International Business Contexts
International Business Contexts
Section A
Introduction
This report will consist of a contextual analysis of the Indian competitiveness and investment attractiveness of the Indian soft drink industry. The author will use Porter’s National Diamond as a framework to conduct the industry analysis of the Indian soft drink industry and will draw clear conclusions and recommendations of entering into the Indian market.
Market Overview
Throughout 2010, the Indian soft drinks market generated total revenues of $3.8 billion, representing a compound annual growth rate (CAGR) of 11% for the period 2006 – 2010. During the period 2006 – 2010, the Indian soft drinks market grew at a double digit rate, as a result of strong sales increases across all of the products categories. Market consumption volumes increased between 2006 and 2010 with a CAGR of 10.7%, to reach a total of 6.7 billion litres 2010. This is expected to rise to 10.1 billion litres by the end of 2015, representing a CAGR of 8.8% for the 2010-2015 period. The overall market growth is expected to accelerate during the forecast period, however, the annual rate of growth is set to fall from a high of 10.1% in 2011, to a low of 7,6% in 2015. (Datamonitor, 2011, pp.7-8).
Porter’s National Diamond
Rugman and Collinson (2009, p.457) noted that Porter’s four determinants of national competitive advantage can be ‘critical in helping a country build and maintain competitive advantage.’ These four determinants are, factor conditions, demand conditions, related and supporting industries and firm strategy, structure and rivalry. There are also two external variables which can have a big influence, these being the Government and chance, which will be included in the analysis. This is known as Porter’s single-diamond framework. A model of Porter’s single-diamond framework can be seen in Fig.1.
Fig.1. Porter’s single-diamond framework
Source:
Section A
Introduction
This report will consist of a contextual analysis of the Indian competitiveness and investment attractiveness of the Indian soft drink industry. The author will use Porter’s National Diamond as a framework to conduct the industry analysis of the Indian soft drink industry and will draw clear conclusions and recommendations of entering into the Indian market.
Market Overview
Throughout 2010, the Indian soft drinks market generated total revenues of $3.8 billion, representing a compound annual growth rate (CAGR) of 11% for the period 2006 – 2010. During the period 2006 – 2010, the Indian soft drinks market grew at a double digit rate, as a result of strong sales increases across all of the products categories. Market consumption volumes increased between 2006 and 2010 with a CAGR of 10.7%, to reach a total of 6.7 billion litres 2010. This is expected to rise to 10.1 billion litres by the end of 2015, representing a CAGR of 8.8% for the 2010-2015 period. The overall market growth is expected to accelerate during the forecast period, however, the annual rate of growth is set to fall from a high of 10.1% in 2011, to a low of 7,6% in 2015. (Datamonitor, 2011, pp.7-8).
Porter’s National Diamond
Rugman and Collinson (2009, p.457) noted that Porter’s four determinants of national competitive advantage can be ‘critical in helping a country build and maintain competitive advantage.’ These four determinants are, factor conditions, demand conditions, related and supporting industries and firm strategy, structure and rivalry. There are also two external variables which can have a big influence, these being the Government and chance, which will be included in the analysis. This is known as Porter’s single-diamond framework. A model of Porter’s single-diamond framework can be seen in Fig.1.
Fig.1. Porter’s single-diamond framework
Source: