INTERNATIONAL BUSINESS ENVIRONMENT: AN OVERVIEW

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Oct 30, 2013 (3 years and 10 months ago)

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INTERNATIONAL BUSINESS
ENVIRONMENT: AN
OVERVIEW

XISS

MARCH 2011

PRESENTATION
SEQUENCE


BUSINESS BASICS





ENVIRONMENTAL SCANNING

BUSINESS BASICS


WHAT IS BUSINESS?


WHAT ARE ITS OBJECTIVES?


WHO STARTS A BUSINESS?


WHAT IS INTERNATIONAL BUSINESS?


WHAT ARE BUSINESS
CLASSIFICATIONS?


HOW ARE BUSINESSES ORGANISED?


ORGANISATIONS AND CHANGE


HIERARCHIES AND NETWORKS


CORPORATE GOVERNANCE

ENVIRONMENTAL
SCANNING


INTERNAL ENVIRONMENT

o
STRENGTHS AND WEAKNESSES


EXTERNAL ENVIRONMENT

o
MICRO (OPPORTUNITIES AND THREATS)


SUPPLIERS


COMPETITORS


CUSTOMERS


INTERMEDIARIES

o
MACRO (OPPORTUNITIES AND THREATS)


THE ECONOMY


GOVERNMENT


SOCIO
-
CULTURAL


TECHNOLOGY

BUSINESS BASICS


WHAT IS A BUSINESS?

o
VAST ARRAY OF ECONOMIC ACTIVITIES IN
WHICH COMMODITIES ARE SUPPLIED IN
EXCHANGE FOR SOME PAYMENT, USUALLY
MONEY. IT INCLUDES BUYING AND
SELLING, MANUFACTURING PRODUCTS,
EXTRACTING NATURAL RESOURCES AND
FARMING.


OBJECTIVES OF BUSINESS

o
PROFIT

o
NOT
-
FOR
-
PROFIT

BUSINESS BASICS


WHO STARTS A BUSINESS?

o
ENTREPRENEUR:. one who creates a new
business in the face of risk and uncertainty for
the purpose of achieving profit and growth by
identifying opportunities and assembling the
necessary resources to capitalize on them.


McDONALD STARTED WITH SINGLE HAMBURGER
OUTLET IN THE US IN 1955 AND HAS CURRENTLY
THOUSANDS OF OUTLETS IN OVER 120
COUNTRIES, MAINLY THROUGH FRANCHISEES
(individual entrepreneurs own the business and operate
it under an agreement with McDonald’s).



International Companies

Bartlett
-
Ghoshal Classfication


International business
refers to business activities that
straddle two or more countries. Businesses are increasingly
looking beyond the bounds of their home country for new
opportunities.


Book: Managing Across Borders: The Transnational Solution
(1989)


Identified 3 types of Cross
-
national companies


MNCs: such as Unilever, that are conglomerates (businesses
involved in many areas): responsiveness and flexibility


Global Companies: Centralized decision making and largely
standardized products, like Ford: Efficiency


International Cos: Focusing upon joint development and
worldwide sharing of knowledge, like the IBM. Transfer of
learning

BUSINESS BASICS

INTERNATIONAL

BUSINESS

MNCs

Loose federation

of enterprises:

National subsidiaries

solve all operative

and some strategic

Tasks

e.g. Unilever

Global

Enterprises

Tightly centralized,

Subsidiaries only

As distribution centers

e.g. Toyota

International

Enterprises

In between MNCs

And Global

Enterprises e.g.

