A

Project Report on

“International Business Plan”

In partial fulfilment for the requirements of International Finance course in the two-
Year Full-time Master of Business Administration Program, GLS University.

Submitted by:

1. Rutwa Kapadiya 202000620010320

2. Kinjal Pandya 202000620010756
3. Jyoti Motwani 202000620010330
4. Kanchan Tekwani 202000620010694
5. Bhumika Chovatiya 202000620010729
6. Naresh Motwani 202000620010331

Class

Finance 2

Submitted To:

Dr. Harikrishan Chaurasiya

Assistant Professor
Submitted On:
27/11/2021

FACULTY OF MANAGEMENT
 PREFACE
As a part of our MBA curriculum and in order to gain practical knowledge in the field of
management, we are required to make a report on “International Business Plan” The basic
objective of this project is to gain practical knowledge about the export of Cotton, Silk and
Woollen in a foreign country.

Doing this project report helped us to polish our knowledge about how to enter in foreign
market for international business. And through this project, we come to know about the
importance of team work and role of devotion towards our responsibility.
 Acknowledgement
We would like to express our special thanks of gratitude to our ma’am, Dr. Harikrishan
Chaurasiya as well as to our university for giving us the golden opportunity to do this
wonderful project on the topic of International Business Plan. This project also helped us in
doing a lot of research and we come to know about so many new things.

We are really thankful to them.

Secondly, we would also like to acknowledge our Guardians, Parents and our Friends who
helped us a lot in making this project Successful within the limited time.

It also helped us to increase our practical knowledge and skill.

THANKS AGAIN TO ALL WHO SUPPORTED.

Reasons to go International Business

As we are dealing in textile business and we export raw materials from India. So, our reasons
to go international are:

1. Improving Profit Margins:

Improving profit margins is one of the most common reasons for entering international
markets. When growth strategies are used up on the national level, the next path is often to
seek out international growth. Distributing your products in additional countries increases
your customer base. As you offer compelling solutions and build loyalty across international
markets, revenue strengthens and escalates as well.

2. Competing for New Sales:

Closely connected to the goal of improved profit margins is the desire to increase sales. The
race to expand internationally is often about gaining a presence in foreign markets. Being the
first to arrive in a new market can provide significant advantages. So to expand the textile
business one needs to compete for new sales.
3. Diversifying the Business:

The international expansion helps in diversifying its business in a couple of key ways. First,
you spread the risk of slowing demand across multiple countries. If one market never gains
or losses interest in your offerings, you can pick up the slack with success in other countries.
In addition, you can connect with suppliers in international markets and take advantage of
raw materials and resources unavailable in domestic markets.

4. Benefits your firm and others:

Exporting benefits you and your business and also the local markets that you operate in, your
region and the nation. Exports are a well-known driver of many positive economic indicators-
most importantly, job growth. Many things that are learned and developed internationally can
further serve your domestic clients with improved products and services.

5. Lengthen your product lifecycle:

If your product is losing market share due to technology or other factors that limit product
lifecycle, exporting could lengthen the product’s lifecycle by developing new customers in
emerging markets.

6. Overall image:

Going international improves the enterprises perceived image as it evidences a more

competitive business in general.

7. Reduce business risk:

By not depending on one market exclusively, sell to different markets abroad can save a
business from market downturns, being it domestic or elsewhere.
APPROACHES USED TO GO FOR INTERNATIONAL BUSINESS

There are four approaches to International Business:

1)Ethnocentric Approach

2)Polycentric Approach

3)Regiocentric Approach

4)Geocentric Approach

(1) Ethnocentric Approach: -

Under this approach, company export the same products as it designed and developed in
domestic market. The excessive production give change to company to expand new market in
globe. Patterns of market behaviour are based on the experience gained from the domestic
market. Moreover, such patterns are usually not modified in any significant way to fit the
foreign market. Organizational culture, marketing, procedures etc. are copies from the domestic
market. The foreign market is considered as a secondary one. It focuses on the values and ethics
of the home country. The hierarchy of the organization is usually highly centralized and directly
 MD/OWNER

FINANCE OPERATION MARKETING

HR HEAD
HEAD HEAD HEAD

EXPORT
MARKETING

subordinated to the headquarter located in the home country. For example, no significant
research activity is done on the foreign market.

