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aims access the footwear market in Mumbai, India. Specifically, Greenstep wants to
sell low price footwear made out of recyclable materials retrieved from the Mithi river
in Mumbai. Greenstep will offer one type of sandal and one type of sneaker-like shoe
for men and women. The shoes are designed with durability in mind and priced at
because it allows the company to set up manufacturing without spending time and
the recycled materials to local entrepreneurs is also a good entry strategy because it
frees time and money to focus on the manufacture, marketing, and selling of our
products. Lastly, e-commerce is another good way to enter into the footwear market
in other cities in India. With e-commerce, Greenstep can access more customers in
Arabian sea, and the Bay of Bengal. India has the seventh largest country and
world history, Indian civilization is the ancient civilization in the world. India was ruled
by United Kingdom in the mid of 19th century, India struggled for independence and
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The constitution of India states that India is a sovereign, socialist, secular,
Geographical setting
Location- India is located in the south of the Asian continent, bordering the Arabian
Climate- India has a significantly different climate from north to south. Indias climate
has classified as a hot tropical country, except the northern states of Himachal
Pradesh and Jammu & Kashmir in the north and the Sikkim in the northeastern hills,
online)
and peninsula with Deccan plateau. Himalayas and Indo-Gangetic Plain are
collectively known as North India, and Peninsula region is known as South India. The
Himalayas abut India in the north and the north-east. the Indo-Gangetic Plain lies to
the south of the Himalayas. The Thar Desert is to the west of India. The peninsula
region is the oldest and geologically most stable part of India, which is also
considered as the central India. The Deccan Plateau lies to the south of the
peninsular land.
sovereign, socialist, secular, Democratic republic. India has a multi party system.
India is a parliamentary republic and the most populous democracy of the world.
Federalism in India distributes the power between the federal government and the
and Judicial. The Executive branch include the President, the vice-President and the
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Prime minister with the council of ministers. The Legislative branch is the bicameral
In the central government, the President of India is the head of state, who is
elected for a five-year term indirectly by a national election. The Prime Minister of
India, appointed by the president, is the head of government and holds most of the
cabinet, is headed by the prime minister. Any minister in this council must be a
the legislature system, the prime minister and the council are directly responsible to
Political Parties- India has a lots of political parties, There is three main political
3 Main political parties are 1) Indian National Congress, 2) Bharatiya Janata Party
Special Taxes- India owns a three-tier tax structure, in which the central government
levies income tax, tax on capital transactions, sales tax, service tax, customs and
excise duties, and the state governments levies taxes of their own states, including
manufacture, stamp duties on transfer of property and collect land revenue. State
as to charge users for public utilities such as water supply and sewage.
the 28 Indian states and the 7 union territories. There are a total of 6,45,000 local
governments of India. Local governments of the rural regions are termed as the
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Panchayats. The local government in the urban areas is referred to as the nagar
Legal system- The bicameral parliament is the legislature of India. The parliament is
Rajya Sabha, means "Council of States") and the lower house (the Lok Sabha ,
means "House of the People"). The Rajya Sabha has 245 members with six-year
terms, 233 members of whom are elected indirectly by the state and territorial
members are appointed by the president. All but two of the 545 members of Lok
Sabha are directly elected by open voting, who represent individual constituencies
and have five-year terms; the president nominates the other two members of Lok
India has a three-tier judiciary system. The top-tier department is the Supreme
Court, which is headed by the Chief Justice of India and is the ultimate interpreter of
the constitution. The Supreme Court holds the original jurisdiction of cases that
involve fundamental rights and over disputes between states and the central
Court performs appellate jurisdiction over the High Courts and can both declare the
law and to strike down union or state laws that conflict the constitution. The bottom-
(where, law is developed by judges through their decisions, orders, and judgments).
It has created a federal system; with a Central government coupled with State
government.
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Patents, trademarks and other conventions-India is a member of the international
different forms, but corruption in India sometimes looks like the civil servants' favorite
contest nationwide. Since 2005, India has been ranking around the middle (90 out of
Socio-cultural environment
Family – In India the family is the most important institution that has survived
through the ages. India, like most other less industrialized, traditional, eastern
societies is a collectivist society that emphasizes family integrity, family loyalty, and
family unity.
