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Costco Case Analysis

India. Costco Case Analysis. Over View. Business Model and Customer V alue P roposition . Economy Government Market Access Infrastructure Real Estate. Summary Conclusion. Business Model. Customer Value Proposition. Economy. Government.

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Costco Case Analysis

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  1. India Costco Case Analysis

  2. Over View Business Model and Customer Value Proposition • Economy • Government • Market Access • Infrastructure • Real Estate Summary Conclusion

  3. Business Model Customer Value Proposition

  4. Economy

  5. Government • India’s government is a Federal Republic. Just like the United States, India has three branches of government, executive, legislative, and judicial. The three branches help separate powers. The ruling party is the Indian Congress Party which has been in power since the 1940’s. India has a stable government, but as with other countries, there are groups who oppose those in power and want bring about change. The President of India is President Pratibha Devisingh Patil (elected July 2009). President Patil is considered head of the state while Prime Minister is Manmohan Singh (elected May 2004). • India is making strides to bring foreign companies into the country. November of 2011, India put together a package of reforms to help bring foreign investments into the nation. Despite opposition from small shop owners and political groups, India announced January 10, 2012 that it will allow foreign companies to sell product under a single company name. Under the new regulations foreign companies must sell 30 percent of their products which are made by Indian shops and artisans. • The currency of India is called a Rupee. On average one Indian Rupee is equal to $.0914 US Dollar. The easiest way to transfer money out of India is through an Indian bank into a bank in the United States with an International Wire Transfer. Wire transfers are subject to fees from both sending money and receiving money.

  6. Market Access Regulations and Duties There are complex license and duties for most goods, some are in excess of 240%. There are special economic trade zones that do offer some tax breaks. They have been a member of the World Trade Organization since 1995. Acceptance of Goods A major concern is their policy on quantity. Some products, normally subject to license, are not authorized to enter the country when the authorities feel that the quantities bought were too huge. Distribution The primary factors here are organization and development for large structures. They are clearly dominated by small family owned business with the average size of 60 square meters. Level of Corruption Corruption seems to be wide spread with the highest being reported in the Police sector. A study conducted by Transparency International has found that corruption in public services affecting the day to day needs of citizens is far more serious than is commonly realized Local Competition The India market is dominated by small family owned businesses but has seen an increase in franchising. It Is key to note that on the commercial side the big players such as the US and the European Union are still having trouble with the governmental regulations.

  7. Infrastructure

  8. Real Estate

  9. Summary Conclusion

  10. Citations (2012, 1 11). Retrieved from fita.org: http://fita.org/countries/indiaportal.html (2012, 1 11). Retrieved from Transparency International: http://www.transparency.org/regional_pages/asia_pacific/newsroom/news_archive2/india_corruption_study_2005 (2012, 1 11). Retrieved from World Trade Organization: http://www.wto.org/english/thewto_e/whatis_e/what_we_do_e.htm India agrees to letforeign companies own 100 percent of single brand stores. (2012, January 10). Retrieved January 12, 2012, from The Republic: http://www.therepublic.com/view/story/f38870fdd4784fe79d65e3b46e5e0be4/AS--India-Retail/ INR-Indian Rupee. (2012, January 13). Retrieved January 13, 2012, from www.xe.com: http://www.xe.com/currency/inr-indian-rupee Petroleum subsidy dangerous as it’s uncapped: Ahluwalia. (2012, January 2012). Retrieved January 11, 2012, from http://www.firstpost.com/economy/petroleum-subsidy-dangerous-because-it-is-uncapped-ahluwalia-179090.html

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