(2) Polycentric Approach: -

Under such an approach a company's policies and procedures are based on host country.
Companies realize that foreign country need different approach and then company establish a
foreign subsidiary company. The local market needs and requirements are met by a team of
local employees and various foreign subsidiaries are established to work independently to
achieve the objectives and plans of the organization. Such an approach is generally used by
Multi-national Corporations. In this approach, companies focus on local objectives and the role
of main head is low. There is complete autonomy for subsidiaries to formulate their own

MD

COUNTRY
HAED

FINANCE HR R&D PRODUCTION MARKETING

MANAGER MANAGER MANAGER MANAGER MANAGER

marketing and operational plans. There are executives from host countries who carry out the
decision making
(3) Regiocentric Approach: -

Regiocentric approach is similar to the polycentric one, but an organization not only recognizes
the specific nature of different foreign markets, but also perceives some similarities of these
foreign markets. Therefore, it makes groups of similar markets (regions) with similar
characteristic between the countries and their markets located in one region are used in order
to develop an integrated regional strategy. These similarities may exist on the economical,
cultural or political background. For example, customers in North America may have different
taste preferences than customers in the post-Soviet countries. It should be notice that groups
of countries naturally emerge due to processes of trade liberalization. Examples of such regions
are NAFTA and the European Union.

Asia Head

Foreign Country
India Head
Head

R & D Manager R & D Manager

Finance Manager Finance Manager

Marketing Manager Marketing Manager

HR Manager HR Manager

Production Production
Manager Manager
(4) Geocentric Approach: -

Geocentric approach is present when an organization treats all foreign markets as the one, i.e.,
global market. The global market is understood sociologically and economically uniform. It
makes no special distinction between the domestic and foreign markets. The market strategies
are rather based on using a variety of opportunities in the best possible way. Managers are
searched in the principle that the person must be the most competent in the particular field. No
geographical, cultural, etc. preferences are present. There are high costs associated with human
resources, personnel management, etc. it arises due to the need of training activity, efficient
communication channels, transportation costs, etc. Factors such as labour standards, customer
taste, customer preferences, etc. are differ significantly between various countries. Therefore,
the geocentric approach is a huge challenge for the organization. Its proper implementation
must be based on internal standards, which allow to overcome the above problems.

MD

Bangladesh United States

Indian Subsidiary China Subsidiary
Subsidiary Subsidiary
DOMESTIC MARKET OF PRODUCT
The textiles and apparel industry in India has strengths across the entire value chain from fiber,
yarn, fabric to apparel. The Indian textile and apparel industry is highly diversified with a wide
range of segments ranging from products of traditional handloom, handicrafts, wool, and silk
products to the organized textile industry in India. The organized textile industry in India is
characterized by the use of capital-intensive technology for the mass production of textile
products and includes spinning, weaving, processing, and apparel manufacturing.

The domestic textiles and apparel industry stood at $108.5 bn in 2019-20 of which $75 bn was
domestically consumed while the remaining portion worth $28.4 bn was exported to the world
market.
The highest contributors to FDI in the Textile sector of India (including dyed, printed) from
April 2016 to March 2021 are Japan, Mauritius, Italy, and Belgium.

The domestic apparel & textile industry in India contributes 5% to the country’s GDP, 7% of
industry output in value terms, and 12% of the country’s export earnings. India is the 6th largest
exporter of textiles and apparel in the world.

