Internation Business Project

7282019 Internation Business Project

httpslidepdfcomreaderfullinternation-business-project 125

Budget Hotels in IndiaInternational Business Venture

Team 7Anand Guda

Manuel CabralAlejandra Lea-Plaza

Victor MoraHenry Morales

Zandra Romero



i

Table of Contents

TABLE OF CONTENTS I 1 EXECUTIVE SUMMARY 1 2 COUNTRY ANALYSIS 2

21 GENERAL CHARACTERISTICS OF YOUR TARGET COUNTRY 2 211 Location size geographical and physical characteristics of the country 2 212 Major news events that have occurred within the country during the past 12 months 2

22 POLITICAL AND LEGAL E NVIRONMENT3 221 Describe the type of government 3 222 Discuss the governmentrsquos involvement in business ownership4 223 Assess the political risks 4 224 Discuss the legal system 5 225 Discuss the degree of corruption and economic freedom 6

23 ECONOMIC E NVIRONMENT 7 231 Provide an overview 7 232

Discuss the recent growth performance and inflation rate 8

233 Analyze the countryrsquos trade performance and key commercial relationships 9 234 Discuss the structure of the economy 10 235 Describe the foreign exchange system 10 236 Discuss laws pertaining to FDI 10 237 Discuss the countryrsquos physical Infrastructure 12

24 CULTURAL AND SOCIO ECONOMIC E NVIRONMENT13 25 COMPOSITE I NDICES FOR I NDIA 13 26 CAGE A NALYSIS AND 5 C ONTEXTS A NALYSIS 14

261 CAGE Analysis between US and India 14 262 Five Institutional Contexts Framework for India 15

3 PRODUCT AND INDUSTRY ANALYSIS 16 31 MARKETING STRATEGY 16 32 BRANDING BRAND EQUITY17 33 MARKET NICHE17 34 EMERGING MARKET AND BRAND POSITION DIAGNOSIS 17 35 SWOT 18

4 ITINERARY FOR A COUNTRY VISIT19 5 FINANCIALS 20

51 PRICING STRATEGY 21 52 PROFIT AND LOSS PROJECTION21

6 REFERENCES 22



1

1 Executive Summary

The Indian hospitality industry is one of the fastest growing sectors of Indian economy Indiawith a population of more than 12 billion and growing middle class is facing shortage of hotelrooms in the mid-market and budget segments This segment of market has the maximumpotential for growth given the domestic demand from business and tourism servicesInternational and domestic hotel chains are rushing to fill a major gap in Indian hospitalitysector Government of India allows 100 Foreign Direct Investment in hotels In this project we

will identify a budget hotel chain in US and expand into Indian market

There is a great demand for budget and business hotels that are moderately priced qualityproperties offering efficient and modern facilities to businessman and tourists at affordablerates ($80 - $150) In India luxury 5 ndashstar properties in metro cities cost over $300 - $500 per night which is beyond the reach of middle class Budget hotels can attract business and middleclass Indians who has purchasing power and evolving life style

As an emerging market and part of BRICS India has been growing at a rate of 7-9 Thestandard of living has been improving with a strong middle class of 300 million Thegovernment has been slowly liberalizing its economy and moving towards an open marketeconomy According to the estimates of World Travel amp Tourism Council (WTTC) the direct

and indirect contribution of travel and tourism to GDP is expected to grow consistently in thenext decade The growth opportunities in travel and tourism cannot be realized without thedevelopment of the hospitality sector

This immense potential opportunity and market in this country cannot be ignored by amultinational company It should be noted that although the opportunities are available thecompanies need to understand the challenges risk and liabilities of operating their businessesin the emerging markets

As managers of the multinational hospitality company our team embarked on researching thishuge opportunity to expand our product in India In this paper we have presented acomprehensive country analysis CAGE and Institutional context analysis product analysis

marketing strategy and financials for our International business venture in India

At the end our team noted that a Greenfield operation of building a hotel and operating will bean expensive venture and will take a long time to reap the profits Therefore the new strategywe have adopted will be franchising and leasing family owned businesses From brand andmarketing perspective our company will extend the business model to the leased hotels so thatin terms of recognition they already have a high amount of brand equity all over the worldInitially this operation was planned to start across ten cities across the country but based onthe financial analysis we propose to sign four contracts and begin the operations next year Werecognize that our product needs local adaption in Indian market hiring local designers andemployees to run our operations The key factor to our success is to generate net incrementalpositive cash flows from third year of operations after realizing the investment costs Also we

understand that setting up a business and operating business in India will be challenging butthe opportunities of 300 million middle class and a steady growth rate of GDP of India cannot beignored by our company



2

2 Country Analysis

21 General characteristics of your target country

211 Location size geographical and physical characteristics of the country

India is located in the south of the Asian continent bordering the Arabian Sea and the Bay of Bengal The country is slightly more than one-third the size of the United States The countrysterritory is measured at nearly 13 million square miles extending from Himalayan Mountains inthe north to tropical forests in the south India shares more than 8800 miles of borders with 7

neighboring countries To the northwest are Afghanistan and Pakistan to the north are ChinaBhutan and Nepal and to the east are Burma (also known as Myanmar) and Bangladesh Anarrow channel of sea formed by the Palk Strait and the Gulf of Mannar separates another neighbor Sri Lanka an island nation with which southeast India shares strong cultural ties

India is composed of 28 states and 7 union territories India as a state is divided into four major geographical regions

The Great Himalayan Mountain Ranges This is one of the most desirable place for trekkersand mountaineers The region encompasses the various Himalayan ranges which extendalong the Indias northern and north eastern border Himalayas are the tallest mountain systemin the world The Indo - Gangetic Plain The Indo- Gangetic Plain lies in the Himalayas and the

southern peninsula which includes the valley of Brahmaputra the Ganges and the Indus River and their branches The eternal city of Varanasi the beautiful Sunderbans the splendid TajMahal and the charming and exotic Khajuraho temples fall in this region

The Desert Region This region comprises of the Great Desert and the Little Desert Rajasthanand Gujarat falls in this place The region is quite popular for its art and architecture and youcan see magnificent forts and palaces here

The peninsular region of the South South India or the southern peninsular region issurrounded by mountains In the north lie the Vindhya and the other mountain ranges thatseparate the Deccan from the northern plains

India is listed amongst the developing countries of the world In the past few years it hasshown rapid growth in almost all its service sectors and industries earning the title ldquoIndiaShining

212 Major news events that have occurred within the country during the past 12 months

The current government has been weakened by a series of alleged corruption scandals andsoaring food and fuel prices are also undermining popular support for Congress party

Decision making has been paralyzed for months The opposition party is demanding a cross-party investigation of the corruption allegations before it will let Indias parliament start workagain State elections are coming up and if the Congress party and its allies are beaten the

ruling coalition will be even weaker That would make it unlikely reform laws will be passedbefore 2014s general election

Police are investigating alleged corruption in the award of mobile phone licenses and havecalled in a number of high-profile executives for questioning including the billionaire Anil

Ambani head of Reliance Communications

Foreign investors in Indias phone companies have been rattled and $900m has been pulledout of the Indian stock market on concern mobile phone licenses could be revoked or



3

renegotiations forced Separately Indias tax authorities have ordered Vodafone to pay $26bnin capital gains taxes (CGT) on its purchase of a stake in local phone company HutchisonEssar in 2007 Vodafone has said it should not pay tax in India on the deal but a local judgeruled in September that the mobile phone giant should have paid CGT because the transfer of Indian assets was involved

Inflation in India was running at 823pc in January well above the central banks target of 5-6pc Higher food and fuel prices are behind the jump in inflation The central bank has said its

main aim is getting that under control and interest rates are now expected to rise faster thanpreviously anticipated That in turn could slow down Indias growth interest rates have alreadyrisen seven times since last March by a total of 175 basis points

Recently Indian rupee has plunged more than 25 against the dollar roiling currency marketsin the country driving up import prices and adding to the persistent problem of inflation Part of it is due to investorrsquos flight to safety to US assets amid a worsening European Union crisisforeign portfolio investors have started going slow on investments into the country - in themonth of April they pulled out close to $1 billion from the Indian markets - on the other thecountrys import bill too has risen due to high crude and commodity prices amid a slower growth in exports

The trend in the rupee is also reflective of Indias weak macro fundamentals Both the fiscaldeficit as well as current account deficit is the highest among emerging Asian peers Indiascombined fiscal deficit including that of state governments has risen sharply Besides thegovernment is also going slow on policy reforms This has proved a further deterrent to foreigninvestments into the country

22 Political and legal Environment

221 Describe the type of government

India is a union of 28 States and 7 Union Territories It is a Sovereign Socialist Secular andDemocratic Republic which is governed by the Constitution of India which came into force on26th January 1950 The Constitution provides for a Parliamentary form of government which is

federal in structure with certain unique features The constitutional head of the Union is thePresident The Parliament consists of the President and two Houses known as the Council of States (Rajya Sabha or the Upper House) and the House of the People (Lok Sabha or theLower House) The Constitution also provides that there shall be a Council of Ministers withthe Prime Minister as its head to aid and advise the President The President shall exercisehisher functions in accordance to the advice The real executive power is thus vested in theCouncil of Ministers with the Prime Minister as its head The Council of Ministers is collectivelyresponsible to the House of the People (Lok Sabha) Every State has a Legislative AssemblyCertain States have an Upper House also called State Legislative Council There is aGovernor for each state who is appointed by the President Governor is the Head of the Stateand the executive power of the State is vested in him The Council of Ministers with the Chief Minister as its head advises the Governor in the discharge of the executive functions The

Council of Ministers of a State is collectively responsible to the Legislative Assembly of theState The legislative powers between Parliament and State legislatures are distributed as per the lists of entries in the Constitution The residual powers vest in the Parliament The centrallyadministered territories are called Union Territories

The legal system in India is based on English common law and the judiciary is relativelyindependent Indias independent judicial system began under the British and its concepts andprocedures resemble those of Anglo-Saxon countries The Supreme Court is the apex court inthe country comprising a Chief Justice and 25 other Justices all appointed by the President on



4

the advice of the Government of India At the State level the judicial administration is headedby the High Court Each State is divided into judicial districts presided over by a district andsessions judge who is the highest judicial authority in a district Below him there are courts of civil jurisdiction known in different states as munsifs sub judges civil judges and the likeSimilarly criminal judiciary comprises chief judicial magistrate and judicial magistrates of firstand second class

222 Discuss the governmentrsquos involvement in business ownership

India has a good investment platform which actively encourages the entrance of foreignplayers into the market either through Foreign Direct Investment (FDI) or through ForeignInstitutional Investments (FII) During 1990s the FDI regime has been liberalized with severalrestrictions on foreign investment being removed Presently FDI can be divided into two broadcategories ndash FDI under automatic approval route and FDI with prior approval of Government(There is also a list of industry into which FDI is prohibited In 2008 despite the slowdown of the global economy India attracted over US$25 billion in foreign investment and from March 9to May 19 2009 foreign institutional investors (FII) invested nearly US$42 billion in the Indianstock markets In February 2009 the Government made two significant changes in the foreigninvestment policy Firstly if a foreign investor invests up to 49 in an Indian owned andcontrolled investing company which in turn makes a downstream investment in a target Indiancompany the total foreign investment in the downstream target company will be considered tobe nil Secondly it was made mandatory to take Government approval for the transfer of ownership and control of Indian companies to non-resident entities in restricted sectors suchas telecom defense production and broadcasting FDI up to 100 is allowed under theautomatic route in all activitiessectors except those which specifically require prior approval of the Government Thus in most cases only intimation needs to be given to the Reserve Bank of India (RBI) within 30 days of making the investment

