Founded in the year 2001, Wistron Corporation is an original design manufacturer headquartered in Taiwan. It employees over 60000 employees worldwide. Original design manufacturer is a company that manufactures a product as designed by the other firm. This product is then rebranded and sold under the designer's trademark. The company produces, notebooks, mobile phone, desktop computers, and LCD TV. (Wistron, 2017) Wistron entered the Indian market in the year 2016 in a joint venture with Optiemus Infracom.
Optiemus Infracom founded in 1993 has evolved itself from a distributor to an original design manufacturer. It was the only Nokia distributor for India until 2006 when the sales of Nokia phones in India was at its peak. Currently, under its various affiliates Optiemus specialises in the production of mobile phones, accessories, power banks and the distribution and sales of these products. It also started distributes Samsung mobiles in 2007 and Apple products in 2015 in India. (About Optiemus, 2017)
India has been attracting foreign direct investment through various sectors after its reforms in 1990. All most all the sectors in 1990 were allowed to invest in India through FDI with 49% share. This gave more power to the local businesses holding the major stakes. Even though the 49% FDI attracted new players in the market, many of the international business houses were sceptical to share their trade secrets with their Indian partners, fearing potential rivalry through sharing their technological know-how. (Dahlmann & Utz, 2005). The automobile industry could be a good example of creating their future rivals. Honda motors a Japanese automobile manufacturer entered the Indian market in 1984 in a joint venture with Hero MotoCorp to produce bicycles. Hero Honda until 2010 was the leading producer of two wheelers in India. However, in 2010 Hero MotoCorp decided to end its partnership with Honda and bought all the shares owned by Honda Motors thus creating two separate entities and a new rivalry. Hero currently has 48% market share in Indian two wheeler industry, and Honda is its biggest competitor. (Hanlon, 2014)
India had set its presence in the world for being one of the fastest growing economies. It is in the top 10 attention-grabbing place for inbound investment, the measures taken by its new Government and major initiatives to produce in India under the campaign Make in India has gone through major reforms and has opened new sectors for FDI. It had increased the sectoral limits and simplified the condition for FDI Policy, which has accelerated the speed of FDI and provides ease of doing business. India has allowed 100% FDI in most of the sectors which allow the company to function on its own corporate values and guarding their trade secrets. India has attracted foreign businesses due to its constant growth in the market, large market size with second highest world population, relatively low wages due to strong competition and a lower standard of living and special investment privileges such as tax exemptions. According to Department of Industrial Policy and Promotion, India, the total foreign direct investment has risen to 30% during April- September 2016. Indicating the government’s efforts to ease the business environment in India. One of the significant amendments to Indian policies is easing permanent residency regulations to the foreign individuals. Earlier Indian FDI policy had restrictions on minimum investments in India which was USD 5 million this restricted smaller players into entering the market. (Foreign Direct Investment India, 2016)
India Rank 130 among 189 countries in Ease of doing the business on the World Bank’s Doing Business Index in 2017. The government of India by launching the Make in India program aim on making Business operation easier, it represents the importance of a business-friendly environment. Indian Government has permitted FDI in most of the sectors, and there are only a few sectors such as lottery business, chit funds and atomic energy, in which FDI is prohibited. Foreign Investors can invest in India, through Joint Venture with Public Limited Company and Private Limited Company or by Sole Owned in Sectors in which 100% FDI is permitted. A Foreign Company can start up a liaison office of its parent company in India or branch office for Export-Import of goods. (Electronic Systems, 2017) As per the recent figures, Indian Government has over USD 3.05 billion worth investment proposal under the ‘Make in India’ Initiative. (Alam, 2015)
In the electronics sector, the government of India allows 100% FDI through automatic route. This gives Wistron Corporation future potential to breakaway with its joint venture from Optiemus and go solo. A joint venture however with a well-established local player offers benefits such as easy access to the local suppliers and lower cost of establishing itself in the new market. India due to its recent reforms has attracted many investments in the electronic sector, especially by original design manufacturers. Some of the other competitors in original design manufacturing to enter Indian market before Wistron are, Videocon Industries, Foxconn Technology, Lava International and Lenovo. Various state governments in India are competing each other to attract more and more foreign investment to support their local markets and provide job opportunities to the locals. Which makes it more attractive to the multi-national corporations where they can bargain for better deals such as tax structures, cheaper property deals etcetera. (Srivastava, 2017)