Answer to Question #309370 in Management for Vinita

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

India is the fastest-growing Asian country, providing new revenue opportunities for both domestic and foreign brands. India currently boasts the world's second-largest population and is an important part of the global economy. They are now one of the most important commerce centres in the world. As a developing country, India offers numerous prospects for enterprises, particularly start-ups. As a result of this element, well-known brands such as L1 Technologies should enter India, where there are prospective markets.

Political issues have a direct impact on a country's stock market. Due to a dispute with neighbouring countries, India has been undergoing political turmoil for many years. Political crises, such as politician's interests, ideological conflicts, and others, have an impact on the state's well-being. Though the situation has improved slightly in recent years, the political aspect continues to be a source of concern. In general, India provides governmental stability that allows businesses to flourish. India is the world's largest democracy and a republic. They must, however, deal with the obstacles created by corruption. Then and only then will the country's economy grow. Through privatization, the country has attempted to limit government or political influence in firms, start-ups, and corporate activities in general. It will assist enterprises in becoming self-sufficient.

The country's rising GDP provides opportunity for firms to expand. India's free industrial policies have assured significant foreign investment in the country since the country's economic reform in 1991, particularly with the founding of the FIBP. It has been beneficial to the economy. The Indian government's tax policies, according to PESTEL study, are advantageous for company expansion in the country. Furthermore, the vast domestic market offers a plethora of fresh business prospects.

India is a diverse country. To manage a business in the country, the company must be aware of the local culture, beliefs, acceptance, and other factors. The company should also be aware of the availability of local labour and product demand. Businesses profit from the country's population. Because the bulk of the population is employed, it is easier for businesses to find labourers at reasonable rates. Another reason multinational firms prefer this country for company expansion is the country's large domestic market. The causes for this are an increase in the standard of living and a shift in lifestyle.

India's technology sector continues to expand. The country boasts one of the most developed IT sectors in the world, which ensures that software is constantly updated and improved. Due to India's technical growth, a growing number of foreign IT businesses are investing in the country. According to India's PESTEL research, future investments in technology improvement will boost the country's economic growth.

Consumer demand for environmentally friendly products and processes has shifted the demand-supply model, forcing businesses to adjust their strategy to accommodate the shift. The varied and unpredictable nature of the Indian climate can be detrimental to businesses, particularly infrastructure. With increased pollution and its harmful impact on health and safety, industrialization has been a source of concern for the country. Companies must implement a sustainability plan that includes recycling, a better waste management system, and other measures. Many tourists are drawn to the area because of its natural beauty. It has the potential to strengthen the economy and enterprises of the country.

Companies must follow the rules and legislation that are specific to each country or region in which they operate. Changes in recycling, employment, and discrimination laws may have an impact on the company's pricing and labour costs. Foreign brands can benefit from the country's flexible policies surrounding foreign trade.