223 Assess the political risks

Indian democracy though largest isnrsquot the best in the world Latest reports state that 162members of parliament have legal charges levied against them and are being investigatedThere is a high level of criminalization in politics which is now getting regularly exposed To

illustrate the Ex-Chief Minister of Karnataka Mr BSY Reddy is now being investigated byLokyukta in illegal mining and other cases A number of members of parliament wereimplicated in scams last year This has put the government on a back foot and political partiesare losing ground

The confusion in Indian democracy is higher as multi-party system exists and no party has aclear majority in parliament Government is formed with alliances from other parties Thecoalition government is not effective as agendas of various party chiefs have to be metHence the reform bills do not get passed

Secondly a number of parties have states control with insignificant presence at national levelTherefore multinational organizations need to build relationships with political parties at each

state to enter into local markets All permissions for land infrastructure and licenses are givenat state level

In nutshell Indian politics is tough and dirty The political risks are high and without a proper plan to deal with political risks the multinationals investment plans can go haywire

Coalition politics hampers the reform agenda The governing United Progressive Alliance(UPA) led by the Congress party has lacked a majority in both houses of parliament in both itsfirst and second terms In its first term (2004-2009) the UPA survived only with outside support



5

from the Left Front consisting of four communist parties This gave the Left a virtual veto onreforms Several reformist bills were introduced by the UPA to allow pension funds to invest inthe stock market to increase the ceiling of foreign investment in insurance from 26 percent to49 percent and to give investors in banks voting rights in line with their shareholding but theLeft dead set against any financial liberalization or improved access to foreign investmentblocked these bills The Left also vetoed legislation to end the public sector monopoly on coalmining and of course it demanded and got a huge increase in social and rural spendingprograms Of these the most useful was Bharat Nirman which massively improved rural

infrastructure

224 Discuss the legal system

India has a well-established and independent judiciary system The Supreme Court of India inNew Delhi is the highest Court of Appeal Each State has a High Court along with subsidiaryDistrict Courts which enforce the rule of law and ensure fundamental rights of citizensguaranteed by the Constitution of India

India has a three-tier court system with a typical Indian litigation starting from District Courtsand reaching its logical conclusion in the Supreme Court of India The High Courts along withthe various State level forums situated mostly in the State capitals constitute the middle rung

of this three-tier system District level courts are the courts of first instance in disputeresolution except in cases where they are prevented from being so by virtue of lack of pecuniary jurisdiction Cases involving violation of fundamental rights are filed in respectiveHigh Court or Supreme Court A civil criminal or commercial dispute may be filed in the courthaving territorial jurisdiction and depending upon level of crime or pecuniary jurisdiction Theplace of cause of action and the place of residence of the defendant are the necessarydeterminants of territorial jurisdiction

A number of special courts and tribunals have been constituted in India to deal with specificdisputes -

Various Tax Tribunals

Consumer Dispute Rederssal Forums Insurance Regulatory Authority of India Industrial Tribunals Debts Recovery Tribunals Company Law Board Motor Accidents Claims Tribunals

An appeal can be filed against an order of the civil or criminal judge before the Court of Districtand Sessions Judge Next appeal can be preferred before the High Court and after that to theSupreme Court

Under Article 141 of the Constitution of India every judgment delivered by the Supreme Court

becomes the Law of the Land to be followed by all the other lower courts

Dispute Resolution awards and decrees of the Indian courts are very rare However Section13 of the Code of Civil Procedure 1908 (CPC) lays down that a foreign judgment shall beconclusive as to any matter directly adjudicated upon between the same parties or betweenparties under whom they or any of them claim litigating under the same title except in fewcases Section 44A of the CPC provides for execution of decrees passed by courts in areciprocating territory It stipulates that where a certified copy of decree of any of the superior



6

courts of any reciprocating territory has been filed in a District Court the decree may beexecuted in India as it has been passed by the District Court

Government of India has notified Singapore Malaysia UK New Zealand Hong Kong and Fijias reciprocating territories For other countries a foreign decree may be executed in India byfiling a suit in the District Court on the basis of the said decree praying inter-alia for theexecution of the decree passed by the foreign court In addition the CPC provides for asummary procedure for faster recovery of a debt or liquidated money in demand under Order

37 of the CPC In summary suit defendant is not as in an ordinary suit entitled as of right todefend the suit

Arbitration and Conciliation Act of 1996 model law provides for resolution of a commercialdispute expeditiously for International commercial arbitration where the seat of arbitration isIndia and Enforcement of international commercial arbitration agreements and awards under the New York Convention and Geneva Convention where the seat of arbitration is outsideIndia

The Arbitration Act also provides for international commercial arbitration whether contractualor not considered as commercial under Indian law and where at least one of the parties is aforeign national or incorporated in a foreign country

India has entered into bilateral investment treaties with a number of countries including Australia France Japan Korea UK Germany Russian Federation The NetherlandsMalaysia and Denmark OPIC of US Each agreement makes provision for settlement of disputes between an investor of one contracting party and an investor of the other contractingparty through negotiation conciliation and arbitration

India is a party to the Convention establishing the Multilateral Investment Guarantee Agency(MIGA) which provides for settlement of disputes between State parties to the Convention andMIGA through negotiation conciliation and arbitration

Under Indian Law the following types of differences cannot be settled by arbitration and

therefore must be settled only through civil suits -

Matters of public rights Proceedings under Foreign Exchange Management Act (FEMA) those are criminal in

nature Validity of intellectual property rights granted by statutory authorities Taxation matters beyond the will of the parties Winding up under the Companies Act 1956 Disputes involving insolvency proceedings

225 Discuss the degree of corruption and economic freedom

Economic reform in India accelerated in the 1990s After a process of 10 to 20 years of liberalization one might have expected truly revolutionary changes to Indiarsquos economic systemYet the Heritage Foundationrsquos 2011 Index of Economic Freedom ranks India at just 124 of 183countries and classifies it as a ldquomostly unfreerdquo state with a lower than average score Aseparate study Economic Freedom of the World 2010 brought out annually by the Fraser Institute and allied think tanks places India at 87 out of 141 countries on economic freedoms Inthe 1980 edition of the same index India had been ranked as high as 57 This apparent declineis not a result of worsening freedoms Indiarsquos score on the index has improved from 541 to 651on a scale of one to ten signifying an improvement However other countries have liberalized



7

much faster than India in the interim period India rank higher than China (82) and ranks muchlower than its neighbors Sri Lanka (111) Bangladesh (113)Pakistan (118) and Nepal (125)

India is relatively considered to be tough environment for doing business Its 2011 report ratedthe country a lowly 134 out of 183 countries India ranked close to the bottom in terms of easeof starting a business (165) getting construction permits (177) and enforcing contracts (182)

All of these indices are clear demonstrations of how India remains hobbled by controlscorruption the pathetic delivery of public goods and flawed administrative and judicial systemsWhile India has indeed been transformed since 1991 the unfinished reform agenda is massiveIn addition to various constraints on doing business corruption remains another area of concern It is currently a hot topic in India with an outraged media revealing scam after scambut India may be experiencing more public outrage rather than more corruption This isconfirmed by the Corruption Perception Index of Transparency International which ranks India87 out of 178 countries behind China (78) but well ahead of Bangladesh (134) and Pakistan(143) India has slipped from 66th in 1998 but in absolute terms its corruption perception indexhas improved from 29 to 33 This may be because corruption has been abolished byderegulation in several areas ndash industrial licenses import licenses monopolies clearance andforeign exchange permits ndash and this more than offsets rising corruption in areas of politicalallocations such as telecommunications land acquisition construction permits andinfrastructure

Despite corruption and business constraints India has averaged 85 percent GDP growth in thelast decade This reflects virtuous cycles created by economic reforms over the last twodecades as well as a demographic dividend This has important implications for the politicaleconomy Having witnessed the benefits of miracle growth Indian politicians have littleincentive to reduce corruption non-Governance or unwarranted economic controls Indianpoliticians like their counterparts everywhere want to get re-elected and while they may opt for reforms in tough times during an economic boom they prefer using increases in revenue toshower handouts to constituents Handouts can range from employment programs andsubsidized grain to free electricity and canal water and subsidized fuel and fertilizers for farmers In some state elections political parties have promised voters bicycles color televisions electric mixer-grinders and even laptop computers Such handouts fritter awayfunds that could better be better utilized building infrastructure improving governance ndash

including establishing more courts and police and improving social services such as health andeducation Voters in poorer countries tend to have short time horizons that favor immediatehandouts over longer-term reforms So the political incentives for accelerating reforms remainweak at present

23 Economic Environment

231 Provide an overview

The Republic of India is the third largest Asian economy after China and Japan Among themajor emerging markets India ranks second in terms of economic growth with the IMFforecasting a GDP growth rate of 69 percent for 2012 India is the second most populouscountry in the world approximately thirty percent of the countryrsquos 12 billion inhabitants reside

in urban areas Indias industrialized economy encompasses diverse manufacturing sectors(steel production oil and gas refining auto plastics textiles) while also including traditionalvillage farming modern agriculture and handicrafts Services especially informationtechnology are the major source of economic growth accounting for more than half of Indiasoutput with less than one third of its labor force which is currently estimated to be 457 millionworkers



8

India is estimated to have a third of the worlds poor In 2011 World Bank stated 327 of thetotal Indian people fall below the international poverty line of US$ 125 per day Postliberalization in 1990s India adds 40 million people to its middle class every year It isestimated 300 million Indians now belong to the middle class one-third of them have emergedfrom poverty in the last ten years

232 Discuss the recent growth performance and inflation rate

The GDP of India with regards to purchasing power parity is approximately 4463 trilliondollars which places it in the 4th position in the world With regards to official exchange rate itsGDP is close to $1843 trillion

At the end of 2011 the real growth rate of India GDP was approximately 78 percent whichgives it the 15th rank from a global perspective In 2010 this was almost 101 and in 2009 itwas close to 68

The per capita (PPP) GDP of India is approximately 3700 US dollars which places it in the163rd position from a global perspective In 2010 this figure stood at almost $3500 and in theprevious year this was at $3200

As per the figures available for 2011 fiscal almost 52 percent of Indiarsquos GDP comes from theagricultural sector and the services sector is the second biggest contributor with 34 percentThe industrial sector contributes almost 14 percent of Indiarsquos GDP

