top of page
Search
  • Writer's pictureDebashish Sakunia

Government's role in feasibility checks.

Communication principles advocate keeping in loop all the stakeholders when making a decision. It means to underline that any Stakeholder's disagreement on a decision can negatively influence stakeholders and the organization itself.


Amongst the stakeholders is the omnipresent Government. In legal terms, the Government has the right to interfere in any decisions/activities undertaken by a business through various departments, each meant to regulate a particular aspect. It is because Government's primary purpose is to safeguard a natural person's interests.

So, to run a business is to do business with the Government. Right from the process of Registration to the Winding-up operation, every step has compliances to be done. You might find it troublesome, but the Government is correct in doing so.

Government compliances fall under the umbrella of operational feasibility. This feasibility, much like other feasibility components, affects all other parts, right from marketing, financial to technical.

This blog will elaborate on why handling your business with the Government in creative ways is essential to the business's survival.

Businesses have to be legal. There is no running away from the compliances put in place: it is simply not an option. However, an understanding of the compliances can undoubtedly give a business edge over others.


I'll prove this with three examples, each from India.


The Case of Multi-Level marketing (MLM).



Multi-level marketing is a legitimate business strategy used by some direct sales companies to sell products and services — many of my clients come up with a marketing strategy that involves multi-level marketing campaigns disguised as referral bonuses. However, this idea might not be feasible in all countries.

India, for example, allows MLM only if the company produces its products. A product that is imported or is a service can not be marketed over MLM.

In the past, several companies were penalized by the Government for using MLM as their marketing strategy. The Government was correct in doing so. It was protecting the vulnerable citizens, many of whom joined MLM schemes as means of earning. This decision was taken after several such plans turned out to be a Ponzi scheme.

So if you are targeting the Indian Market with MLM as your Go-to-market Strategy, think again!

However, companies such as Amway have flourished under this scheme. This is because they started their manufacturing base in India. Since they had a product that was manufactured domestically, everything worked in their favour.

The Case of 29-minute recording cameras.


All famous digital camera brands once allowed recording for only 29 minutes on their cameras exported to India. The same models were allowed to register until their space ran out in other countries.

Why, you ask? Taxes.

The Indian Customs department categorized all Digital Cameras which could record over 29 minutes as Professional Filmography Cameras which attracted higher taxes.

So if Canon were to import a Digital Camera from China that could allow recording for over 29 minutes, it would have to pay extra taxes. Wouldn't the additional amount impact its marketing and financial feasibility?

Let me know your views in the comments.


The Case of sub-4 meters cars.



If you were to observe all Popular cars in India, you would see that most cars, especially in the mid-cost range, are within 4 meters in length. This is because the excise duties for cars under 4 meters is less than the excise duties for ones with a length above 4 meters. To prevent the extra taxes, manufactures started pivoting their models to the sub-4 meter category.

So next time when someone complains about the leg space in cars, remember to share this fun fact.

I hope this blog underlined the importance of doing business with the Government and how feasibility studies can shape your product and go-to-market strategy.

Comments


bottom of page