Internet Cafe Market Success Entry Strategy Commerce Essay

cyberspace Cafe Market victory Entry Strategy Commerce EssayBefore opening a patronage in a un corresponding plain we should analyze the foodstuff in which we be going to enter. We surrender to understand how country variables mint our argument whether in positive or negative ways. The first protrude of this paper covers grocery store victory analysis in which I will discuss market sizing, resources, regulations and procedures, and risks. The second part will touch upon the cut back of market penetration analysis. And the third part will move on with a discussion of market entry implementation dodging.II. Market success analysisMarket size (potential to make m atomic number 53y by providing the service), Resources (educated or non educated laborers, professional services, naked as a jaybird materials), Regulations and Procedures (government red tape, duties, and taxes), and Risks (financial, safety, and emulous).Indian market has a huge potential and this is explain ed by the concomitant that India is the second most live country in the world. In India, thither ar 7-8 million net income users (including 2 million subscribers of ISPs). Total community of India is 1 billion people. In Indian companies, there be 5 million computers. Thus, two kibibyte profit cafes ar an central way to gain access to the communicate for Indian users. The number of Internet cafes in India is increasing constantly. In particular, for example, the confederacy Satyam Info way Ltd is planning to open a chain of 500-600 and cyber cafes crossways the country. This will be a very significant step in the popularization of the Internet, because until lately such a cafe located merely in the four major Indian cities Delhi, Mumbai, Bangalore and Madras. Further enhances the significance of this step, the fact that other options for access to the Network for the Indians, almost closed. For example, home Internet access, in fact, still a dream for them, because even today for the 100 residents of the country accounts for entirely more or less three ph stars. All in only, I argue Internet caf in India to be very attractive. The great number of population involved in this sector will partake my bank line only in a positive way.Resources (educated or non educated laborers, professional services, raw materials)The labor force in India is wiz of the cheapest in the world. In India there atomic number 18 a large number of English qualified workers. This join ons the size of the Indian market and attracts unknown companies to establish firms there. India is the largest example of countries that suffer from the puzzle of child labor. In my opinion it is obvious to all that in India children without didactics be being exploited and forced into labor. There be almost 60 to 115 million working children in India the highest number in the world (Human Rights Watch 1996, 1).In one way the fact that Indian labors ar the cheapest it is a n advantage to hire children without education for food service workers and underpay them. nevertheless there is a disadvantage too. For example, I cant hire unenlightened IT experts, administrators because they are the integral part of my short letter. Will I prosper or lose mostly it will depend on them.There are m whatsoever Internet cafs in India which provide diffe consider services. nearly all cafes provide more than access to the Internet. in worry manner Internet caf serves with food, drink, vie room for children and whitethornbe it is crucial factors to become one of the top cafes. further there is a professional caf in Delhi for companies and businessmen.Another very important aspect is raw materials. As concerns Internet caf I consume to rent a building, buy tables. Also I rent wireless Internet and food drink services. So My Internet caf will cast off an probability to assume raw materials adjust in India.Regulations and Procedures (government red tape, du ties, and taxes)India has well-establishes rules of law, stable political environment. As I discussed in previous paper for setting up business in India I have to obtain permission from the arrest cant of India to conduct any activity in India, trade, office or other place of business .To put in application for such permission I have to go to the Office of the Reserve Bank in Mumbai. Bureaucracy and corruption affect business in India. head start a business with contracts in India is very difficult. India has the worst take aims of red tape. It takes lot of time to run the business when there are many regulations. On one hand it is negative impact on my business and if we will think in other way we come up with a thought that government regulations and laws protect society. And it seems to me that a country that cares nigh people attracts foreign firms in spite of its rules, regulations, and duties.Local companies in India are taxed on income from all sources in India. Howev er with an accordance of the Income Tax encounter foreign companies are taxed on income earned through business affiliation in India or from other Indian sources. If a foreign caller has no business with India, and the income is not taxable. Tax rate for local companies is 33.22% and for foreign companies is 42.23%.As I am going to set up a foreign club of course I will pay taxes. Taxes are pretty high. But tax rates were lowered in recent years with the governments cultivation to broaden the tax base and ensure greater observance. In my opinion, India is an appropriate place to set up a business. Actually, the taxation is very high however the political environment is stable and well-established.Risks (financial, safety, and competitive)In fact there are good and bad sides establishing business in the country where the population is seemingly at its peak. Everyone knows that India is still facing dearth of skilled workers and thus it is risky for my caf to hire residents. To raise the productivity of the company I would like to have good qualified workers.Today India is one of the fastest growing economies. Government urges foreign firms to invest in the business and by this to lead the growth of economy. Economic reforms are aimed to regulate the economy. The challenge arises whether or not to invest in the business In any case, each company has a risk that either it will be burned up with the money or the reverse side to hop on up. As India is a rapidly growing economy, I believe that it minimise the risks of Internet caf.India established by the judicial system, complex legal and method of accounting systems and convenient infrastructure gives foreign companies the opportunity to feel in a safe environment that ensures safe long-term relationship. Vibrant and highly competitive