Comparative Analysis

COMPARATIVE ANALYSIS ND SELECTION THROUGH STRATEGIC PLANNING

COMPARATIVE ANALYSIS OF SRILANKA AND MALDIVES

Waqas-Ul-Haque
(MC130200585)

Virtual University of Pakistan

Dr. Mukhtar Ahmed

Principles of Marketing MGT-301

Comparative Analysis

THE FOREIGN ENTRY PROCESS: A CRITICAL ANALYSIS

INTRODUCTION
The business world of today calls for expanding sales and profits in order to achieve everincreasing earnings. Business owners and managers must look for any available opportunities to
keep their market share and expand into new markets. What happens when their local market
becomes saturated? The savvy leader is inclined to search abroad for any and all potential new
markets for their product or service. New markets offer the possibility of increasing total
revenue and/or decreasing the costs of goods sold, thereby increasing profits. Entering new
markets may also allow a company to follow its existing customers abroad, attack competitors in
their home markets, guarantee a continued supply of raw materials, acquire technology or
ingenuity, diversify geographically, or satisfy the stockholders desire to expand.
In many cases, with many companies, it is survival. There simply isnt enough domestic demand
to keep many firms in business, without going overseas.
Once management has made the decision to expand and has determined the target market or
markets, the next question is obviously, how. Selecting a mode for entering or expanding in a
foreign market is one of the most crucial strategic decisions that can be made by a company.
Weighing all factors and choosing the proper mode of entry can result in huge competitive
advantages, while making a poor decision can lead to the demise of the company.
COMPANY PROFILE
Inspire Group, ranks among Indias top three private sectors business houses in terms of net
worth. The group has business interests that range from telecommunications (Inspire
Communications Limited) to financial services (Inspire Capital Ltd) and power generation
(Inspire Infrastructure Limited). Inspire Groups leading company, Inspire Communications, is
India's largest private sector information and communications company (after Bharti Airtel.
Established in 2004), with over 150 million subscribers. It has established high standard and
quality in communication and information networks. It statuses among the top 5
telecommunications companies in the world by number of customers in a single country. Inspire
Communications Company covering over 24,000 towns and 600,000 villages. Inspire
Communications owns and operates the next-generation IP-enabled connectivity infrastructure,
comprising over 190,000 kilometers of fiber optic cable systems in India, USA, Europe, Middle
East and the Asia Pacific region.
SUBSIDIARY COMPANIES
Inspire Communications Ltd.
Inspire Capital Ltd.

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Inspire Infrastructure Ltd.

THE COMPANY PORTFOLIO

Inspire Co. is a famous company working in India for so many years. Inspire Co. has very
diversified portfolio and working in different segments. Company has the dynamic work force,
capable enough to adjust themselves in different capacities and able to work in any environment.
Top management including CEO, Mr. Aakash Bohmani, and all directors has decided to make
new office either in Sri Lanka or Maldives.
CRITICAL ANALYSIS BETWEEN SRILANKA AND MALDIVES
On the basis economic and demographic indicators we would find that which country is better
for entering into the market.

GEOGRAPHICAL INDICATORS

SRILANKA

MALDIVE

Location
Sri Lanka lies on the Indian tectonic plate, a Maldives, officially the Republic of the
minor plate within the Indo-Australian Plate. Maldives and also referred to as the Maldive
It is in the Indian Ocean southwest of the Bay Islands, is an island nation in the Indian Ocean
of Bengal, between latitudes 5 and 10N, and consisting of a double chain of twenty-six
longitudes 79 and 82E. Sri Lanka is atolls, oriented north-south, that lie between
separated from the Indian subcontinent by the Minicoy Island (the southernmost part of
Gulf of Mannar and the Palk Strait.
Lakshadweep, India) and the Chagos
Archipelago.
Geographic coordinates
7 00 N, 81 00 E
3 15 N, 73 00 E
Area
Total: 65,610 sq km
Total: 298 sq km
Climate
tropical monsoon; northeast monsoon
tropical; hot, humid; dry, northeast monsoon
(December to March); southwest monsoon
(November to March); rainy, southwest
(June to October)
monsoon (June to August)
Natural resources
limestone, graphite, mineral sands, gems,
fish
phosphates, clay, hydropower

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Environment - current issues

Deforestation;
soil
erosion;
wildlife Depletion of freshwater aquifers threatens water
populations threatened by poaching and supplies; global warming and sea level rise;
urbanization; coastal degradation from mining coral reef bleaching.
activities and increased pollution; freshwater
resources being polluted by industrial wastes
and sewage runoff; waste disposal; air
pollution in Colombo.

