UNIVERSTIY OF NEUCHATEL

INTERNATIONALIZATION OF
AUDIOTEKA: INDIAN PERSPECTIVE
Case Study
By Binayak Malla & Abhinayak Malla

Sminaire de SynthseMSc International Business Development

Case study and teaching notes prepared under the supervision of Professor Sam Blili
Professor Michal Zdziarski, Dr. Katarzyna Jagodzinska and Philippe Lamb
Submission date: 29th May 2013

SPRING SEMESTER 2013

University of Neuchatel Faculty of Economic and Business Enterprise institute.

Table of Contents
Synopsis of case ..........................................................................................................................3
PART I: Introduction of Audioteka .............................................................................................5
Background of Audioteka: .......................................................................................................5
Investment in Audioteka ............................................................................................................6
Defining market .........................................................................................................................6
Competitors analysis ................................................................................................................7
Internationalization in Europe .................................................................................................7
PART II: Introduction to India ..................................................................................................10
Publication industry Audiobook market in India ................................................................11
Challenges in India ..................................................................................................................12
Cultural dimension of India ...................................................................................................14
Part III: Closing Paragraph .......................................................................................................16
PART IV: Assignment questions ...............................................................................................18
Bibliography and References ......................................................................................................19
Appendix .......................................................................................................................................20

Audioteka
Synopsis of case
With a very simple concept of providing digital audio book, a young Polish entrepreneur Mr.
Marcin Beme established Audioteka in 2008. His vision was to make Audioteka a global
company by presenting his idea of selling book in an audio format. With audio book, people
could now sit, relax and even close their eyes and listen to the story presented in the book
narrated by the voice of celebrities and famous radio speakers. The best part of audio book was
its compatibility on most of the electronic devices. It could be used in mobile devices,
computers, laptops and any other audio devices capable of downloading audio files. Unlike paper
books, audio book did not require readers to totally concentrate on reading. People could listen to
it when they were doing their regular activities such as driving, cooking, going on a walk,
jugging etc. Also they shouldnt worry much about weight and space required to carry a book.
Audio books user could carry as many audio books as they wish just in their portable devices and
use them whenever they felt like.
Because of these amazing features, Marcin believed that his company was destined to have
success, and so it did. Within five years of Audiotekas establishment, it was the biggest
producer of book recoding in Poland and the biggest distribution platform of audio books in
Poland and Czech Republic. Success in home market and Czech Republic provided Marcin
confident in launching aggressive internationalization strategy to other European Market.
Investment made by Giza Venture Capital worth 0.5 million also provided support for his
campaign. He planned to launch Audioteka in 12-15 European countries before the end of 2013.
It was quite natural for a technology-based company to be very aggressive in internationalization
and to expand their reach as far as possible before new technology arrived or new competitor
entered the market. Also the fact that technology was changing very rapidly and products
associated with it had shorter lifespan provided great threat to the company. So there was a belief
that technologically innovative products should be accessible as soon as possible to the general
people for the company to maximize its profit potential and expand its growth. Also, the fact that
core idea behind production of technology-based product could easily be transferred and it didnt
require much of capital to establish an office in new location, added more support for rapid
expansion.
3

For Marcin being aggressive in expanding its reach within Europe was quite understandable but
thinking of something much bigger and planning to enter giant Indian market was a subject to be
scrutinized in more appropriate way. The questions associated with it could be, was the company
matured enough to initiate such a big move? Did they have enough resources (capital, human and
technical) and business information (market, social-culture, political and economical) about it?
India is not just a country, but it is a different world on its own. Growing economy, supported by
favorable government policies for foreign investor, 1.2 billion population (1.5 time more than
whole Europe) providing huge market opportunities. However, difference in business
environment, culture and social setting of the country compared to European market, made it
very challenging for foreign company to establish well in India. The country had 22 regional and
more than 100 locally spoken languages. Most of the people living in it associated themselves
strongly with religion. Cultural and religious aspect (about which very little was known to
western world) played very influential role in doing business in India. Complexity, associated
with establishing business and operating it were very high. So, could Audioteka be able to adapt
to these new kinds of environment and establish them in Indian market was the big question to
be answered.