private sector in India offers great opportunities for foreign companies, creating a rival among enterprises. As previously mentioned, there are plenty of Internet cafes in India, and because of that we need to learn more or less market entry strategies in localise to succeed in this business.III. Market Entry AnalysisEach of us necessitates to flourish the business. In order not to fail in the initial stages we have to select the right market entry system. There are main market entry strategies direct investing, joint estimates, licensing, franchising, exporting and importing, piece of ass project, and management contract. Im going to set up my business in India and hence I have to choose the right strategies considering culture of a chosen country, consumers and so on. I think the best entry strategies for my business are Franchising, direct Investment, and Joint Venture.Franchising is a widespread-known marketing strategy. Lets discuss what does Franchising mean? Franchising is an balance between firms that one firm make an agreement with other one firm to sell its products. The second firm has a right to get the trademark and the log o of products. There are disadvantages and advantages of this market strategy entry. Advantages are that franchising gives an opportunity for the second firm to grow rapidly and to be widespread-known. Also this company is sure that the product will be in petition because it is brand. The benefit of the first company is that it makes more money by providing its products to another company, franchisee. Buying a franchise you will get a get from franchisor-advices, training support, and help for running business. Disadvantages are restrictions from the franchisor in operating the business you have to share with a profit with franchisor and also franchisee can pander the good reputation of the brand. I think using franchising strategy Internet caf will survive and prosper because my business will operate on proven ideas.The second entry strategy is overseas Direct Investment. Foreign direct investment (FDI) is becoming an increasingly important factor in economic development. In re cent years more and more of an increase in foreign direct investment is observed. Foreign direct investment (FDI) occurs when a firm invests in facilities to manufacture the product in another country. The creator of the company is the owner.AdvantagesInvested money stimulates economic growthEmployment increases home(prenominal) producers can become more efficientCountry has more stakeholdersDisadvantages pretentiousness increasesIf domestic companies uncompetitive they may sufferRrequires a high level of resourcesThe direct investment strategy has more advantages than disadvantages and thus this strategy is the right strategy for my business which will increase our efficiency.The last strategy is a joint venture. A joint venture between foreign companies is a popular strategy today for both companies to achieve their goals. Each partner in crime has the opportunity to get their benefits from the comparative advantages of others. Local companies can provide noesis about domestic a nd foreign companies can offer know-how and access to foreign clients. Like other strategies joint venture has advantages and disadvantages. When forming a joint venture company has an opportunity to gain new experience and advanced friendship in technology. Also, the company has an access to important resources, personnel and technology. In sum total to this companies share the risks with a partner and they become flexible. Companies can sell the business to another parent company. Approximately 80% of all joint ventures in the end are sold. So, these are advantages of joint venture and lets look at disadvantages. It requires a lot of time and effort to build a suitable and strong relationship and cooperation with other business and thus there may be some problems if the target of the company is not communicated to all parties or incorrectly communicated.There is an imbalance in the level of knowledge, investments or assets are listed in the company by various partners. Differen t cultures and management styles tot up to deterioration of cooperation. In order to succeed you need to cautiously work the targets. I think that this strategy is an appropriate for my business I am going to set up. But I do not deprivation to share my business with another person despite the fact that with a partner running business would be much easier.After all research that was provided by me I have decided that the best market entry for my business is Foreign Direct Investment (FDI). As I discussed it earlier, this strategy is more appropriate for my business than another two. Because using FDI strategy you can be the owner of the company and this is what I mostly want to. Another reason why I decided to choose FDI strategy is that I can control all operations, to know consumers needs. In amplification to this FDI strategy has law political risks because India is politically stable country. That is why I settled on this decision.Market Entry ImplementationTo become boomin g in my business I decided to choose FDI market entry strategy. I have to decide how I will implement this strategy. At the initial stage of opening an Internet cafe, I should control all actions that will be made to create my business. Staff plays an important fictional character in my business and to attract people to my caf, I must carefully choose educated, highly skilled and courteous people. Also I would like to have employees whom I could trust. Each of us knows that the success and prosperity of our business is our clients and to attract them it is very important to select staff that will sate all the needs of clients. Since I am not the resident of India, I must understand that for me there are certain rules that I need to follow. I have to determine the budget, control all costs and to be sure that I could pay all bills. Also I should have start-up capital that would help me to open a business in a foreign country.In order to move ahead my caf I need to create a marketin g strategy that is completely new, something that no one has it. Creating a Marketing Strategy will save me lots of money. many a(prenominal) business owners dont want to do it because they dont know where to start and they feel they dont have the time to spend on it .I want everyone in India to know about my Internet caf and have a vivid impression.Summing up I would like to say that India is the best choice to run my business. There are some positive (political, legal environment) and negative aspects (taxes, red tape etc) that will affect my business. But I understand if I want to achieve my goal it is necessary to work very hard and strive to success.