TOPIC: Market Analysis & Selection through Strategic Planning
The objective of this activity is to apply the concept of market analysis and
importance of market characteristics in launching business in new market.
After this activity students will be able to understand that how different factors
affect the decision of a business to enter into new country market.
Students will also learn that how & why to prefer one country market to other.
Inspire Group, ranks among India’s top three private sectors business houses in terms of
net worth. The group has business interests that range from telecommunications (Inspire
Communications Limited) to financial services (Inspire Capital Ltd) and power
generation (Inspire Infrastructure Limited). Inspire Group’s leading company, Inspire
Communications, is India’s largest private sector information and communications
company (after Bharti Airtel. Established in 2004), with over 150 million subscribers. It
has established high standard and quality in communication and information networks.
It statuses among the top 5 telecommunications companies in the world by number of
customers in a single country. Inspire Communications Company covering over 24,000
towns and 600,000 villages. Inspire Communications owns and operates the nextgeneration
IP-enabled connectivity infrastructure, comprising over 190,000 kilometers of
fiber optic cable systems in India, USA, Europe, Middle East and the Asia Pacific region.
THE FOREIGN ENTRY PROCESS: A CRITICAL ANALYSIS
Inspire Co. is a famous company working in India for so many years. Inspire Co. has
very diversified portfolio and working in different segments. Company has the dynamic
work force, capable enough to adjust themselves in different capacities and able to work
in any environment. Top management including CEO, Mr. Aakash Bohmani, and all
directors have decided to make new office either in Sri Lanka or Maldives.
Sri Lanka has grown tremendously in telecom sector during last few years, especially
after recent increases in export of yarn and textile. GDP growth rate is also high as
compared to the last year which shows that it will continue to grow in coming years.
On the other hand, Maldives has more established economy, with a very consistent
growth in GDP. Law and order situation in Maldives is also better than Sri Lanka. Like
Sri Lanka, Inspire has joint venture in Maldives as well with Wataniya Telecom
On the basis of economic and demographic indicators, make a complete comparative
analysis for both countries and suggest company that which country is better for entering
into foreign market? (20 marks)
Marking Scheme: 08 Marks for each comparative analysis of both countries based on
each factor and 04 marks for the decision supported by logical arguments.
GDP growth rate of both countries
Maldives 8,800 Sri Lanka 5,700
here first of all we have to compare the GDP growth rate of both countries.
Then we have to decide which one is best country
The island consists mostly of flat-to-rolling coastal plains, with mountains rising only in the south-central part. The highest point Pidurutalagala, reaching 2,524 meters (8,281 ft.) above sea level. The climate is tropical and warm, due to the moderating effects of ocean winds. Mean temperature ranges from 17 °C (62.6 °F) in the central highlands, where frost may occur for several days in the winter, to a maximum of 33 °C (91.4 °F) in other low-altitude areas. Average yearly temperature ranges from 28 °C (82.4 °F) to nearly 31 °C (87.8 °F). Day and night temperatures may vary by 14 °C (57.2 °F) to 18 °C (64.4 °F).
According to the International Monetary Fund, Sri Lanka has a yearly gross domestic output of US$59 billion as of 2010.It has a GDP of US$116 billion in terms of purchasing power parity. Sri Lanka is next only to Maldives in the South Asian region in terms of per capita income, with a nominal value of US$2,877 and PPP value of US$5,673.It recorded a GDP growth of 8.3% in 2011.
In the 19th and 20th centuries, Sri Lanka became aplantation economy, famous for its production and export of cinnamon, rubber and Ceylon tea, which remains a trademark national export.the development of modern ports under British rule raised the strategic importance of the island as a center of trade.
While the production and export of tea, rubber, coffee, sugar and other commodities remain important, industrialization has increased the importance of food processing, textiles, telecommunications and finance. Main economic sectors of the country are tourism, tea export, clothing, rice production and other agricultural products. In addition to these economic sectors, overseas employment contributes highly in foreign exchange, most of them from the Middle East.As of 2010, the service sector makes up 60% of GDP, the industrial sector 28% and the agriculture sector 12%.
Sri Lanka is the 53rd most populated nation in the world, with an annual population growth rate of 0.73%.Sri Lanka has abirth rate of 17.6 births per 1,000 people and a death rate of 6.2 deaths per 1,000 people. Population density is highest in western Sri Lanka, especially in and around the capital.Sinhalese constitute the largest ethnic group in the country, with 74.88% of the total population.