IBM, Ericsson



BUSINESS BASICS:
BUSINESS CLASSIFICATION


OWNERSHIP

o
SOLE TRADER: Self
-
employed, unlimited liability: Franchise a less risky route to
starting a business because the business can trade under an established brand
name

o
PARTNERSHIP: unlimited liability

o
Public Private partnership: Basically Financing arrangement: BOT and BOOT:
B’lore airport PPP, GMR group

o
COMPANY: Share capital or equity, limited liability


PRIVATE Companies: Not allowed to offer shares to the public: Virgin group
of companies


PUBLIC: allowed to offer shares to the general public, listed in stock
exchanges

o
STATE OWNED ENTERPRISES: Privatization, disinvestment


SIZE

o
MICRO: 0
-
9 EMPLOYEES

o
SMALL: 10
-
49 EMPLOYEES

o
MEDIUM: 50
-
249 EMPLOYEES

o
LARGE: 250+ EMPLOYEES

o
SME: SMALL TO MEDIUM ENTERPRISES


EXAMPLE: PICSEL TECHNOLOGIES: SMALL SCREEN DEVICES

BUSINESS BASICS:
BUSINESS ORGANISATION


BUSINESS ORGANISATION REFERS TO
DESIGN OF ORGANISATION THROUGH
WHICH ENTERPRISE IS ADMINISTERED
.

o
FUNCTIONAL APPROACH

WHERE
BUSINESS FUNCTIONS DETERMINE
ORGANISATIONAL STRUCTURE

o
DIVISIONAL STRUCTURE

WHERE BUSINESS
IS ORGANISED INTO BUSINESS UNITS OR
DIVISIONS BASED ON PRODUCT, BRAND OR
GEOGRAPHICAL REGION

o
HOLDING COMPANIES

MULTIDIVISION
APPROACH

BOARD OF

DIRECTORS

DIVISION

PRODUCT OR

REGION

DIVISION

PRODUCT OR

REGION


DIVISION

PRODUCT OR

REGION


CEO

GENERAL OFFICE

DEPARTMENT

SALES

DEPARTMENT

MANUFACTURING

DEPARTMENT

PURCHASING

DEPARTMENT

FINANCE

FUNCTIONAL APPROACH

BOARD OF

DIRECTORS

R & D

PRODUCTION

PRODUCT

DESIGN

CEO

MARKETING

HRM

FINANCE

RECRUITMENT

TRAINING

EMPLOYEE

RELATIONS

HOLDING COMPANY


The
holding company
may also be said to
be based on divisions, in that a parent
company is the owner of a diverse array of
subsidiary companies. However, unlike the
multidivisional companies described above,
the holding company exerts little control over
the separate companies and provides few
general functions for the group as a whole.
The companies within the group operate, in
effect, as independent organizations.


BUSINESS BASICS

ORGANISATION AND CHANGE


ORGANISATIONAL CULTURE
:


No two organizations, even two with similar outward
structures, will be run in exactly the same way.
Differences in behaviour, values and overall atmosphere
are part of a business’s
organizational culture


Ingrained ways of doing things


TAKEOVER OR MERGER AS CATALYSTS TO CHANGE IN
CULTURE


STRATEGY: PLAN OF ACTION TO ACHIEVE CERTAIN
OBJECTIVES


DELIBERATE AND EMERGENT STRATEGY
:

Strategy is often a combination of ‘deliberate’ strategy, that which has
been originally intended, and ‘emergent’ strategy, which has arisen from
events not

part of the intended

strategy
.


STRATEGIC THINKING

BUSINESS BASICS:

HIERARCHIES AND
NETWORKS


HIERARCHIES AND BUREAUCRACY
-
INFLEXIBLE AND UNRESPONSIVE


DELAYERING OR FLAT STRUCTURE:
EMPOWERMENT


EMPOWERMENT TIES IN WITH NETWORK
ORGANISATION.


NETWORK ORGANISATION: IT IS THE
INFORMAL OVERLAY THAT CUTS ACROSS
WHATEVER FORMAL STRUCTURE IS
CHOOSEN.


NETWORKS RELY ON
SOCIAL CAPITAL,
THAT
IS, SHARED NORMS AND RELATIONSHIPS OF
TRUST, RATHER THAN ANY FORMAL
AUTHORITY STRUCTURES.