Major producing Areas in India:-

The states like Maharashtra, Gujarat, Tamil Nadu, Uttar Pradesh, Karnataka, Madhya Pradesh,
Rajasthan and West Bengal have very high degree of concentration of this industry and
especially in the three cities of Bombay, Ahmedabad and Coimbatore. It is the leading
producer of textile in India.
MAJOR IMPORTING COUNTRY OF PRODUCT
The international textile industry is one of the few sectors that impact almost everyone on earth.
It is a $3 trillion industry that is concerned with refinement, distribution, and production of
natural and synthetic fibers that are used in several other industries. Textile is the material that
is made using either synthetic or natural fibers. The threads and fiber are worked on to produce
yarn and then turned into cloth. The textile industry has employed about 60 million people on
the planet.

Major Importing Countries: -

1. European Union: - The European Union is the largest importer of textiles and apparel,
accounting for over 23% of the global textile and apparel imports. The largest textile
markets within the EU (Italy, the Netherlands, Spain, and the United Kingdom) were
responsible for 72% of the European Union’s textile imports. The value of the textile
imports to the EU has been increasing by 5.8% per annum. The fastest-growing EU markets
for textile imports are Romania, Hungary, Croatia, and Poland. Despite the rapid growth,
these 4 nations accounted for only 6.7% of the region’s textile and apparel imports.

2. The United States: - Other than being one of the world’s top exporters of textile
products, the United States was the second-biggest textile importer in 2018. The value
of the country’s imports increased by 7.2% from 2016 to 2017 ($25.7billion). The
textile imports by the U.S. have grown by 77.8% from 2000 to 2017, while the apparel
imports have decreased by 0.5% from 2016 to 2017. Since the U.S. is no longer a
leading apparel manufacturer, but one of the world’s top consumers. Therefore, apparel
accounted for 75.7% of the total American apparel and textile imports in 2017, followed
by textile, yarns, and fabrics.
Top 10 Textile Importing Countries In The World

Rank Country Import value in billion USD

1 European Union 77

2 United States 30

3 China 18

4 Vietnam 18

5 Bangladesh 11

6 Japan 9

7 HongKong, China 7

8 Indonesia 7

9 Mexico 7

10 Turkey 6
INDIA'S COMPETITOR COUNTRIES

The biggest challenge facing the Indian textile industry is competition from the other low cost
neighboring countries which attract more business from the international market because of
lower production costs, ease in doing business and easier trade routes, according to an industry
expert.

Competition from low cost countries like Bangladesh, Vietnam, Indonesia and Pakistan is
the biggest challenge for the Indian textile industry. In the last few years, these countries have
given a special impetus to their textile industry and been able to build new capacities with latest
technology.
ENTRY MODE IN FOREIGN COUNTRY

➢ Exporting:- Exporting is the direct sale of goods and / or services in another country.
It is possibly the best-known method of entering a foreign market, as well as the lowest
risk. It may also be cost-effective as you will not need to invest in production facilities
in your chosen country – all goods are still produced in your home country then sent to
foreign countries for sale. However, rising transportation costs are likely to increase the
cost of exporting in the near future.

➢ Licensing:- Licensing allows another company in target country to use property. The
property in question is normally intangible – for example, trademarks, production
techniques or patents. The licensee will pay a fee in order to be allowed the right to use
the property. Licensing requires very little investment and can provide a high return on
investment. The licensee will also take care of any manufacturing and marketing costs
in the foreign market.

➢ Franchising:- Franchising is somewhat similar to licensing in that intellectual property

rights are sold to a franchisee. However, the rules for how the franchisee carries out
business are usually very strict – for example, any processes must be followed, or
specific components must be used in manufacturing.

➢ Joint venture:- A joint venture consists of two companies establishing a jointly-owned

business. One of the owners will be a local business (local to the foreign market). The
two companies would then provide the new business with a management team and share
control of the joint venture.

