Jcb in India
JCB in India
Question1 What was the strategic rationale underlying JCB’s entry into India in 1979 and China 2005? Given that the capital to fund expansion is limited, does it make more sense for JCB to expand its presence in these markets, as opposed to more developed markets , such as those of Western Europe? Answer 1 From reading the case study it can be stated that the choice for JCB entrance into the Indian market was due to its construction market. JCB believed that the Indian markets were deemed as being favourable for investments and cold benefit then in the long to a greater extent. The Managers also believed that by entering the Indian market than do competitors they would gain an advantage rather than waiting for when this growth of the Indian market came noticeable to other Manufacturers. JCB being the ranked the fifth largest construction equipment manufacturer in the world thought that it should compete in China on the same level with that of its competitors (namely Caterpillar, Komatsu and Vovlo) reason being that the construction industry was increase at a fast rate and these competitors had already started expansion into the Chinese markets.
Question 2 Why do you think JCB chose to enter India via a joint venture, as opposed to some other entry mode?
Cyreen M St Louis Graduate Gateway Seminar in Global Business and International Trade Final Examination April 30, 2012
Answer 2
JCB decided to enter in the Indian market via joint venture with escorts as opposed to any other entry mode for the reason of the high tariff barriers which made direct exports to foreign markets difficult. A tariff is any tax placed on imports or exports (trade tariffs); they serve as a form of protectionist measure. By JCB engaging into a joint venture with Escorts, JCB was able to gain access into the India market while not having to experience any challenges that may arise when one is starting a business that solely owned. Furthermore, it can be assumed that one reason
Question1 What was the strategic rationale underlying JCB’s entry into India in 1979 and China 2005? Given that the capital to fund expansion is limited, does it make more sense for JCB to expand its presence in these markets, as opposed to more developed markets , such as those of Western Europe? Answer 1 From reading the case study it can be stated that the choice for JCB entrance into the Indian market was due to its construction market. JCB believed that the Indian markets were deemed as being favourable for investments and cold benefit then in the long to a greater extent. The Managers also believed that by entering the Indian market than do competitors they would gain an advantage rather than waiting for when this growth of the Indian market came noticeable to other Manufacturers. JCB being the ranked the fifth largest construction equipment manufacturer in the world thought that it should compete in China on the same level with that of its competitors (namely Caterpillar, Komatsu and Vovlo) reason being that the construction industry was increase at a fast rate and these competitors had already started expansion into the Chinese markets.
Question 2 Why do you think JCB chose to enter India via a joint venture, as opposed to some other entry mode?
Cyreen M St Louis Graduate Gateway Seminar in Global Business and International Trade Final Examination April 30, 2012
Answer 2
JCB decided to enter in the Indian market via joint venture with escorts as opposed to any other entry mode for the reason of the high tariff barriers which made direct exports to foreign markets difficult. A tariff is any tax placed on imports or exports (trade tariffs); they serve as a form of protectionist measure. By JCB engaging into a joint venture with Escorts, JCB was able to gain access into the India market while not having to experience any challenges that may arise when one is starting a business that solely owned. Furthermore, it can be assumed that one reason