The Gross Domestic Product (GDP) in India expanded 08 percent in the second quarter of 2012 over the previous quarter Historically from 1996 until 2012 India GDP Growth Rateaveraged 165 Percent reaching high of 610 Percent in March of 2010 and a record low of -150 Percent in March of 2004 The Gross Domestic Product (GDP) growth rate provides anaggregated measure of changes in value of the goods and services produced by an economyIndias diverse economy encompasses traditional village farming modern agriculturehandicrafts a wide range of modern industries and a multitude of services Services are themajor source of economic growth accounting for more than half of Indias output with less thanone third of its labor force The economy has posted an average growth rate of more than 7in the decade since 1997 reducing poverty by about 10 percentage points This page includesa chart with historical data for India GDP Growth Rate



9

The inflation rate in India was recorded at 781 percent in September of 2012 Historicallyfrom 1969 until 2012 India Inflation Rate averaged 775 Percent reaching high of 3468Percent in September of 1974 and a record low of -1131 Percent in May of 1976 Inflation raterefers to a general rise in prices measured against a standard level of purchasing power TheInflation measure is represented by CPI which measures consumer prices and the GDPdeflator which measures inflation in the whole of the domestic economy This page includes achart with historical data for India Inflation Rate

233 Analyze the countryrsquos trade performance and key commercial relationships

India reported a trade deficit equivalent to 18080 Million USD in September of 2012Historically from 1994 until 2012 India Balance of Trade averaged a deficit equivalent to400178 Million USD reaching the best surplus at 49128 Million USD in November of 2001and the worst deficit at 1964400 Million USD in October of 2011 India is leading exporter of

gems and jewelry textiles engineering goods chemicals leather manufactures and servicesIndia is poor in oil resources and is currently heavily dependent on coal and foreign oil importsfor its energy needs Other imported products are machinery gems fertilizers and chemicalsMain trading partners are European Union The United States China and UAE India has beena WTO member since 1 January 1995

India has recently signed trade agreements with its neighbors and is seeking new ones with

the East Asian countries and the United States Its regional and bilateral trade agreements - or

variants of them - are at different stages of development

India-Sri Lanka Free Trade Agreement Trade Agreements with Bangladesh Bhutan Sri Lanka Maldives China and

South Korea India-Nepal Trade Treaty Comprehensive Economic Cooperation Agreement (CECA) with Singapore Framework Agreements with the Association of Southeast Asian Nations

(ASEAN) Thailand and Chile Preferential Trade Agreements with Afghanistan Chile and Mercosur (the latter

is a trading zone between Brazil Argentina Uruguay and Paraguay)



10

234 Discuss the structure of the economy

The structure of Indiarsquos GDP has undergone immense transformation in the face of such rapideconomic growth and has in turn contributed to it During the 1960s agricultural value addedas a percentage of GDP was 425 per cent Corresponding magnitudes for industrymanufacturing and services were respectively 203 per cent 143 per cent and 372 per centIn 2008 agriculture contributed 176 per cent of GDP whereas the contributions of industrymanufacturing and services were 29 per cent 16 per cent and 534 per cent respectivelyIndias large service industry accounts for 572 of the countrys GDP Major industries

include telecommunications textiles chemicals food processing steel transportationequipment cement mining petroleum machinery software and pharmaceuticals

235 Describe the foreign exchange system

Indiarsquos currency can be considered to be relatively stable Indiarsquos currency is not a fixed or floating system Indias approach can be characterized as intermediate since it follows asystem between a freely floating and fully managed system This type of system is known asmanaged float system Exchange rates are allowed to float freely but RBI (Reserve Bank of India) intervenes when it feels necessary in the way it considers suitable For eg in order tocurb appreciation of INR (Indian Rupees) it may buy USD from the market or it may increasethe interest rates The exchange rate of the Indian rupee (or INR) is determined by market

conditions However in order to maintain effective exchange rates the RBI actively trades inthe USDINR currency market The rupee currency is not pegged to any particular foreigncurrency at a specific exchange rate The RBI intervenes in the currency markets to maintainlow volatility in exchange rates and remove excess liquidity from the economy

236 Discuss laws pertaining to FDI

Under Foreign Direct Investment (FDI) policy FDI up to 100 percent is allowed under theautomatic route in most sectorsactivities except a few where sectoral equityentry routerestrictions have been retained FDI under the automatic route does not require any approvaland only involves intimation to the Reserve Bank of India within 30 days of inward remittancesandor issue of shares to non-residents The hospitality industry where the current project isbeing planned 100 of FDI is allowed in this sector



11

There are also certain sectors in which FDI is prohibitedGovernment Approval for FDI in the following sectors requires prior approval of Government

Activitiesitems that require an industrial license Proposals in which the foreign collaborator has an existing financialtechnical

collaboration in India in the same field Proposals for acquisitions of shares in an existing Indian company in financial service

sector and where regulations of Securities and Exchange Board of India (SEBI)regarding substantial acquisition of shares and takeovers are attracted

All proposals falling under sectors in which FDI is not permitted

Approvals of all such proposals are granted on the recommendations of Foreign InvestmentPromotion Board (FIPB) The finance ministry in the government gave commitment to a 90-day period for approving all foreign investments Government officers assigned to larger foreign investment proposals shall facilitate Central and State clearances in a time-boundmanner Unlisted companies with a good 3 year track record have been permitted to raisefunds in international markets through the issue of Global Depository Receipts (GDRs) and

American Depository Receipts (ADRs)

FIIs (Foreign Institutional Investments) include Asset Management Companies PensionFunds Mutual Funds and Investment Trusts such as Nominee CompaniesIncorporatedInstitutional Portfolio Managers or their Power of Attorney holders UniversityFunds Endowment Foundations Charitable Trusts and Charitable Societies They areregulated by SEBI Regulations and FEMA (Foreign Exchange Management Act) FIIs caninvest up to the level of FDI permitted under various sectors with the approval of the Board of Directors and the Shareholders of the Investee Company

External Commercial Borrowings (ECB) ECBs include bank loans suppliers and buyerscredits fixed and floating rate bonds and borrowings from private sector windows of Multilateral Financial Institutions such as International Finance Corporation Euro issuesinclude Euro-convertible bonds and Global Deposit Receipts (GDRs) ECBs are permitted for

financing expansion of existing capacity as well as for fresh investment to augment theresources available domestically ECBs can be used for any purpose (domestic expenditureas well as imports) except for investment in stock market and speculation in real estate

Industrial Policy Due to liberalization and deregulation of the economy industrial license isrequired for specified industries Industrial licenses are regulated under the Industries(Development and Regulation) Act 1951 At present industrial license is required only when

The industry is retained under compulsory licensing scheme Manufacture of items is reserved for small scale sector The proposed location attracts restrictions for geographical reasons

General Permission of RBI under FEMA (Foreign Exchange Management Act) Indian

companies having foreign investment approval through FIPB route do not require any further clearance from RBI for receiving inward remittance and issue of shares to the foreigninvestors The companies are required to notify the concerned Regional office of the RBI of receipt of inward remittances within 30 days of such receipt and within 30 days of issue of shares to the foreign investorRepatriation of investment capital and profits earned in India



12

All foreign investments are freely repatriable subject to sectoral policies and except for cases where Non Resident Indians choose to invest specifically under non-repatriableschemes

Dividends declared on foreign investments are fully repatriable subject to certainconditionsmiddot Non-residents can sell shares through stock exchanges without prior approval of RBI and repatriate the sale proceeds through a bank if they hold theshares on repatriation basis and if they have the necessary no objection certificates

Tax clearance certificate issued by the Income Tax authority will also hold good

Profits dividends etc (which are remittances classified as current accounttransactions) can be freely repatriated

237 Discuss the countryrsquos physical Infrastruct ure

Airports India has 16 international and 87 domestic airports The PPP model has beensuccessful in Bangalore Hyderabad Mumbai and Delhi The projected investment intoairports by 2012 is estimated at USD$10 billion Some projects include upgrading of Kolkata(East) and Chennai (South) Other opportunities exist for Greenfield airports in Noida(USD$365 million) Navi Mumbai (USD$610 million) Goa (USD$365 million) Kunnur

(USD$365 million) and Pune (USD$365 million) The modernization of 35 non-metro airportswill involve an investment of USD$15 billion Airports that need immediate upgrades includeUdaipur Amritsar and Jaipur

Railways Total investment planned by 2012 is USD$75 billion It includes 22 stationsidentified for development 2 dedicated freight corridors planned and 2 new locomotivefactories in Bihar Other metro projects include the Delhi metro expansion Bangalore Metroand the Kolkata Metro

Sea ports India has 7500 km of coastline but only 12 major ports Projected investment by2012 is USD$21 billion 276 projects have been identified additional berths deepeningchannels equipment and rail road connectivity The share of private investment is valued at

USD$155 billion

Indiarsquos overstressed power grid is one of the most obvious signs of lagging infrastructuredevelopment In India power failures can and should be expected daily even in the mostdeveloped areas of Delhi Mumbai and Bangalore Companies or factories in India maintain adiesel generator and the shopping malls and call centers are built atop huge storage tanks of fuel The outages arenrsquot just spikes but rather hour -long blackouts with multi-hour brownoutsthrown in Beyond keeping industrial machines and computers running air conditioning isessential to office work in this unmercifully hot country and even service providers must bear the burden of backup power

In a good hotel visitors may not even notice the shift from grid to generator but this necessityadds to the cost of building and operating a facility in India Effectively the government ispassing the buck on infrastructure to the investor and generator costs add up fast

Indiarsquos government has committed itself to improving the nationrsquos power grid but in the worldrsquoslargest democracy government targets tend towards ldquoElectricity for all by 2012rdquoThe nationrsquosuse of electricity per capita is expanding as the as the middle-class becomes wealthy enoughto afford air conditioners and run them around the clock It is estimated that betweenincreased consumer demand and new industrial projects over a hundred Giga watts of new



13

power capacity are needed by 2012 A multinational to setup an operation a generator isneeded for uninterrupted power supply

24 Cultural and Socio Economic Environment

India Population - 1210193422 Literacy - 7404 of the population

Unemployment - 38 Labor cost per hour - Minimum wage $30month manufacturing sector are expected to

average USD268 per hour In software industry about $12hour

Indias education system is often cited as one of the main contributors to the economic rise of India Much of the progress especially in Higher education Scientific research has beencredited to various public institutions The labor force in the nonagricultural sector can bedivided into three different segments At one end are the elite white-collar workers consistingof senior public sector officials and the managerial class in the private sector It is estimatedthat this segment accounts for no more than 1 percent of the labor force roughly 3 millionworkers At the other end are self-employed informal-sector workers and casual laborersmaking up the unorganized sector This sector accounts for 92 percent of the labor force

about 300 million workers In the middle are the regular wage employees in the public sector and in the organized private sector who account for about 7 percent of the labor force about22 million people In the nonagricultural sector workers are more skilled since they haveaccess to formal education as well as to training facilities India is endowed with an abundantand technologically skilled labor force (engineers and scientists) and is ranked first among 53countries for both these criteria in the Global Competitiveness Report (GCR) 1998 The recentsurge in computer software exports reflects this growing comparative advantage in the skilled-labor sector

