Autor: simba • March 8, 2011 • Essay • 816 Words (4 Pages) • 1,010 Views
For the purpose of our analysis, we will compare France, which is member of the European Union and India, which is located in South East Asia. For Acme Corporation, which is looking to set up a Greenfield project in a foreign country, my choice would obviously be India as compared to France because of the tremendous business opportunity offered by Indian markets.
In the last few years, India has emerged as one of the fastest growign emerging markets alongwith countries like China and Brazil, and is already one of the largest and fastest growing market in the world due to its large population and tremendous growth across all sectors and per capita income.
There is a huge inflow of foreign direct investment in India in all the sectors and more and more global companies are pumping money into the Indian economy to take advantage of the comparative advantage offered by India. India has already emerged as a global player in information technology and outsourcing related activities due to the significant comparative advantage offered by the country in terms of low cost of production, adequate availability of qualified and skilled english speaking population and host of other factors such as locational advantage, which really makes it a unique country to set up operations.
Indian stock markets have risen like anything in the past few years and economists have no fear in saying that India wil come on par with US economy on the likes of China.
For Acme corporation, India offers significant comparative advantage as compared to a country like France in the following ways:
1) Huge market size: India has not only a signifiantly larger population size as compared to France, but also has increasing market demand for products and services due to strong growth in the GDP, per capita income and due to significant improvement in the standard of living of the people. Further, the locational advantage of India provides a strong base for companies who wish to explore the fast growing markets of South East Asia which includes countries like Pakistan, Bangladesh, etc. As compared to France, Acme will be able to step into a much faster growing economy which is slated to become one of the largest economies in the world.
2) Comparative Advantage: India, due to the cheap availability of skilled as well as unskilled labor and low cost of production, can be developed as a global manufacturing hub for Acme, thereby providing dual advantage