CORPORATE
GOVERNANCE


IT REFERS TO STRUCTURE AND
PROCESSES BY WHICH ULTIMATE
CONTROL AND DECISION MAKING
IN THE COMPANY ARE EXERCISED


AGENCY THEORY


SEPARATION OF OWNERSHIP AND
MANAGEMENT


CORPORATE
GOVERNANCE

BOARD OF DIRECTORS

REMUNERA
TION
COMMITTE
E

SHAREHOLDERS AGM

EXECUTIVE AND

NON
-
EXECUTIVE

DIRECTORS

AUDIT
COMMIT
TEE

CEO

ENVIRONMENTAL
SCANNING


INTERNAL ENVIRONMENT CHECKLIST FOR
PERFORMING STRENGTHS AND WEAKNESS
ANALYSIS

o
MARKETING


REPUTATION


MARKET SHARE


CUSTOMER SATISFACTION


CUSTOMER RETENTION


PRODUCT AND SERVICE QUALITY


PRICING, DISTRIBUTION, SALES AND INNOVATION
EFFECTIVENESS


GEOGRAPHICAL COVERAGE

o
FINANCE


COST/AVAILABILITY OF CAPITAL


CASH FLOW (NET PROFIT + DEPRECIATION)



INTERNAL ENVIRONEMENT
CHECKLIST CONTD..


MANUFACTURING

o
FACILITIES

o
ECONOMIES OF SCALE

o
CAPACITY

o
ABILITY TO PRODUCE ON TIME

o
TECHNICAL AND MANUFACTURING SKILLS


ORGANISATION

o
VISIONARY AND CAPABLE LEAERSHIP

o
ENTERPRENEURIAL ORIENTATION

o
FLEXIBLE AND RESPONSIVE ORGANISATION

o
DEDICATED WORKFORCE



EXTERNAL ENVIRONMENT


MICRO ENVIRONMENT

o
SUPPLIERS


VERTICAL VIS
-
S
-
VIS HORIZONTAL (MERGERS AND
TAKEOVERS) INTEGRATION: outsourcing or in
-
house?
High Inventory costs

o
COMPETITORS: Competitor Array: Discretionary Income:
brand competition and desire competition


STRATEGY TO TAKE THEM ON: Case of Bharti and
Reliance

o
CUSTOMERS: Institutional or retail: Few or Many clients: IT
industry: Case of Tech Mahindra


CREATE AND SUSTAIN

o
INTERMEDIARIES: Those that help businesses in its
activities: Vital links between company and final consumers


MARKETING AND FINANCIAL: M&A: IPO: Rights Issue:

SUPPLIER


Vertical integration is the degree to which a firm owns its
upstream suppliers and its downstream buyers (growing raw
materials, manufacturing, transporting, marketing, and/or
retailing )


BACKWARD INTEGRATION: Control of raw material suppliers


FORWARD INTEGRATION: Control of distribution centers and
retailers


HORIZONTAL INTEGRATION: Consolidation of many firms
engaged in manufacturing of same product.


Issue: In
-
house or outsourcing


High cost of inventory if supplier is unreliable

COMPETITOR ANALYSIS:
Competitor Array

Success
factors

Weighting

Competitor 1
rating

Competitor
1 weighted

Competitor
2 rating

Competitor
2 weighted

Extensive
distribution

.4

6

2.4

3

1.2

Customer
Focus

.3

4

1.2

5

1.5

Economies
of scale

.2

3

.6

3

.6

Product
Innovation

.1

7

.7

4

.4

Total

1.0

20

4.9

15

3.7

Competitor Profiling


Background

o
location of offices, plants, and online presences

o
history
-

key personalities, dates, events, and trends

o
ownership, corporate governance, and organizational structure


Financials

o
P
-
E ratios, dividend policy, and profitability

o
various financial ratios, liquidity, and cash flow

o
Profit growth profile; method of growth (organic or acquisitive)


Products.

