Mumbai, Dec. 29: Indian businesses are expecting stiff competition in the next two years both in selling products and accessing inputs, according to an Ernst & Young study.
The study — Competing for Growth — tapped 1,400 senior executives around the world.
Almost 95 per cent of Indian respondents say their market will be more competitive over the next two years; globally, 85 per cent of executives feel the same way about their markets.
With an over 8.5 per cent GDP growth, India continues to offer enormous potential. It is getting competitive, particularly on key aspects such as building market share, accessing talent and other input costs, said Farokh Balsara, partner and national leader (markets) at Ernst & Young India.
According to Balsara, to remain competitive, businesses were increasingly considering options such as more effective use of alliances and partnerships and transformation initiatives to become more agile to respond to change, apart from focusing on building the brand and driving service and product innovations.
The study found that globally 60 per cent of respondents felt developed markets were the likely source of profitable growth, while the emerging ones would be more competitive.
India is said to remain the third most volatile market after Japan as margins will be under pressure because of price erosion and increasing labour costs. Brazil is said to be the most volatile market.
According to Ernst & Young, 80 per cent of Indian respondents said they were introducing new products or services to increase sales.
The companies were also trying to find growth in existing markets, with 71 per cent of Indian respondents looking to sell new products and services in markets where they are already present compared with only 25 per cent who want to launch products and services in new markets.