South India. In business for over two decades; manufactures furniture for open office systems, modular furniture, Aditoria, Classroom seating, Workstations, Chairs & tables, Complying with ISO standards. Ergomaxx has rich experience in delivering sophisticated seating solutions for a variety of industries- Software, BPO, Education, Retails, Public sector, Government, etc.

15

SECTION FOUR
PRODUCTS
Current & Near Future Products First Touch Technologys current products are developed adhering to the core value of: Innovation without Compromise, which epitomises the versatile design and layout of FTT products to date. Their current products would enhance every scenario within where it deemed suitable; From Classrooms to Conference calls, auditoriums to test centres. The Conference Room Examination Centre

All of FTTs products are highly versatile and adaptable to any position. This is a real unique selling point for the product in any country; the product can be adapted to the person or much case the countrys cultural behaviour patterns. FTT offer a variety of layouts to choose from:

16

They then offer multiple Desk option types

And finally a choice of positioning for the Monitor: Monitor Setup

Espace space management systems is at the centre of FTTs product range; the solution for creating office spaces that are more productive, cost effective and healthier is a niche in the market that they have acted upon effectively and now in order to go global they are looking at a market such as South India to outsource its manual labour. Competitive Advantage Competive advantage is derived from FTTs core values such as innovation through design, being user focused and of course environmentally aware. The versatility of the products to multiple enviroments is also appealing.

17

Benefits & Value New design: Neater, more productive work space. Ergonomically sound. Health & Safety Benefits: Natural Posture Correct Viewing Angle Correct Viewing Distance Health & Safety standards compliant Reduced dry-eye syndrome Allows correct and comfortable desk height Keyboard tray can be placed at correct height User benefits: Contemporary look and feel Increased comfort Reduced desktop clutter Confidentiality and privacy Touch-screen friendly Fully adjustable Can be mounted left-side, right-side or centrally Video-conferencing available Organizational Benefits: Reduced PC maintenance Multifunctional rooms and workstations

18

Increased productivity Standards Compliant Higher security Greater Occupancy Densities Save costs by retrofitting to existing desks Universal VESA compatible fitting Cable management made easy Environmental & Social considerations By setting up a presence in South India the usual social impacts on the region would be rise in employment, better standard of living. Social implications would include a healthier environment, better standard of living, less out with old, in with the new mentality Superior savings by FTT. They would be able to sell their products to region that is occupied by many world leaders in IT and car manufacturing. Regulations & Standards FTT are ISO certified in Ireland. The Indian Government sets Standard on Occupational Health & Safety (OH&S) management systems. It is called as the IS 18001:2000. At what stage is each product in its life cycle? FTTs range of products is currently at the growth stage of the product life cycle. They have introduced their products to the market in Ireland and England and they have yet to get more traction in those markets.

19

SECTION FIVE
MARKETING
Targeting Primary Target: Education The rapid expansion of universities and educational facilities in southern India offer the greatest opportunity. FTT already have a proven track record in providing smart desk design for universities and should be able to use their contacts to establish meetings with relevant people to try to sell their designs. Secondary Target: Corporate Southern India and its cities are also developing rapidly as commercial hubs, with a number of new international airports now opened in cities such as Kannur, and recently opened airports such as Thiruvananthapuram expanding. Office space is growing and FTT should be able to leverage their contacts and experience in education to get corporate contracts. Product benefits FTTs e-space designs can be implemented in any space; office, commercial space, boardroom, lecture hall. They offer a comfortable, clean and modern design and as a result, a more productive work environment. Product distribution FTT will need to utilise current staff to design and construct the desks. Local staff can be used to manufacture the parts needed to spec, unless FTT decide to import the parts: wood, handles, glass tops etc. Product promotion FTT already have established relationships with universities in Ireland and the UK and have a proven track record. These universities will have contact in some educational facilities in India and where possible, these relationships should be used. Meetings should be arranged to establish interest and perhaps get advice. A promotional plan should then be designed, perhaps focusing on advertising in educational and business magazines and trade magazines that specialize in furniture. There are a lot of benefits with advertising, which allow the publicity of your product or service. Benefits include, informing the consumer of your product and how it may be what they want to suit their values, lifestyle or within organisations. Advertising gives a better range of value and choice

20

to perspective customers (Value of Advertising.org, 2008). To ensure the business has a good footing within Southern India it is important that the company becomes known. For this to happen, various advertising channels must be explored to highlight FTT within the Market. The following are options, which FTT could consider within their marketing plan; they include online resources, Television, Newspapers and Radio. India is said to be one of the most creative countries when developing marketing ideas (India One Stop.com, 2009-2010). With regard to newspaper/magazine advertising there are a vast amount of options to chose from for example, The Times of India Bangalore Business Standard, Economic Times, Business India and Business World to name a few. The cost of this service can range from 1430- 3855 Indian Rupees across India yet one of the costliest is The Times of India Bangalore, which is 2485/sq cm colour (Release My Ad.com, 2010). The western channels influence a lot of the television within Southern India. Indian channels which probably would be the most effective to avail off would be Zee and Sony TV again the cost of these could be up on 350000 Indian Rupees for just a ten second slot. The cost of this could be a deterrent for companies to advertise using this source yet the benefit for FTT we believe would out weigh the cost as they need to become well known within the Southern Indian Market, so reaching people in their homes, business educational organisations is crucial. The final medium of advertising is social media. FTT already have a substantial website yet other resources they could avail off when conducting online advertising are for example; Ozone Media who deal with clients in diverse sectors, Komli/Pubmatic who are international publishers within the Indian audience and AdMagnet who deal with various actions such as media, campaign management, SEO and interactive marketing (Pluggd.in, 2008). All aspects of advertising should be looked at by FTT to choose the best fit for their business. Customer communication, interaction and feedback Client testimonials are a central part of FTTs offering. FTT will use the work that they have done previously to inspire confidence in the product and offer expectations of what deliverables can be achieved. Product support for the life of the product The e-space design can be updated and altered during the lifetime of the product. The clean design allows for expansion at any time of existing models. Product pricing and purchasing We have no information on pricing and will adapt pricing plan to market and materi

