Challenges Before Indian Entrepreneurs
The challenges which Indian entrepreneurs have to face are depicted below.
The Indian entrepreneurs have to face following challenges:
- To understand, tackle and survive the era of globalization.
- To take optimum advantage of business opportunities arose due to liberalization of Indian economy since 1991.
- To replace outdated technology with improved modern technology.
- To motivate and properly manage needs and expectations of women and young managers that make an Indian workforce.
- To follow marketing techniques that are result and consumer-oriented.
- To professionally manage the financial activities of the business.
- To improve production process and produce high-quality goods.
- To balance profit earning capacity and social-welfare activities.
Discussed below are the challenges before Indian entrepreneurs.
1. Challenge of globalization
A few years back the Indian entrepreneurs had to fight regional and national competition. However, today, the scenario has changed and become much more complex than what it was earlier. Now, almost all countries have opened up their economies, and the world (globe) has become one giant global market.
To survive this competitive era of globalization, Indian entrepreneurs must prepare themselves with new, better, and innovative business tactics and skills. They must accept this global challenge willingly and try their best to seek business opportunities to establish their dominant place in this ever-changing and always challenging open market.
In this global competitive scenario, the Indian entrepreneurs have to compete with well-established giant foreign companies. For example, if they decide to start a beverage company, their competitors are likely to be large multinational corporations such as Coca-Cola and Pepsi.
Giant multinational corporations have tremendous money power (surplus funds), branches all over the world (global presence), efficient teams of wise managers and experienced employees (skilled human resource); they sell high-quality goods and services at lower prices, and also use superior marketing techniques.
These solid advantages of multinational corporations make it very difficult for Indian entrepreneurs to compete. Hence, this is a big challenge before them.
Indian entrepreneurs will have to improve in all departments of business such as Production, Marketing, Finance, etc. They will have to use modern technology, new methods and efficient and highly motivated manpower to fight this competition.
2. Liberalization in India, 1991
Liberalization is a process of giving liberty or freedom to someone to do something, which was previously restricted, banned or prohibited.
In context of this article, liberalization means removing all restrictions imposed on the entry and growth in trade or business.
The Government of India (GOI) started the process of liberalization in India in year 1991. With its initiation, private entrepreneurs were granted liberty (freedom) to start any business in any open domain (unreserved sector) of choice. However, this openness came with few exceptions that were strictly restricted only for Indian government to operate and manage, this included Railways, Water Supply, Defence, and other reserved public sectors.
India's liberalization of 1991 opened a gift-box of many new business opportunities for entrepreneurs. Now, the challenge before Indian entrepreneurs is how to take optimum advantage of these business opportunities in India.
The Ambani family that handles Reliance Group of Industries took full advantage of liberalization in India. Other entrepreneurs must also analyse their footsteps and try to follow them by making their own individual ways in a wise manner. Again this is not an easy task to accomplish, rising cut-throat competition has made it much more difficult for both Indian and foreign companies.
However, Indian entrepreneurs can beat this enormous competition by focusing more on selling high-quality yet unique goods and services at lowest prices feasible.
3. Adapting a modern technology
With each passing day, Science and Technology are developing rapidly. Modern technology not only improves quality of produced goods and services, but it also helps to reduce their cost of production. It speeds up their process of production. High-quality commodities, lower cost of production, and faster production rate makes any company a highly competitive one. Therefore, it becomes mandatory for every company to keep pace with new emerging technologies and adapt it regularly to remain as cutthroat as possible.
So, it is always better to replace outdated technology with the new technology. Old machines must be replaced by modern machines. This is a big challenge before an Indian entrepreneur. If he has a financial problem, then he must try to maintain a good balance between old and new technology. He also has a challenge to train his staff well to make them able to use (handle) the modern machines and technology properly.
4. Changing workforce in India
In the recent decade, the workforce in India has undergone a remarkable change. Statistics indicate the dominance of men in the workforce is shrinking day-by-day. A new breed (generation) of highly educated Indian women has entered the workforce in India. Breaking all traditional and social barriers, they have established themselves as efficient employees and professional managers. Today, it is very common to see a lady professional working in a corporate office. This presence of women in the workforce has brought new challenges before Indian entrepreneurs.