o
products offered, depth and breadth of
product line
, and product portfolio
balance

o
new products developed, new product success rate, and R&D strengths

o
brands, strength of brand portfolio, brand loyalty and brand awareness

o
patents and licenses

o
quality control conformance

o
reverse engineering


Competitor Profiling


Marketing

o
segments served, market shares, customer base, growth rate, and customer
loyalty

o
promotional mix, promotional budgets, advertising themes, ad agency used, sales
force success rate, online promotional strategy

o
distribution channels used (direct & indirect), exclusivity agreements, alliances,
and geographical coverage

o
pricing, discounts, and allowances


Facilities

o
plant capacity, capacity utilization rate, age of plant, plant efficiency, capital
investment

o
location, shipping logistics, and product mix by plant


Personnel

o
number of employees, key employees, and skill sets

o
strength of management, and management style

o
compensation, benefits, and employee morale & retention rates


Corporate and marketing strategies

o
objectives, mission statement, growth plans, acquisitions, and divestitures

o
marketing strategies


Customer Analysis


Create and Sustain


Types of customers

o
Retail or Institutional

o
Few or More


Customer Focus Groups

o
Mechanism for gathering the voice of the customer through
a structured group interview


Exploratory focus groups are used to discuss customer needs,
develop concepts for new products and/or evaluate new
concepts/products


Experiential focus groups are used to observe customers
using products (and learn from those observations) or to hear
motivations for the purchase of a product.

Intermediaries


Financial and Marketing

o
Those that help businesses in its activities: Vital
links between company and final consumers

o
A
financial intermediary

is an entity that
connects surplus and deficit agents. The classic
example of a financial intermediary is a bank that
transforms bank deposits into bank loans.

o
Business organizations that expedite the
distribution of goods and services from the
producer to consumers

EXTERNAL MACRO
ENVIRONMENT


THE ECONOMY

o
GNP OR GDP PER CAPITA

o
GNP OR GDP GROWTH

o
UNEMPLOYMENT AND INFLATION
RATE

o
CONSUMER AND INVESTOR
CONFIDENCE

o
CURRENCY EXCHANGE RATES

o
TRADE BALANCE

o
BALANCE OF PAYMENTS

Components of Economic
Environment


Existing structure of the economy in terms of relative role of
private and public sectors.


The rates of growth of GNP and per capita income at current
and constant prices


Rates of saving and investment


Volume of imports and exports of different items


Balance of payments and changes in foreign exchange
reserves


Agricultural and industrial production trends


Expansion of transportation and communication facilities


Money supply in the economy


Public debt (internal and external)


Planned outlay in private and public sectors

CURRENCY EXCHANGE
RATE


NOMINAL EXCHANGE RATE

o
PRICE OF ONE CURRENCY IN EXCHANE FOR OTHER


DEVALUATION AND REVALUATION


DEPRECIATION AND APPRECIATION


SPOT RATES, FORWARD RATES AND FUTURES


WHAT DETERMINES EXCHANGE RATES


PPP


PORTFOLIO BALANCE


WHO DETERMINES EXCHANGE RATES


MONETARY POLICY AND INTERVENTION


EFFECTS OF EXCHANGE RATE MOVEMENTS


EFFECTIVE EXCHANGE RATE

o
AVERAGE EXCHANGE RATE AGAINST A BASKET OF CURRENCIES LIKE
THE USD INDEX (EUR, JPY,GBP, CAD, CHF, SEK)


REAL EXCHANGE RATE

o
IT MEASURES INTERNATIONAL COMPETITIVENESS


IF PRICE GOES UP BY 4% IN GERMANY AND 6% IN US, THE US COMPETITIVENESS
FALLS BY 2%. HOWEVER IF OVER THE SAME PERIOD THE DOLLAR FELL 3%, OVERALL
US COMPETITIVENESS HAS ACTUALLY IMPROVED BY 1%.