21

Market Entry Experience in India Clearly, any entry into a new market requires a certain degree of tailoring to its specific needs and conditions. But FTT must start to rethink their product range and test if it will offer daily improvements to businesses in India, cost structures should also be looked at along with distribution and management teams. Companies that successfully tap into the promising Indian market often ignore conventional wisdom, including the need for joint ventures. The reason why many multinationals have not experienced the success they have had in other regions is because they just replicated their product offerings to the market in India, however the products and price points that are competitive in India are often considerably different from those that work well in other countries. Below is a list of recommendations that FTT should explore when planning their market strategy in India. Adaptations: 1. Reach into the middle and lower-end segments or they may end up as niche high-end players, with insignificant revenues and profits. 2. Indian Consumers will pay a premium if the value of superior features and quality is seen too far outweigh their cost. 3. Develop completely new products to compete at target price points. 4. Localize their product offerings to meet Indian consumer preferences. 5. Re-engineer its supply chain

Examples of Companies that adapted to the Indian Market successfully Companies trying to break into the Indian market must understand the Indian consumer's expectations and price sensitivities. Electronics Industry: Appeal to the lower & middle class LG Electronics, for example, reengineered its TV product specifications in order to develop three offerings specifically for India, including a no-frills one to expand the market at the low end and a premium 21-inch flat TV for the middle segment. By keeping the price of the latter offering to within 10 percent of the price of TVs with conventional screens, LG persuaded many consumers to

22

buy it. These innovations have led the company to a top-three position in the country's consumer durable-goods and electronics market in a little over three years, with revenues of nearly a billion dollars in India. Retail Industry: Develop new Products Very often, however, companies need to develop completely new products to compete at target price points set by local competitors, as Hindustan Lever Limited (HLL), a part of the multinational Unilever, did with its low-priced detergent brand, Wheel. Responding to local competition, HLL lowered the active detergent content of its existing product, decreased the oil-to-water ratio, and then launched the new detergent at a 30 percent discount to the price points of the company's more traditional detergents. Today, Wheel accounts for 45 percent of HLL's detergent business in India and for 8 percent of total HLL sales. Automobile Industry: Localise their products In other cases, companies must significantly localize their product offerings to meet Indian consumer preferences. Because Indian consumers attach significant importance to lifetime ownership costs, Hyundai reduced the engine output of the to keep its fuel efficiency high, priced its spare parts reasonably, and made more than a dozen changes to the product specifications to suit Indian market conditions. In contrast, other global automakers entered the market with vehicles that had low gas mileage and high repair rates and after-sales service costs. We also recommend hiring an Indian CEO as part of local operations. Supply Chain Companies can bolster their profitability by reengineering their supply chain both Hyundai and LGE have built global-scale manufacturing facilities to capture economies, making India a global manufacturing hub that can serve other markets as the local market develops. Support for Business The following are resources that FTT or any other potential business could avail off when needing information and assistant when entering the Southern Indian market. India Business support.com

They offer open seminars, training packages, further information on culture manners and customs, information on sourcing, DUNYA Group

They are a support for business providing advice, training in intercultural management and

23

communications within the workplace. ucityindia.com

Fruticious offers a variety of services to ensure your first steps into India are well guided and on firm footing They set up office, company formation, human resources, sourcing, advertising etc. Help with supply chain. Enterprise Ireland

Enterprise Ireland have an office in New Delhi and offer services such as market research and can assist in setting up meetings etc. Being an Irish agency, they will also understand any cultural barriers that need to be overcome.

24

SECTION SIX
STRATEGY
A number of the most attractive market entry options for FTT are discussed below: Option 1: Strategic Alliance Gonsalez (2001) states that strategic alliances are suitable for any business type or industry, and are becoming more successful as the world becomes more networked; the principles are the same. Strategic alliances can allow for faster growth as organic growth may not be sufficient, and speed to market is crucial. Partnerships can also lessen the degree of risk, and allow for greater access to new markets. However, partnerships need a great deal of ongoing commitment and time in order to make them work, and it is crucial hat the organizations are properly aligned to begin with. FTT could try to establish a relationship with another company that possessed the same core values: innovation, design, and adaptability. Perhaps a furniture manufacturer that wanted to branch into or extend their reach of the office furniture segment. Option 2: Joint Venture A joint Venture is when two or more businesses joining together under a contractual agreement to conduct a specific business enterprise with both parties sharing profits and losses. The venture is for one specific project only, rather than for a continuing business relationship as in a strategic alliance (Small Business Notes.com). Joint Ventures can be structured in many ways it depends on the parties involved. With this option FTT would have to find a suitable company with which to enter a venture with. The agreement of operations would include such this as, shares, management structure, competition issues and warranties or indemnities. Relations between both parties, regarding legalities, divisions of power exist. These issues must be addressed (Lavelle Coleman Solicitors, 2009). For FTT if considering a joint venture then teaming up with a resident Indian manufacturing company would be the best option. This would carry huge advantages as they have the design and the manufacturer could then produce their designs. Availing of an indigenous company will bring ease of doing business as they obviously are already exposed to the culture and would have a vast amount of contacts.

25

Option 3: Go it Alone FTT are a small company with big potential. India is an unfamiliar market and it will be difficult to get to meet the right people. However, the potential and need for FTTs product is great, and there is a lot of assistance available. Enterprise Ireland has offices in New Delhi where is serves Irish companies in India, Sri Lanka and Nepal. They can assist in research and in preparing a customised programme of meetings when in India, the cost for setting up a full programme (along with other pre-mission market research on opportunities for your product/service) can be calculated based on FTTs individual requirements. Should their move into India not be successful, FTT can choose when they want to leave independently, without having any obligation to contracts with others.

26

SECTION SEVEN
RECOMMENDED STRATEGY
FTT should strongly consider entering the Indian market. The potential far outweighs the risk and we believe that FTT should go it alone, with a view to finding joint venture should a suitable opportunity arise. The recommended strategy is outlined below: Our financial office for the region subsidiary with be in Mauritius to take advantage of their stronger rule of law and ability to enforce international contracts, and the investment treaty with India that allows profits made in India to be treated at the Mauritian tax rate of 15% instead of the much higher Indian rate. Some have argued, that Mauritius is a tax haven; however, given the economic relationship between the Mauritian and Indian governments are very strong, this is not the equivalent of Bermuda and or the Cayman Islands based firms investing in the United States, but more like firms investing in Ireland to invest in greater Europe. Our operations and implementation and legal offices will be based in Bangalore, but our logistics office will be based in the port city of Chennai to handle any issues that may come about as our materials arrive at the port and are transported to their final destination. We plan to target South India because of the trends that have this particular region of India growing faster and attracting the young and upwardly mobile members of the new service sector economy. In order to support the dramatic growth in business process outsourcing (BPO) services along with the countless new office parks the south of India has seen the majority of new Universities being founded buy the national and state governments over the last 20 years. More are likely on the way and now American and European universities are attempting to set up campuses in Southern Indian states. As millions of new workers join the service sector and many are of a BPO, high tech, or software nature, millions of new office desks and other furniture will be needed. This is where FTT comes in. A vigorous pursuit of a suitable local joint venture partner should be attempted. Obviously our above office locations may change, if a partner is found. However, if one cannot be found, in an acceptable timeframe, FTT should go it alone in targeting this growing market for office furnishings.