The country has leveraged its rich pool of human capital with quality English is taught as alanguage and a medium of instruction in higher education The country has big advantage dueto its large English knowing population English population in India is more than the entire

European Union and several times over the individual countries The most of Indias populationfollows Hindu religion which contributes towards the 80 of the population India is culturallylinguistically religiously and to an extent ethnically the most diverse country in the world Theculture of India has been shaped by its long history unique geography and diversedemography Indias languages religions dance music architecture and customs differ fromplace to place within the country but nevertheless possess a commonality The culture of India is an amalgamation of these diverse sub-cultures spread all over the Indian subcontinentand traditions that are several millennia old[93] The Indian caste system describes the socialstratification and social restrictions in the Indian subcontinent in which social classes aredefined by thousands of hereditary groups often termed as castes The term multiculturalismis not much used in India Within Indian culture the term unity in diversity is more commonlyused

25 Composite Indices for India

The composite indices are shown below for India Indiarsquos ranking declined by three places to59th position in the Global Competitiveness Index 2012-2013 of the World Economic Forum(WEF) The country which was once ahead of Brazil and South Africa now trails them bysome 10 places and lags behind China by a margin of 30 positions Indiarsquos infrastructure islargely ldquoinsufficientrdquo and ldquoill-adaptedrdquo to the needs of the economy Moreover the country alsofaces problem areas such as corruption and bureaucracy Despite challenges India does



14

possess a number of strengths in the more advanced and complex drivers of competitivenessldquoIndia can rely on a fairly well developed and sophisticated financial market that can channelfinancial resources to good use and it boasts reasonably sophisticated and innovativebusinesses

The World Bank and the Worldwide Governance Indicators capture six key dimensions of governance (Voice amp Accountability Political Stability and Lack of Violence GovernmentEffectiveness Regulatory Quality Rule of Law and Control of Corruption) between 1996 and

present They measure the quality of governance in over 200 countries based on close to 40data sources produced by over 30 different organizations worldwide Indias image on tacklingcorruption seems to have gone from bad to worse in the perception of people dealing with thesystem with its rank slipping to a low 95 among 183 countries in Transparency InternationalsCorruption Perception Index (CPI) The debate continues in India over an anti-corruption Thestudy by the international watchdog shows the countrys image declining consistently over thepast three years The results for India are shown below

Composite Indices for IndiaGrowth competitiveness Index Ranking 59Business Competitiveness index Ranking 31Governance Indicators (Percentile Ranking)

Voice and accountabilityPolitical StabilityGovernment EffectivenessRegulatory QualityRule of LawControl of corruption

5917544357495

Corruption perceptions Index Ranking 95Weight in Emerging Markets Index 502

26 CAGE Analysis and 5 Contexts Analysis

261 CAGE Analysis between US and India

GAGE Analysis is an important tool for companies entering into a foreign market This frameframework was published by Pankaj Ghemawat in his HBR article titled ldquoDistance stillmatters The Cultural Administrative Geographic and Economic (CAGE) distance frameworkhelps us to identify and assess the impact of taking our American product to conduct businessIndia This analysis will reduce the risk of bad decisions before expanding the business tonew markets The differences will be clearly visible for liability due to foreign operations andmarket comparisons

Cultural Distance AdministrativeDistance

GeographicDistance

EconomicDistance

English speakingbusiness and

hospitality serviceoperation similar toUnited States

Political friendship

Common laws

Cultural similarities

Administrative hurdlesin starting

establishmentoperation andcorruption

Bureaucracy andtransparency (no setstandards)

No uniformity in rules

India is so far awaycompared to US

Business operation indifferent time zones

Infrastructure supportis inadequate

Growing per captiaincome may lead to

higher cost of operations in future

Highly educatedlabor pool

Wide gap in rich andpoor

Economically



15

with business people

Relatively less incultural distance asIndia is open for foreign businesses

Country is made up of highly diverse religion

and language

amp regulations betweenone state to another

Frequent Politicaldisturbances and mayneed to closebusiness

Labor laws in the

countryLess in administrativedistance as 100 FDIallowed in Hospitality

growing but has arisk of slowdown inthe growth

262 Five Institutional Contexts Framework for India

The table below provides an analysis of five institutional context framework for India Thisframe work was published by Palepu Khanna and Sinha in their paper Strategies That FitEmerging Markets Businesses tend to overlook the opportunities in emerging markets dueto institutional voids More and more companies are now realizing the opportunities inemerging markets and they are willing to expand The framework analysis for a foreigncountry will provide the visibility to CEOs of growing opportunities to expand their businesses into emerging markets

Political and SocialSystems

Civil Society

The democracy is vibrant The government is highly bureaucraticCorruption is rampant in the state and local governments

A dynamic press and vigilant NGOs act as checks on politiciansand companies

Openness Restrictions on Green field investments and acquisitions in somesectors make joint ventures necessary Red tape hinderscompanies in sectors where the government does allow foreigndirect investmentIn the hospitality industry FDI is allowed 100

Product markets

Supplier base andLogistics

Some local design capacity is available IPR problems exist insome industries Regulatory bodies monitor product quality andfraud

Suppliers are available but their quality and dependability variesgreatly Roads are in poor conditions Ports and airports areunder developed

Labor markets

Workers market

The country has highly liquid pool of English speakingmanagement talent fueled by business and technical schoolsLocal hires are preferred over expatriates

The trade union movement is active and volatile although it isbecoming less important Trade unions have strong politicalconnections

Capital Markets

Venture Capital

The local banking system is well developed Multinationals canrely on local banks for local needs Equity is available to local andforeign entities

VC is available in some cities and from the Indian diaspora



16

Accounting Standards

Financial distress

Financial reporting which is based on Common law systemfunctions wellBankruptcy processes exist but are inefficient Promoters find itdifficult to sell or shut down sick enterprises

3 Product and Industry Analysis

Hospitality sector is one of the fastest growing and the market is very competitive with India

being the focus for almost all the major hospitality companies As per HVS Global HospitalityServices report India has an estimated 114000 hotel rooms spread across various hotelcategories This is around 150000 rooms short from what is required Markets in urban Indiaare poised to be the future growth drivers due to higher disposable incomes Today in Indiawith fast growing sectors like information technology have opened up new opportunities toconduct business in India The Indian hotel industry is a direct beneficiary of the growth in theeconomy and the tourism industry The middle class is emerging strong so there will begrowth in the mid-market and budget segments

Our team is proposing to set up a budget hotel chain and partnering with an existing hotelchain with a large amount of brand equity We believe that the budget hotel segment in Indiapresent a large and untapped opportunity We offer a branded product in the country for the

business traveler Today India does not have significant competition in this segment of market but we expect national regional and international competition in future Our proposition is to provide service offerings that will remain ahead of competition Budget hotelsprovide everything that is essential for a business traveler with no compromise on quality Thehotels do not offer facilities that are not essential ndash a swimming pool for instance or specialtyrestaurants The rooms will have the latest facilities including plasma TV mini-fridges and areWi-Fi enabled No room service or bell desk will be offered The emphasis will be self-serviceTariffs will be set fixed at a value price These budget hotels can also attract non-businesstravelers especially the growing number of middle class Indians who are taking their familieson vacation

After liberalization of the Indian economy Government of India allowed 100 foreign

investment under the automatic route in hotel and tourism industry Tourism interest in India isgrowing with arrival of foreign visitors Government of India is issuing Visa on arrival for certain countries to boost tourism These measures will significantly benefit the hotel industry

Many international hotel chains are entering Indian market and they are expanding steadilyThese hotels chain include the Sheraton Hilton Hyatt and the Marriott Our hotels wouldnrsquothave to compete with these chains of hotels because our hotels are more going to beaffordable

31 Marketing Strategy

In marketing hotel services it is important to know about the different types of users availing

the services with diverse aims and objectives Our customers can be broadly divided into twogroups The Domestic group will be private and public sector officials academicians teachersdomestic tourists families The foreign group consists of travelers such as traderepresentatives foreign tourists sportsmen political representatives

Domestic and foreign groups will be marketed aggressively Our customers are looking for adifferent lodging experience that cannot be found in any other hotels We will offer our customers a comfortable affordable quality services that will assure return visits to our hotelOur quality services consist of high speed internet connections business centers meeting and



17

conference rooms voicemail work desks as well as many other amenities for todayrsquosbusiness and corporate traveler

32 Branding Brand Equity

Brand equity is a consumer-centric concept describing the intrinsic value of having anestablished brand name The concept makes the assumption that consumers are more likelyto purchase products from a well-recognized brand name than products from a lesser known

brand name Ideally a high level of brand equity correlates with several important consumer factors such as high brand awareness brand recognition and brand recall For this reasonwe decided that as a starting point for our hotel business it was paramount that we partner with an already existing hotel chain with a large amount of brand equity Best Western is thebrand name of the largest hotel chain in the world with 4195 hotels in over 100 countries Toour advantage they currently operate hotels in 22 cities in India ndash so in terms of recognitionthey already have a high amount of brand equity with the Indian consumer We have alreadyidentified factors such as the rapid growth of Indiarsquos economy and the surge of businesstravel to-and-from India From this we have further identified a niche in this industry that willbe filled by our company to serve this growing market Business class hotels for the businesstraveler to India Brand equity is only one of several marketing factors that play into our strategy to serve this segment of the hospitality market Key to our marketing approach ishighlighting our product differentiation for our target market and more importantly sellingthem on the benefits and features of products by using digital media to support our investment and spur growth for our budget brand of hotels

33 Market Niche

By developing a budget-conscious business class hotel we can serve the needs of travelersto India in a more efficient way than the conventional 4+ star hotels that currently saturate thelandscape It is exactly the same model that Marriott and Hilton hotels have used in theUnited States with business travelers for example Courtyard by Marriott hotels offersbusiness cheaper rates in-room Wi-Fi access business centers with Wi-Fi access andcomputer terminals printing capabilities conference rooms travel to-and-from the airportand express checkout services Many also offer breakfast as part of the hotel room rate

along with a copy of the latest newspaper in the morningOur new business-class hotels will cater to the needs of the traveling businessperson but willalso attract business from political representatives traveling abroad education and researchprofessors athletes and even general tourists just looking for a more affordable rate Theidea is not to cannibalize Best Westernrsquos existing hotel offerings but rather provide another outlet to attract consumers to Best Western when they may have felt that a 4+ star offeringwas too expensive for their 1-2 day trip

34 Emerging Market and Brand Position Diagnosis

According to the Harvard Business Review Spotlight report titled Strategies That Fit

Emerging Markets by Khanna Palepu and Sinha ldquohellipcorrectly diagnose developingcountriesrsquo institutional contexts and you make savvier foreign investmentdecisionshellipcapturing the wealth of opportunities presented by other emerging marketsrdquo Wedecided to do our own qualitative research to find if this market is being adequately served

After digging through the various websites of hospitality companies in India Trident Hotelsseemed to offer these services the most effectively ndash but itrsquos a 5 star hotel Again all signspoint to the fact that anyone doing business in and out of India is basically forced to stay inhotels that may adequately serve their business needs but at a high cost compared to our product offering Within the case study we also identified a key tenet that supports our



