Political Factors India is the biggest democracy in the World. The government type is federal republic.

. Based on English common law; judicial review of legislative acts; accepts compulsory ICJ jurisdiction with reservations; separate personal law codes apply to Muslims, Christians, and Hindus. The political Situation in the country is more or less stable. For most of its democratic history, the federal Government of India has been led by the Indian National Congress (INC). State politics have been dominated by several national parties including the INC, the Bharatiya Janata Party (BJP), the Communist Party of India (CPI), and various regional parties. In the 2004 Indian elections, the INC won the largest number of Lok Sabha seats and formed a government with a coalition called the United Progressive Alliance (UPA), supported by various left-leaning parties and members opposed to the BJP. Overall India currently has a coalition led government and both major political parties the UPA and BJP, whichever comes in power. Economic Factors - The economic factors in India are improving continuously. The GDP (Purchasing Power Parity) is estimated at 2.965 trillion U.S. dollars in the year 2007. The GDP- per Capita (PPP) was 2700 U.S. dollars as estimated in 2007. The GDP- real growth rate in 2007 was 8.7%. India has the third highest GDP in terms of purchasing power parity just ahead Japan and behind U.S. and China. Foreign direct investment rose in the fiscal year ended March 31 2007 to about $16 billion from just $5.5 billion a year earlier. There is a continuous growth in per capita income; Indias per capita income is expected to reach 1000 dollars by the end of 2007-08 from 797 dollars in 2006-07. This will lead to higher buying power in the Hands of the Indian consumers. Social - India is the second most populous nation in the world with an approximate population of over 1.1billion people. This population is divided in the following age structure: 0-14 years 31.8%, 15-64 years 63.1% and 65 years and above 5.1%. There has also been a continuous increase in the consumption of beer in India. With an increase in the purchasing power the Indian consumer which preferred local hard liquor which is far cheaper is now able to get a taste of the relatively expensive beer market. The social trend toward beer consumption is changing and India has seen an increase of 90% beer consumption from the year 2002- 2007. This increase is far greater than the increase in the BRIC nations of Brazil (20 per cent), Russia (50 per cent) and China (almost 60 per cent). Thus this shows a positive trend for beer industries in India. Technology - The Indian beer Industry is heating up with a lot of foreign players entering the Indian market. The technological knowhow and expertise will also enter the Indian market with an increase in competition. For example beer brewing technology major Ziemann has entered India and has set up manufacturing plant in India. Ziemann Group, based in Ludwigsburg near

Stuttgart in Germany, has founded Ziemann India. It will start production in 2008. This will help bring in technological knowhow and increase the production of beer. SABMiller has just placed an order for the design and construction of two turnkey plants in India to Ziemann. The new plants are planned for Sonipat in Haryana and for another location near Bangalore. Both breweries will have an annual capacity of 1 milllion hectoliters each in the beginning and might be extended later. Thus with European technology entering the Indian beer market increased production and lowering cost of production could play a major role in the Indian beer market. The OLI Model: Ownership: The Indian market provides good ownership opportunities for Inbev India International private limited. The Government policies on FDI are relaxing and companies like Carlsberg has also invested in breweries in India. Also cost of manufacturing and brewing beer in India is much cheaper. The cost of raw material and labor in India is cheap thus giving Inbev India a good chance of reducing cost of production. The fact that European companies are setting up plants in India to manufacture brewing technology means that in the future Inbev could have ownership of these technologies at a much cheaper rate as compared to when bought in other markets. Location: There are a lot of location specific advantages for Inbev India International Private Limited. The Indian beer Industry is all set to heat up with the Indian markets compound annual growth rate (CAGR) of 6.7% from 2002 to 2006. The beer market volume is set to rise to 1155 million liters by 2011 an increase of 37.4% from 2006. North India is enjoying beer like never before. During the first quarter of 2006, nearly 5 million cases of beer were sold in Punjab and Haryana as against 600,000 cases in Q1 of 2005-06. This was the case because the government has revised its policy in these states and there is an improvement in the distribution channels in these areas. India is also expected to become the second largest beer market in Asia by 2020 just after China. Thus all these factors along with India having neighboring countries like Nepal and Sri Lanka, where beer could be exported through India gives Inbev India a good Location advantage. Internalization: Inbev India International Private Limited would want to have internalization because over a period of time it would lose out on a competitive edge in the region if it just sticks to exporting and not FDI investment. As other firms would come in and develop their infrastructure and distribution channel, thus able to produce at with low costs. India also is a huge potential market as mentioned earlier and Inbev would not want to lose out on the opportunity it can provide. Also since there is a lot of red tapism and contractual problems while exporting etc. It would be better to be in India rather than export.