Education - The educational system in the India society not only transmits the
cultural heritage, but also aids in preparing the young for adjustment to any changes
in them that may have occurred or are likely to occur in future. in such modern
Sadly, the rich in India or the upper class are getting richer and the Poor or the lower
class are getting poor. It’s a country with a lot of social inequalities which in some
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Religion - Religion in India is characterized by a diversity of religious beliefs and
practices. The Indian subcontinent is the birthplace of some of the world's major
symbols.
Business customs and practices - In such a richly diverse and complex country as
India it is difficult to impart generic conclusions that can be used by those doing
business there. Regionalism, religion, language and caste are all factors that need to
be taken into account when doing business in India. Behaviour, etiquette and
approach are all modified depending on whom you are addressing and the context in
Organizations
Group behaviour - The Indian culture is often labeled as an amalgamation of
several cultures, spans across the Indian subcontinent and has been influenced by a
history that is several millennia old. Many elements of India's diverse cultures, such
as Indian religions, yoga and Indian cuisine, have had a profound impact across the
world.
Social classes - Earlier, India used to have a caste system. The caste system in
transformed by the British Raj, and is today the basis of reservation in India. The
caste system was a system of dividing people on the basis of the family they were
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Clubs, other organizations - India Trade Promotion Organisation (ITPO),
India under aegis of Ministry of Commerce and Industry (India) for promoting
people is known for known for their long hair,tall stature, sweet language, and also
2) Gujaratis: This group mainly follows the Hindu religion. They inhabit in western
India
3) Marathas- This group renamed the India city to Mumbai from Bombay and is
gaining power in Mahashtra. They inhabit in western India and are Hindus
5) Rajputs: These are Hindus that inhabit North and West India.
6) Tamils: This group practices Hinduism and Islam. They also inhabit southern India
Languages - According to Census of India of 2001, India has 122 major languages
and 1599 other languages. However, figures from other sources vary, primarily due
to differences in definition of the terms "language" and "dialect". The 2001 Census
recorded 30 languages which were spoken by more than a million native speakers
Demographics
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Total and growth rates - India’s the second most populated country in the world
with a population of 1.2 Billion and an annual growth rate change of a whopping
1.2%
Distribution of population:
Age structure:
0-14 years: 28.5% (male 187 million/female 165 million)
2013 from 5.20 percent in 2012. And now the unemployment rate is at 3.7%
Economic conditions
GDP - India has about a 1.5 trillion dollar USD GDP. Their growth rate is about 5.0%
annual change. India’s annual household income came in as one of the lowest at
$616 per capita. As for the banking system, there are different types of banking
throughout India. Some banks are under presidency government, others run under
the state of India (which are subsidiary banks), and some are Indian government
nationalized private banks. The banks are typically harder for the poor to utilize, but
the has developed initiatives to address this through the state bank of India
expanding it’s branches such as microfinance. Comparing the INR to USR it’s
typically stable. This because of their strength in economy, but sometimes they run
fairly high trade deficits due to their rapid growth. In comparison, the exchange rate
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is for 1INR is 0.020 Canadian Dollar. Within India they have recorded an inflation
Business Conditions
Contract law - Their contract law follows the Indian contract 1782 It is applicable to
all states in India. It contracts all legal binding, rights, and duties. The property
Trademarks, and Designs. To enjoy these IP rights in India you must register them.
To their regulatory rights, entrepreneurs must follow the Foreign Trade (development
& regulation) Act 1992 and also the EXIM policy announced by the government.
Lastly their foreign trade includes restrictions on agricultural tariffs; the anti-dumping
measure is followed and has banned foreign investment in retail trade. Thus not
located across India. They distribute by Automobiles, Air Freight and Ocean Freight.
http://www.cevalogistics.com/country/india
on earth. With its never ending occupation on the road, the state of Mumbai is
concerned. Thus the Mumbai infrastructure Project was launched in November 1st
2003 to improve the connectivity of the east-west and north-west to the city of
Mumbai. Some of the objectives that was established during this project was to
urban-infrastructure-project
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Customs brokers and intermediaries - Linked in is a perfect website to find
multiple custom brokers from around Mumbai India. It gives a short description of
their current position as a custom broker such as being a shipping agency, Custom
broker/mumbai-area
for our product to be put up in the market such as SaltNPepper, Bata and SoleFry
http://bata.in, http://solefry.com/
Carpets, Machinery and engineering goods, chemicals and textiles and garments.
