Political Risk Assessment for Dole in India

The assignment discusses the potential risks and benefits for Dole, a global company, to operate in the Indian market. It evaluates India's ranking in terms of taxation, government spending, innovation capacity, and infrastructure development, concluding that while there are challenges, the positive factors make it an effective target market for Dole.

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Introduction
It is becoming more difficult for the contemporary business organizations to compete in
the global market by having their market presence in maximum country available. This is due to
the reason that entering in the all the countries will require huge capital for investment and
increases risk. On the other hand, it is also important for the business organizations to effectively
determine the business environment of the country of interests in order to have the fair idea about
the potentiality and risk of the host country market (Gnizy, Baker & Grinstein, 2014). In this
case, political risk assessment is being used by the business organizations in order to determine
country potentiality. This helps the business organizations in deciding whether to enter in the
selected market or not (Deresky, 2017).
This paper will discuss about the market potentiality of Dole orange juice from Malaysia
in entering the market of India. Dole orange juice is a halal certified product in Malaysia and is
applicable for consumption for the Muslim population. On the other hand, this product is
currently not available in India but India is the home for largest Muslim population in the world.
Thus, India is being selected as the chosen country for entering and expanding the market for
Dole orange juice.
Challenges of doing business in India
Though India is having largest population of Muslims in the world, but there are number
of challenges that may be faced by Dole in doing business in India (Kumar & Sethi, 2016).
According to the report of globaledge, India is currently ranked at 100 out of total 190 countries
around the world (Insights, 2018). Thus, Dole will not have highly favorable business
environment in doing business in India nor they will have huge difficulties. However, According

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to global competitive index, there are number of difficulties being identified in doing business in
India.
Figure: 1
Problematic factors in doing business in India
Source: (Www3.weforum.org 2018)
According to the above figure, there are number of problematic factors being identified.
One of the major problematic factors being identified is corruption. This will have huge adverse
impact on the business operation of Dole due to the reason that corruption will lead to incursion
of extra and added cost for them. Access to financing is also being identified as another
problematic factor for doing business in India. Thus Dole will have the issue of accessing to
financial resources in operating in India (Www3.weforum.org, 2018). It will also be one of the
major challenges for Dole due to the reason that financial resources are important for expansion
of business operation. Tax rates are also identified as problematic factors for Doles to have their

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business in India. This will create added difficulties and complexities for Dole along with
increase in operating cost.
Political demography of India
India is the second largest country in the world in terms of population. Thus, the huge
population also denotes the favorable market size for Dole. This is one of the positive sides of
doing business in India. This is due to the reason that, the more will be the size of the market, the
more will be the potentiality of gaining profits from the market. According to the data given the
world economic forum, India is having the ranking of 3 in terms of total gross domestic product
(Www3.weforum.org, 2018). Thus, this denotes that India is having the major income earning
population with having favorable purchasing power. This can also be treated as positive factor
for Dole due to the reason that, the more will be the purchasing power of the average population,
the more will be the market potentiality for Dole (Boutabba, 2014). In addition, according to the
report of globaledge, 14.2 percent of the total population of India is Muslims that are largest in
number in the world (Insights, 2018). Thus Dole is having huge market opportunity to sell their
halal certified fruit juice in the Indian market.
Competitive scenario in the Indian market
India being one of the largest countries in the world in terms of population is having good
number of business firms operating in diverse business sectors. However, the economic growth
of India is still in the nascent stage and thus there is still huge untapped market left for Dole to
operate in the Indian market. According to the global competitive index, India is having the
ranking of 98 in terms of intensity of local competition (Www3.weforum.org, 2018). Thus it can
be concluded that India is not having huge intensity of local competition in the market. This will

