The topic selected by us is "We want to manufacture UGG Boots in India. Our base country is Australia and the new country is India. The industry is Manufacturing and the product is UGG Boots and slip ons.
Opportunities and Challenges of UGG Boots in the Indian Market
The primary and main motive of this study is to describe the various cultural issues that would be dealt and handled by UGG boots while entering or moving into the Indian market. UGG boots are a unisex style of sheepskin boot formulated in Australia and New Zealand. The firm has started so many businesses to meet the long-term requirements and needs of the business. UGG boots has decided to expand and flourish the business actions in the Indian market for attaining several competitive benefits in the global market. UGG wants to manufacture boots and slips on products in the Indian market. The paper outlines how the company has been able to attain benefits in the Indian market. The cultural issues that would be faced by UGG boots while initiating business in India also have been explained in the task. Some recommendations that help in preventing these issues and challenges also further have been drawn in the report. More detail of the task is discussed below.
UGG Boots Private Limited is an Australia Company. It was established a decade ago and specializes in making sheepskin products, mainly boots. The headquarter of the company is situated in South East of Melbourne (Uggaustralians, 2009). The products of the firm are all sold under a roof. The company serves the country with good quality products and provides services which make its customers happy and satisfied. UGG Boots Pvt Ltd. has seen a forever growth since it has been established and will continue its existence in the market worldwide. This boot industry has become one of the largest boots selling corporation providing products that are made of sheepskin in the world (Business government & society III, 2018). The firm also specializes in making customized boots. It stands significantly and remarkably on the expectations and demands of its customers and is running on a large platform. It also handles its online store and serves all the necessities of the customers in the international market. The company has owned highly skilled labors and professional staff to conduct business activities and functions in the international market (Uggaustralians, 2009). It is further stated that UGG boots render on its promise of comfort and luxury. The products of the company fit into the consumer’s everyday life providing them boots and slip ons products that are comfortable, fashionable and attainable. Finest and unique materials are being used by the company in the construction and production of products (Business government & society III, 2018). The company is planning to produce boots and slips on products in the Indian market to compete with rivalries.
Cultural Differences in the Indian Market
It is very complex to manufacture boots and slip ons products in the Indian market because there is a high risk in such a market. People of India want a good quality of products at a reasonable price. Hence, manufacturing products in India can create various challenges and issues for Australia (Footwearsinfoline, 2018). The company can get ample of opportunities while manufacturing boots and slip ons products in the Indian market if it focuses on the manpower in the competitive market. Apart from this, the firm can take benefits of the low cost of labor which helps in building and enhancing profitability in such a market. Moreover, the raw material and other resources are easily available in Indian market thus, the firm can take various advantages when implementing the business in the country (Footwearsinfoline, 2018). Furthermore, Indian country has well-established linkages with suppliers in USA and EU (Footwearsinfoline, 2018).
On the other hand, various threats also are possessed in the Indian market that has directly impacted on the revenue and returns of UGG boots. Entry of multinational in the domestic market is one of the biggest threats for the firm which can be entertained by the firm while entering into the Indian market. Stiff and intense competition from other nations such as China, Thailand, Indonesia, Brazil, and Vietnam also may affect the long-term target and progress of the firm in such a market. Aside this, fashion is an ongoing issue that put a direct and adverse impact on the tastes and preferences of the customers. Rapidly changing fashion trends are complex to adapt for UGG boots in the Indian market (Footwearsinfoline, 2018).
There are a lot of opportunities that a company can find while exercising business in India. On the other hand, some challenges also are faced by the firm while planning to enter into such a market (Lea-Greenwood, 2013). The three basic challenges are keeping in minds while introducing boots and slip ons products in the Indian market that has been discussed below.
Culture plays a major role in enhancing and boosting outcomes and revenue in the foreign market. Without analyzing and identifying the culture, trends, and values of the foreign market, the company could not able to initiate business in foreign countries (Vanita, 2013). Culture is a collaboration of behavior and pattern of people of a specific region over a period of specific time. The pattern or behavior may include moral, laws, belief, art, customers and traditions. Along with this, there is no easy method and tool of doing business in the foreign market. In India, setting a business is not very much complex but it is necessary to initiate a proper and unique strategy while producing boots and slip on products in the Indian market (Anderson, 2013).