27

Primary target: Education First we will target testing centers like for example those run by Pearson Vue India, (http://www.pearsonvueindia.com, 2012) and other testing companies running higher education and English language certification testing for those attempting graduate level education at home and abroad and the Universities they often operate out of or in conjunction with. We think our product is optimal for the testing environment and it shows its strengths over tradition desk for these highpressure situations where absolute confidence is desired in attesting to rigid academic honesty codes of conduct. Testing centers and companies are among the lowest hanging fruit. Next, we see our products selling well in academic settings looking to boast similar confidences in academic honesty, ergonomic, and quite modern. The number of Colleges and Universities in only Southern India to Target include: Andhra Pradesh - 42 Karnataka - 40 Tamil Nadu - 55 Kerala - 14 Pondicherry - 2

There are roughly 153 academic institutions of higher learning that we could persuade to possibly purchase our desks, as their campuses grow and develop, with more Indians pursuing higher education each year. We do not see this growth in new institutions of higher learning slowing, for example Hyderabad only got an Indian Institute of Technology (IIT) in 2008. Not to mention, the future new campuses are that coming from foreign Universities the likes of Georgia Tech and Virginia Tech and others (New York Times, 2012) (USA Today 2010). To round out of academic sector we would target private secondary schools, which numbers are growing, albeit much slower that the tertiary education system in our targeted southern Indian states. Next, we will be attacking the modern outsourcing campuses along with western multi-national organizations large new growing research and development campuses that spread from Bangalore to Chennai and Hyderabad. Our modern, ergonomic office furniture design would go with the image

28

being projected by Indias growing corporate economic might at home and abroad (New York Times, 2012). We will begin by targeting new companies first arriving in Southern India via trade fairs for Education and India-sourcing looking to set up new modern offices or expand into new consolidated campuses. In other words persuading customers when the are freshly thinking of their new office spaces corporate image projection instead of attempting to sell new office furniture to full office spaces humming at full speed. Secondary Target: Corporate Finally, we will target large growing publically listed state companies, local and state Development Corporations and local governments as the change and grow into new modernizing office buildings and get more image conscious, about projecting their part of the new Modern India Rising.

29

SECTION 8
RISK FACTORS AND REGULATORY COMPLIANCE
The risk and regulatory compliance within India are those that some companies may find difficult to consent to. The culture is far distinct from any other part of the continent (Amritt Inc), which causes grave difficulty to foreign firms to adapt too. The political risks that arise also can be a deterrent for foreign companies because the in recent times there have been claims of corruption within the Indian Government (Telegraph UK, 2011). Other risks which could affect companies are Currency depreciation, Systemic Risks, Liquidity Risks, and Sovereign Risks. These may not be an issue at the moment but may arise in the future, keeping an eye on the current markets are crucial. With regard to regulatory compliance the main issues arise when talking about the Tax system in South India and also the requirements on entry to the Country by foreign firms. First we will analyse the possible risks, which could become apparent for firms. As every country is vastly different in many respects this will inevitably be a concern for foreign firms. The differential cultural aspects of doing business in South India will have to be addressed by FTT. Relationships are held in a higher context then the actual business dealings itself and is said to be the most important part of the business cycle. Also within Indian Culture hierarchy within the business is respected and the Boss is the Boss (World Business Culture.com, 2012). Without accurate research a company could be taking a huge risk in entering South India without knowing the lay of the land. The political make up within India is mainly on the discussion of the social make up of groups and their major distinctions and interests. Since the difference in income inequality is at an all time high within some groups and states, according to the World Bank 76% are living on less than US$2 per day. (Euromonitor.com) However, the southern Indian states we are targeting are among the wealthier ones in the nation and even more so if you are using a purchasing power parity (PPP) basis and not absolute earnings. Also there have been alleged corruption scandals regarding the leading Political Party and has lead to the soaring food and fuel prices (Telegraph UK, 2012). Another risk that is highlighted for South India and the whole Country are the peace negotiations with Pakistan, this heightens Indias vulnerability for a war. This would be a major discouragement for any possible firm.

30

Now to highlight the regulatory compliances which every foreign investment firm needs to know when entering South India. Firstly the following are relevant entry implications for any non-resident company. Every potential company must receive the approval of the Reserve Bank of India, RBI. Once they get the go ahead then the company is free to commencement commercial activity. Liaison offices are required to be open by foreign corporations, this office will act as a communication channel between them and foreign companies and Indian companies. It is in fact a marketing tool for the company (Ernst & Young, Section D). Branch office is also required if the company wishes to export or import goods, acquiring consultancy services, carrying out research, tendering technical support. It is NOT allowed to carry out retail trading or manufacturing. It is taxed at a rate of foreign companies. (Ernst & Young, Section D) Contracts in India are governed by a law which is called Indian Council of Arbitration or ICA, companies should be aware of this resource if contractual relations occur to ensure all details are known for both parties if a disagreement occurs. Also Visas required on entry to India there are a few different types yet the following would apply to those doing business and are non resident or native to India
-

business and employment Visa (valid from 1-5years)

As every country has a tax system which differ, it is important to understand the tax brackets your company will fall into and that are required to be paid. South Indias tax year is from 1st April to 31st March. All corporations are liable for tax on worldwide income arising from all sources if resident. FTT are non resident within South India so they would be taxed on income that they earned from a business connection in India or from other Indian sources. The effective tax rate for FTT as a foreign corporation if taxed under Indian law would be 42.23%. Excise duty within India is payable by the manufacturer the rate of this effective duty is 8.24% in some case credits may be available which enables relief yet companies must check this for their own specific situation. Within each state in South India there are certain entry taxes which have to be paid, it differs in all areas yet in recent times in has come under some constraints. Stamp duty is also applicable on purchase of land, lease mortgage it is dependent from state to state. (Ernst & Young, Section L)

31

However, if we chose to entire the Indian market via a Mauritian subsidiary the effective tax rate would be in the 15-18.5% range as Indian law allows Mauritian based firms to choose which tax jurisdiction and rates it wishes to pay for income purposes (not import and export taxes tariffs and fees.) Legalities also need to be adhered to for ease of business within South India the following are a few examples from a report by Ernst & Young, of Acts, which apply:
-

The Designs Act 2000 encourages and protects those who produce a new idea Registered design Artistic copyright This act will enable FTT to ensure the security of their ideas.