Introduction PESTLE Analysis in Business Environment In business PESTLE analysis role is very important.Originally designed as a business environmental scan,the PESTLE analysis is an analysis of the external macroenvironment in which a business operates. These arefactors which are beyond the control or influence of abusiness, however are important to be aware of whendoing product development, business or strategyplanning.PESTLE means:P- PoliticalE- EconomicalS- Social TTechnologicalL- LegalE-Environmental The PESTLE subject should be a clear definition of themarket being addressed, this is the followings: A company looking at its market A product looking at its market A brand in relation to its market A local business unit or function in a business A strategic option, such as entering a new market A potential acquisition A potential partnership An investment opportunityNow we see in details of PESTLE factors/Impact in IndiaIn next following pages: POLTICAL

These refer to government policy such as the degree of intervention in the economy. What goods and servicesdoes a government want to provide? To what extentdoes it believe in subsidising firms? What are itspriorities in terms of business support? Politicaldecisions can impact on many vital areas for businesssuch as the education of the workforce, the health of the nation and the quality of the infrastructure of theeconomy such as the road and rail system.India is the biggest democracy in the World. Thegovernment type is federal republic. Based on Englishcommon law, judicial review of legislative acts, acceptscompulsory ICJ jurisdiction with reservations, separatepersonal law codes apply to Muslims, Christians, andHindus. The political Situation in the India is more orless stable. Most of its democratic history, the federalGovernment of India has been led by the (INC) Indian National Congress. State politics dominated by severalnational parties including the INC. The Bharatiya JanataParty (BJP), the Communist Party of India (CPI), andvarious regional parties. In the 2009 Indian elections,the INC won the biggest number of Lok Sabha seatsand formed a government with a alliance called theUnited Progressive Alliance (UPA), supported by variousleftleaning parties and members opposed to the BJP.Overall India currently has a coalition led governmentand both major political parties the UPA and BJP,whichever comes in power.It comprises political stability and the policies of thegovernment. Ideological inclination of political parties,personal interest on politicians, influence of partyforums etc. create political environment. For example,Bangalore established itself as the most important ITcentre of India mainly because of political support.In India many poltical factors those effect in businessenvironment. Political pressures in ruling governmentand vote bank problems. These are the major factorsthose affect on political environment:(i)Taxation policy India has a well developed tax structure with a three-tier federal structure, comprising the UnionGovernment, the State Governments and the Urban &Rural Local Bodies. The power to levy taxes and dutiesare distributed among the three tiers of Governments,in accordance with the provisions of the IndianConstitution. The main taxes/duties that the UnionGovernment is empowered to levy are Income Tax income, Customs duties, Central Excise and Sales Taxand Service Tax. The principal taxes levied by the StateGovernments are Sales, Stamp Duty, State Excise, LandRevenue, and Duty on Entertainment and Tax onProfessions & Callings. The Local Bodies areempowered to levy tax on properties, Octroi Tax onMarkets and Tax/User Charges for utilities like watersupply, drainage, etc.

(ii)Privatisation Reduce the political interface in the management of enterprises, leading to improved efficiency andproductivity. In India this time do many govt companyGood performance but some time later there are facingmany problems so the go for privatisation. (iii)Deregulation India Govt makes some Act to freely do business inIndia. (iv)International trade regulations International trade regulation day by day India makesit flexi able for foreign trade.(v) General initiatives Some policy to first Political initiates for the businessenvironment in In India. (vi) Government stability In India past 10 years govt is stable. Before 10 yearsIndia facing govt stability. If govt stability not market isnot improve and no one come here for investment.(vii) International stability No wars, no any country home problems, and no anytype of war like Iraq they make uncertainty in market. ECONOMICAL It includes interest rates, taxation changes, economicgrowth, inflation and exchange rates. As you will seethroughout the "Foundations of Economics" bookeconomic change can have a major impact on a firm'sbehaviour. For example: higher interest rates may deter investmentbecause it costs more to borrow a strong currency may make exporting moredifficult because it may raise the price in terms of foreign currency