The Telecommunications Regulatory Commission of Sri Lanka (TRCSL) was established under the Sri Lanka Telecommunication (Amendment) Act No. 27 of 1996.m As the national regulatory agency for telecommunications in Sri Lanka we will promote sustained development in the telecommunication industry by shaping the regulatory process, protecting public interest and being responsive to challenges in an increasingly competitive market. TRCSL will ensure that competition in the market is open, fair and effective.
Maldives consists of 1,192 coral islands grouped in a double chain of 26 atolls, along the north-south direction, spread over roughly 90,000 square kilometers (35,000 sq. mi), making this one of the world’s most dispersed countries. It lies between latitudes 1°S and 8°N, and longitudes 72° and74°E. The atolls are composed of live coral reefs and sand bars, situated atop a submarine ridge 960 kilometers (600 mi) long that rises abruptly from the depths of the Indian Ocean and runs north to south. Only near the southern end of this natural coral barricade do two open passages permit safe ship navigation from one side of the Indian Ocean to the other through the territorial waters of Maldives.
In ancient times the Maldives were renowned for cowry shells,coir rope, dried tuna fish (Maldives Fish), ambergris(Maavaharu), and coco de mer (Tavakkaashi). Local and foreign trading ships used to load these products in Sri Lanka and transport them to other harbors in the Indian Ocean.
Historically Maldives provided enormous quantities of cowryshells, an international currency of the early ages. From the 2nd century AD the islands were known as the ‘Money Isles’ by the Arabs.Monetaria Monetawas used for centuries as a currency in Africa, and huge amounts of Maldivian cowries were introduced into Africa by western nations during the period of slave trade.The cowry is now the symbol of theMaldives MonetaryAuthority.
The Maldivian government began an economic reformprogram in 1989, initially by lifting import quotas and opening some exports to the private sector. Subsequently, it has liberalized regulations to allow more foreign investment. Real GDP growth averaged over 7.5% per year for more than a decade. Today, the Maldives’ largest industry is tourism, accounting for 28% of GDP and more than 60% of the Maldives’ foreign exchange receipts. Fishing is the second leading sector.
The Maldivian ethnic identity is a blend of the cultures reflecting the peoples who settled on the islands, reinforced by religion and language. The earliest settlers were probably from southern India and Sri Lanka. They are linguistically and ethnically related to the people in the Indian subcontinent. They are ethnically known as Dhivehis.Some social stratification exists on the islands. It is not rigid, since rank is based on varied factors, including occupation, wealth, Islamic virtue, and family ties. Instead of a complex castesystem, there was merely a distinction between noble (bēfulhu) and common people in the Maldives. Members of the social elite are concentrated in Malé.As of April 2008, more than 70,000 foreign employees, along with 33,000 illegal immigrants, comprised more than one third of the Maldivian population.
The Maldivian telecomsector has gone through partial liberalization in the mobile and broadband sectors in the past few years. The incumbent Dhiraagu (a joint venture between the government ofMaldives and Cable & Wireless of the UK) faces competition from the newcomers Wataniyain the mobile sector and Focus Infocom in the broadband sector. The fixed sector is a monopoly, but Dhiraagu’s exclusivity is scheduled to end in 2008.
*Business Enterprise Recommendation*
Base of the Economy Growth, Tourist Attraction, friendly Telco regulatory Authority rules, regulation as well as Market demand and Gaps providing a good environment for the Maldives should be best option. With its relatively small population of less than 350,000 living on many islands across the archipelago, providing good communications for the Maldives has been great success. Importantly Tourist Attraction is one of the best positive factor to increase revenue as well as Internationally Government insurance policies will provide the secure investment policy.
Bases of key telecom parameter growth show significant change within 12 month.
Maldives – key telecom parameters – 2011 – 2012
|Total number of subscribers||
|Fixed-line penetration (population)||
|Total number of subscribers||
|Internet subscriber penetration (population)||
|Total number of subscribers||
|Mobile penetration (population)||
As per my reading and understandings of this comparative analysis I found conclusion that economy growth and tourist favorite country, telecom regularity rules, demand in the market and providing best environment in the country The Maldives is good option entering into foreign market.
Bases of telecom growth there are so many logical arguments but some are here under.
- Mobile Services
- Annual Growth
- Huge number of users
- Attraction for the population.