The Indian Patent Act 1970 provides for the grant, revocation, registration, license, assignment and Infringement of Patents in India. International Labour Organisation- provides a good working environment for labour and protects them. industrial disputes act 1947 trade unions act 1926 payment of bonus act 1965 (on basis of profits or level of production, considering there are 20 or more employed) payment of gratuity act 1972 work mans compensation act 1923 minimum wage act 1936 factories act 1948 (governs health and safety of factory workers) maternity benefit act 1961 contract labour (regulation and abolition) act 1970 (employed as contract labour when he is hired in connection with the work of an establishment by or through a contractor) Anti trust regulations ensure the competitiveness in Indian markets.

32

The importation of technology through a foreign collaboration carries a 5% CESS (Tax) There are some state level incentives to encourage investment;
-

rebate on cost of land/cost of land employment subsidies The above examples of Legal Acts within India

To conclude on this analysis of Risks and Compliance, firms should conduct in-depth research on the particular Country. For FTT in South Indias case the above information should help with the decision. Although some of the content may be off putting, a lot of benefits can be sought from this growing economy.

33

Appendix 1.0

34

Appendix 2.0 2.1

Kerala
Population Area Capital City Largest City Language Geography Kerala is situated at the lower southwest side of India and is bordered by the regions of Karnataka to the north and northeast and Tamil Nadu to the east and south. Kerala climate is humid equatorial tropic. Situated between the Lakshadweep Sea and the Western Ghats, it also lies near to the centre of the Indian Tectonic Plate and is subject to very little seismic and volcanic activity. The state has a coast of length 590 km and the width of the state varies between 11 and 121 km. Geographically, Kerala can be divided into three climatically distinct regions: the eastern highlands (rugged and cool mountainous terrain), the central midlands (rolling hills), and the western lowlands (coastal plains). The state of Kerala is divided into fourteen districts, which are further divided into three regions depending on their geographical, cultural and historical similarities. These regions are classified as follows: North Kerala:Kasaragod, Kannur, Wayanad, Kozhikkod, Malappuram Central Kerala: Palakkad, Thrissur, Eranakulam, Idukki 33.4m 38,863 km2 Thiruvananthapuram Thiruvananthapuram Malayalam

35

South Kerala: Thiruvananthapuram, Kollam, Alappuzha, Pathanamthitta, Kottayam Kerala has 44 rivers, all of which begin in the Western Ghats; 41 flow west and three rivers flow east.

Population The majority of Keralas 31.8m population are of Malayali descent, with the rest made up of Jewish and Arab populations; a small minority indigenous tribe Adivasis consist of 1.1% of the population. Malayalam is Keralas official language; Konkani, Tamil, Kannada, Hindi and various Adivasi (Tribal) languages are also spoken. Kerala is home to just 3.5% of Indias total population but is one of the most densely populated regions of India. Keralas decadel growth is less than half of the average for India, but with an ageing population, even with very high morbidity rates, this could lead to problems. Females comprise 51.42% of the population; males form the remaining 48.58% of the population. Kerala's principal religions are Hinduism (56.2%), Islam (24.70%), and Christianity (19.00%). In comparison with the rest of India, Kerala experiences relatively little sectarianism. (Wikipedia, 2012) Kerala's human development indices (primary level education, health care and elimination of poverty) are among the best in India. According to a 20052006 national survey, Kerala has one of

36

the highest literacy rates (95%) among Indian states and life expectancy (74 years) was among the highest in India in 2011.

Education At present there are seven universities in Kerala with many affiliated colleges. The government, private trusts, or individuals run schools and colleges, and the government aids many of the schools owned by private sector. The majority of the public schools are affiliated to the Kerala State Board. Other educational boards are: Indian Certificate of Secondary Education (ICSE), the Central Board for Secondary Education (CBSE), or the National Institute for Open Schooling (NIOS). English is the language of instruction in most self-financing schools, while government and government aided schools offer English or Malayalam Infrastructure Kerala has 145,704 km of roads (4.2% of India's total). This includes 1,524 km of National highway (2.6% of nation's total), 4341.6 km of state highway and 18900 km of district roads. Traffic in Kerala has been growing at a rate of 1011% every year, resulting in high traffic and pressure on the roads. The Indian Railways Southern Railway line runs through the state, connecting most major towns and cities except those in the highland districts of Idukki and Wayanad. Kerala has three major international airports, at Thiruvananthapuram, Kochi and Kozhikode, with a fourth under development at Kannur. Kerala, with numerous backwaters, is one of the States in India, where waterways are successfully used for commercial Inland Water Transport. The transportation is mainly done with country craft and passenger vessels. There are 41 navigable rivers in Kerala. The total length of the Inland Waterways in the State is 1687 km. The main constraints to the expansion of Inland Water transport in the State are lack of depth in the waterway.

Political Structure Kerala's Government is based on rules and regulations determined by the Government of India. The Governor of Kerala is the constitutional head of state, and is appointed by the President of India.

37

Keralas last governor M.O.H. Farook passed away at the end of January 2012, and the Governor of Karnataka is currently overseeing the region. The Government of Kerala has a secretariat of its own. It is the highest echelon of state administrative structure offering locus for the exercise of authority by state Government. The secretariat refers to the complex of departments. So the government departments are classified according to the functions defined: Secretariat departments and Field Departments. Its political heads are ministers while the administrative heads are secretaries to the Government. The entire administrative machinery of the state is divided into several departments. This section profiles the various departments of the state. Each district (North Kerala, Central Kerala and South Kerala) is headed by a Deputy Commissioner who is over all in-charge of the administration in that particular district. He has to perform triple functions as he holds three positions: at once he is the Deputy Commissioner, the district Magistrate and the Collector. As a Deputy Commissioner he is the executive head of the district with multifarious responsibilities. As the District Magistrate he is responsible for maintaining the law and order situation in the district. As the Collector he is the Chief Revenue Officer of the district, responsible for revenue collection and recovery. The Police administration in the district is under the control of Superintendent of Police (SP).

Economic Structure Kerala is managed as a democratic socialist welfare economy. The state treasury is suffering massive losses due to regular hartals or strike actions, which restrict infrastructure and services. The service sector (including tourism, public administration, banking and finance, transportation, and communications63.8% of GSDP in 20022003) and the agricultural and fishing industries (together 17.2% of GSDP) dominate the economy.