18

grassroots guerilla type marketing strategy ldquoconsumers buy both local and global brandsGlobal ad agencies are present but they have been less successful than local ad agenciesrdquoThis is a clear indicator to us that in order to serve this market effectively and to draw our target consumer we have to empower local ad agencies to place our ads within transitstations airports cabs and bus-stops around the country Because the country is rich ingraduates of business schools and English-speaking management personnel identifyingcandidates to serve as hotel managers capable of carrying out marketing initiatives will beeasier than in say China where many middle and senior managers arenrsquot fluent in English

Itrsquos important for these managers to speak English because ideally our product would caterat first to the traveling American businessperson in India Establishing credibility with thisconsumer is important for us because it is through the experience of this consumer that wewill begin to further develop our brand equity and position as the budget business hotel of choice for anyone traveling to-and-from India

35 SWOT

The Strength Weakness Opportunities and Threat (SWOT) for the budget hotel product ispresented below

Strength

1 The perfect experience of clean and neat business

friendly hotel2 Expertise in managing hotel operations3 Worldwide good brand image4 Worldwide recognition of brand hotel chain in India

Weakness

1 Sensitive to economic cycles2 Poor infrastructure high cost of land procurement and

multiple licenses3 Terrorist attacks security due to western brand

Opportunity

1 Huge market potential2 Growing middle class3 Fastest growing economies of the world4 Travel and tourism which is estimated to contribute

between 8-9 towards Indiarsquos GDP5 Domestic travel is expected to be the primary driver of

the sectorrsquos growth

6 High disposable income and the advent of better locations are driving this growth

7 100 FDI8 Increased visibility of India due to business and sporting

events

Threats

1 Competitors upgrading to international standards2 Limited market share due to tough competition

domestic players Can imitate the model and create asubstitute product



19

4 Itinerary for a country visit

The table below presents an estimated cost of travel for three senior executives The executiveswill be visiting all the geographic locations and will be able to visit potential sites

Airfare -Business

Class

Total cost of tickets $ 500000 1 ticket $ 500000

HotelCost Per Night $ 35000 14 days $ 490000

FoodCost per day

$ 6000 14 days $ 84000

Guide

Cost per

day

$ 25000 14 Days $ 250000

Domestic air Travel Amount $ 160000 5 cities $ 160000

Business Visa Amount $ 25300 $ 25300Travel

Insurance Amount $ 50000 $ 50000

Miscellaneous Amount $ 100000 $ 100000

Total per Person $ 1759300

TotalAmount for

3Executives

$ 8796500



20

5 Financials

Our business model will be to start new budget hotel chain by leasing existing family ownedhotels in the cities determined as our target market This business model was adopted as thecost of the land in India is very expensive and to build a hotel could take more than 3 yearsTherefore leasing an existing hotel will reduce the risk and budget and to quickly ramp up theoperations in the new market The profitability of this operation can expand into future projectsof owning the properties as new cities emerge with better locations It is assumed that thecapital will be available from the operations of leasing hotels The expansion will happen in

four years from the time we enter the market The other advantage of leasing the hotels willexpedite the process to obtain the licenses for ramp up operations Our main strategy will be tofocus and build a brand and market niche that will be recognized as the very best among thesegment of budget business hotels

Initially the venture will start with 4 locations geographically covering North South East andWest of India the cities identifies as probable targets areNorth - Delhi Noida West - Mumbai Pune Goa East - Kolkata Bhubaneswar South -Bangalore Hyderabad ChennaiIt is estimated that to lease a budget hotel with 125 rooms with restaurant and a conferenceroom will cost around around 35 to 40 Lakh Rupees per month (1Lac = INR100000) This willbe $78000 per hotel monthly calculating at the Exchange rate of $1 = INR5490 The initial

operational budget is presented below

Initial Operational Budget

Financial Assumptions The initial costs of the project will be raised from capital markets from infrastructure

development banks domestic banks equity funds and International investors The improvements and remodeling will be approximately 6 months from signing the

contracts We expect to start the remodeling during the second semester of 2013 and the hotels will

begin operations in 2014

All operational costs are based on the Indian national average rates The initial cost is expected to be amortized and recovered over 5 years period Room Occupancy Rate (ROR) is expected to be 47 the first year of operation After that

we expect an increase of 12 yearly until we have a constant occupancy rate of 76during the third year of operation

The operational costs are calculated on annual basis All employee salaries including Property Manager are based on the National average

except those of expatriate employees (estimated to be 3 employees per hotel) The average salary increment will be 13 per year

Project BudgetBuilding leases average $78000 monthly $3744000Remodeling and improvements per room $ 975 $487500Fixtures Build-Out and Furniture $150739Brand developed $33600012 Months Working Capital $649261Two expatriate executives $250000

Travel to India 3 Executives $8796500Training $15000000Total $585546500



21

All revenues are estimated to increase 15 annually The price per room has been estimated in a range between US$ 80 to US$ 150 The price

of $115 per room was applied in the profit loss projection The lease cost is estimated to increase 6 per year Inflation rate estimated is 78 During 2012 the exchange rate in India varied between 5000 INR to 5600 INR per USD India has a very stable rate comparing with other developed nations In our projection to avoid any risk of currency fluctuations we have used a rate of $1 =

INR7500 This price would give us leverage in case of any unexpected situation andcovers the risk due to inflation

These statements will be revised based on yearly performance of Indian economy

51 Pricing Strategy

The average pricing per room has been estimated to vary between $80 and $150 We proposeto offer discounts to businesses loyal customers and large groups those that use our facilitiesfor conventions and other major events Based on the pricing and demand analysis the roomswill be priced at $80-150 and conference room $850

52 Profit and Loss Projection

Profit and Loss Projection (3 Years)

Hotel leasing and operations

2014 2015 2016

Sales $ 972900000 47 $ 1221300000 59 $ 1469700000 71

$ - 0 $ - 0 $ - 0

Total Sales $ 972900000 100 $ 1221300000 100 $ 1469700000 100

Operating Expenses

Salary (Office ampOverhead) $ 121080000 124 $ 136820400 112 $ 154607052 105

Royalties $ 68103000 70 $ 85491000 70 $ 102879000 70

Supplies (off andoperation) $ 25340000 26 $ 39081600 32 $ 58788000 40

Repairs Maintenance $ 9729000 10 $ 12213000 10 $ 14697000 10

Advertising $ 33600000 35 $ 42134850 35 $ 50704650 35

Car Delivery and Travel $ 1589800 02 $ 1854700 02 $ 2198700 01

Accounting and Legal $ 42500000 44 $ 42530000 35 $ 44889700 31

Lease cost $ 374400000 385 $ 411840000 337 $ 453024000 308

Utilities $ 162413793 167 $ 186775862 153 $ 205453448 140

Insurance $ 53509500 55 $ 79384500 65 $ 102879000 70

Interest and amortization $ 151459968 156 $ 151459968 124 $ 151459968 103

Lost from the previousyear $ - 00 $ 83589841 68 $ 64630501 44

Depreciation $ 12764780 13 $ 12754780 10 $ 12764780 09

Total Expenses $ 1056489841 109 $ 1285930501 105 $ 1418975799 97



22

Net Profit Before Tax $ (83589841) $ (64630501) $ 50724201

Income Taxes $ - $ 5072420

Net Profit After Tax $ (83589841) $ (64630501) $ 45651781

Owner DrawDividends $ - $ - $ 17753470

Adj to RetainedEarnings $ (83589841) $ (64630501) $ 27898310

6 References

1 Doing business in India 2011 - Ernst amp YounghttpwwweycomPublicationvwLUAssetsDoing_business_in_India_2011$FILEDoing_business_in_India_2011pdf

2 Economic Impact 2012 - World Travel amp Tourism Councilhttpwwwwttcorgsite_mediauploadsdownloadsindia2012pdf

3 Hospitality insights from India CEOs Desk- PWChttpwwwpwccominenassetspdfspublications-2012hospitality-insights-from-the-indian-ceo-deskpdf

4 Hotels in India Trends and Opportunities ndash 2011 report by HVS Global hospitality serviceshttpwwwhvscomContent3185pdf

5 India Inflation Rate - Trading Economics httpwwwtradingeconomicscomindiainflation-cpi

6 Indias economy growing rapidly and unequallyhttpwwweastasiaforumorg20110428india-s-economy-growing-rapidly-and-unequally

7 Welcome to India in Business Ministry of External Affairs Government of Indiahttpwwwindiainbusinessnicininvestmentfor_dir_investmenthtm

8 Reserve Bank of India Foreign ExchangehttpwwwrbiorginscriptsFAQDisplayaspxdid=47

9 Overview of legal systems in Asia Pacific Region ndash Indiahttpscholarshiplawcornelleducgiviewcontentcgiarticle=1001ampcontext=lps_lsapr

10 India-US Economic and Trade Relations August 31 2007 Congressional Research ServicehttpwwwfasorgsgpcrsrowRL34161pdf

11 2010 Corruption Perceptions Index - Transparency Internationalhttpwwwtransparencyorgcpi2010results

12 2012 Index of Economic Freedom - Heritage Foundation httpwwwheritageorgindex

13 Doing business in India Guide - HSBCcomhttpwwwhsbccom1contentassetsbusiness_banking110329_hsbc_doing_business_in_indiapdf



14 Final Report on Evaluation of the scheme ldquoIncentives to Accommodation Infrastructure inIndiardquo Tourism Finance Corporation of India Limited New Delhi June 2007httpwwwgooglecomurlsa=tamprct=jampq=ampesrc=sampsource=webampcd=1ampved=0CB4QFjAAampurl=http3A2F2Fijrcmorgin2Fdownloadphp3Fname3Dvol-2_issue-6-art-7pdf26path3Duploaddata2Fvol-2_issue-6-art-7pdfampei=lI6ZUNXtM4qQ9gS8gYEwampusg=AFQjCNGjcuYA8GZu9aVdbDoMtzZrIwi08A

15 Economic Freedom of the States of India 2011 Report funded by CATO Institute FriedrichNaumann Foundation Indicus Analytics Academic FoundationhttpwwwfreetheworldcompdfEconomicFreedomIndia-2011pdf

16 Focus on India International Business Report 2012 ndash Economy focus series by GrantThornton International business reporthttpinternationalbusinessreportcomfilesibr201120-20india20economy20focus20finalpdf

17 Negotiating International Business - India Lothar Katz 2008 httpwwwglobalnegotiationresourcescomcouIndiapdf

18 Dont Make These Mistakes When Entering a New Market Scott Anthony 2012httpblogshbrorganthony201210dont_make_these_mistakes_whenhtml

19 How do foreign companies market to India Julien Cayla 2009 Publication of Yale School of Management httpqnsomyaleeducontenthow-do-foreign-companies-market-india

20 Doing business in India Amarchand Mangaldass amp Suresh A Shroffhttpwwwgooglecomurlsa=tamprct=jampq=ampesrc=sampsource=webampcd=13ampved=0CEUQFjACOAoampurl=http3A2F2Fwwwlexmundicom2FDocumentasp3FDocID3D4684ampei=3pWZUJCOFpS60QGth4D4Cwampusg=AFQjCNHgrM0rqn3mb7vGvShr6Bz3_twSAA

