Groupe PSA: Re-Entering India Case Study Help
Environmental Factor
Eco-Friendly Products
There is a developing trend in India towards using green/eco-friendly products. PSA can take it as an opportunity and undertake green commercial enterprise practices to attract the stakeholders. Regulatory bodies emphasizeon making sure that compliance with environmental norms is altering the product innovation priorities. It calls for Groupe PSA to enter into India to prioritize and have consciousness on advertising the eco-friendly nature of their products over customary price propositions customary price propositions.
The launch of green products in an Indian market is a strength of PSA, which will help it in increasing its market share in India.
Environmental Regulations to Evade Resource Depletion
Before entering in the Indian market; the Groupe PSA needs to study about the environmental regulations of India and consider the availability of the resources in the Indian market. India has scarcity of water resources and electricity as well. The company needs to keep that in mind whether they will be able to beat this deficiency or not. If the study or market research of India is not properly done then the company might suffer in future.
Legal Factor
Intellectual Property Law
India is a developing country and the rules and regulations of the countryare not that much impressive or could not not work when needed.Intellectual property laws are designed to protect the companies' patents and precious ideas. The country is not able to protect the right of the companies, which might lead the company towards loss incurrence as well as the loss of identity. The company needs to keep that in mind whether they can bet this inefficiency of Indian market or not.
Employee Protection Law
As per the aforementioned facts, the company has poor control over imposing laws and legislations. They don’t care about the employees’ protection law and the labors’ working hours. Majority of the companies that are operating in India are working against the ethical rule of labor working hour laws. The company needs to study about the legal structure of the country and similarly, anti-discrimination laws (like equal employment opportunity) when growing human resource practices, as discriminatory suits against the organization may harm the organizational picture and might have a negativeimpact on the organizations’ capability to attract and retain the talent.
Alternatives
The alternatives for Groupe PSA, are as under:
- Enter in Indian market as a company, not as a joint venture.
- Do not enter in the Indian market.
- Import skilled labor and install thermal plant
Enter as a Company
The company Groupe PSA should to enter into the Indian market not as a joint venture but as a company. The pros and cons are as under:
Pros
- Full control over the project.
- 100% share in profits.
- 100% control over price setting.
- No restriction over the diversification of investment.
Cons
- Huge amount of investment is required.
- 100% risk to be bore by Groupe PSA.
- No idea sharing.
Do Not Enter in Indian Market
Instead of entering in Indian market Groupe PSA should approach another market like Japan, Austria, and many more. The pros and cons are as under;
Pros
- Company won’t face any sort of problem of lack of resources.
- The Japanese or Austrian market is enrich of skilled labor.
- The Groupe PSA will avail the competitive advantage because of high competition in these markets.
- Highly advanced countries.
- Stable economy.
- Low interference by government.
- Flexibility in rules and regulations for new entrant.
Cons
- Lack of market knowledge.
- Time consuming.
- No relation with suppliers.
- Lack of customer desirability.
- PSA needs to pay huge amount of salaries because labor is cheap in India but not in above-mentioned markets.
Import Labor and Install Thermal Plant
The Indian market lacks in resources and enrich in unskilled labor. But, the market expects growth in future. The pros and cons of this alternative are discussed below;
Pros
- Skilled labor will help in quality productivity.
- Reduction in cost.
- Low amount of asset depreciation or machine failure.
- Risk of failure will be reduced.
- Helps in increasing the market share.
- Helps in making profits.
Cons
- Huge amount of investment required.
- Lack of trust.
- Time consuming.
- Company have to provide or give lots of benefits because the employees have to migrate from one country to another.
Recommendations
At the end, the company has decided to enter in the Indian market. Although the company has faced failure twice, but now the company is making another attempt to enter in an Indian market, because of the growth it is expected to have while operating its business in the Indian market. Indian are attracted more towards comfort and better life style. Entry in Indian would be the best option after the joint venture. But among the other alternative, the best option or alternative the company can choose for entering in the Indian market is alternative # 3: importing skilled labor and installing thermal plant. This will benefit the company and will help it meeting all the requirements that the company had failed to achieve in the last two unsuccessful attempts. (Groupe PSA: Re-Entering India, 2020)
Although the company will face some issues like huge investment is required for the execution and benefits to be given to the employees but still the company will eventually strengthen its roots in the Indian market.
So, the best alternative among all the alternatives is entering in an Indian market, but importing your own labor and installing a thermal plant. So, the company won’t face the same issues it previously faced.................................
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