2.2

38

Karnataka
Population Area Capital City Largest City Language 61.3m 191,976 km Bangalore Bangalore Kannada

Geography
Karnataka is one of the regions in South India. It is situated along the Western coastline. It is boarded by the Arabian Sea to the left, Goa to the northwest, Maharashtra to the north, Andhra Pradesh to the east, Tamil Nadu to the southeast and Kerala to the southwest. Karnataka is divided up into different natural regions; Karnataka Northern Region, Karnataka Coastal Region, Karnataka Central Region and Karnataka Southern Region. There are 27 districts within Karnataka. The region has a vast selection of mountains having the highest peak in all of India, 1500ft. There are several river systems, one of which flows into the Bay of Bengal. Karnataka enjoys a tropical climate with some places experiencing temperatures of up to 28degrees Celsius all year round.

Population
Karnataka is the eight largest states in India with regard to its population. The population density in
Bangalore has risen by 47% ,

the increase in industrialisation is said to be a factor in the high population

count. The increased growth in population is a result of adding six new fringe areas to Bangalore. (T.N. Bhat, ISEC) Also there is a higher count of males than females. As regard the religious composition of the population, 83% of the are Hindi, 12.2% are Muslim, 3.1%

39

are Christian, 0.8% are Jains, 0.7% are Buddhist, <0.1% are Sikhs, and remaining belong to other religions.

Education
Within the region of Karnataka there are quite a lot of opportunities for educational development. The literacy rate is 67%. The education system in Karnataka is made up of four sections; Primary and Secondary Education which has three kinds of schools within, Government, Aided and Un-aided Private. Pre University Education consists of a two-year pre university course or a three year diploma which enables you entrance into a degree course. Baccalaureate Education are institutions which are run by the Universities, There are 481 degree colleges Technical Education involves engineering and Bangalore was one of the first in the Country to have such a college.

Infrastructure
Karnataka has quite a developed set of infrastructures in place. There are 7 airports with an expanding air sector, 3000km rail network and 11 ports all, which are connected to Bangalore. The two main airports Bangalore International Airport and Mangalore International Airport have great connectivity internationally with such airlines as British Airways and Lufthansa flying there regularly.

Political Structure
Politics in Karnataka is ruled by three parties; Indian National Congress, Janata Dal and the Bharatiya Janata Party of which the Government is formed. Nationally there are 28 parliament constituencies and from there 28 members are elected. The subject of politics here is often based around language issues and caste. Karnataka has gained a position within the political field as it has brought a lot of power, in the form of economic and resource to India as a whole. The National political parties do not have a major role to play in Karnataka Politics. Regional parties have more of an influence.

Economic Structure
Karnataka is a high growth region of South India with GDP of 8% in 2011, yet this rate has hit a

40

slump. Growth is not as rapid as it used to be. Reasons for this may due to the rising land prices, labour shortages. Although there seems to be a decline Bangalore has been called the Silicon Valley of India, this comparison yield benefits as the IT industry can remain to flourish in such an area with the relevant resources. Like most economies Karnataka is divided into three sectors; Primary agriculture, which was quite prominent but not so much in the 21st Century. Secondary manufacturing, mining which still contribute to the economy Tertiary transport, education, Real Estate this sector it would argue gives the most to the Karnataka economy at this point in time. 2.3

Andhra Pradesh Population Area Capital City Largest City Language Geography Andhra Pradesh is situated at the southeast side of India. The state has a coast of length 590 km and the width of the state varies between 11 and 121 km. Andhra Pradesh is bound on the north by Orrisa and Chhattisgarh states, on the west by the states of Maharashtra and Karnataka, on the south by Tamil Nadu State and on the east by the Bay of Bengal with a coastline of around 974 km. Hyderabad the capital city and largest city spanning 583 km squared (including its smaller twin 76.2.m 275,069 sq km Hyderabad Hyderabad Telugu and Urdu

41

city) and has a population of 5,300,000 inhabitants. (Wikipedia, 2012) Visakhapatnam, Andhra Pradesh's primary port, is the second largest city. Two major rivers flow through Andhra Pradesh, the Godavari and the Krishna. The state of Andhra Pradesh is divided into twenty-three districts. Population Below are some examples of census data from some of the states districts and below that is a map of the various districts that make up Andhra Pradesh. (indiafacts.in, 2011)

42

Education A quality primary and secondary education is still a struggle in Andhra Pradesh; however, the number of Universities is growing as well as interest in setting up satilite and research campuses outside Hyderabad for some American and other international Univerisities. (New York Times, 2012) (USA Today, 2010)

Infrastructure Good access for FTT staff and freight via the airport and ports there + the direct flights from international business transit countries (UK, UAE, and USA0. Including in this category is the new international airport in Hyderabad completed in 2008. Political Structure The political scene of Andhra Pradesh has a combination of the parties at the national level and parties at the state level. The state has five prominent "National Parties" and two "State Parties," that have contributed towards the development of the state. Here is a list of the National Parties of the state of Andhra Pradesh:
-

Bhartiya Janta Party (center right) Bahujan Samaj Party Communist Party of India Communist Party of India (marxist)

43

Indian National Congress (center left)

Here is a list of the primary State Parties of Andhra Pradesh: Telugu Desam Party: (center right Telugu center right nationalist party) Telangana Rashtra Samity: Both the state parties work towards the growth of the Telugu language, culture and tradition. (Much more culturally conservative and independence orientated than the Desam) These parties do not compete in other state elections. The Telugu Desam Party has led the state government for many years however at this it is currently being run by the Indian National Congress party. Economic Structure The economy of Andhra Pradesh is primarily agriculture. The Godavari and Krishna rivers provide irrigation. Rice, sugarcane, cotton, mango and tobacco are the usual mix of local crops. Recently, crops used for cooking oil production such as sunflower and peanuts are being planted. Andhra Pradesh was among the Indian states, which went with the Green Revolution in rice cultivation in the 1970s Andhra Pradesh, India is also a mineral rich state, ranking second in India in terms of mineral wealth. It accounts for about 93 percent of India's total production of Barites. Other important minerals in the state are copper ore, manganese, mica, coal and limestone (Wikipedia, 2012). The state ranks first nationwide in hydro electricity generation with national market share of over 11%. The offshore gas Krishna-Godavari basin reserves of 60+ Trillion cubic foot. Andhra Pradesh has a robustly growing information technology and biotechnology services sector. In 20042005, Andhra Pradesh was at the Seventh position behind Maharastra, New Delhi, Karnataka, Tamil Nadu, West Bengal, and Gujarat in the list of top IT exporting states of India. The IT sector is expanding quickly every year. The service sector of the state already accounts for 43% of the GSDP and employs 20% of the work force as of the mid 2000s. (Wikipedia, 2012) Andhra Pradesh's IT industry is advanced enough to have had the Satyam Computer Services scandal in 2011 which has been referred to as India's Enron scandal. As it was to be confessed that