Economic Challenges Faced by UGG Boots in India
Making a proper strategy can be the greatest challenge for UGG Boots Company in the Indian market because they are unaware about the culture of India and the taste, needs, expectations, and demands of Indians. Hence, in order to flourish and expand its trade in India, UGG boots can face issues of learning about the custom, values, and traditions of (Indians Lo Bianco, 2010). The taste and preferences of Indians is different as compared to the Australians. This challenge, therefore, can become a major threat and issue for UGG boots to manufacture its products and provide its services in the Indian market. It has been further stated that communication gap exists in the Indian market thus, it may hamper UGG boots financial position and brand image in the Indian market. Due to poor communication, the company could not able to understand the language of Indians effectively. Moreover, it leads to language barriers which can directly impact on the outcomes of the firm (Solomon, Dahl, White, Zaichkowsky & Polegato, 2014).
Understanding and evaluating the cultural difference which exists while working together in India are just the initial step or action. Changing fashion trends could be the biggest issue that can affect the sustainability and results of UGG boots in the Indian market (Relocateglobal, 2018). Diversity is a major concern that may influence the performance and efficiency of employees in the Indian market. Traditionally Indians have been significantly considered as family oriented, religious, time insensitive and status-conscious can further affect the long-term mission and vision of UGG boots in Indian market (Gautam, Lowery, Mays & Durant, 2016).
The economy of Australia is better than India and therefore people of Australia are able enough to pay for the product at the cost it is being offered or rendered. In India, the economy is low as compared to Australia and therefore economic scenario keeping in mind while implementing the business activities and actions in the Indian market (Sharma, Mishra & Choudhary, 2018). A brief market research and survey need to be done before implementing the business functions in such a market. It is noted that the Indian economy is one of the growing and fastest economies in the world (Pal, 2018).
It has seen analyzed the low level of national income is one of biggest economic issues that would be dealt by the company if UGG boots is planning to manufacture boots and slips on products in India. Apart from this, unemployment rate is very high in such market which can impact on the human resources of UGG boots (Pal, 2018). It is further reported that social and economic overheads of capital are inadequate and insufficient in India that can become a major issue in the Indian market. The infrastructure in Indian is poor and underdeveloped that may create ample of issues for UGG boots while functioning business in such market (Pal, 2018). Beside this, scarcity of capital and low rate of capital formation are serious issues which can put adverse impact on the progress and targets of UGG boots in the Indian market (Wilson & Wilson, 2017). Due to illiteracy, use of sophisticated and advanced technology is quite weak in the Indian market (Pal, 2018).
Importance of Evaluating the Culture, Trends, and Values of the Foreign Market
This can create a problem for UGG Boots to grow its business. This economic strategy procedure not just contains a brilliant review of the Indian economy hence it can also reflect the targets and revenue of UGG boots in the Indian market (Kanwal, 2010).
The Indian business culture concentrates a great deal on relationship and trust fabricating instead of buckling down and brisk towards particular business destinations (Tenzer, Pudelko & Harzing, 2014). Due to lack of trust and loyalty, the people are unable to maintain trust on the partners and some other countries as it affects the results and profit margin of UGG boots in the Indian market. It creates and enhances dissatisfaction and job insecurity among the employees in such market (Cappelli, Singh, Singh & Useem, 2010). This further creates lack of contacts which becomes one of the other challenges for the firm facing while functioning the business activities in the Indian market. Many companies have to develop contacts with other businesses so that they can prepare strategies of development effectively and efficiently (Budhwar, Varma, Malhotra & Mukherjee, 2009). Growing contacts in a different country are not easy and therefore this can be termed as another challenge for the UGG Australia that is seeking to expand its business in India. Working environment is another issue that will be entertained by UGG boots in such a market because different approaches are used by both countries. Therefore, it can hamper and destroy the relationship between the two countries (Lawrence & Tar, 2010).