ECONOMIC INDICATORS

SRILANKA

MALDIVE

Sri Lanka continues to experience strong

economic growth following the end of the
26-year conflict with the Liberation Tigers of
Tamil Eelam (LTTE). The government has
been pursuing large-scale reconstruction and
development projects in its efforts to spur
growth in war-torn and disadvantaged areas,
develop small and medium enterprises and
increase agricultural productivity. The
government's high debt payments and
bloated civil service have contributed to
historically high budget deficits, but fiscal
consolidation efforts and strong GDP growth
in recent years have helped bring down the
government's fiscal deficit. However, low tax
revenues are a major concern. The 2008-09
global financial crisis and recession exposed
Sri Lanka's economic vulnerabilities and
nearly caused a balance of payments crisis.
Growth slowed to 3.5% in 2009. Economic
activity rebounded with the end of the war
and an IMF agreement, resulting in two
straight years of 8% growth in 2010-11.
Growth moderated to about 6% in 2012.
Agriculture slowed due to a drought and
weak global demand affected exports and
trade. In early 2012, Sri Lanka floated the

Tourism, Maldives' largest economic activity,

accounts for 28% of GDP and more than 60%
of foreign exchange receipts. Fishing is the
second leading sector, but the fish catch has
dropped sharply in recent years. Agriculture and
manufacturing continue to play a lesser role in
the economy, constrained by the limited
availability of cultivable land and the shortage
of domestic labor. Lower than expected tourist
arrivals and fish exports, combined with high
government spending on social needs,
subsidies, and civil servant salaries contributed
to a balance of payments crisis, which was
temporarily eased with a $79.3 million IMF
Stand-By agreement. However, after the first
two disbursements, the IMF withheld
subsequent disbursements due to concerns over
Maldives' growing budget deficit, and the
government has been seeking other sources of
budgetary support ever since. New Goods and
Services Tax (GST) on tourism introduced in
January 2011, on general goods and services in
October 2011, and a new Business Profit Tax
introduced in July 2011 have provided a boost
to revenue. Economic growth slowed to 3.4% of
GDP in 2012, compared to 7.0% in 2011
because of slower tourist arrivals and weak

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global conditions. Diversifying the economy

beyond tourism and fishing, reforming public
finance, increasing employment opportunities,
and combating corruption, cronyism, and a
growing drug problem are major near-term
rupee, resulting in a sharp depreciation, and
challenges facing the government. Gross
took steps to curb imports. A large trade
foreign reserves at the end of November 2012
deficit remains a concern. Strong remittances
were approximately $356 million, compared
from Sri Lankan workers abroad have helped
with $326 million in 2011, and were sufficient
to offset the trade deficit.
to finance only 2.6 months of imports. Over the
longer term Maldivian authorities worry about
the impact of erosion and possible global
warming on their low-lying country; 80% of the
area is 1 meter or less above sea level.
GDP (purchasing power parity):
$125.3 billion (2012 est.)

$2.974 billion (2012 est.)

GDP (official exchange rate):

$59.2 billion (2012 est.)

$1.537 billion (2012 est.)

GDP - real growth rate:

6% (2012 est.)
$6,100 (2012 est.)

3.4% (2012 est.)

GDP - per capita (PPP):
$8,700 (2012 est.)
GDP - composition by sector:

agriculture: 12%
industry: 30.1%
Services: 57.9% (2012 est.)

agriculture: 3%
industry: 17%
Services: 80% (2012 est.)
Labor force - by occupation:

agriculture: 31.8%
industry: 25.8%
Services: 42.4% (June 2012)
4.5% (2012 est.)
8.9% (2010 est.)
13.7% of GDP (2012 est.)

agriculture: 11%
industry: 23%
Services: 65% (2006 est.)
Unemployment rate:
28% (2012 est.)
Population below poverty line:
16% (2008)
Taxes and other revenues:
41.5% of GDP (2012 est.)
Inflation rate (consumer prices):

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9.2% (December 2012)

5.1% (2012 est.)

Industries:
processing of rubber, tea, coconuts, tobacco
tourism, fish processing, shipping, boat
and other agricultural commodities;
building, coconut processing, woven mats, rope,
telecommunications, insurance, banking;
handicrafts, coral and sand mining
tourism, shipping; clothing, textiles; cement,
petroleum refining, information technology
services, construction
Exports:
$10.51 billion (2012 est.)

$283 million (2012 est.)

Imports:

$19.08 billion (2012 est.)

$1.406 billion (2012 est.)

DEMOGRAPHIC INDICATORS
SRILANKA

MALDIVE

Ethnic groups
Sinhalese 73.8%, Sri Lankan Moors 7.2%,
South Indians, Sinhalese, Arabs
Indian Tamil 4.6%, Sri Lankan Tamil 3.9%,
other 0.5%, unspecified 10% (2001 census
provisional data)
Languages
Sinhala (official and national language) 74%, Dhivehi (official, dialect of Sinhala, script
Tamil (national language) 18%, other 8%
derived from Arabic), English (spoken by most
note: English, spoken competently by about
government officials)
10% of the population, is commonly used in
government and is referred to as the link
language in the constitution

Religions
Buddhist (official) 69.1%, Muslim 7.6%,
Sunni Muslim (official)
Hindu 7.1%, Christian 6.2%, unspecified 10%
(2001 census provisional data)

21,675,648 (July 2013 est.)

Population
393,988 (July 2013 est.)