44

the companys public accounts had been falsified (the books were cooked.) (Wikipedia, 2012) However these setbacks have not stopped many from opening up technology R and D and outsourcing offices in Hyderabad in and around HITEC city (the campuses of corporate developments in Greater- Hyderabad.) Facebook has even found a home for its India based operations and Google is among the many multinational companies that have an office in or around Hyderabad (Facebook corporate page, 2012) (watblog, 2010) Many others have as well, for example here are a few:
-

Ananth Technologies (Ananth Info Park) Computer Maintenance Corporation (CMC) Campus Convergys Campus DELL Campus CyberCity I.T. Campus[12] E-Park I.T. Campus (Currently leased by TCS) Franklin Templeton campus Honeywell Campus Hindustan Petroleum Corporation Limited. IT Data Centre HSBC Campus Capgemini Campus iLabs Centre Infosys Campus Infotech Enterprises Campus Microsoft Campus Motorola Campus Oracle Campus Polaris Campus Satyam Cyber Space Campus Satyam Infocity Campus Satyam GateWay Campus [My Home Hub - Bldg 1 & 2] Sierra Atlantic Campus Soft Sol Campus Tata Consultancy Services (TCS) Campus (Deccan Park)

45

UBS (now Cognizant) ValueLabs Campus VSNL campus WIPRO Campus Zensar technologies Lt

2.4

Population Area Capital City Largest City Language Geography:

72,138,958 130,058 km2 Chennai Chennai Tamil & English

Forests take up more than 17% of the states geographical area with numerous wildlife parks and bird sanctuaries. 54% of the states population lives in an urbanised area. Capitol City is Chennai, which is the largest urbanised city in India. Since it is the most southern state in India with a long coastline, it is the meeting point of the Arabian Sea, Bay of Bengal and the Indian Ocean. The coastline itself is 910 km long but it is only the 3rd largest coastline in India.

46

West and North of Tamil Nadu have lofty hills while the east and south have coastal plains. Kerala, Karnataka and Andhra Pradesh to the north. To the east are the Bay of Bengal, Arabian Sea and the Indian Ocean all meet at Kanyakumari the southernmost tip of India. Tamil Nadu's coastline bore the brunt of the 2004 Indian Ocean Tsunami when it hit India, which caused 7,793 direct deaths in the state. (thinkquest.org, 2004). Tamil Nadu falls mostly in a region of low seismic hazard with the exception of the western border areas that lie in a low to moderate hazard zone. Tamil Nadu is entirely dependent on rain for recharging its water resources so if monsoon season is not plentiful there is a risk of water shortage and drought. (unsystem.org) Education: Tamil Nadu has 37 universities, 455 engineering colleges, and 566 arts and science colleges, 34,335 elementary schools, 5167 high schools, 5054 higher secondary schools and 5000 hospitals. (India Today, 2007) Population: 7th largest by population with 555 persons per sqkm . The life expectancy is 65.2 years for a male and 67.6 years for female. Legislation India is a fast growing economy and attracting foreign firms despite certain uncertainties. Entering Indian market is a task that can be taken up through various ways. The ways have been listed below. Setting up a base in India requires some steps that make the Indian Entry process a bit easy. Tamil Nadu is one of the states where law and order has been maintained largely successfully. The Tamil Nadu Police Force is over 140 years old. It is the fifth largest state police force in India. Government Sanctions Well before setting up operations; several central and state governmental approvals are sought by The Reserve Bank of India (RBI) and Foreign Investment Promotion Board (FIPB). The project has to be registered with the Registrar of Companies (ROC). At the time of creating a joint venture or subsidiary, the company is supposed to be incorporated and get hold of a certificate to start business. To set an office, registration ought to be done with the concerning regional ROC.

47

Other Approvals As soon as the entry plan get nod from the Central Government and registered appropriately, several State clearances like building planning, land use, environmental clearance, power clearance, etc. have to be kept before finally starting the business. Languages The language Tamil is over 200 years old and it is spoken by 89.9% of the population however English joins it as the official language of the region. Tamil is one of the remaining few classical languages left in India and the language forms a strong bond amongst the population. Cuisine: The Tamil cuisine is perhaps the oldest representative of the continuous vegetarian cultures of the world. The delicious dishes from the state are relished all over the country and abroad. There is a wide range of rice and vegetable preparations. The Tamil food is of great value and good quality. The meals are traditionally served on banana leaves. Tamil Nadu is known for having a rich tradition of rich literature, song and dance. In fact music and dance are the essence of Tamil Nadu; National festivals like Independence Day, Republic day, Gandhiji's birthday etc. are celebrated throughout the state. Muslim festivals like Eid-ul-Fitr, Eid-ul-Adha, Muharrum, Birthday of Prophet Mohamed and Christian festivals like Christmas, Easter, and Good Friday etc. are celebrated harmoniously as in other regions of the country. Including the Karagram dance where the performer wears a pot on their head. Carnactic music is the classical form used in South India. Trade Industrially the state has made rapid strides: Agriculture is the dominant source in the economy. Foods such as rive, Jowar, Ragi, Sugar, Coconut, Coffee and Tea play a vital role in the economy. Hides and skins are very popular exports aswell as other leather products. Tamil Nadu has the most reserves in India with almost 90% of Indias Lignite reserves, 45% of Magnesium and over 40% of Granite is found there. Political Structure Tamil Nadu State has at present 32 Districts. District Collector is the head of the District Administration.

48

Districts are divided into Taluks for the purpose of Revenue Administration. Tahsildar is the head of taluk level administration. Taluks consist of a group of Revenue Villages. Development administration in a district is coordinated by the Panchayat Unions (also called as Blocks) for the rural areas. Panchayat Unions consist of a group of Panchayat Villages. In the case of urban areas, the development administration is taken care by the urban local bodies. The urban local bodies are called as Municipal Corporations, Municipalities and Town Panchayatsdepending on the size of the town.