BALANCE OF PAYMENTS


EXPORTS LESS IMPORTS OF PHYSICAL
GOODS= MERCHANDISE BALANCE


MERCHANDISE BALANCE+NET EXPORTS AND
IMPORTS OF SERVICES=TRADE BALANCE


TRADE BALANCE + NET CURRENT TRANSFER
(WAGES+PROFITS+INTEREST+INTERNATIONA
L AID)=CURRENT ACCOUNT BALANCE


CURRENT A/C BALANCE +CAPITAL A/C
BALANCE(NET PORTFOLIO
INVESTMENT+FDI+EXTERNAL BORROWING) =
BALANCE OF PAYMENTS



Balance of Payments


IMPORTS

o
COMPARATIVE ADVANTAGE

o
VALUE AND VOLUME

o
IMPORT PENETRATION

o
IMPORT COMPOSITION

o
COMPRESSIBILITY

o
IMPORT SOURCES


EXPORTS

o
VALUE AND VOLUME

o
EXPORT PENETRATION

o
COMPOSITION AND DESTINATIONS


TRADE BALANCE, MERCHANDISE TRADE BALANCE

o
ELIMINATING A TRADE DEFICIT


A CHANGE IN THE VOLUME OF TRADE


A CHANGE IN RELATIVE PRICES THROUGH A CHANGE IN THE EXCHANGE RATE OR A
CHANGE IN DOMESTIC PRICES


CURRENT ACCOUNT BALANCE

o
ACQUISITION OF NET FOREIGN ASSETS OR EXTERNAL DEBT GROWS TO
TUNE OF CURRENT ACCOUNT DEFICIT


BALANCE OF PAYMENTS


OFFICIAL RESERVES

o
GOLD AND FOREIGN CURRENCIES HELD BY THE
GOVERNMENT

o
INTERVENTION TO SMOOTHEN TEMPORARY BLIPS IN
EXCHANGE RATES

o
STERILISATION


EXTERNAL DEBT, NET FOREIGN ASSETS

o
EXTERNAL DEBT AS % OF GDP

o
DEBT SERVICE RATIO


PAYMENT OF INTEREST PLUS PRINCIPAL AS % OF EXPORTS
OF GOODS AND SERVICES

o
NET FOREIGN ASSETS


EXTERNAL DEBT


ACQUISITION OF STOCKS OF ASSETS IN OTHER COUNTRIES,
LIKE INDUSTRIAL COUNTRIES AND OIL EXPORTERS

Consumer

Confidence


Degree of
optimism

on the state of the economy that
consumers express through their activities of savings and
spending .


Started in 1967 and is benchmarked to 1985=100


Monthly: Leading Indicator of economic trends.


survey consists of five questions to be answered in positive,
negative or neutral:

o
Current business conditions

o
Business conditions for the next six months

o
Current employment conditions

o
Employment conditions for the next six months

o
Total family income for the next six months



Investor Confidence Index


It measures the attitude of investors to risk.


Index uses the principles of modern financial
theory to model the underlying behavior of
global investors.


It measures confidence by assessing the
changes in investor holdings of equities.


The more of their portfolio that institutional
investors are willing to hold, the greater their
risk appetite or confidence.

INFLATION


Persistent rise in prices


Fall in value of money


Rise in money supply


Adaptive expectations:


EXTERNAL MACRO
ENVIRONMENT


GOVERNMENT

o
FORM OF GOVERNMENT

o
POLITICAL STABILITY

o
GOVERNMENT DEBT

o
BUDGET DEFICIT/SURPLUS

o
CORPORATE AND PERSONAL TAX
RATES

o
IMPORT TARIFFS AND QUOTAS

o
RESTRICTIONS ON INTERNATIONAL
FINANCIAL FLOWS

o
MONETARY POLICY

PUBLIC DEBT


India's public debt includes market
borrowings, external debt and other liabilities
like small savings and provident funds.


Estimated public debt= Rs 34 lakh crore ( or
Rs 11.5 trillion) as on end 2008
-
09.


Total P D= $723.86 billion


Internal Debt=$225billion (31%)


OF THE RS 34 LAKH CRORE, 22.7 LAKH
CRORE ARE INTERNAL AND THE REST
EXTERNAL DEBT.


