DEVELOPING A DISTRIBUTION NETWORK

Abstract

India is a complex country to operate within for an international MNC and it was not until recently the government initiated reforms to deregulate in order to attract foreign direct investment. Due to the dynamic environment and lack of institutional setting it is of high importance that the relationships with the different actors function efficiently in order to cope with organisational change caused by the dynamics in the business environment. This thesis is mainly concentrated to the backhoe loader industry, which is a separate segment within the construction equipment industry. The backhoe loader market in India is the fourth largest in the world and the attention from all the major global actors has increased in recent years, mainly due to the reforms of privatisation, liberalisation and the huge potential in the market. There are a number of specifics typical for the Indian market, such as a high price sensitivity due to the constant alternative of the low cost labour, and additionally the heavy usage of products, which are not likely to be found in other more developed markets. In order for Volvo Construction Equipment India to build long-term relationships with customers, trust and commitment are key factors. Additionally, this thesis includes an in-depth analysis of the competition in the market. Furthermore, the thesis covers the external institutions of importance for the case company that needs to be considered when competiting on the Indian market. The aim of this thesis is to prepare and develop Volvo CE’s distribution network, for a potential launch of the backhoe loader in 2004.