1. Executive summary
As DIGGA Australia intends to expand to the Indian market, this report will analyse the present and potential market, and advise on strategic recommendations for the expansion.
Through the market analysis, it was identified that the Indian city of Mumbai would be an ideal target due to the high focus on innovation and infrastructure. The market analysis also discusses the importance of quality and service focused products in the Indian market. Hence, it was found that developing technologies like virtual reality and augmented reality have played an important in India progressing as a nation. With the focus on infrastructure, the report also analysed the high potential for DIGGA Australia in India, because of the quality and highly developed product they offer.
Based on the findings of the market analysis, 2 recommendations have been made. It is recommended that DIGGA Australia utilise their earth moving range and focus on the service aspect of the product, to encourage positive brand awareness and offer a product that will continually meet the needs of the customers. Furthermore, it is recommended that DIGGA Australia incorporate the use of mobile augmented reality which will allow customers in India to digitally see what the equipment and product looks like and how it will work in their company.
2. Analysis
As DIGGA Australia seeks to expand in India, it is critical for the company to understand the market context and its challenges and opportunities.
Within the Indian market, the innovative city of Mumbai appears to be a highly lucrative expansion option. According to the Innovation Cities Index, Mumbai was ranked 92, ahead of the Indian city of Delhi, which placed 199. Mumbai has been constantly evolving, and is becoming a globally engaged city. It has become the most globalised city in South Asia, with a population of 18 million people and the resources to be the main destination for foreign investment and joint ventures (Dubey, 2014). Mumbai’s total wealth as a city amounts to 950 Billion USD, and is the economic hub of India, due to the Bombay Stock Exchange which is the 12th largest stock exchange in the world. Despite, the Indian city of Delhi, also having a significantly high wealth total, it is in fact Mumbai set to become the fastest growing city over the next 10 years. It is the leading symbol of emerging megacities in the global south, with significant metropolitan development and progress, that will lead to overall success of 21st century urbanisation. Additionally, research has indicated that the infrastructure development for the city, will mean DIGGA Australia would be a vital piece in Mumbai’s hopes to build an urbanised city and foster global relationships and connections (Nair, Guldiken, Fainshmidt & Pezeshkan, 2015).
The development of technology, has become home to Mumbai and there have been many innovation centers started in the city. Companies including CP Kelco, Puratos India and BASF, are some of the large international and domestic companies to open innovation centers, encouraging Mumbai to become one of the most innovative Indian cities today. However, alongside innovation centers, the fundamentals of technology are beginning to change, with the result being heavy reliance on e-commerce and consumer needs. These changes have seen consumers move away from in-store purchasing and towards purchasing online in a digital environment (Ahn, 2015). The nature of DIGGA Australia, has showed significant understanding of this shift, and this will become an important strength in entering the Indian market. In Mumbai, with the increasing need for infrastructure and developments, access to companies like DIGGA will coincide with incorporation of digital technology to bring the products to the consumer without needing to visit Australia or a potential warehouse area. Additionally, smartphone technology has enabled on-the-go purchasing for Indian consumers after countries like China and the United States initiated this type of technology use, consequently boosting purchasing frequency. Today, 96.5% of consumers now actively search the internet on their mobile device. Thus, the retail industry is becoming heavily reliant on technology to be able to offer unique and immediate product to the consumer (Hinterhuber & Liozu, 2018).
As wireless communication technology continues to evolve in Mumbai, mobile commerce appears to be a significantly impactful business model and again will change the way companies conduct business with their consumers. It is becoming more evident that despite Mumbai still holding a large focus on the management of growth, reducing inequality and promoting sustainability, as a city Mumbai is aspiring to emulate the urbanisation in regions like Shanghai and Singapore. It is evident that technology is a pivotal part to growth in Mumbai and consumers are leading towards adopting more readily new technology (Ahn, 2015). However, one factor that is restricting the growth of technology is trust, because the security and privacy of the population is questioned and the uncertainty of the physical attributes or specifications of the product. This is reflective of the risk avoidance culture; however, India presents some acceptance for fault and understands risk but is not always forthcoming in taking large risks especially with development and technology. As a country, they prefer to watch others try and improve on the mistakes or enforce when they believe it is ready. However, is it in fact the agriculture industry that India has had the most purchasing power and as developments continue to expand, they are maintaining growth in the agriculture industry with the incorporation of new technology to boost productivity (Mohan, 2016). There is an evident shift towards products of higher quality as income rises and Indian society evolves. Although this shift has not occurred as quickly as countries like China, there is a continual process to become more affluent and increase urbanization (Hinterhuber & Liozu, 2018).