➢ Foreign direct investment:- Foreign direct investment (FDI) is when you directly
invest in facilities in a foreign market. It requires a lot of capital to cover costs such as
premises, technology and staff. FDI can be done either by establishing a new venture
or acquiring an existing company.
➢ Wholly owned subsidiary:- A wholly owned subsidiary (WOS) is somewhat similar
to foreign direct investment in that money goes into a foreign company but instead of
money being invested into another company, with a WOS the foreign business is bought
outright. It is then up to the owners whether it continues to run as before or they take
more control of the WOS.
PESTEL Analysis Of USA

The PESTEL analysis of the USA aims to address some of the Political, Economic, Social,
Technological, Environmental and Legal issues concerning the USA. The United States of
America (USA) is commonly known as US. It is an economic and political superpower. In
terms of nominal GDP, it is the largest economy in the world.

The USA contributed immensely to the founding and development of institutions such as the
UN, World bank, and International Monetary Fund. It is a highly developed country with a
great reputation for its infrastructural and technological brilliance.
 Political

Legal Economic

PESTEL Analysis

Environmental Social

Technological

➢ Political Factors Affecting the USA:

The USA is the second largest democracy in the world. The President is the head of the
country and is elected for a four-year term. Elections held in the USA are usually consider
fair and transparent. The country enjoys a stable political climate, even though there have
been some challenges recently. It also has an enormous influence over the political
dynamics of many countries around the world. However, the USA faces international
criticism for some of its interventionist policies in some parts of the world.

The USA advocates and promotes democracy around the world. With a stable political
environment, advanced infrastructure, and technology, the USA positions itself as a great
destination for FDI (Foreign Direct Investments). Consequently, the country has been the
first choice for many multinational companies for FDI for a long time. However,
countries such as China, India, Brazil, Turkey, Nigeria, South Africa and many others
came forward as contenders for FDI (Foreign Direct Investments).
➢ Economic Factors Affecting the USA:
The next element to discuss in the PESTEL analysis of the USA is the Economic
environment. The USA is the largest economy in the world in terms of nominal GDP. It is
a country from where companies such as Coca-Cola, McDonalds, Subway, Microsoft,
Apple, Facebook, Google, and many others are shaping and leading the socio-economic
discussions of the world. However, the global economic landscape is changing very
rapidly which is the challenge for USA. There is no doubt that the country is an economic
superpower and world leader. However, it may turn out to be the third in the global
ranking by 2050 in terms of GDP by Purchasing Power Parity (Martin, 2017).

Some of the top exports of the USA are refined petroleum, crude petroleum, cars,
integrated circuits, and vehicle parts that largely go to the countries such as Canada
Mexico, China, Japan, and Germany. Its top imports are computers, crude petroleum,
broadcasting equipment and packaged medicaments that mostly come from countries
such as China, Mexico, Canada, Japan and Germany. The USA recovered from 2008/
recession well. Unemployment fell and income levels improved. It is worth mentioning
that that there was wide spread fear of recession facing the US in late 2019 as the
country’s stock market had dropped sharply. Labor is not cheap in USA, particularly
when compared to that in China, India and Mexico. Availability of cheap labor has
encouraged many US firms to out-source many of their business activities around the
world.
➢ Social Factors Affecting the USA:
The USA is the third most populous country in the world with a total population of
approximately 332 million. It sees one birth in every eight seconds, and one death in
every 11 seconds. It has a big aging population which can cause problems, particularly in
the supply of labor. The USA is a very diverse country. The education system is one of
the best in the world; so is the health care system. However, health care is not usually free
and certainly not cheap for many people. Likewise, police violence, crime and infant
mortality rate are some other issues of grave concerns.

Socio-economic mobility in the USA increases from 1950 to 1980; however, according to
some studies, there has been a decline since 1980. Socioeconomic mobility refers to the
upward or downward movement of people from one social class or economic level to
another.

