JCB in India Assignment Example | Topics and Well Written Essays - 500 words

JCB in India - Assignment Example Expanding into the emerging markets, such as China and India, would enable the JCB take advantage of the booming construction industry. The strategic rationale adopted by JCB was that it could gain a strategic advantage by focusing on less competitive markets that has high growth potential. JCB estimated that the Indian and Chinese markets were ripe and had huge growth potential in the future. The company could gain a competitive advantage by exploiting the first mover advantage in these markets (Delios & Kulwant, 2012). One of the benefits of being a first mover is the ability of a firm to capture the market ahead of their rivals and establish a powerful brand name and image. JCB would also be able to establish great sales volume and build an effective experience curve in the market ahead of its main rivals. The JCB Company experienced a number of problems the selection of the appropriate expansion strategy. Initially, JCB relied on exporting strategy to serve foreign and international markets. It would manufacture approximately three-thirds of its products in Britain and then export them to other nations in which it served. However, given the high tariff rates on direct exporting, this strategy became uneconomical. The alternative was for JCB to go alone in its operations in India, but this was impossible due to the tough government regulations, which required new companies to enter into joint venture arrangement with the locals. Another problem experienced by JCB was the risk of losing control over its technological expertise, which were its core competence and a major source of its competitive advantage. There were several opportunities for exploitation in the Indian and Chinese markets. Given that these markets were relatively new, less competitive and obviously unexploited, JCB was likely to incur less expansion costs and reap exceedingly from the growth potential (Delios & Kulwant,