Economic Structure Tamil Nadu's gross state domestic product for 2011 is estimated at US$ 97.970 Billion in current prices (rediff.com, 2011). The state experienced a GDP growth rate of 12.1% for 2007-08. (indiaedunews.net) It was the third largest economy among all states in India ]and also the most industrialised state in India. It ranks third in foreign direct investment approvals next only to Maharashtra and Delhi. It is the fourth largest contributor to Indias GDP. It is home to many natural resources. It has hilly rich fields with vegetation and in the east it has fertile plains. Tamil Nadu is one of the leading states in livestock, poultry and fisheries production. . Tourism is a major industry as it has 8 UNESCO World Heritage Sites. It is well developed and is the second most popular destination in the country with ancient temples and natural beauty hill walks, not to mention the Tiger conservation nature parks. Tamil Nadu has seen major investments in the automobile industry over many decades manufacturing cars, railway coaches, battle-tanks, tractors, motorcycles, automobile spare parts and accessories, tyres and heavy vehicles. Major global automobile companies including BMW, Ford, Renault-Nissan, Caterpillar, Hyundai, Mitsubishi Motors and Michelin. DaimlerChrysler AG Company established a new plant in Tamil Nadu. Electronics manufacturing is a growing industry in Tamil Nadu, with many telecommunications giants like Nokia, Flextronics, Motorola, Sony-Ericsson, Foxconn, Samsung, Cisco, Moser Baer and Dell having chosen Chennai as their South Asian manufacturing hub. Tamil Nadu is the second largest software exporter by value in India, second only to Karnataka.

49

Infrastructure Tamil Nadu is connected to all parts of the state via its road networks. In total it has 28 highways and 532 railways stations in the region. Added to that there is an international airport that has 169 direct flights per week. This is the third largest Airport in India. There are also three major seaports. Market Size and Attractiveness Unlike China, the Indian legal system provides some protection of patents and while India is price sensitive, they will pay for the right quality product. We would recommend using an integrator with offices in India who will set all your offices up in India. Good access for FTT staff and freight via the airport and ports there + the direct flights from leading countries. Naturally is there is a demand in sales from Southern India we would set up there too. Chennai is the capital and it is the major commercial, cultural, and educational centre in South India. Chennai is divided into four broad regions: North, Central, South and West. North Chennai is primarily an industrial area. Central Chennai is the commercial heart of the city and includes an important business district,. South Chennai and West Chennai, previously mostly residential, are fast becoming commercial, home to a growing number of information technology firms, financial companies and call centers. The port of Chennai is the second largest in India. According to the 2011 Census there is 4.6 million people living in Chennai city and approx 8.9 million living in suburbanised towns. The majority of the populations people in Chennai are Tamil. Tamil is the primary language spoken in Chennai. English is spoken primarily and largely by white-collar workers and students. Chennai's economy has a broad industrial base in the automobile, computer, technology, hardware manufacturing and healthcare industries. The city is the centre of information technology and business process outsourcing services. It is located on the southeastern coast of India in the north eastern part of Tamil Nadu

50

Commercial and domestic broadband Internet services are provided by four service providers and a majority of the mobile network providers. Chennai was the first Indian city to have the WiFi facility in a widespread manner. Chennai serves as a major gateway to southern India, and the Chennai International Airport is the third busiest airport in India with approximately 10.5 million passengers per year. The city is connected to major hubs across Asia, Europe, and North America through more than 30 national and international carriers Sea The city is served by two major ports, Chennai Port, one of the largest artificial ports, and Ennore Port. The Chennai port is India's second busiest container hub handling automobiles, motorcycles and general industrial cargo. The Ennore Port handles cargo such as coal, ore and other bulk and rock mineral products. Rail Chennai is the headquarters of the Southern Railway. The city has two main railway terminals. Chennai Central station, the city's largest, provides access to other major cities as well as many other smaller towns across India Road

51

Chennai's transportation infrastructure provides coverage and connectivity, but growing use has caused traffic congestion and pollution. The government has tried to address. Other Issues such as Cultural factors As I write this report there is a threat of a global trade war over a European Union scheme, which wants to control airlines carbon Indian airplanes, emit by imposing carbon emission charges. But the Indian Government will not give them the figures on how much pollution their airplanes emit. India could hit back via any of the following forms of retaliation halting talks with European airlines on new routes, retaliatory levies on EU airlines and even fees for overflying countries. However the European Parliament could hit back at India by blocking a Free Trade Agreement with the country. High drop-out and low completion of secondary schools continue to hinder the quality of training in the population. Other problems include class, gender, inter-district and urban-rural divide- it has a high level of poverty especially in the rural areas. The Oxford Poverty & Human Development Initiative ranks Tamil Nadu to have a Multidimensional Poverty Index of 0.141, which is in the level of Ghana among the developing countries (oneworld.net, 2012). Corruption is a major problem in the state with Transparency International ranking it the second most corrupt among the states of India (rediff.com, 2011). Tamil Nadu is now allowing other industries that they previously didnt want in the region enter. This will facilitate companies such as Walmart and Tesco to set up in the region.

52

Bibliography Websites: Advertising, 2009-2010. India One Stop [online] Available at: <http://www.indiaonestop.com/markets-advertising,%20direct%20marketing...htm> [Accessed at: 23 March 2012] Agrawal S., (2009), The New Word in Luxury. Available at: http://www.tata.com/media/interviews/inside.aspx?artid=1azV38ohKH4= [Accessed at: 25 March 2012] Background to Business in India, 2012. World Business Culture. [online] Available at: <http://www.worldbusinessculture.com/Indian-Business-Style.html> [Accessed 23rd March 2012] Bernama, (2012), INDIA FURNITURE MARKET OFFERS BIG PROMISE, SAYS MATRADE, Malaysian National Agency, Jan, pp. n/a. Companies Registration Office. First Touch Technology. Available at: http://www.cro.ie/search/CompanySearch.aspx [Accessed at: 25 March 2012] Dornob: Demure Desk: Compact Corner Computer Workstation. Available at: http://dornob.com/demure-desk-compact-corner-computer-workstation/ [Accessed at: 23rd March 2012] EconomyWatch, (2010), India Furniture Industry. Available at: http://www.economywatch.com/business-and-economy/furniture-industry.html [Accessed at: 25 March 2012] Ergomaxx India. Available at: http://www.ergomaxxindia.com/office_furniture.aspx [Accessed at: 25 March 2012] Ernst & Young, Doing Business in India, 2010. Embassy of India. [online] Available at: <http://www.indembassy.co.il/Additional%20files/Doing%20Business%20in%20India.pdf> [Accessed at: 20 March 2012] Fish E., (2011), Casemod Builds a PC Into a Desk, Looks Awesome, Available at: http://www.pcworld.com/article/224804/casemod_builds_a_pc_into_a_desk_looks_awesome.html [Accessed at: 26 March 2012] Italian Trade Commision, (2009), The Furniture Market in India Profile 2009. Available at: http://www.ice.gov.it/paesi/asia/india/upload/182/Furniture%20Industry%20India%20%202009.pdf [Accessed at: 25 March 2012] JML Lifestyle Furniture. Available at: www.jmlifestyle.in/office_furniture.php [Accessed at: 25 March 2012] Joint Venture. Small Business Notes. Definition of Joint Venture. [online] Available at: <http://www.smallbusinessnotes.com/small-business-resources/definition-of-joint-venture.html> [Accessed at: 25 March 2012]

