Answer to Question #297078 in Management for Jack Patz

Question

L1 technologies, a US based Defence contractor wishes to enter India. Conduct a

PESTLE analysis for L1 technologies in India & suggest whether L1 technologies should

enter India or otherwise. (Please assume that Covid-19 pandemic is over).

Answer 1

L1 Technologies is a leading provider of technology services for software and geospatial information on digital maps.

Politically, the company has political issues through political turbulence owing to the dispute with neighbouring countries. Political crises, including politician’s interests, differences in ideology, and others, influence the state's well-being. Though the situation has improved a little in the last few years, the political factor remains a concern.

Economically, he taxation policies of the Indian government are favourable for business expansion in the country. Besides, the widespread domestic market posses many new opportunities for businesses.

Socially, India is a land of diversity. The company must be aware of the local culture, beliefs, acceptability, and other things to run a business in the nation. The firm should also know about the availability of the local workforce and demand for products. The country's population benefits the businesses. Since the majority are working-population, it is easier for industries to look for labourers that too in affordable labour fees. The massive domestic market of the country is another reason why multinational companies are favouring this country for business expansion. Increased standard of living and changing lifestyle are the reasons behind.

Environmentally, Inclination towards environmental awareness can open up more growth opportunities for businesses in India because sustainability is the key. These include scarcity of raw materials, pollution, carbon footprint, climate change tec. Growing concern over environmental issues is a result of the ongoing ecological crises. Businesses must come up with innovative strategies to combat it. The increasing demand for eco-friendly products and processes among consumers has changed the demand-supply model, and companies are compelled to change their strategies to adopt the change.

Legally, legal parameters overlap the political factors of PESTEL analysis of India. These cover equal opportunities for all, advertising, discrimination law, copyright law, consumer rights, and others. These are viable, especially for the foreign companies looking for a trade opportunity in India. Companies must abide by the rule and laws exclusive to each country or region they operate. Recent changes in some recycling, employability and discrimination law can affect the company's pricing and labour cost.

Given the above Pestel analysis I would advise L1 technologies to enter Indian market.