inflation may provoke higher wage demands fromemployees and raise costs higher national income growth may boost demandfor a firm's productsIn order to solve economic problems of our country, thegovernment took several steps including control by theState of certain industries, central planning andreduced importance of the private sector. The mainobjectives of Indias development plans were: Initiate rapid economic growth to raise thestandard of living, reduce unemployment andpoverty, Become self-reliant and set up a strong industrialbase with emphasis on heavy and basic industries, Reduce inequalities of income and wealth, Adopt a socialist pattern of development basedon equality and prevent exploitation of man byman,As a part of economic reforms, the Government of Indiaannounced a new industrial policy in July 1991, The broad features of this policy as follows: The Government reduced the number of industriesunder compulsory licensing to six. Disinvestment was carried out in case of manypublic sector industrial enterprises. Policy towards foreign capital was liberalized. Theshare of foreign equity participation was increasedand in many activities 100 per cent Foreign DirectInvestment (FDI) was permitted. Automatic permission was now granted fortechnology agreements with foreign companies.

 Foreign Investment Promotion Board (FIPB) was setup to promote and channelise foreign investmentin India. The economic factors in India are improvingcontinuously. The GDP (Purchasing Power Parity) isestimated at about 3.965 trillion U.S. dollars in the year2009. The GDP- real growth rate in 2009 was 6%. Indiahas the third highest GDP in terms of purchasing powerparity just ahead Japan and behind U.S. and China.Foreign direct investment rose in the fiscal year endedSeptember 2009 to about US$ 10.532 billion. There is a continuous growth in per capita income; Indias percapita income is expected to reach Rs. 33283 by theend of 2009-2010. This will lead to higher buying powerin the Hands of the Indian consumers. India GDP is now6.5. Today India reserve Us dollor in Good condition.In Indian economy is strong. We see in recession oureconomy is less affect from recession compression towestern countries. These following factors:(i) Interest rates(ii) Money supply(iii) Credit control(iv) Financial markets(v) Inflation(vi) Competitors pricing(vii) Globalization

SOCIAL Changes in social trends can impact on the demand fora firm's products and the availability and willingness of individuals to work. In the India, for example, thepopulation has been ageing. This has increased thecosts for firms who are committed to pension paymentsfor their employees because their staff are livinglonger. It also means some firms have started torecruit older employees to tap into this growing labourpool.It describes the characteristics of the society in whichthe organization exists. Literacy rate, customs, values,beliefs, lifestyle, demographic features and mobility of population are part o the social environment. It isimportant for managers to notice the direction in whichthe society is moving and formulate progressivepolicies according to the changing social scenarioIndia is the second most populous nation in the worldwith an approximate population of over 1.1billionpeople. This population is divided in the following agestructure: 0-14 years 31.8%, 15-64 years 63.1% and65 years and above 5.1%. There has a(i)Mobility(ii)Income distribution(iii)Population demographics(iv)Attitude to work and leisure(v)Standard of education and skills vi)Working conditions

TECHNOLOGICAL New technologies create new products and newprocesses. MP3 players, computer games, onlinegambling and high definition TVs are all new marketscreated by technological advances. Online shopping,bar coding and computer aided design are allimprovements to the way we do business as a result of better technology. Technology can reduce costs,improve quality and lead to innovation. Thesedevelopments can benefit consumers as well as theorganisations providing the products. Today in India 3Gtechnology starts. A heavy infrastructure for bandwidth.BSNL and Reliance have more covered city by opticalfibre. India have many Technological Projects. GoodService provider in IT sector ex TCS, Infosys and manymore.Today India is a big market in mobile sector here5-6 player operataors and new operators launch theirservices soon.(i) IT Development(ii)New Materials and processes(iii)Government technology funding(iv)Speed of technology transfer(v)Software upgrades