The strategic responses of Indian room air-conditioner manufacturers to liberalisation, market reform, and the entry of foreign competition

Punj, Raghav (2006) The strategic responses of Indian room air-conditioner manufacturers to liberalisation, market reform, and the entry of foreign competition. (PhD thesis), Kingston University,


The focus of this dissertation is to examine the strategic responses of Indian room air-conditioner (RAC) manufacturers to changes in the business environment, specifically those brought about by economic liberalisation, market reform, and new foreign competition post 1991. Strategic management literature is replete with appeals for examining developing economy industries in a state of transition, yet very little data exist pertaining to the strategic responses of firms as they adjust to increasing competitive pressures, both domestic and foreign, within the Indian market. Using an emerging market- strategic factor - corporate strategy conceptual model developed by the researcher from strategic management literature, this research investigates how Indian RAC firms have been responding to the changes brought about by liberalisation and reform. Information was gathered by means of semi-structured interviews with respondents at three different levels within the domestic room air-conditioner industry. These included industry experts, RAC manufacturers, and dealers of RACs. In addition, secondary data was also collected in order to examine the strategic behaviour of RAC manufacturers over the past fifteen years, thereby providing a contextual/historical background to the primary data. The strategic analysis undertaken of the Indian RAC industry and the capture of rich data, obtained from the in-depth interviews in particular, make a major contribution to strategic management knowledge - specifically within an emerging market context such as India. The research findings show that liberalisation and reforms have increased foreign and domestic competition within the Indian RAC industry and substantially raised consumer demand levels. The results demonstrate that the institutional environment, and the RAC industry structure and market settings have had a significant impact on domestic organisations' strategy. Firm-specific resources and network/relationship capabilities, however, have exerted a smaller influence since the onset of economic reforms. Yet, the importance of the resource and relational perspectives can beseen in Indian RAC firms' responses to the changing environment. The research noted cost reductions, an expansion in RAC product ranges and marketing initiatives, and strategic alliances with industry participants as typical responses.

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