21 Trade amp Commerce Embassy of India Washington DC httpwwwindianembassyorgtrade-

amp-commercephp

22 Pankaj Ghemawat ldquoDistance still matters The hard reality of global expansionrdquo Harvard

Business Review September 2001 Volume 79 Number 8 pp 137 ndash47

23 Palepu Krishna Khanna Tarun Sinha Jayant (June 2005) Strategies That Fit EmergingMarkets Harvard Business Review

24 While Hill Charles W L International Business Competing in the Global Marketplace 9th EditionMcGraw-Hill Irwin 2012 ISBN 9780078029240

25 Business Plan Seven Elms resort httpwwwreferenceforbusinesscombusiness-

plansBusiness-Plans-Volume-07Hotel-Resorthtmlbixzz2C1jL3ykH

26 Hotel Development Cost Trends in India httpwwwhvscomarticle4912hotel-development-cost-trends-in-indiaUKFZMeOe8iU

27 India 4th largest economy but has low per capita incomehttpwwwthehinducombusinessEconomyindia-4th-largest-economy-but-has-low-per-capita-income-surveyarticle2998234ece



i

Table of Contents

TABLE OF CONTENTS I 1 EXECUTIVE SUMMARY 1 2 COUNTRY ANALYSIS 2

21 GENERAL CHARACTERISTICS OF YOUR TARGET COUNTRY 2 211 Location size geographical and physical characteristics of the country 2 212 Major news events that have occurred within the country during the past 12 months 2

22 POLITICAL AND LEGAL E NVIRONMENT3 221 Describe the type of government 3 222 Discuss the governmentrsquos involvement in business ownership4 223 Assess the political risks 4 224 Discuss the legal system 5 225 Discuss the degree of corruption and economic freedom 6

23 ECONOMIC E NVIRONMENT 7 231 Provide an overview 7 232

Discuss the recent growth performance and inflation rate 8

233 Analyze the countryrsquos trade performance and key commercial relationships 9 234 Discuss the structure of the economy 10 235 Describe the foreign exchange system 10 236 Discuss laws pertaining to FDI 10 237 Discuss the countryrsquos physical Infrastructure 12

24 CULTURAL AND SOCIO ECONOMIC E NVIRONMENT13 25 COMPOSITE I NDICES FOR I NDIA 13 26 CAGE A NALYSIS AND 5 C ONTEXTS A NALYSIS 14

261 CAGE Analysis between US and India 14 262 Five Institutional Contexts Framework for India 15

3 PRODUCT AND INDUSTRY ANALYSIS 16 31 MARKETING STRATEGY 16 32 BRANDING BRAND EQUITY17 33 MARKET NICHE17 34 EMERGING MARKET AND BRAND POSITION DIAGNOSIS 17 35 SWOT 18