To handle women's workforce-related challenges efficiently, Indian entrepreneurs must know and follow all the special Labour Laws for women. They must provide women staff with better working conditions, safe environment, and other essential facilities. Special care must be taken to see to it that they are treated with dignity and respect. Their grievances or complaints, if any, regarding physical or mental harassment must be addressed immediately and seek prompt actions. Working women experience more stress than their male counterparts. It is so since they perform dual duties on a day-to-day basis. Along with managing their professional jobs they also have to look after their children, family and domestic chores. This overall increase their personal responsibilities and causes them both mental and physical stress.
Understanding women's dual roles, an employer can try to some extend alleviate their stress by granting satisfactory maternity leave, providing separate toilets and washrooms, implementing favorable work timings that don't disturb their domestic lives, providing a health insurance or at least a free routine medical checkup, employee benefits that can improve their lives.
Employer must remember that a happy, sincere and hard-working woman always gives her best to the organization she works for. This ultimately pays an employer a good return over his kind and humane investment.
Along with handling women in the workforce, Indian entrepreneurs also face a great challenge to tackle young-generation in the workforce. Today, managers hired by most companies are young, energetic and ambitious graduates that have big dreams to accomplish. These managers are eager to work hard but expect a good reward in return, which is satisfactory to their monetary, physical and psychological needs. These restless youngsters must be continuously motivated by keeping them engage in challenging tasks and interesting work assignments, providing attractive salaries, incentives, perks or employee benefits, etc. If not, they will resign and leave the company and then join the competitors. Loyalty is not a big factor now-a-days as it was a few years ago.
The Indian entrepreneur has to face this challenge by training and developing these young minds and motivating them continuously.
5. Marketing is a big challenge
Today, companies have formulated many new techniques to market their products and services. High pressure salesmanship is used. Children are often targeted in the many advertisements. It is so since kids compel their parents to buy products they are lured by. Advertising is done to propagate marketing message and this is done through various media like television, newspapers, magazines, the internet, radio, cell phones, hoardings, etc. Advertising is now become an inseparable part of modern marketing.
Marketing is a big challenge before every Indian entrepreneur. He has to select an efficient and experienced marketing team. He must train and develop this team into a result-oriented one. He must motivate his marketing team with high salaries, attractive incentives and good commissions.
Indian entrepreneur must try his level best to satisfy needs and expectations of his customers. He must use marketing research and produce his product by taking into consideration the consumers likes and preferences. He must sell high-quality goods at lower prices. He must also provide after-sale services. In short, he must make his business a consumer-oriented and service-oriented one. He must always give his customers full value for their money. If not, they will lose trust in his brand and go to the competitors.
6. Managing the finance of business
Finance is the life blood of a business. It can either make a business or break it. Under-capitalization and Over-capitalization are very harmful to the business. Managing the finance of his business is a big challenge for an Indian Entrepreneur. He must manage both Fixed and Working capital properly. He must borrow money from the right source. He must manage his Cash Flow properly. He must invest his excess funds correctly. He must create sufficient Reserves and surpluses. He must provide enough depreciation for his fixed assets, so that he can replace them when they become old and outdated. He must provide for repairs and maintenance of machines. He must also take steps to provide for but avoid bad debts.
7. Challenges in the field of production
The Indian entrepreneurs have to face many challenges in the field of production. They must replace all outdated plants and machineries with new modern ones. They must provide continuous training to their production staff. They must use good quality raw-materials to produce high quality finished goods. They must have a good Inventory Control system. This will avoid Over-stocking and Under-stocking. Over-stocking will block the working capital, and Under-stocking will block the production process. Indian entrepreneurs should use a part of their profits for Research and Development (R & D). They must pay special attention to Quality Control (QC). Now-a-days most companies also use Total Quality Management (TQM) to ensure their finished goods are of good quality.
8. Balancing economic and social Objectives
This is also a big challenge before Indian entrepreneurs. They must balance between earning high profit and doing social-welfare activities. They must use modern machines without causing unemployment and harm to the environment. They must earn a profit without reducing quality of their goods and services. They must earn a profit without charging high prices for their products. They must not cause any type of pollution in the society. They must accept their communal responsibilities and donate a small part of their profit (money) for social causes. They must pay all their taxes and duties. They must not use unfair and unethical practices to fight cutthroat competition.