➢ Technological Factors Affecting the USA:

The next element to discuss in the PESTEL analysis of the USA is the technological
environment. The USA is the global leader in science and technology. Americans have a
long-standing fascination for technology, and companies such as Apple, Microsoft,
Google and Facebook., and many others have addressed the technological needs of the
Americans and the people around the world. And in doing so, they have become the
global leaders in their respective field.

The USA has been at the fore-front foe adapting and applying technologies in a wide
variety of fields. Technologies have changed the ways many things are done. Many jobs
have been transferred from the USA to other countries and production facilities have been
relocated. While this has helped companies to reduce their production costs, it has also
made many Americans upset. The rate of technological innovation and change is
extremely rapid in the USA. However, the country faces strong challenges from a number
of countries e.g., China, South Korea, and India.
➢ Environmental Factors Affecting the USA:
The USA has an extremely diverse geography, climate and wildlife. This diversity
coupled with other factors such as breath-taking natural attractions, charming little towns,
and vibrant cities has been a driving force to draw millions of tourists to the country.
79.26 million international visitors came to the US in 2019. Canada, Mexico, UK, Japan,
Brazil and China are the top six countries sending tourists to the USA.

However, the USA faces some of the toughest weather conditions in the world. The
country has sustained over 220 weather and climate disasters since 1980. In 2017 alone,
there were 15 weather and climate disasters with losses exceeding $1 billion each. Apart
from financial damages, these disasters also cause disruptions to everyday life in the most
technologically developed country in the world.

➢ Legal Factors Affecting the USA:

Each state in the USA has its own government structure and legal scheme. Businesses
come under the regulatory environment of the state in which they operate. The country
upholds equal treatment of nationals and foreigners. Expatriate employees can expect an
unbiased trial from the judicial system. The USA also offers a strong legal system to
protect Intellectual Property Rights.
INDIAN GOVERNMENT POLICY TOWARD THE
SELECTED PRODUCTS: -

1. The Cotton Textiles Export Promotion Council:-

The Cotton Textiles Export Promotion Council is the first Council set up after Independence
by the Government of India in 1954 is an autonomous, nonprofit body dedicated to promotion
of exports. The Cotton Textiles Export Promotion Council, popularly known as TEXPROCIL
has been the international face of cotton textiles from India facilitating exports worldwide.
Texprocil has a membership of around 3,000 companies spread across major textile clusters in
India. Its members are well established manufacturers and exporters of cotton textile products
like Cotton, Yarns, Fabrics and Home Textiles, showcasing a dazzling array of products across
the value chain.

The Council enables better understanding of Indian and International trade policies, emerging
trade issues, social and environmental compliances, quality management and sustainable
business practices.

The Council Promotes Exports of:-

• Raw Cotton
• Cotton Yarns and Blended Yarns (50% or more cotton) Grey and Processed (
doubled, gassed, mercerized, dyed, melange); Cotton and Blended (50% plus cotton)
• Woven and Knitted fabrics , Grey and Processed
• Home Textiles ( Bed linen, Kitchen linen, Bath towels and Other linen)
• Technical textiles ( Protective, Performance, Medical and Geo textiles)
External Activities:-

For the foreign buyer, TEXPROCIL has opened a wide array of yarns, fabrics and madeups,
including home textiles in its entire splendor, and has become a major source of supply of
these items. Other activities include -

• Organizing fairs, Buyer Seller Meets and Overseas Trade Delegations

• Giving information to overseas customers about Indian companies when asked
• Market information, trends and forecasts
• Identification of potential new markets and seeding the export activity through
delegations
• Defending Indian exporters from non tariff barriers , anti subsidy investigations etc

Internal Activities:-

For the Indian exporters it has made available opportunities to trade that exist across the
globe. Other activities include

• Working with Indian Government on export promotion policies

• Providing Industry data on duties and taxes suffered with documentary evidence to
arrange refund of the same after exports through well thought out draw back
mechanism
• Assisting the Government in bilateral negotiations bringing to the table the domestic
perspective
• Help members understand the various procedures and policies of the Government
• Help members reach out to customers through the various export promotion efforts
undertaken
• Provide data and trends in Export/Import
2. Wool and Woolens Export Promotion Council:-

Introducing foreign businessmen to local manufacturers/exporters and provide them with the
information useful in conducting business.
Inviting leading exporters to visit India and gain first hand information regarding the
capability of the Indian Woolen Industry.

