Avaya's market entry strategy in India through strategic partnerships

Business Strategy

India is a rapidly changing country that many foreign companies see as an extremely lucrative opportunity for international growth. Avaya is one of those companies. According to the research, Avaya is a "U.S. based manufacturing company [that] is a global leader in communication systems, applications and services. It designs, builds, deploys and manages networks for enterprises."

It has been implementing strategies to slowly focus on entering into the Indian telecommunications market for several years now. Working within the Asia Pacific submarket, India proves an incredibly challenge, but yet also a potential lucrative reward.

Avaya has focused on entering into the country with an approach using strategic partnerships with the example of Tata Telecom, a partnership between Avaya and the Tata Group of India.

Thus, Avaya is essentially tapping into an already established system, banking on its reputation to help increase profit potential in India, as it expects worldwide.

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Social Factors

India is a massive nation, with millions of residents. Its demographics very incredibly, thanks to the vast regional differences caused by extreme physical distances. The nation has the second highest population in the world, behind China.

Still, it has a largely rural population base, but with growing population density rates in vast urban sprawls. There are also staunch class differences seem to be embedded into the national culture, because of the long dominance of the caste system which distinctly separated socio-economic classes in India for centuries. Although the government has officially banned the caste system, it still plays a large role in social structures and how different classes interact with one another. This feeds into the immense digital divide that separates Indians who are able to use modern technologies from those within lower socio-economic classes that still do not have access to innovative telecommunications technology. Here, the research states that the "digital divide refers to the unequal availability of Information and Communications Technology (ICTs) to different socio-economic groups."

Environmental Factors

India is an incredibly diverse country in terms of geography. Its vast borders include almost all kinds of topographies, from low lying jungles, to high mountain deserts. The extreme physical features of India can hinder business from acting large scale on a national level. It is often incredibly difficult to provide service or products to some clients in the most remote areas of the nation. These remote areas are often extremely limited in terms of what technologies are available as well because of the high cost of connecting villages so far off the map. India's cities, on the other hand, are often overcrowded, leading to separate issues within the city regarding high retail space and rent considerations.

Economic Factors

The economic outlook in India is extremely positive. The free market structure is gaining speed in India

Recent governmental changes in 1991 have helped capitalize on a freer economic structure in the region by lessoning high tariff barriers for foreign companies looking to enter into the Indian market.

Here, the research states that there was recently "A series of reforms aimed at further deregulating and stimulating foreign investment have moved India firmly into the front ranks of growing international economies."

This has helped lower entry barriers for foreign companies looking to set up shop in India. It has also helped facilitate the growing business start up environment. According to the research "India's known strength in software and Information Technology (IT) and tremendous e-commerce potential ensures a progressive trend in the Indian economy."

Thus, starting up business in India is much easier than many other Southeast Asian nations that share its regional identity.

However, there are major business risks involving the intense competition within the Indian environment. Since the infrastructure is there, and the people of India are more than willing to eat up the latest gadgets and technology products, many foreign companies have already established strongholds within the region.

Companies large and small, are already operating within India for products and services geared towards the Indian people. Therefore, there is a high barrier to entry in terms of stiff competition from companies around the globe that already hold a strong presence in the region. Major companies like Tyco are continuing to gather a hold of the telecommunications market, limiting what Avaya can work with.

Political Factors

Growth of private ownership of telecommunication facets has been seen worldwide, and such is the case for India. Telecommunications was once largely the responsibility of the state; however, as modern companies began to grow into other borders, the industry was often split into various privatized sects. However, India has been slow to tap into this emerging trend. Research shows that still as late as 2006, privatized telecommunication facets made up only a fraction of what was being made available by the state.

Yet, more and more facets of the telecommunication industry are being privatized as profit potential becomes too big to ignore. As of today, the main internet provider, VSNL and various sell phone companies within India are privatized.

This has helped create a political environment that helps and supports efforts for the privatization of telecommunication needs, therefore facilitating the entry of already established private foreign firms as they slowly work their way into the Indian marketplace. Additionally, India has one of the largest democracies in the world. The Indian government is now adhering to economic practices that stipulate free market systems. Therefore, it's democratic and more liberal policies and practices help allow for easy access into its vast market share.

Implications and Conclusions

There is plenty of opportunity for Avaya, despite high competition rates. It's already pre-established reputation and partnerships with operations already operating in India help reduce the down time in entering the market, and will allow the company to better adapt to life and business in India. Therefore, it would be a recommendation to continue a joint venture strategy to get started with already established facets in India. This will continue to lesson the time spent on entering the market, and result in a faster adaptation to India's unique specifications as a marketplace.