Written Assignment Format

Name:

Due Date / Day:

Class:

Roll No:

Subject:

Assignment No:

Topic:

Title of the Assignment:

Signature: (Of the student)

Name (Of the faculty) : Marks out of 15

Signature:

Date of Evaluation:

Remarks (By Faculty): _________________________________________

________________________________________

_________________________________________

_________________________________________
 Country Risk Analysis

Assignment 02:-

Keep in mind bottom of pyramid approach, judge any element of country’s risk for tata ace,
nano, ginger hotels, in a country like Indonesia and Thailand.

The concept “Bottom of the Pyramid” dwells on the unexplored and unexploited, yet absolutely
opportunistic market of the poor, or in other words, the 60% population of the world that is
below the poverty line. Academicians and entrepreneurs alike, in recent times, have come to
believe that this population emerging market in developed and under-developed countries has a
very large potential to drive highly profitable businesses.

C.K. Prahalad spelt out an alternative approach to the poor (he used the term “Bottom of the
Pyramid” or BOP)—one that treats them as savvy consumers and efficient producers in the
global economy. He pointed out that the poor, including the 400 million people in India who live
at less than Rs.100/day, are a viable market. The savvy entrepreneur and the forward-looking
corporation can serve this segment and profit from it once they look at the poor as potential
customers and suppliers rather than “beneath them.”

Elements of country’s risk for Tata Ace in Thailand :-

As a part of the company's new internationalization strategy, the company has decided to focus
on a narrow base of 14-15 countries where market conditions are similar to that of India. In these
countries, Tata Motors now has dedicated manufacturing facilities, marketing teams and sales
teams. The idea is to have self sustained operations in this narrow band of countries. The
company evaluates locations on the basis of market opportunities and labour skills.

Tata Motors formed a joint venture with Thonburi Automotive Plant to enter Thailand. Thailand
is the second most competitive market for pickups, and the new pickup trucks developed here
will be sold in both domestic and export markets.

No political stability since 1932

foresay who will be in power in Thailand in the future

 to intervene and a democratic environment were to last longer, stability
could be achieve

But Tata Nano has entered this market and also have achieve great success but you cant
comment on its political stability. There is no such stability in Thailand. Also it is very much
influence by the U.S. there are certain norms regarding the entrant of foreign investors which
could affect the business. Also corruption is one of the most important factor affecting the
smooth functioning of business.

Indonesia:-
Indonesia consists of more than 13,500 islands spread over 3,200 miles. Its population of more
than 190 million is the world's fourth largest. Approximately 85% of the population is Muslim,
making Indonesia the largest Muslim nation in the world. The country has over 300 ethnic
groups, speaking 538 languages and dialects.

Indonesia's size and ethnic and cultural diversity make it a country of many contrasting parts.
Abdurraham Wahid was elected president on 20 October 1999, replacing B J Habibie. Former
opposition leader Megawati Sukarnoputri was elected vice-president. Political games and the
growing differences between class, religious and regional groups will ensure a high level of
instability. While the situation in East Timor appears to calmer since the deployment of UN
forces, calls for independence in the Aceh region have been echoed by demand for greater
autonomy in other regions.

SOS members are advised to exercise caution when traveling to Jakarta. Members traveling to
other areas of the country are warned that the current tensions between Muslim and Christian
groups are high, and minor incidents can erupt into full-scale riots.

Tata Ace:-

Tata Ace has achieved par success in many countries including India and Thailand. The
introduction of this car into Indonesia will also lead the company to the higher growth level. But
the working climate for Tata Ace in Indonesia is not quite good. There is always a communal riot
in this country. The two community are about to fight with each other any any point of time.
Also there is no such political stability which will help the smooth functioning of a business. The
business can operate effectively in such an environment which gives political stability. The
political support in any country is very necessary so the risk element for Tata Ace would be
political instability.

Tata Nano:-
Tata Nano has achieved remarkable success in India. The first Indian low-priced car. If Tata
Nano decides to operate in Indonesia, then the risk element would be:-

Communal Riots.

Technology savy.

More advanced products.

Indonesia also included in one of the emerging economy, but the people over there are more
advanced. The technology that they adopt is far more updated than that which is use in India.
Indonesia prefers to have cars which are more advanced and more technology savy. China is
producing smallest cars with latest technology and that also at a cheaper rates. Thus if Tata Nano
wants to enter Indonesia then they have to be more advances in terms of their product. And the
political instability is also one of the reason affecting the entrance of business in China.

Ginger Hotels:-

The market for Hotels into Indonesia is not quite good. There are situation in which the tourists
are being affected by local people. Local people snatches away or steals money from the tourists.
Thus the free moving of tourist into this country is not safe. In such a situation, setting up hotels
wouls not be a sound business strategy. As more tourists avoid travelling Indonesia in such a
situation the sitting up of hotels may lead to loss in a business. Considering the bottom of
pyramid approach, it is basically enchasing the project with poor people. But Hotels is not for a
poor market.