IT firms in India Essay Example | Topics and Well Written Essays - 2500 words

IT firms in India - Essay Example The paper tells that rapid industrialization and globalization have led to firms expanding their services in foreign countries. The service firms are entering the foreign markets and the most critical issue in international marketing strategy remains the choice of entry mode. The choice of market entry mode according to Zhao and Decker has an impact on international operations and is considered important in international marketing. It is one of the most critical decisions for the MNCs and it affects future decisions and performance in foreign markets. The initial entry mode choice significantly affects the performance and longevity of the firm. Nearly 80 percent of the global investors plan to locate their corporate offices overseas by 2008. The corporate investors are looking at offshoring opportunities more aggressively across all major functions. Kearney contends that the IT sector will see the highest levels of offshoring activity with 67% global investors expecting to offshore t hese functions. Business processes like R&D, HR and accounting offshoring would amount to about 41 percent. These business models will include captive and joint venture, both of which result in FDI. Since there are concerns over quality control and the intellectual-property protection, it is expected that most of the offshoring would be through captive business models (or wholly owned subsidiaries) or joint ventures. Most of the R&D offshoring will be through FDI. Kearney further states that global investors prefer to rely on third-party outsourcing contracts and other non-FDI operating models.