Acquiring an unrelated wholesale business in India
Acquiring an unrelated wholesale business in India
India is now considered the second fastest growing economy after China and is providing great number of business opportunities in its various sectors. It has become a commercial hub for the business community around the globe due to its increased production of modern and innovative products or articles at low prices with high quality. This has increased the scope of wholesale business in India which has seen a great boom in 2006 and 2007. India wholesale business is still on the path of success due to cheap skilled labor and easy availability of raw material.
When businesses which have shown the maximum growth in their related fields in India and other countries then there is a danger that further growth can jeopardize their success, they look for new markets or venture into the unrelated businesses. One of the very best options available in this case for the Indians and other people is to diversify by acquiring an unrelated wholesale business in India. This is because this business is getting huge popularity in this country since 1990. Many European countries engaged in wholesale business, in order to gain the benefits of low cost production and to be highly competitive in the tough markets are outsourcing their manufacturing to India or importing their India wholesale products from Indian wholesalers which is due to efficient but nonetheless low cost labor available here.
Acquiring an unrelated wholesale business in India can help the acquiring company to diversify its investment. This can ensure high returns to them due to the increasing scope of this business in India. They can earn huge revenues and also maintain their brand images by providing wholesale supplies at lesser rates as compared to the other countries. This can give them more business as foreign nationals highly depend on the Indian wholesale markets to import from which is then sold at higher rates in their local markets. Acquiring an unrelated wholesale business in India can help the companies or businesses to offset their losses from their main businesses against the profits of unrelated wholesale business in bad times and off seasons. This brings the benefits of good profits even in lull seasons and distressed business conditions.
If businessmen acquire unrelated wholesale businesses in India they are less exposed to the risks and can increase their competitive advantage by improving their entire cost structure. Acquiring the unrelated wholesale business in India requires easy documentation and, as can be expected of a third-world or developing economy, a set of loose rules and regulations. Also acquiring businesses can transfer their efficient and cost effective labors in India to their main businesses and can generate synergies through economies of scale. Besides that, due to greater scope of this business in India unrelated diversification can increase the debt capacity of a business due to operation on large scale and can increase the market power of the acquiring company.