https://www.quora.com/What-are-the-most-popular-goods-exported-from-India-to-
Dubai
Major Imports - The major imports in India are Crude Petroleum, Gold, Coal
http://atlas.media.mit.edu/en/profile/country/ind/#Imports
known to be a popular city in India and also the richest city in India. With that said,
http://mumbai.timesjobs.com/jobs/multilateral-bilateral-agencies-jobs-in-mumbai
Competitive conditions
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Market size - The market size in India is the largest producer of footwear after
China. India Mumbai produces approximately 2,000 Million pars annually in different
categories. http://retail.economictimes.indiatimes.com/re-tales/indian-footwear-
industry-a-perspective/81
SWOT Analysis
Strengths - Greenstep Footwear possesses several key strengths that give the
company a competitive advantage. In the first place, the raw material for the shoes
comes from plastic items recovered from the river Mithi1i. The tremendous amount of
pollution in the river gives Greenstep plenty of low cost, readily available material
with which to make the shoes. Consequently, our company does not have to rely on
a corporate supplier and manufacturer of plastic for our product. This means
Greenstep has greater control over how much plastic it can acquire because there
are no contracts to uphold and minimum orders to request from traditional style
suppliers. For this reasons our variable costs related to production can be kept lower
As well, the rising industry of recycling in Mumbai provides Greenstep with the
advantage of not having to do the gathering and storing the plastic itself. Specifically,
the area of Dharavi in Mumbai is a hub of people who are already recycling and
storing plastic from the river Mithi. Greenstep’s partnership with these individuals
means the company simply has to buy the plastic as needed2. There are no costs
1
Minister vows to clean up Mithi river, make it tourist hotspot in 2 years. (2015, January 20). Retrieved April 7,
2016, from http://indianexpress.com/article/cities/mumbai/minister-vows-to-clean-up-mithi-river-make-it-
tourist-hotspot-in-2-years/
2
Glaeser, E. L. (2009, May 26). Slumdog Entrepreneurs. Retrieved April 7, 2016, from
http://economix.blogs.nytimes.com/2009/05/26/slumdog-entrepreneurs/?_r=0
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related to gathering, cleaning, sorting, and storing the plastic. Greenstep has to only
purchase from the individuals who are already doing all the work. Through partnering
with the recyclers of Dharavi, our company avoids the cost of acquiring the
By purchasing recycled plastic, Greenstep can foster good relations with its
target market of low income workers who need quality and affordable footwear. A
Greenstep’s reputation and loyalty among our target demographic because we will
Similarly, because the pollution in the river Mithi is a problem for everyone,
purchasing plastic retrieved from the river helps fight pollution by creating an
incentive to remove more plastic from the river. As a result, Greenstep is viewed as a
good corporate citizen because our business helps solve an important social and
will tend to prefer Greenstep over our competitors because by buying from us, they
improve, they tend to prefer prestigious and better quality products. At present, our
company does not yet offer a premium shoe or sandal. For Greenstep this means
that our shoes and sandals may, in the near future, be viewed as inferior and not
good enough for consumers who have newly risen above low income status,
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Another weakness is negotiating the culture when buying plastic from local
Ensuring that the plastic we buy meets the requirements necessary to make
our shoes is a weakness because we are dealing with an unregulated industry and
specifications. Therefore, quality control of our raw material will require time, and
purchased plastic may prove particularly difficult and could strain our relationship
may have little recourse if it is the case that our supplies are unable to meet our
demand for recycled plastic. Although there is plenty of plastic available, there may
not be enough labour available to meet increasing demand. Should this be the case,
Greenstep would be forced to invest in the industrial assets needed to procure the
plastic. On the short term, the company may be forced to buy new, non-salvaged
our current business model, it does provide an opportunity to diversify our product
line and reach a different target market. The rising incomes in India represent a
chance for Greenstep to adapt and improve our products to meet a predictable
3
Ablett, J., Baijal, A., Beinhocker, E., & Bose, A. (2007, May). The 'bird of gold': The rise of India's consumer
market. Retrieved April 7, 2016, from http://www.mckinsey.com/global-themes/asia-pacific/the-bird-of-gold
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In 2015, federal Minister of Environment Ramdas Kadam promised to clean
the “..filthy Mithi river..” as part of the Mithi Development Project4. The government’s
initiative to beatify the river from which Greenstep sources its raw material
from the Mithi and to gain valuable exposure for our company as a socially
special benefits from the Indian government for the company’s increased efforts in
helping remove plastic from the river. This could take the form of reduced tax rates,
Threats - After China, India is the largest producer of footwear with 13% of the
continue to intensify as Bata India and Paragon Group, the two dominant players in
the market, continue to expand in small and medium sized cities6. The threat to
Greenstep is that it lacks the resources to meet such a high demand and the
resources to compete with the rapid expansion of its competitors. One possible
scenario could be that customers turn to our competitors because they have more
stores and because they are able to meet their demands in terms of volume and
variety of shoes.