Due to the growing interaction between consumers and mobile phones, there is a shift in customers wanting a more personalised experienced. Whilst India has showed some progression towards technology use and digital infrastructure, it has not completely adopted it in all industries. Two such technologies include virtual reality (VR) and augmented reality (AR), which many companies in China and the USA, have used to bring positive customer attitude towards when compared to 2D mobile advertisements. Much like several Asian countries, China has paved the way for many technological advancements, and India has followed by introducing various innovation centres (as mentioned earlier) that aim to encourage domestic and international technological advancements. For India, there has been a shift in virtual reality use and it is more readily available, especially in the gaming industry, with virtual reality games becoming more popular globally (Brengman & Willems, 2018). Although, despite the opportunity VR and AR technology has brought to India, there is still the concern of privacy, and continues to be a barrier for consumers.
3. Evaluate and recommendations
Due to the high demand for premium construction materials within the Indian market (refer to section 2), it is first recommended that DIGGA Australia utilise their earth moving machinery range when penetrating the Indian market. More specifically, it is recommended that DIGGA Australia lead with the larger and more premium attachments, to provide Indian consumers with a premium brand that will separate them from domestic equipment. This will also focus on the service driven aspect of the company, and prioritising the continual development that is undergone in manufacturing.
An integral part of DIGGA Australia is their commitment to producing quality and reliable products that are continually being developed. Their range is comprehensive and will enable all companies to get all necessary quality equipment and receive expert knowledge about the products. Amid concerns of quality because it is Australian and produced internationally (in Australia), focusing on the positive brand and abundance of product, will enable DIGGA to remain advantageous and prioritise addressing the reliability of their technology and comprehensive development taken. It will be crucial to also focus on the service aspect of the product, as they will be receiving continual feedback and support from DIGGA. Additionally, the brand’s stance on ethical production indeed adheres to the positive perception of CSR within the Indian manufacturing industry, because of the heavy influenced from global industries who have focused on CSR. Now despite, foreign brands being perceived of higher quality for Indian consumers, it will be crucial to build this perception for Australia and encourage positive brand association. However, it is significantly advantageous that the products are also made and manufactured in Australia and is a comparable strength for entering the Indian market (Brengman & Willems, 2018). As urbanisation and affluence increases, India becomes more opportunistic for companies like DIGGA, that aim to promote quality, service driven products and highlighting the company’s focus on a continual relationship will build trust for Indian consumers. Despite, this recommendation holding several benefits, there are some concerns India’s infrastructure requiring this high level of quality and service. There focus is primarily on boosting infrastructure, it is however unpredictable whether a premium product like DIGGA, will serve a place in the industry if there are other companies offering not only machine parts but the machines themselves. It is therefore evident that DIGGA will be able to effectively provide a product for larger companies who have their own machinery and require an increase in productivity or a more developed product. They will need to focus on highlighting that they are a service beyond just a supplier, and demonstrating their service focus, and that they will be able to provide continual development and support for the customer. This recommendation, will broaden the customer base, and build relationships and trust between DIGGA and the customers (Nair, Guldiken, Fainshmidt & Pezeshkan, 2015).
Due to Indian consumers shifting their reference towards a more personalised, service based experience, the second recommendation involves the utilisation of mobile augmented reality (AR) to display DIGGA’s earth moving machinery range, as it would appear in the machine and how it will work. It will primarily allow customers to see the range of attachments in use, and how best they are utilised. The proposed solution will allow for a direct path to purchase, allowing for the consumer purchase after trying the product, further reinforcing the on-the-go consumption preference (as outlined in Section 2). The concern with purchasing online, especially from foreign companies is the risk of not knowing exactly what is being purchased. It is evidently preferred that customers can try the products before buying. This AR technology enables customers to gain greater clarity, regarding the efficiency and appearance of the product (Iconaru, 2012). Furthermore, AR will provide a more unique and service focused experience, which will generate positive brand association and cater to the customer’s needs. As discussed in section 2, AR holds many concerns due to the scalability and the technology that is associated with it. The proposed recommendation seeks to eliminate the number of variables associated with the user experience by limiting the environment due to the motionless perspective of the user. This system is called a marker-based system, and the AR technology relies on image recognition and physical anchors to display the interface (Kerrebroeck, Brengman & Willems, 2017). It will enable both DIGGA and the customer to consult the product whilst being able to visually see the specifications, size and how it works. Comparatively, this model is a more use-friendly model, as it doesn’t rely on intangible elements like gestures (Brito & Stoyanovaz, 2018). Despite, the significant benefit AR technology will present for DIGGA and their consumers, the cost of developing the technology remains very large, which is again another concern. DIGGA would need to weigh up the strengths of the technology and develop the most cost-effective solution, because not only India will benefit but in fact all their customers. They will be able to take the software worldwide and build their brand recognition through the advanced technology use. This technology will separate their already premium product and provide customers with a quality, technology focused product (Nair, Guldiken, Fainshmidt & Pezeshkan, 2015).