PER PERSON DEBT = Rs 30000/=

MONETARY POLICY


REGULATION OF MONEY SUPPLY


Various measures of money supply like, M1 and M3,

o
M1: CURRENCY (Notes and coins) + demand deposits or current a/c
deposits) +commercial banks reserves with RBI: also called monetary base

o
M3: M1+Time Deposits with Banks: Also called Broad Money


IMPACT ON COST AND AVAILABILITY OF CREDIT THROUGH

o
REPO RATE: THE RATE AT WHICH THE CENTRAL BANK PROVIDES A
SHORT
-
TERM LOAN (OVERNIGHT LOAN OR LOAN FOR A WEEK), IN
RETURN FOR WHICH BANKS PLEDGE SECURITIES AS COLLATERAL
(6% in oct 2010).

o
REVERSE REPO RATE: THE RATE AT WHICH THE CENTRAL BANK
BORROWS MONEY FROM THE MARKET FOR SHORT PERIODS.( 5%)

o
CRR (6%)

o
SLR (25%)

o
BANK RATE OR DISCOUNT RATE: RATES AT WHICH THE CENTRAL
BANK PROVIDE MONEY TO COMMERCIAL BANKS TO HELP SMOOTH
LONGER (SAY, WEEKLY) FINANCING NEEDS. (6 %)


BOND YIELDS AND BOND PRICES:

o
Yield calculations

o
Yields and price

o
Yield and economic cycle


INTERNATIONAL
ENVIRONMENT


GLOBAL GROWTH


WTO

o
PRINCIPLES

o
CASE FOR OPEN TRADE


THEORY OF ABSOLUTE AND COMPARATIVE ADVANTAGE

o
GATT TRADE ROUNDS

o
FARM SUBSIDIES

o
TARIFF BARRIERS

o
NON
-
TARIFF BARRIERS

o
TRADING BLOCKS


FTA


CUSTOMS UNION


COMMON MARKET


ECONOMIC UNION

POLITICAL ENVIRONMENT


The Constitution of the country


Prevailing political system


The degree of politicisation of business and economic issues


Dominant ideologies and values of major political parties


The nature and profile of political leadership and thinking of


political personalities


The level of political morality


Political institutions like the government and allied agencies


Political ideology and practices of the ruling party


The extent and nature of government intervention in business


The nature of relationship of our country with foreign countries

EXTERNAL MACRO
ENVIRONMENT


LEGAL

o
MINIMUM WAGES LAW

o
ENVIRONMENTAL PROTECTION LAWS

o
WORKER SAFETY LAWS

o
COPYRIGHT AND PATENT LAWS

o
ANTI
-
MONOPOLY LAW

o
COMPETITION LAW

ENVIRONMENT
PROTECTION LAWS


WATER (PREVENTION AND CONTROL OF POLLUTION) ACT
1974


AIR (PREVENTION AND CONTROL OF POLLUTION) ACT 1981


ENVIRONMENT PROTECTION ACT 1986


CENTRAL POLLUTION CONTROL BOARD MONITORS AIR
QUALITY AND WATER QUALITY UNDER NATIONAL AIR
MONITORING PROGRAMME AND WATER MONITORNG
PROGRAMME.


14 MAJOR RIVERS, 44 MEDIUM RIVERS AND 55 MINOR RIVERS:
MAINLY RAINFED DURING MONSOONS, DRY FOR REST OF THE
YEAR OFTEN CARRYING WASTEWATER DISCHARGES FROM
INDUSTRIES AND CITIES ENDANGERING THE QUALITY OF
SCARCE WATER RESOURCES


AIR QUALITY MONITORING AS ASCERTAINED BY SUSPENDED
PARTICULATE MATTER (SPM), CARBON MONOXIDE (CO),
OZONE (O3), SULPHUR DIOXIDE (SO2), NITROGEN DIOXIDE
(NO2)


OCCUPATIONAL HEALTH
AND SAFETY (OH&S)


CONSTITUTIONAL PROVISIONS UNDER ARTICLES 24, 39(e AND f) and 42


BIS APPROVED IS 18001:2000 OH&S MANAGEMENT SYSTEMS (OH&SMS)