4 ITINERARY FOR A COUNTRY VISIT19 5 FINANCIALS 20

51 PRICING STRATEGY 21 52 PROFIT AND LOSS PROJECTION21

6 REFERENCES 22



1

1 Executive Summary













2

2 Country Analysis




















3














4














5


infrastructure














6
















7












8










9














10











11

















12










USD$155 billion






13














14






5917544357495






GeographicDistance

EconomicDistance




Common laws













Economically



15




and language



Labor laws in the






Civil Society




Product markets




Labor markets

Workers market



Capital Markets

Venture Capital





16


Financial distress
















17





33 Market Niche









18



35 SWOT


Strength



Weakness



Opportunity






events

Threats





19



Airfare -Business

Class



FoodCost per day

$ 6000 14 days $ 84000

Guide

Cost per

day

$ 25000 14 Days $ 250000






TotalAmount for

3Executives

$ 8796500



20

5 Financials


















21





51 Pricing Strategy





2014 2015 2016

Sales $ 972900000 47 $ 1221300000 59 $ 1469700000 71

$ - 0 $ - 0 $ - 0

Total Sales $ 972900000 100 $ 1221300000 100 $ 1469700000 100

Operating Expenses


Royalties $ 68103000 70 $ 85491000 70 $ 102879000 70



Advertising $ 33600000 35 $ 42134850 35 $ 50704650 35



Lease cost $ 374400000 385 $ 411840000 337 $ 453024000 308

Utilities $ 162413793 167 $ 186775862 153 $ 205453448 140

Insurance $ 53509500 55 $ 79384500 65 $ 102879000 70



Depreciation $ 12764780 13 $ 12754780 10 $ 12764780 09

Total Expenses $ 1056489841 109 $ 1285930501 105 $ 1418975799 97



22






6 References
























amp-commercephp











1

1 Executive Summary













2

2 Country Analysis




















3














4














5


infrastructure














6
















7












8










9














10











11

















12










USD$155 billion






13














14






5917544357495






GeographicDistance

EconomicDistance




Common laws













Economically



15




and language



Labor laws in the






Civil Society




Product markets




Labor markets

Workers market



Capital Markets

Venture Capital





16


Financial distress
















17





33 Market Niche









18



35 SWOT


Strength



Weakness



Opportunity






events

Threats





19



Airfare -Business

Class



FoodCost per day

$ 6000 14 days $ 84000

Guide

Cost per

day

$ 25000 14 Days $ 250000






TotalAmount for

3Executives

$ 8796500



20

5 Financials


















21





51 Pricing Strategy





2014 2015 2016

Sales $ 972900000 47 $ 1221300000 59 $ 1469700000 71

$ - 0 $ - 0 $ - 0

Total Sales $ 972900000 100 $ 1221300000 100 $ 1469700000 100

Operating Expenses


Royalties $ 68103000 70 $ 85491000 70 $ 102879000 70



Advertising $ 33600000 35 $ 42134850 35 $ 50704650 35



Lease cost $ 374400000 385 $ 411840000 337 $ 453024000 308

Utilities $ 162413793 167 $ 186775862 153 $ 205453448 140

Insurance $ 53509500 55 $ 79384500 65 $ 102879000 70



Depreciation $ 12764780 13 $ 12754780 10 $ 12764780 09

Total Expenses $ 1056489841 109 $ 1285930501 105 $ 1418975799 97



22






6 References
























amp-commercephp











2

2 Country Analysis




















3














4














5


infrastructure














6
















7












8










9














10











11

















12










USD$155 billion






13














14






5917544357495






GeographicDistance

EconomicDistance




Common laws













Economically



15




and language



Labor laws in the






Civil Society




Product markets




Labor markets

Workers market



Capital Markets

Venture Capital





16


Financial distress
















17





33 Market Niche









18



35 SWOT


Strength



Weakness



Opportunity






events

Threats





19



Airfare -Business

Class



FoodCost per day

$ 6000 14 days $ 84000

Guide

Cost per

day

$ 25000 14 Days $ 250000






TotalAmount for

3Executives

$ 8796500



20

5 Financials


















21





51 Pricing Strategy





2014 2015 2016

Sales $ 972900000 47 $ 1221300000 59 $ 1469700000 71

$ - 0 $ - 0 $ - 0

Total Sales $ 972900000 100 $ 1221300000 100 $ 1469700000 100

Operating Expenses


Royalties $ 68103000 70 $ 85491000 70 $ 102879000 70



Advertising $ 33600000 35 $ 42134850 35 $ 50704650 35



Lease cost $ 374400000 385 $ 411840000 337 $ 453024000 308

Utilities $ 162413793 167 $ 186775862 153 $ 205453448 140

Insurance $ 53509500 55 $ 79384500 65 $ 102879000 70



Depreciation $ 12764780 13 $ 12754780 10 $ 12764780 09

Total Expenses $ 1056489841 109 $ 1285930501 105 $ 1418975799 97



22






6 References
























amp-commercephp











3














4














5


infrastructure














6
















7












8










9














10











11

















12










USD$155 billion






13














14






5917544357495






GeographicDistance

EconomicDistance




Common laws













Economically



15




and language



Labor laws in the






Civil Society




Product markets




Labor markets

Workers market



Capital Markets

Venture Capital





16


Financial distress
















17





33 Market Niche









18



35 SWOT


Strength



Weakness



Opportunity






events

Threats





19



Airfare -Business

Class



FoodCost per day

$ 6000 14 days $ 84000

Guide

Cost per

day

$ 25000 14 Days $ 250000






TotalAmount for

3Executives

$ 8796500



20

5 Financials


















21





51 Pricing Strategy





2014 2015 2016

Sales $ 972900000 47 $ 1221300000 59 $ 1469700000 71

$ - 0 $ - 0 $ - 0

Total Sales $ 972900000 100 $ 1221300000 100 $ 1469700000 100

Operating Expenses


Royalties $ 68103000 70 $ 85491000 70 $ 102879000 70



Advertising $ 33600000 35 $ 42134850 35 $ 50704650 35



Lease cost $ 374400000 385 $ 411840000 337 $ 453024000 308

Utilities $ 162413793 167 $ 186775862 153 $ 205453448 140

Insurance $ 53509500 55 $ 79384500 65 $ 102879000 70



Depreciation $ 12764780 13 $ 12754780 10 $ 12764780 09

Total Expenses $ 1056489841 109 $ 1285930501 105 $ 1418975799 97



22






6 References
























amp-commercephp











4














5


infrastructure














6
















7












8










9














10











11

















12










USD$155 billion






13














14






5917544357495






GeographicDistance

EconomicDistance




Common laws













Economically



15




and language



Labor laws in the






Civil Society




Product markets




Labor markets

Workers market



Capital Markets

Venture Capital





16


Financial distress
















17





33 Market Niche









18



35 SWOT


Strength



Weakness



Opportunity






events

Threats





19



Airfare -Business

Class



FoodCost per day

$ 6000 14 days $ 84000

Guide

Cost per

day

$ 25000 14 Days $ 250000






TotalAmount for

3Executives

$ 8796500



20

5 Financials


















21





51 Pricing Strategy





2014 2015 2016

Sales $ 972900000 47 $ 1221300000 59 $ 1469700000 71

$ - 0 $ - 0 $ - 0

Total Sales $ 972900000 100 $ 1221300000 100 $ 1469700000 100

Operating Expenses


Royalties $ 68103000 70 $ 85491000 70 $ 102879000 70



Advertising $ 33600000 35 $ 42134850 35 $ 50704650 35



Lease cost $ 374400000 385 $ 411840000 337 $ 453024000 308

Utilities $ 162413793 167 $ 186775862 153 $ 205453448 140

Insurance $ 53509500 55 $ 79384500 65 $ 102879000 70



Depreciation $ 12764780 13 $ 12754780 10 $ 12764780 09

Total Expenses $ 1056489841 109 $ 1285930501 105 $ 1418975799 97



22






6 References
























amp-commercephp











5


infrastructure














6
















7












8










9














10











11

















12










USD$155 billion






13














14






5917544357495






GeographicDistance

EconomicDistance




Common laws













Economically



15




and language



Labor laws in the






Civil Society




Product markets




Labor markets

Workers market



Capital Markets

Venture Capital





16


Financial distress
















17





33 Market Niche









18



35 SWOT


Strength



Weakness



Opportunity






events

Threats





19



Airfare -Business

Class



FoodCost per day

$ 6000 14 days $ 84000

Guide

Cost per

day

$ 25000 14 Days $ 250000






TotalAmount for

3Executives

$ 8796500



20

5 Financials


















21





51 Pricing Strategy





2014 2015 2016

Sales $ 972900000 47 $ 1221300000 59 $ 1469700000 71

$ - 0 $ - 0 $ - 0

Total Sales $ 972900000 100 $ 1221300000 100 $ 1469700000 100

Operating Expenses


Royalties $ 68103000 70 $ 85491000 70 $ 102879000 70



Advertising $ 33600000 35 $ 42134850 35 $ 50704650 35



Lease cost $ 374400000 385 $ 411840000 337 $ 453024000 308

Utilities $ 162413793 167 $ 186775862 153 $ 205453448 140

Insurance $ 53509500 55 $ 79384500 65 $ 102879000 70



Depreciation $ 12764780 13 $ 12754780 10 $ 12764780 09

Total Expenses $ 1056489841 109 $ 1285930501 105 $ 1418975799 97



22






6 References
























amp-commercephp











6
















7












8










9














10











11

















12










USD$155 billion






13














14






5917544357495






GeographicDistance

EconomicDistance




Common laws













Economically



15




and language



Labor laws in the






Civil Society




Product markets




Labor markets

Workers market



Capital Markets

Venture Capital





16


Financial distress
















17





33 Market Niche









18



35 SWOT


Strength



Weakness



Opportunity






events

Threats





19



Airfare -Business

Class



FoodCost per day

$ 6000 14 days $ 84000

Guide

Cost per

day

$ 25000 14 Days $ 250000






TotalAmount for

3Executives

$ 8796500



20

5 Financials


















21





51 Pricing Strategy





2014 2015 2016

Sales $ 972900000 47 $ 1221300000 59 $ 1469700000 71

$ - 0 $ - 0 $ - 0

Total Sales $ 972900000 100 $ 1221300000 100 $ 1469700000 100

Operating Expenses


Royalties $ 68103000 70 $ 85491000 70 $ 102879000 70



Advertising $ 33600000 35 $ 42134850 35 $ 50704650 35



Lease cost $ 374400000 385 $ 411840000 337 $ 453024000 308

Utilities $ 162413793 167 $ 186775862 153 $ 205453448 140

Insurance $ 53509500 55 $ 79384500 65 $ 102879000 70



Depreciation $ 12764780 13 $ 12754780 10 $ 12764780 09

Total Expenses $ 1056489841 109 $ 1285930501 105 $ 1418975799 97



22






6 References
























amp-commercephp











7












8










9














10











11

















12










USD$155 billion






13














14






5917544357495






GeographicDistance

EconomicDistance




Common laws













Economically



15




and language



Labor laws in the






Civil Society




Product markets




Labor markets

Workers market



Capital Markets

Venture Capital





16


Financial distress
















17





33 Market Niche









18



35 SWOT


Strength



Weakness



Opportunity






events

Threats





19



Airfare -Business

Class



FoodCost per day

$ 6000 14 days $ 84000

Guide

Cost per

day

$ 25000 14 Days $ 250000






TotalAmount for

3Executives

$ 8796500



20

5 Financials


















21





51 Pricing Strategy





2014 2015 2016

Sales $ 972900000 47 $ 1221300000 59 $ 1469700000 71

$ - 0 $ - 0 $ - 0

Total Sales $ 972900000 100 $ 1221300000 100 $ 1469700000 100

Operating Expenses


Royalties $ 68103000 70 $ 85491000 70 $ 102879000 70



Advertising $ 33600000 35 $ 42134850 35 $ 50704650 35



Lease cost $ 374400000 385 $ 411840000 337 $ 453024000 308

Utilities $ 162413793 167 $ 186775862 153 $ 205453448 140

Insurance $ 53509500 55 $ 79384500 65 $ 102879000 70



Depreciation $ 12764780 13 $ 12754780 10 $ 12764780 09

Total Expenses $ 1056489841 109 $ 1285930501 105 $ 1418975799 97



22






6 References
























amp-commercephp











8










9














10











11

















12










USD$155 billion






13














14






5917544357495






GeographicDistance

EconomicDistance




Common laws













Economically



15




and language



Labor laws in the






Civil Society




Product markets




Labor markets

Workers market



Capital Markets

Venture Capital





16


Financial distress
















17





33 Market Niche









18



35 SWOT


Strength



Weakness



Opportunity






events

Threats





19



Airfare -Business

Class



FoodCost per day

$ 6000 14 days $ 84000

Guide

Cost per

day

$ 25000 14 Days $ 250000






TotalAmount for

3Executives

$ 8796500



20

5 Financials


















21





51 Pricing Strategy





2014 2015 2016

Sales $ 972900000 47 $ 1221300000 59 $ 1469700000 71

$ - 0 $ - 0 $ - 0

Total Sales $ 972900000 100 $ 1221300000 100 $ 1469700000 100

Operating Expenses


Royalties $ 68103000 70 $ 85491000 70 $ 102879000 70



Advertising $ 33600000 35 $ 42134850 35 $ 50704650 35



Lease cost $ 374400000 385 $ 411840000 337 $ 453024000 308

Utilities $ 162413793 167 $ 186775862 153 $ 205453448 140

Insurance $ 53509500 55 $ 79384500 65 $ 102879000 70



Depreciation $ 12764780 13 $ 12754780 10 $ 12764780 09

Total Expenses $ 1056489841 109 $ 1285930501 105 $ 1418975799 97



22






6 References
























amp-commercephp











9














10











11

















12










USD$155 billion






13














14






5917544357495






GeographicDistance

EconomicDistance




Common laws













Economically



15




and language



Labor laws in the






Civil Society




Product markets




Labor markets

Workers market



Capital Markets

Venture Capital





16


Financial distress
















17





33 Market Niche









18



35 SWOT


Strength



Weakness



Opportunity






events

Threats





19



Airfare -Business

Class



FoodCost per day