• Assisting foreign buyers in their visits to India and chalk out their tour programmes,
arrangements etc
• Working with the organizers of leading International Trade Fairs and Exhibitions,
in order to project the quality and variety of Indian Woollen Products abroad
• Researching foreign markets and sponsor Study-cum-Sales Team/Delegations
abroad
• Promoting and actively practice overseas public relations
• Monitoring international fashion forecasts and transmit them to Indian Exporters
• Helping the Textile Inspection committee of India to ensure that Indian Woolen
Products are made as per International Standards
• Chalking out and implementing programmes for enlarging and improving the
production base of the Woolen Industry
• Maintaining close liason with the International Wool Secretariat and Wools of New
Zealand
3. Indian Silk Export Promotion Council:-

The Indian Silk Export Promotion Council (ISEPC) was set up in 1983 as a company not for
profit under Companies Act duly sponsored by the Government of India in the Ministry of
Textiles. The Council as on date has a membership of 655 regular exporters of Silk goods
whereas more than 1800 exporters have registered with the Council. ISEPC works closely
with the Government of India on policy formulation concerning silk sector and provides
specialized services to the entrepreneurs enlarging global business opportunities for the silk
industry in India.

Main Activities of the Council:-

• Explore markets and identifies items offering export potential by conducting market
surveys
• Organize Buyer Seller Meets for its member exporters
• Organize Silk fairs and exhibition in India
• Participate in trade fairs and exhibitions abroad
• Launch generic promotion of silk products from India
Promotional Tools for International Business

Advertising Sales Promotion

Promotinal
Tools

Public Relation Direct Marketing

1) Advertising:

Advertising is defined as any form of paid communication or promotion for product,

service and idea. Advertisement is not only used by companies but in many cases by
museum, government and charitable organizations. However, the treatment meted out
to advertisement defers from an organization to an organization. Advertising
development involves a decision across five Ms Mission, Money, Message, Media
and Measurement.

2) Sales Promotion:

Promotion is an incentive tool used to drive-up short-term sales. Promotion can be

launched directed at consumer or trade. The focus of advertising to create reason for
purchase the focus of promotion is to create an incentive to buy. Consumer incentives
could be samples, coupons, free trial and demonstration. Trade incentive could be
price off, free goods and allowances. Sales force incentive could be convention, trade
shows, competition among sales people.
 Sales promotion activity can have many objectives, for example, to grab attention of
new customer, reward the existing customer, increase consumption of occasional
users. Sales promotion is usually targeted at the fence sitters and brand switchers.

3) Public Relation:

Companies cannot survive in isolation they need to have a constant interaction with
customers, employees and different stakeholders. This servicing of relation is done by
the public relation office. The major function of the public relation office is to handle
press releases, support product publicity, create and maintain the corporate image,
handle matters with lawmakers, guide management with respect to public issues.

Companies are looking at ways to converge with functions of marketing and public
relation in marketing public relation. The direct responsibility of marketing public
relation (MPR) is to support corporate and product branding activities.

4) Direct Marketing:

The communication establishes through a direct channel without using any

intermediaries is referred to as direct marketing. Direct marketing can be used to
deliver message or service. Direct marketing has shown tremendous growth in recent
years. The internet has played major part in this growth story. Direct marketing saves
time, makes an experience personal and pleasant. Direct marketing reduces cost for
companies. Face to face selling, direct mail, catalog marketing, telemarketing, TV and
kiosks are media for direct marketing.

Advertisement, Promotional activity, public relation and direct marketing play an

essential role in helping companies reaches their marketing goals.