Reason JCB Entered India in 1976 and Benefits of Making Investment in the Country

The construction sector in India was rapidly expanding at the time, and JCB decided the market was too big to ignore. This led to the company’s expansion into India in 1979. The business intended to gain a foothold and gain an edge over rivals by forging ahead into the market (Hill, 2008). The company saw this as having long-term advantages, leading to a large investment in the nation.

JCB launched a joint venture in 1979 to penetrate the Indian market. The strategy would allow the organization to grow faster and generate greater profits. At the same time, joining with Escorts enabled the JCB to access the new market and distribution network quickly. They also benefited from reduced of expanding the business to India because of the shared cost with their partner (Madichie, 2012. Further, the company gained an opportunity to venture into a new market and grow without having to borrow money or look for outside investors, gain new capacity as well as expertise.

Determining Whether JCB Expansion to India Paid off

Based on the information given in the case study, it can be inferred that JCB business strategy and approach paid off. First, the organization saw increase market share in 1990s and 2000s they were controlling manufacturing of construction materials. More specifically, the business strategy used worked well between 2001 and 2012 as the firm’s revenue increase tenfold (Dass & Jain, 2017). Currently, the organization is considered one of the leading producers of backhoes in the India. Therefore, in my opinion, the company’s decision to make a significant commitment to the market was a good one.

References

Dass, V., & Jain, A. (2017). Case study: Implementation of 5S methodology in JCB assembly business unit material storage. International Journal of Engineering Research, 6(7), 373-378.

Hill, C. (2008). International Business: Competing in the global market place. Strategic Direction, 24(9).

Madichie, N. O. (2012). International Business: Competing in the Global Market Place. Management Decision.