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Population growth rate

-0.11% (2013 est.)
Urbanization
Urban population: 14% of total population
urban population: 40% of total population
(2010)
(2010)
Rate of urbanization: 1.1% annual rate of
Rate of urbanization: 4.2% annual rate of
change (2010-15 est.)
change (2010-15 est.)
0.89% (2013 est.)

Literacy
definition: age 15 and over can read and write definition: age 15 and over can read and write
total population: 91.2%
male: 92.6%
female: 90% (2010 census)

total population: 93.8%

male: 93%
female: 94.7% (2006 Census)

TELECOMMUNICATION INDUSTRY
SRILANKA MOBILE NETWORK OPERATOTRS
As of December 2012, the penetration rate in Sri Lanka was estimated at 100% over a population
estimate of over around 20.3 million.

Rank
1
2
3
4
5

Operator
Dialog
Mobitel
Etisalat
Airtel
Hutch

Subscribers
(in millions)
7.8[112] (December 2012)
4.2[113] (July 2011)
4.0[114] (Feb 2012)
1.7[115] (January 2013)
0.899[116] (4Q 2009)

Sri Lanka - key telecom parameters 2011 - 2012

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Category

2011

2012 (e)

Fixed-line services
Total number of subscribers

3.61 million

3.60 million

509,000

600,000

Internet
Total number of subscribers (fixed)
Mobile services
Total number of subscribers

18.3 million

20.0 million

The highly competitive mobile market in Sri Lanka had been running with a healthy overall
annual growth rate for some years. With mobile penetration is still relatively low compared with
other more developed Asian markets, having reached 91% by mid-2012, the strong annual
growth of earlier years has moderated somewhat and was continuing at a very modest 10%. The
market has undoubtedly benefited from its liberalisation and the competition that came with four
operators seriously battling it out for market share. This is despite one of these Dialog Telekom
still clinging to a large slice (still around 40%) of the market. The number of mobile operators
increased to five with Bharti Airtel Lanka launching a mobile service in 2009. Bharti hit the
market hard; signing up one million subscribers in just six months but by 2012 had lost
considerable momentum and had been losing customers. This report presents an overview of
mobile phone services in Sri Lanka. The countrys TV broadcasting sector is also briefly
reviewed.

MALDIVES MOBILE NETWORK OPERATOTRS

As of March 2011, the penetration rate in Maldives was estimated at 116.456% over a population
estimate of around 0.4 million.

Rank

Operator

Subscribers
(in millions)

Dhiraagu

0.185[82] (March 2007)

Wataniya Maldives

0.102[83] (Q1 2010)

Maldives - key telecom parameters 2012 2013

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Category

2012

2013 (e)

Fixed-line services
Total number of subscribers

24,200

24,000

19,500
69,600

19,000
200,000

560,500

600,000

Internet
Total number of fixed subscribers
Total number of mobile broadband subscribers
Mobile services
Total number of subscribers
LOGICAL RECOMMENDATION
On the basis of above facts and figures, economic growth, GDP (per capita), attracted tourism
sites, telecommunication policies, telecommunication infrastructure, market penetration and
overall economic growth going with MALDIVES and this would be the recommendation.

MARKET HIGHLIGHTS IN FAVOR OF MALDIVES

The Maldives continues to benefit from its newly competitive market, with overall
service improving greatly since the arrival of second mobile operator Wataniya Telecom;

Mobile penetration had reached 175% at the start of 2013;

Stronger growth in the national economy in 2011 provided encouraging signs for the
future and suggesting further growth opportunities for the telecom sector; however, 2012
saw the economy slip backwards again and the forecasts for 2013 remained gloomy.

CONCLUSION
With its relatively small people of less than 350,000 living on a lot of islands across the
archipelago, providing good communications for the Maldives has been paramount. The country
has addressed this challenge with considerable success, and now prides itself on having built of
the majority advanced telecommunications systems in the region, according to Research &
Markets. Despite the slow start, the introduction of a level of competition quickly saw a boom in
the countrys telecom market. Mobile penetration in the Maldives had reached a remarkable
175% by the start of 2013.
REFERENCES
www.partnersinternational.com

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http://www.partnersinternational.com/articles/foreign-market-entry.html
Srilanka, (2012) The World Factbook.
https://www.cia.gov/library/publications/the-world-factbook/geos/ce.html
Maldives, (2012) The World Factbook.
https://www.cia.gov/library/publications/the-world-factbook/geos/mv.html
Wikipedia
http://en.wikipedia.org/wiki/List_of_mobile_network_operators_of_the_Asia_Pacific_re
gion#Maldives
Wikipedia
http://en.wikipedia.org/wiki/List_of_mobile_network_operators_of_the_Asia_Pacific_re
gion#Sri_Lanka
Budde.com (2012)
http://www.budde.com.au/Research/Maldives-Telecoms-Mobile-and-Broadband.html
http://www.budde.com.au/Research/Sri-Lanka-Telecoms-Mobile-Broadband-andForecasts.html

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