THREE TYPES OF LAWS FOR OH&S

o
STATUTES FOR SAFETY AT WORKPLACES

o
STATUTES FOR SAFETY OF SUBSTANCES

o
STATUTES FOR SAFETY OF ACTIVITIES




AT PRESENT, SAFETY AND HEALTH STATUTES FOR REGULATING OH&S OF PERSONS AT
WORK EXIST IN THE FOLLOWING FOUR SECTORS

o
MINES

o
FACTORIES

o
PORTS

o
CONSTRUCTION


THE MAJOR LEGSLATIONS ARE

o
THE FACTORIES ACT 1948

o
MINES ACT, 1952

o
DOCK WORKERS (SAFETY, HEALTH AND WELFARE) ACT, 1986

o
PLANTATION LABOUR ACT, 1951

o
EXPLOSIVES ACT 1884

o
PETROLEUM ACT 1954

o
INDIAN ELECTRICITY ACT 1910

o
INDIAN ATOMIC ENERGY ACT 1962




COPYRIGHT AND PATENT
LAWS
understanding WTO.pdf page 37


COPYRIGHT IS THE LEGAL RIGHT OF CREATIVE ARTISTS
OR PUBLISHERS TO CONTROL THE USE AND
REPRODUCTION OF THEIR ORIGINAL WORKS LIKE
COMPUTER PROGRAMS


PATENT IS AN EXCLUSIVE RIGHT OFFICIALLY GRANTED
BY A GOVERNMENT TO AN INVENTOR TO MAKE OR SELL
AN INVENTION.


TRIPS: TYPES OF INTELLECTUAL PROPERTY

o
COPYRIGHT AND RELATED RIGHTS

o
TRADEMARKS: Types of signs

o
GEOGRAPHICAL INDICATIONS: A place name identifies
the product like Champagne, Scotch.

o
INDUSTRIAL DESIGNS

o
PATENTS for both products and processes

o
LAY
-
OUT DESIGNS OF INTEGRATED CIRCUITS

o
UNDISCLOSED INFORMATION INCLUDING TRADE
SECRETS

ANTI
-
MONOPOLY LAW


MRTPC IS AN IMPORTANT ORGAN OF THE
DEPARTMENT OF COMPANY AFFAIRS


MRTPC ESTABLISHED U/S 5 OF THE MRTPA,
1969


FUNCTION: ENQUIRE INTO AND TAKE
APPROPRIATE ACTION AGAINST UNFAIR
TRADE PRACTICES AND RESTRICTIVE TRADE
PRACTICES.


IN REGARD TO MONOPOLISTIC TRADE
PRACTICES, THE COMMISSION CAN ENQUIRE
INTO SUCH PRACTICES UPON A REFERENCE
MADE TO IT BY THE CENTRAL GOVERNMENT
OR UPON ITS OWN KNOWLEDGE AND SUBMIT
THE FINDINGS TO THE CENTRAL
GOVERNMENT FOR FURTHER ACTION.
EXAMPLES: JET ARWAIYS AND KINGFISHER
AIRLINES


COMPETITION LAWS


CCI


PROHIBITION OF ANTI
-
COMPETITIVE AGREEMENTS:
HORIZONTAL AND VERTICAL INTEGRATION. HORIZONTAL
AGREMMENT AMONG EXPORTERS EXEMPTED


PROHIBITION OF DOMINANCE: Acquisition of significant market
power, which enables the enterprise to increase the price or limit
production independently of competitors as well as customers.
Dominance is not treated bad per se; it is the abuse of dominant
position which is prohibited. Predatory pricing is one of the abuses
which can be established against a dominant player if the selling
price is below cost and there is intent to oust competitors.


REGULATION OF COMBINATIONS: Combinations include mergers,
amalgamations and acquisition of control, shares, voting rights or
assets. Combinations are classified into horizontal, vertical and
conglomerate combinations (Merger of unrelated business activities
for synergy, cross selling and increasing market share). If a proposed
combination causes or is likely to cause appreciable adverse effect
on competition, it cannot be permitted to take effect.