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help Dole to face less competition in operating in the Indian market. The less will be the
competition, the more will be the rate of profitability for Dole in the Indian market.
In addition, it is also being stated in the global competitiveness report that India is having
the ranking of 23 in terms of market dominance (Www3.weforum.org, 2018). This denotes that
the Indian economy is majorly market oriented and it will help Dole to have more liberal policies
and strategies in the country. In addition, another advantage that will be gained by Dole is having
same political scenario between the home and host country of them (Mosco, 2014). Political
structure and environment of India and Malaysia are same and thus it will be less difficult for
Dole to operate in the Indian market.
Cost of operating in the Indian market
There are different and diverse cost is associated in doing business in India. One of the
major costs for Dole in doing business in India is tax rate. According to the global
competitiveness index, India is having the ranking of 124 in terms of total tax rate. This denotes
that India is having poor tax structure with having higher rate of taxation (Www3.weforum.org,
2018). This will cause extra cost for Dole in their business. India is having the ranking of 93 in
terms of inflation. Thus, India is having on the higher side of the inflation. This will also lead to
the increase in the cost of operation for Dole due to the reason that the more will be the rate of
inflation, the more will be the cost of raw materials, production process and business operation.
Another cost of business cost of terrorism. India is situated in the South East Asian region
that is hugely affected by terrorism. In this parameter, India is having the ranking of 117 that
denotes that India is on the lower side of the ranking and Dole will have the challenge to face the
impact of terrorism. The more will be the risk of terrorism, the more will be the cost for Dole in

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safeguarding their business interest. However, on the other hand, India is having the ranking of
20 in terms of efficiency of government spending. Thus, it will have majorly positive impact on
the business operation of Dole due to the reason that efficient government spending will help
Dole is having favorable domestic and operating infrastructure.
Capability to be gained
According to the global competitiveness index, India is having the ranking of 29 in terms
of capacity of innovation. This denotes that India is having the favorable ranking in terms of
generation of innovative ideas. This can help Dole in enhancing their business effectiveness due
to the reason that the more will be the possibility of generating of innovative ideas, the more will
be the chance for Dole to initiate newer and updated techniques in the market. India is also
having favorable ranking of 23 in terms of corporate spending in research and development
(Www3.weforum.org, 2018). This shows that spending in this sector is high and possibility of
development is high. This will also lead Dole to have extensive process of research and
development in India and develop their products. The major advantage that they will gain from
having their research and development in India is effectively catering to the local market along
with increased level of localization.
In terms of rail and roadways, India is having the ranking of 26 and 55 respectively. Thus
both the ranking denotes that India is having relatively positive set of infrastructure in the
country. This can also help Dole to enhance their business capability due to the reason that
having effective mode of transportation and domestic infrastructure will help Dole to operate in
the entire country effectively with having lower cost of transportation. These factors in addition

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to the financial and marketing capability and expertise of Dole will help in having effective
business operation in the Indian market.
Conclusion
Thus, it can be concluded that India is the most effective and potential target market for
Dole. In this paper, there are number of factors being discussed through the political risk
assessment that showed that Dole will have to face both difficulties and potentiality in doing
business in India. It is also being concluded that cost for operating in the Indian market will be
comparatively more for Dole mainly due to the higher rate of taxation in the country. However,
the positive factors are more and it will help Dole to effectively expand their business in the
Indian market.

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Reference
Boutabba, M. A. (2014). The impact of financial development, income, energy and trade on
carbon emissions: Evidence from the Indian economy. Economic Modelling, 40, 33-41.
Deresky, H. (2017). International management: Managing across borders and cultures. Pearson
Education India.
Gnizy, I., E. Baker, W., & Grinstein, A. (2014). Proactive learning culture: A dynamic capability
and key success factor for SMEs entering foreign markets. International Marketing
Review, 31(5), 477-505.
Insights, G. (2018). By Country >> globalEDGE: Your source for Global Business Knowledge.
Retrieved from https://globaledge.msu.edu/global-insights/by/country
Kumar, R., & Sethi, A. (2016). Doing business in India. Springer.
Mosco, V. (2014). Political Economy. In The Routledge Companion to Global Popular Culture
(pp. 35-44). Routledge.
Www3.weforum.org. (2018). Retrieved from http://www3.weforum.org/docs/GCR2017-
2018/05FullReport/TheGlobalCompetitivenessReport2017%E2%80%932018.pdf