53

Lavelle Coleman Solicitors, 2009. Joint Ventures [online] Available at: <http://www.lavellecoleman.ie/cuuploads/editor/file/JointVentures.pdf> [Accessed at: 23 March 2012] Ladwa., M., and Shukla., V., 2007. Establishing a Joint Venture in India. US India Business Council. [online] Available at: <http://www.usibc.com/sites/default/files/committees/files/jointventuresinindiaanoverview.pdf> [Accessed at: 23 March 2012] Lewin T., (2011), Colleges Slower to Branch Out Abroad, Available at: http://www.nytimes.com/2012/01/12/education/colleges-slower-to-branch-out-abroad.html?_r=1 [Accessed at: 27 March 2012] Michigan State University. GlobalEdge Country Profile: India. Available at: http://globaledge.msu.edu/Countries/India/ [Accessed at: 25 March 2012] Office Furniture India. Available at: http://www.officefurnitureindia.com/ [Accessed at: 25 March 2012] Online Ad Networks in India, 2008. Pluggd.In: We love Start Ups [online] Available at: <http://www.pluggd.in/online-advertising-in-india/list-online-ad-networks-in-india-3198/> [Accessed at: 27 March 2012] Reyami India. Available at: http://www.reyamiindia.com/about.htm [Accessed at: 25 March 2012] Risk to Doing Business in India, 2011. The Telegraph. [online] Available at: <http://www.telegraph.co.uk/finance/newsbysector/energy/8334721/Risks-to-doing-business-inIndia.html> [Accessed at: 27 March 2012] The Economic Times, (2010), Dubai-based Al Reyami group to set up three office furniture facilities in south. [Accessed at: 25 March 2012] Colleges slower to branch out Abroad, 2012. The New York Times. [online] Available at: <http://www.nytimes.com/2012/01/12/education/colleges-slower-to-branch-out-abroad.html> [Accessed at: 27 March 2012] Flashy Office Space, Advertising Indias Allure, 2010. The New York Times. [online] Available at: <http://www.nytimes.com/2010/12/28/business/global/28sizzle.html?pagewanted=all>[Accessed at: 27 March 2012] Times of India Display Ads Rate Card for 2010-2011. Release My Ad.com [online] Available at: <http://blog.releasemyad.com/2010/10/times-of-india-display-ads-rate-card-for-2010-2011/> [Accessed at: 27 March 2012] Value/Choice, 2008. The Value of Advertising[online] Available at: <http://www.valueofadvertising.org/benefits-consumers.php> [Accessed at: 27 March 2012] U.S. universities exploring expansion -- in India, 2010. USA Today. [online] Available at: <http://www.usatoday.com/news/education/2010-06-30-IHE-India-US-colleges30_ST_N.htm> [Accessed at: 27 March 2012]

54

Shrinivasan,R. (2010). Multiple poverty dimensions reveal 'real' India. Available: http://southasia.oneworld.net/todaysheadlines/multiple-poverty-dimensions-reveal-real-india. Last accessed 24th Mar Raghavan, B S. (May2011). Beware the political superbug: Hubris! Available: (http://www.rediff.com/news/column/column-beware-the-political-superbug/20110517.htm). Last accessed 24th Mar (2011). India's top 20 states by GDP. Available: http://www.rediff.com/business/slide-show/slideshow-1-indias-top-20-states-by-gdp/20110722.htm. Last accessed 24th Mar (2011). How to Enter the Indian Market. Available: http://www.chartered-accountantindia.com/indian-market.html. Last accessed 24th Mar 2012. Jeevan Mohanty P, Shekhar S. (2005). Top three States a socio-economic comparison. Available: http://www.thehindubusinessline.in/2004/10/20/stories/2004102000101100.htm. Krishnamurthy, A. (2007). India Today- Survey of Colleges Results.Available: http://www.indiatoday.com/itoday/20070604/cs-science.html. Last accessed 24th Mar 2012. Office of International Trade Expositions. (2012). Hyderabad http://www.hitex.co.in. Last accessed 24th Mar 2012. Jung, T. (2011). India Facts. Available: http://indiafacts.in/uncategorized/andhra-pradesh-districtspopulation-census-2011/. Last accessed 24th Mar 2012. Lewin T. (2012), Colleges Slower to Branch Out Abroad, Available: http://www.nytimes.com/2012/01/12/education/colleges-slower-to-branch-out-abroad.html?_r=1. Last accessed 24th Mar 2012 (Redden, E. (2010). U.S. universities exploring expansion -- in India.Available: http://www.usatoday.com/news/education/2010-06-30-IHE-India-US-colleges30_ST_N.htm. Last accessed 24th Mar. Books: Bean, R (2008). World and Its Peoples: Eastern and Southern Asia. New York: Marshall Cavendish Corporation. 442. Ladwa., M., and Shukla., V., 2007. Establishing a Joint Venture in India. US India Business Council. [online] Available at: <http://www.usibc.com/sites/default/files/committees/files/jointventuresinindiaanoverview.pdf> [Accessed 25th March 2012] Articles: Cavusgil S. T., Kiyak T., Yeniyurt S., (2004) Complementary approaches to preliminary foreign market opportunity assessment: Country clustering and country ranking, Vol. 33, pp. 607617. Jain K. D., Manson N. A. S., Sankhe S., (2005). The Right Passage to India, McKinsey on Finance, Winter (3), pp. 1360-1380.

55

The Registrar General & Census Commissioner. (2011). Provisional Population Totals India. Census 2011. (VMW Analytics. (2011). Meet the Parents. Economy of the Federal States For Year 2011 & Population for Year 2011.

56