Question

Suppose you are the owner of a successful electric-powered, environmentally-friendly scooter company and plan to launch your product in India. Pick either the cost leadership or differentiation strategy and explain how bring the scooter to India. Will you have to alter the design at all? What difficulties could the Indian market pose and how will your strategic plan deal with them?

Exporting from Canada.

Answer 1

COST LEADERSHIP or DIFFERENTIATION STRATEGY :

Cost leadership means outperforming competitors by producing at the lowest cost , consistent with the quality demanded by the consumer.

Differentiation strategy means creating value for the customer through product innovation , product features , customer service , etc. for which the customer is willing to pay.

As the electric powered and eco friendly scooter to be launched in India , I would go with cost leadership strategy . We all know that Indian population is 130 crore which is a huge number when compared to world population. So it was a potential market to the businesses especially for automobiles. There are many more foreign companies who are operating in India and gaining good profits . But if you see the percentage of middle class income people are very high in India . So it is better to go with cost leadership strategy other than differentiation strategy.

Bringing scooter to India strategically :

As Indian markets are middle class oriented , like in foreign countries high ended products are not much more attractive to the Indian basic market. To have more sales in the Indian market you have to make changes according to Indian style . Generally in foreign, scooters will be used by single persons but, as far as India is concerned the people on the scooter are minimum 2 and maximum 4 persons. So they have to manufacture according to Indian population . Indian people need to get good mileage scooters . They have to be low - ended with average speed and more travel. These are the things that foreign manufactures has to keep in the mind before manufacturing scooter for Indian market .

Difficulties of Indian market :

/ Political inconsistency - These kind difficulties can be overcomed by doing the CSR activities and political funding and not giving importance to any single party .

/ Financial options - As India is middle ranged market , people cannot pay at a time . So company has to make partnership with some banks to provide financial loans to their customers.

/ Corruption - India is having corruption , so to deal with these corruption issues companies has to be vigilant and has to know proper guidance from the companies which have already started their business from foreign .

/ Government restrictions - in India government hand will be there upon the private businesses in every NOOK and corner so , companies have to be prepared to deal with this kind of restrictions to move on .

Conclusion : So to make business in India in any industry , businesses have to make some kind of changes to their approach , models , prices and all kind of different strategies .