EXTERNAL MACRO
ENVIRONMENT


TECHNOLOGY

o
EFFICIENCY OF INFRASTRUCTURE INCLUING ROADS,
PORTS, AIRPORTS, ROLLING STOCK (railroad and road
vehicles, wagons, locomotives) HOSPITALS,EDUCATION,
HEALTHCARE, COMMUNICATION

o
INDUSTRIAL PRODUCTIVITY

o
COST AND AVAILABILITY OF
ELECTRICAL POWER

o
STATE OF INFORMATION
TECHNOLOGY

SOCIAL ENVIRONMENT


Attitudes towards product innovations, lifestyles, occupational


distribution and consumer preferences


Concern with quality of life


Life expectancy


Expectations from the workforce


Shifts in the presence of women in the workforce


Birth and death rates


Population shifts


Educational system and literacy rates


Consumption habits


Composition of family

EXTERNAL MACRO
ENVIRONMENT


SOCIO
-
CULTURAL

o
ATTITUDE TOWARDS


MATERIALISM, CAPITALISM, FREE ENTERPRISE,
INIVIDUALISM, CONSUMERISM, IMPORTANCE OF
WORK.

o
DEMOGRAPHIC FACTORS SUCH AS


POPULATION SIZE AND DISTRIBUTION


EDUCATION AND INCOME LEVELS


RELIGIOUS AFFILIATIONS


ETHNIC ORIGINS


CULTURAL STRUCTURES INCLUDING DIET AND
NUTRITION AND HOUSING CONDITIONS



SOCIO
-
CULTURAL
FACTORS


MATERIALISM: Devotion to material wealth and
possessions at the expense of spiritual or
intellectual values: Focus on possessions.


CAPITALISM: An economic system based on the
private ownership of the means of production and
distribution of goods, characterized by a free
competitive market and motivation by profit.


FREE ENTERPRISE: the doctrine or practice of
giving companies the freedom to trade and make a
profit without government control.



SOCIO
-
CULTURAL
FACTORS


CONSUMERISM: An attitude that values the
acquisition of material goods: The belief that the
buying and selling of large quantities of consumer
goods is beneficial to an economy or a sign of
economic strength.


INDIVIDUALISM: The pursuit of personal
happiness and independence rather than collective
goals or interests: The belief that society exists for
the benefit of individual people, who must not be
constrained by government interventions or made
subordinate to collective interests.


DIGNITY OF LABOUR: Respect for all kinds of
labor




DEMOGRAPHIC FACTORS


Population size and distribution: Birth Rate, Death Rate, Infant Mortality Rate,
Child Mortality Rate, Female Fertility rate, Distribution by age, residence,
occupation, Dependency ratio


Education and Income Levels: Middle Class: Companies that fail to
understand the unique desires and tastes of the new Indian consumer will
miss out on a half
-
billion
-
strong market that along with China ranks as one of
the most important growth opportunities of the next two decades.


INCOME GROUPS


DEPRIVED: INCOME<RS 90000/PER ANNUM/PER FAMILY (CONSISTING
OF 5 MEMBERS) (54% OF THE POPULATION)


ASPIRERS: RS 90000
-
200000/PER ANNUM/PER FAMILY (CONSISTING
OF 5 MEMBERS) (CURRENTLY FORMS 40 PERCENT OF THE
POPULATION)


SEEKERS: Rs 200000
-
500000 /PER ANNUM/PER FAMILY (CONSISTING
OF 5 MEMBERS)


STRIVERS: Rs 500000
-
1000000 /PER ANNUM/PER FAMILY (CONSISTING
OF 5 MEMBERS)


MIDDLE CLASS ARE SEEKERS AND STRIVERS: PURCHASING POWER
PARITY WOULD PUT THEM INTO MORE LIKE $23000
-
$118000 WHICH IS
MIDDLE CLASS BY MOST DEVELOPED COUNTRY STANDARDS.
Currently number 50 million (4.5 % of population) AND ARE LIKELY TO
INCREASE TO 583 MILLON BY 2025.


GLOBAL INDIANS: INCOME>1000000 (NUMBERS ABOUT 1.2 MILLION



THANK YOU

DR RAMAKANT AGRAWAL

XISS

RANCHI

ramakantagrawal@yahoo.com

9431109076