ENRON INTERNATIONAL

Business Plan in INDIA

Using relevant information given in the case study and appropriate conceptual concepts related to international environmental analysis, consumer behavior and country entry modes, critically analyze Enron Internationals business strategy for India?

Market Summary
Enron, established a subsidiary, Enron International, and gave it the mission of building and running power generation projects in the developing world.

Enron would set up two LNG terminals and units in India, one at Dabhol one at Ennore in the state of Tamil Nadu.

Opportunities to Learn
Bombay fields not able to supply LNG LNG imported from Gulf of State of Qatar 170 State and Federal permits - How to get the work done in India. Corruption charges by BJP and Shivsena - Enron was able to know the political environment State government not letting them survive - Strong agreement and public survey protects them

Business Concept
Enron International had plans to invest $20 billion in India. Become a maximum producer of LNG in India by 2010

Risks and Rewards

$4 Billion investment by couple of investors and State owned Qatar Gas and Pipeline Co resulting 15% annual growth in Shareholders income

Sued State government and rewarded by immediate effect on government.

Custom Inspector charges duty at different rates. Risk of holding public opinion rewarded by 60% Indian support. Risking $20 Million in training workers. 22.6% decrease in power rates in return walk away with 2450MW power plan.

Key Issues of the success

Central Government support. Strong agreement with the government. Public opinion support

Why DABHOL???
Government in Maharashtra and Government headed by Congress. Located near western coast i.e. comparatively closer to Qatar. Dabhol encouraging foreign investors to invest.

Enrons Business Strategy for India

Because lot of political interferences and political conflicts the business strategy has to be designed as follows-:

Not to trust on the government policies and entry modes as most of them are being managed by government servants/workers/policy makers and these are just a matter of entry restrictions.
A strong contract so that minimization of future problems. Maintain a good relation with the Central Government. A good public relation required. Factory setup at the Indian Western Coast transportation cost is bit low.

Other factors resulted ENRON success

Public support 80% of Maharashtra and about 60% of the whole nation. Reframing of policies and agreement between Enron and Indian Government.