There are a number of challenges that Australian company would have to go through while manufacturing boots and slip ons products in India. These challenges also have solutions that can be recommended in order to overcome them and conduct the business in a hassle-free manner. Some of the aspects to overcome these challenges are discussed below which the company should follow:
- In order to overcome the challenge of building relationships, UGG can seek for Indian clients or Indian partners with whom it can tie up to meet its requirements. The company can conduct conference inviting its competitors from around the world especially from India where it can interact and develop its contacts (Cavusgil, Ghauri & Akcal, 2012). This will enable them in having face to face conversation by the company. It will give them a chance to know about the culture of India from India itself. It can also invest its time in developing healthy relationships by arranging a video conference from Indian business clients. The company can also greet them by investing in a there company which it feels worth putting its money in.
- The company should use Hofstede cross-cultural dimension model to reduce and prevent the culture differences between both the countries. There is six dimensions of Hofstede cross-cultural dimensions such as power of distance, individualism, uncertainty avoidance index, long-term orientation, and This dimension will help the company in rendering and encouraging motivation among the workers in the Indian market as further, this model also helps in minimizing conflicts and issues among the employees. Improving organizational performance and productivity are another advantages of Hofstede cross-cultural dimension. It is stated that the Hofstede model shall be used by the company to overcome the rivalries in the Indian market.
- A deep marketing research and survey should be conducted to increase the scope of maximizing profitability in the Indian This marketing research and survey further help UGG boots to evaluate and identify the challenges, threats, and risks of the Indian market. For this purpose, the company can use pestle analysis and porter five forces analysis at an international level. Pestle analysis will help the firm to identify and evaluate the economic and political issues that can hamper the productivity and effectiveness of UGG boots in India (Fairclough, 2014).
- Training and development shall be provided to the employees for understanding and measuring the cultural issues in the international market. It will further support to understand the language, values, culture, traditions, customer, fashion and trends of the Indian
- Apart from this, market survey for understanding and evaluating the tastes, preferences, choices, and needs of the Indian customers shall be done. If the company analyzes and identifies the changing trends and fashion of Indians then it can easily overcome the competitors as it further helps in reducing cultural issues in such a market. Open and string communication shall be promoted by the company in the Indian market for resolving and handling language barriers and issues.
- Team building is generally an overlooked part of the business across the world. Building and enhancing meaningful and significant relationships among the various countries are significant and essential to keep everyone engages in the business effectively and efficiently. Forging international relationships in the international market is a win for every country in a maximizing multinational boots business across the globe.
- In order to overcome the other challenge Australian company e. UGG Boots Pvt Ltd. must focus on hiring large number of Indian employees rather than recruiting indigenous people. Hiring Indian employees will increase their healthy relationship with India as well as they can easily be able to flourish in the Indian market. Indian professionals in this regard can become a backbone of the company. They will help the Australian Company to think in such a way that can impress Indians and can create growth in business by implementing successful and effective strategies. The strategies shall be made by the company after considering the likes and dislikes of Indians. Hiring Indian employees can serve UGG boots a greater aspect in running business successfully in the Indian market.
- Economic conditions of the Indian market shall be analyzed and identified by the company to struggle and overcome the rivalries in the Indian market. This would further provide the ample of chances to grow and uplift the profitability in the Indian market.
It is concluded from the above-mentioned analysis that economy can be a biggest and serious challenge for Australian company like UGG Boots which is trying to manufacture boots and slip ons products in India along with the other two challenges including building relationships and culture issues also may affect the targets and goals of UGG boots in the Indian market. The company has decided to conduct business functions in the Indian market for gaining competitive benefits and uplift profitability successfully.
It is analyzed that UGG Boots Company has to face ample of issues and challenges when entering into the Indian market from Australia for manufacturing of boots and slip ons products. One of the significant issues is a culture that may adversely affect the revenue, returns, and profitability of UGG boots in the Indian market. Without analyzing cultural issues, the company could not think about to attain rivalries benefits in the competitive market. Thus, at the end, some suggestions have been given to overcome and prevent the various cultural issues in the Indian market. These recommendations further help the Corporation to augment and maximize outcomes and revenue in the Indian market.
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