Another, though long term, threat, lies in running out of salvaged plastic to
make our products. As the Mithi river becomes cleaner and as demand for
4
Minister vows to clean up Mithi river, make it tourist hotspot in 2 years. (2015, January 20). Retrieved April 7,
2016, from http://indianexpress.com/article/cities/mumbai/minister-vows-to-clean-up-mithi-river-make-it-
tourist-hotspot-in-2-years
5
Minister vows to clean up Mithi river, make it tourist hotspot in 2 years. (2015, January 20). Retrieved April 7,
2016, from http://indianexpress.com/article/cities/mumbai/minister-vows-to-clean-up-mithi-river-make-it-
tourist-hotspot-in-2-years/
6
Footwear in India. (2016, March). Retrieved April 7, 2016, from http://www.euromonitor.com/footwear-in-
india/report
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Greenstep’s products rises, our company will have to find different sources of plastic.
Looking for other sources and establishing a supply chain for those sources will
result in greater costs and may compromise the production schedule of our shoes,
Although there are many ways to enter a foreign market, it is critical to select the
most appropriate one. For example, a greenfield investment would not be a good fit
Licensing the right to make our shoes to a manufacturer would not be the right
way to enter the Mumbai market because Greenstep would lose control over its
product and it does fit with the goal of raising awareness of Greenstep as a brand.
We want Greenstep to have its own retailers, licensing does not help achieve that
goal.
exclusively in one city and does not have the marketing and financial resources a
large firm like Nike or Adidas. It would be difficult to find a partner of the same size
and with similar goals for Greenstep to form a joint venture with. Partnering with a
Our company could outsource the gathering, sorting, and processing of recyclable
recycling.
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Another good option is brownfield investment. Greenstep will manufacture in
Mumbai, but it does not have the resources to create manufacturing facilities from
scratch. The best option is to acquire already existing facilities and change them
With regards to trade, indirect and direct exporting to India from Canada is out
because the market for shoes in India is so large, it is possible to tap into other
access our shoes without the need to set up physical operations in other cities.
Brownfield investment is the best option for Greenstep to enter the market in Mumbai
market faster than if we had to start from scratch. A faster market entry results in a
faster return on invest for the company and its investors. Moreover, a brownfield
suitable building or facility and fit it with the production equipment related to making
shoes. Fortunately, India has highly educated, English speaking professionals who
could assist with the engineering aspect of setting up our operations. One possible
problem with brownfield investment in India is finding the right firm to help our
businesses, our company saves time and money by leaving the gathering, cleaning,
sorting, and processing of the recyclable materials to those who have the expertise.
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Greenstep does not process the knowledge nor the resources to gather and process
material from the Mithi river. Outsourcing this part of the production process leaves
our company free to specialize on the manufacture, marketing, and delivery of the
product. The plastic pellets of recycled material will be supplied to our production
facility according to how much demand there is for our shoes. The demand driven
supply means we do not have to spend as much money and space holding extra raw
material.
location. This will be done by taking advantage of India’s large pool of technology
professional to set up and manage the website. India’s highly skilled and
labour and using people who are familiar with the country and its target market.
Support
Conveniently for Greenstep, EDC has offices in Mumbai as well as New Delhi.
Other sources of support are the state and federal governments in India. The
investing in India. Depending on the kind of investment and where it is located, one
can expect waiving electricity tax and other taxes based on how much employment
7
Foreign Direct Investment. (n.d.). Retrieved March 7, 2016, from
http://www.makeinindia.com/policy/foreign-direct-investment
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References for Geographical Setting, Political And Legal Enviroment (Joseph)
3) Weather online
4) Maps of India.com
Ablett, J., Baijal, A., Beinhocker, E., & Bose, A. (2007, May). The 'bird of gold': The
rise of India's consumer market. Retrieved April 7, 2016, from
http://www.mckinsey.com/global-themes/asia-pacific/the-bird-of-gold
Minister vows to clean up Mithi river, make it tourist hotspot in 2 years. (2015,
January 20). Retrieved April 7, 2016, from
http://indianexpress.com/article/cities/mumbai/minister-vows-to-clean-up-mithi-river-
make-it-tourist-hotspot-in-2-years/
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