Reference no: EM133324091

Case Study: Market Entry Strategy

The Indian economy is projected to grow by 6.4 percent in 2022. India jumped three places to become the United States' ninth most significant trading partner in 2021, with sales of U.S. goods and services valued at $56.8 billion. The United States has remained India's largest trading partner, with exports of goods and services to the United States worth $102.3 billion. The United States continues to have a trade deficit with India, which stood at -$45.5 billion in 2021.

The Indian Government has promoted the concept of "self-reliance" to develop and support Indian businesses and employment, making it more difficult for U.S. companies to sell their goods and services in India (International Trade Administration, 2022). The wholly owned subsidiary in India through a greenfield venture is the mode of entry I recommend for U.S. companies considering expansion (Hill, 2020, p. 454). Therefore, allowing a company to set up new operations in India and, hopefully, keep the company in good graces with the Indian Government, perhaps preferential treatment over competitors.

For U.S. companies considering expansion into the Indian market, the first-mover advantage would be the timing I would recommend. For these reasons, they preempt rivals and capture demand by establishing a solid brand name and customer satisfaction, building sales volume, and riding down the experience curve ahead of competitors (Hill, 2020, p. 447). I recommend using a large scale of entry which shows a long-term commitment to the market and would attract customers and distributors knowing the company is there indefinitely. Also, U.S. exporters are pressured to start manufacturing their products locally to retain market access, mainly if similar goods are not already produced in India. India has introduced market access barriers through tariffs, localization requirements, indigenous standards and labeling practices, price controls, and import restrictions as part of its self-reliance movement (International Trade Administration, 2022).

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