$ 6000 14 days $ 84000

Guide

Cost per

day

$ 25000 14 Days $ 250000






TotalAmount for

3Executives

$ 8796500



20

5 Financials


















21





51 Pricing Strategy





2014 2015 2016

Sales $ 972900000 47 $ 1221300000 59 $ 1469700000 71

$ - 0 $ - 0 $ - 0

Total Sales $ 972900000 100 $ 1221300000 100 $ 1469700000 100

Operating Expenses


Royalties $ 68103000 70 $ 85491000 70 $ 102879000 70



Advertising $ 33600000 35 $ 42134850 35 $ 50704650 35



Lease cost $ 374400000 385 $ 411840000 337 $ 453024000 308

Utilities $ 162413793 167 $ 186775862 153 $ 205453448 140

Insurance $ 53509500 55 $ 79384500 65 $ 102879000 70



Depreciation $ 12764780 13 $ 12754780 10 $ 12764780 09

Total Expenses $ 1056489841 109 $ 1285930501 105 $ 1418975799 97



22






6 References
























amp-commercephp











10











11

















12










USD$155 billion






13














14






5917544357495






GeographicDistance

EconomicDistance




Common laws













Economically



15




and language



Labor laws in the






Civil Society




Product markets




Labor markets

Workers market



Capital Markets

Venture Capital





16


Financial distress
















17





33 Market Niche









18



35 SWOT


Strength



Weakness



Opportunity






events

Threats





19



Airfare -Business

Class



FoodCost per day

$ 6000 14 days $ 84000

Guide

Cost per

day

$ 25000 14 Days $ 250000






TotalAmount for

3Executives

$ 8796500



20

5 Financials


















21





51 Pricing Strategy





2014 2015 2016

Sales $ 972900000 47 $ 1221300000 59 $ 1469700000 71

$ - 0 $ - 0 $ - 0

Total Sales $ 972900000 100 $ 1221300000 100 $ 1469700000 100

Operating Expenses


Royalties $ 68103000 70 $ 85491000 70 $ 102879000 70



Advertising $ 33600000 35 $ 42134850 35 $ 50704650 35



Lease cost $ 374400000 385 $ 411840000 337 $ 453024000 308

Utilities $ 162413793 167 $ 186775862 153 $ 205453448 140

Insurance $ 53509500 55 $ 79384500 65 $ 102879000 70



Depreciation $ 12764780 13 $ 12754780 10 $ 12764780 09

Total Expenses $ 1056489841 109 $ 1285930501 105 $ 1418975799 97



22






6 References
























amp-commercephp











11

















12










USD$155 billion






13














14






5917544357495






GeographicDistance

EconomicDistance




Common laws













Economically



15




and language



Labor laws in the






Civil Society




Product markets




Labor markets

Workers market



Capital Markets

Venture Capital





16


Financial distress
















17





33 Market Niche









18



35 SWOT


Strength



Weakness



Opportunity






events

Threats





19



Airfare -Business

Class



FoodCost per day

$ 6000 14 days $ 84000

Guide

Cost per

day

$ 25000 14 Days $ 250000






TotalAmount for

3Executives

$ 8796500



20

5 Financials


















21





51 Pricing Strategy





2014 2015 2016

Sales $ 972900000 47 $ 1221300000 59 $ 1469700000 71

$ - 0 $ - 0 $ - 0

Total Sales $ 972900000 100 $ 1221300000 100 $ 1469700000 100

Operating Expenses


Royalties $ 68103000 70 $ 85491000 70 $ 102879000 70



Advertising $ 33600000 35 $ 42134850 35 $ 50704650 35



Lease cost $ 374400000 385 $ 411840000 337 $ 453024000 308

Utilities $ 162413793 167 $ 186775862 153 $ 205453448 140

Insurance $ 53509500 55 $ 79384500 65 $ 102879000 70



Depreciation $ 12764780 13 $ 12754780 10 $ 12764780 09

Total Expenses $ 1056489841 109 $ 1285930501 105 $ 1418975799 97



22






6 References
























amp-commercephp











12










USD$155 billion






13














14






5917544357495






GeographicDistance

EconomicDistance




Common laws













Economically



15




and language



Labor laws in the






Civil Society




Product markets




Labor markets

Workers market



Capital Markets

Venture Capital





16


Financial distress
















17





33 Market Niche









18



35 SWOT


Strength



Weakness



Opportunity






events

Threats





19



Airfare -Business

Class



FoodCost per day

$ 6000 14 days $ 84000

Guide

Cost per

day

$ 25000 14 Days $ 250000






TotalAmount for

3Executives

$ 8796500



20

5 Financials


















21





51 Pricing Strategy





2014 2015 2016

Sales $ 972900000 47 $ 1221300000 59 $ 1469700000 71

$ - 0 $ - 0 $ - 0

Total Sales $ 972900000 100 $ 1221300000 100 $ 1469700000 100

Operating Expenses


Royalties $ 68103000 70 $ 85491000 70 $ 102879000 70



Advertising $ 33600000 35 $ 42134850 35 $ 50704650 35



Lease cost $ 374400000 385 $ 411840000 337 $ 453024000 308

Utilities $ 162413793 167 $ 186775862 153 $ 205453448 140

Insurance $ 53509500 55 $ 79384500 65 $ 102879000 70



Depreciation $ 12764780 13 $ 12754780 10 $ 12764780 09

Total Expenses $ 1056489841 109 $ 1285930501 105 $ 1418975799 97



22






6 References
























amp-commercephp











13














14






5917544357495






GeographicDistance

EconomicDistance




Common laws













Economically



15




and language



Labor laws in the






Civil Society




Product markets




Labor markets

Workers market



Capital Markets

Venture Capital





16


Financial distress
















17





33 Market Niche









18



35 SWOT


Strength



Weakness



Opportunity






events

Threats





19



Airfare -Business

Class



FoodCost per day

$ 6000 14 days $ 84000

Guide

Cost per

day

$ 25000 14 Days $ 250000






TotalAmount for

3Executives

$ 8796500



20

5 Financials


















21





51 Pricing Strategy





2014 2015 2016

Sales $ 972900000 47 $ 1221300000 59 $ 1469700000 71

$ - 0 $ - 0 $ - 0

Total Sales $ 972900000 100 $ 1221300000 100 $ 1469700000 100

Operating Expenses


Royalties $ 68103000 70 $ 85491000 70 $ 102879000 70



Advertising $ 33600000 35 $ 42134850 35 $ 50704650 35



Lease cost $ 374400000 385 $ 411840000 337 $ 453024000 308

Utilities $ 162413793 167 $ 186775862 153 $ 205453448 140

Insurance $ 53509500 55 $ 79384500 65 $ 102879000 70



Depreciation $ 12764780 13 $ 12754780 10 $ 12764780 09

Total Expenses $ 1056489841 109 $ 1285930501 105 $ 1418975799 97



22






6 References
























amp-commercephp











14






5917544357495






GeographicDistance

EconomicDistance




Common laws













Economically



15




and language



Labor laws in the






Civil Society




Product markets




Labor markets

Workers market



Capital Markets

Venture Capital





16


Financial distress
















17





33 Market Niche









18



35 SWOT


Strength



Weakness



Opportunity






events

Threats





19



Airfare -Business

Class



FoodCost per day

$ 6000 14 days $ 84000

Guide

Cost per

day

$ 25000 14 Days $ 250000






TotalAmount for

3Executives

$ 8796500



20

5 Financials


















21





51 Pricing Strategy





2014 2015 2016

Sales $ 972900000 47 $ 1221300000 59 $ 1469700000 71

$ - 0 $ - 0 $ - 0

Total Sales $ 972900000 100 $ 1221300000 100 $ 1469700000 100

Operating Expenses


Royalties $ 68103000 70 $ 85491000 70 $ 102879000 70



Advertising $ 33600000 35 $ 42134850 35 $ 50704650 35



Lease cost $ 374400000 385 $ 411840000 337 $ 453024000 308

Utilities $ 162413793 167 $ 186775862 153 $ 205453448 140

Insurance $ 53509500 55 $ 79384500 65 $ 102879000 70



Depreciation $ 12764780 13 $ 12754780 10 $ 12764780 09

Total Expenses $ 1056489841 109 $ 1285930501 105 $ 1418975799 97



22






6 References
























amp-commercephp











15




and language



Labor laws in the






Civil Society




Product markets




Labor markets

Workers market



Capital Markets

Venture Capital





16


Financial distress
















17





33 Market Niche









18



35 SWOT


Strength



Weakness



Opportunity






events

Threats





19



Airfare -Business

Class



FoodCost per day

$ 6000 14 days $ 84000

Guide

Cost per

day

$ 25000 14 Days $ 250000






TotalAmount for

3Executives

$ 8796500



20

5 Financials


















21





51 Pricing Strategy





2014 2015 2016

Sales $ 972900000 47 $ 1221300000 59 $ 1469700000 71

$ - 0 $ - 0 $ - 0

Total Sales $ 972900000 100 $ 1221300000 100 $ 1469700000 100

Operating Expenses


Royalties $ 68103000 70 $ 85491000 70 $ 102879000 70



Advertising $ 33600000 35 $ 42134850 35 $ 50704650 35



Lease cost $ 374400000 385 $ 411840000 337 $ 453024000 308

Utilities $ 162413793 167 $ 186775862 153 $ 205453448 140

Insurance $ 53509500 55 $ 79384500 65 $ 102879000 70



Depreciation $ 12764780 13 $ 12754780 10 $ 12764780 09

Total Expenses $ 1056489841 109 $ 1285930501 105 $ 1418975799 97



22






6 References
























amp-commercephp











16


Financial distress
















17





33 Market Niche









18



35 SWOT


Strength



Weakness



Opportunity






events

Threats





19



Airfare -Business

Class



FoodCost per day

$ 6000 14 days $ 84000

Guide

Cost per

day

$ 25000 14 Days $ 250000






TotalAmount for

3Executives

$ 8796500



20

5 Financials


















21





51 Pricing Strategy





2014 2015 2016

Sales $ 972900000 47 $ 1221300000 59 $ 1469700000 71

$ - 0 $ - 0 $ - 0

Total Sales $ 972900000 100 $ 1221300000 100 $ 1469700000 100

Operating Expenses


Royalties $ 68103000 70 $ 85491000 70 $ 102879000 70



Advertising $ 33600000 35 $ 42134850 35 $ 50704650 35



Lease cost $ 374400000 385 $ 411840000 337 $ 453024000 308

Utilities $ 162413793 167 $ 186775862 153 $ 205453448 140

Insurance $ 53509500 55 $ 79384500 65 $ 102879000 70



Depreciation $ 12764780 13 $ 12754780 10 $ 12764780 09

Total Expenses $ 1056489841 109 $ 1285930501 105 $ 1418975799 97



22






6 References
























amp-commercephp











17





33 Market Niche









18



35 SWOT


Strength



Weakness



Opportunity






events

Threats





19



Airfare -Business

Class



FoodCost per day

$ 6000 14 days $ 84000

Guide

Cost per

day

$ 25000 14 Days $ 250000






TotalAmount for

3Executives

$ 8796500



20

5 Financials


















21





51 Pricing Strategy





2014 2015 2016

Sales $ 972900000 47 $ 1221300000 59 $ 1469700000 71

$ - 0 $ - 0 $ - 0

Total Sales $ 972900000 100 $ 1221300000 100 $ 1469700000 100

Operating Expenses


Royalties $ 68103000 70 $ 85491000 70 $ 102879000 70



Advertising $ 33600000 35 $ 42134850 35 $ 50704650 35



Lease cost $ 374400000 385 $ 411840000 337 $ 453024000 308

Utilities $ 162413793 167 $ 186775862 153 $ 205453448 140

Insurance $ 53509500 55 $ 79384500 65 $ 102879000 70



Depreciation $ 12764780 13 $ 12754780 10 $ 12764780 09

Total Expenses $ 1056489841 109 $ 1285930501 105 $ 1418975799 97



22






6 References
























amp-commercephp











18



35 SWOT


Strength



Weakness



Opportunity






events

Threats





19



Airfare -Business

Class



FoodCost per day

$ 6000 14 days $ 84000

Guide

Cost per

day

$ 25000 14 Days $ 250000






TotalAmount for

3Executives

$ 8796500



20

5 Financials


















21





51 Pricing Strategy





2014 2015 2016

Sales $ 972900000 47 $ 1221300000 59 $ 1469700000 71

$ - 0 $ - 0 $ - 0

Total Sales $ 972900000 100 $ 1221300000 100 $ 1469700000 100

Operating Expenses


Royalties $ 68103000 70 $ 85491000 70 $ 102879000 70



Advertising $ 33600000 35 $ 42134850 35 $ 50704650 35



Lease cost $ 374400000 385 $ 411840000 337 $ 453024000 308

Utilities $ 162413793 167 $ 186775862 153 $ 205453448 140

Insurance $ 53509500 55 $ 79384500 65 $ 102879000 70



Depreciation $ 12764780 13 $ 12754780 10 $ 12764780 09

Total Expenses $ 1056489841 109 $ 1285930501 105 $ 1418975799 97



22






6 References
























amp-commercephp











19



Airfare -Business

Class



FoodCost per day

$ 6000 14 days $ 84000

Guide

Cost per

day

$ 25000 14 Days $ 250000






TotalAmount for

3Executives

$ 8796500



20

5 Financials


















21





51 Pricing Strategy





2014 2015 2016

Sales $ 972900000 47 $ 1221300000 59 $ 1469700000 71

$ - 0 $ - 0 $ - 0

Total Sales $ 972900000 100 $ 1221300000 100 $ 1469700000 100

Operating Expenses


Royalties $ 68103000 70 $ 85491000 70 $ 102879000 70



Advertising $ 33600000 35 $ 42134850 35 $ 50704650 35



Lease cost $ 374400000 385 $ 411840000 337 $ 453024000 308

Utilities $ 162413793 167 $ 186775862 153 $ 205453448 140

Insurance $ 53509500 55 $ 79384500 65 $ 102879000 70



Depreciation $ 12764780 13 $ 12754780 10 $ 12764780 09

Total Expenses $ 1056489841 109 $ 1285930501 105 $ 1418975799 97



22






6 References
























amp-commercephp











20

5 Financials


















21





51 Pricing Strategy





2014 2015 2016

Sales $ 972900000 47 $ 1221300000 59 $ 1469700000 71

$ - 0 $ - 0 $ - 0

Total Sales $ 972900000 100 $ 1221300000 100 $ 1469700000 100

Operating Expenses


Royalties $ 68103000 70 $ 85491000 70 $ 102879000 70



Advertising $ 33600000 35 $ 42134850 35 $ 50704650 35



Lease cost $ 374400000 385 $ 411840000 337 $ 453024000 308

Utilities $ 162413793 167 $ 186775862 153 $ 205453448 140

Insurance $ 53509500 55 $ 79384500 65 $ 102879000 70



Depreciation $ 12764780 13 $ 12754780 10 $ 12764780 09

Total Expenses $ 1056489841 109 $ 1285930501 105 $ 1418975799 97



22






6 References
























amp-commercephp











21





51 Pricing Strategy





2014 2015 2016

Sales $ 972900000 47 $ 1221300000 59 $ 1469700000 71

$ - 0 $ - 0 $ - 0

Total Sales $ 972900000 100 $ 1221300000 100 $ 1469700000 100

Operating Expenses


Royalties $ 68103000 70 $ 85491000 70 $ 102879000 70



Advertising $ 33600000 35 $ 42134850 35 $ 50704650 35



Lease cost $ 374400000 385 $ 411840000 337 $ 453024000 308

Utilities $ 162413793 167 $ 186775862 153 $ 205453448 140

Insurance $ 53509500 55 $ 79384500 65 $ 102879000 70



Depreciation $ 12764780 13 $ 12754780 10 $ 12764780 09

Total Expenses $ 1056489841 109 $ 1285930501 105 $ 1418975799 97



22






6 References
























amp-commercephp











22






6 References
























amp-commercephp



















amp-commercephp









Documents

Internation Business Project