Part 1: Introduction of the company:

Background of Audioteka:
After completing three university (MA) degree in mathematics, economics at the University of
Warsaw and in computer science at the Faculty of Technical Physics and Applied Mathematics
of Warsaw University, Marcin Beme established Audioteka with a dream to make it one of the
first Polish company to be successful worldwide. The concept of audio book came to his mind
when he was traveling with his brother on trip to Polish seaside. The trip was boring so they
started talking with each other and one of them mentioned that it would be great if we could
listen to some books on such trip. So, then the idea clicked on Marcins mind (who was already a
young entrepreneur). His brother had some experience as a manger in multinational company.
So, they decided to work together on it. At the early stage of establishment, Marcin had a very
simple objective of serving Polish people with audiobook- a book that can be listened to,
instead of spending time and effort in reading. His aim was to make every Pole listen to audio
book at least once in their lifetime. He knew that not everyone would become a client of
Audioteka but thought all should know about audio book.
Audioteka employed six full time persons as their core staff. In addition to Marcin as the CEO,
the company employed country manager for Poland, marketing director, a graphic designer, IT
specialists, and directors preparing services for Scandinavian countries, Spain and Portugal, UK
content and France. They were willing to look for agents and partners who could facilitate the
expansion into other markets but were not willing to add more staff. In 2009 more than 1 million
users visited Audiotekas websites. They altogether downloaded approximately 50000
audiobooks. These numbers were respectively close to 2 million users and over 100000
audiobooks in 2010. The exponential growth continued in the year 2011with over 2.5 million
users and 300000 audiobooks. Audioteka cooperates with more than 300 publishers and its
services offered more than 3000 recordings, and more than 5000 were being prepared for sales.
Reason of its success came from its strength, which was IT based platform that enabled to play
recordings on any mobile and audio device produced in the world. Rapid expansion of mobile
technologies and the increasing sales of smart phones triggered additional sales of audio books.
The company cooperates with many well-known global corporations including Amazon, Apple,
Android, Blackberry, Deutsche Telecom, HTC, Huaiwei, Nokia, Orange, Renault, Samsung,
Sony, or Satchi & Satchi and was in conversation with several others to start a project in joint
5

collaboration. These projects varied from the simple marketing projects to more enduring
partnerships on joint distribution and promotion. The first such project was agreed with Nokia.
To promote the launch of a new model of mobile phone, Nokia wished to have a new book by
Paolo Cohelo installed in it. The sale of the Nokia model with Cohelo audio book was much
higher compared to other comparable phones from competitive companies. Many of the
customers, who bought Nokia with the initial audio book, come back after few months to
downloaded audio book directly from Audioteka.
Investment in Audioteka
Audioteka initial funding was provided from the owner investment and a seed capital from K2
Internet SA - a local Polish interactive marketing agency. They were also engaged in Audioteka
development from the early stage by providing non-executive advises and IT support. Investment
also came from Giza Venture Capital1, the Israeli fund which decided to invest EUR 0.5 million
in Audiotekas development, taking up to 20% of its shares. This investment made the valuation
of the company at the level of 2.5 million Euros.
Defining market:
In February 2011 the National Library of Poland and TNS OBOP research group presented an
annual survey on reading trends in Poland2 which stated "As many as 20% of Poles with
academic degrees, and 27% of Polish students, did not read any text longer than three pages in
the last month, including any web content". In 2010 only 44% of responders declared any kind of
reading of a book, a guide, an album or Internet content. In comparable studies carried out in the
Czech Republic and France these numbers were 83 and 69% respectively. These facts indicated
that

the

readership

of

books

and

magazines

was

vanishing

in

recent

time.

A supportive argument could be presented by stating - advancement in technology, and

introduction of new means of entertainment presented in internet such as social media sites,
online videos and news sites etc., young people paid lesser attention in reading books. By
digitizing reading materials such as books, magazines, a newspaper in audio format Audioteka
was been able to create new market suitable for their products.
1
2

http://antyweb.pl/giza-polish-ventures-inwestuje-w-audioteka-pl-2-miliony-zlotych/ website visited on 05/20/2013

http://www.bn.org.pl/aktualnosci/230-z-czytelnictwem-nadal-zle---raport-z-badan-biblioteki-narodowej.html

http://www.bn.org.pl/aktualnosci/230-z-czytelnictwem-nadal-zle---raport-z-badan-biblioteki-narodowej.html
website visited on 05/20/2013

Core market for audio book was based on entertainment business. The Audioteka service started
with an offer of 200 audio books, which increased to more than 2000 within three years. In 2012
the company produces about 25 new audio books monthly. A post mortal biography of Steve
Jobs, a legendary Apples leader, had become an absolute blockbuster. Its sales in an audio
version exceeded the level of 1000 copies in the first month after it had been released.
For the purchase of audio books, customers were billed through the mobile phone operators in
exchange of small share of revenues. In Poland, the prices of audio-recorded books were similar
to the prices of printed, paper versions. The average price of a recording was about EUR 8. Sales
values of a single audio book varied, but rarely exceeded EUR 25.00. In 2012 the company
produced about 25 new audio books monthly. Since November 2008 until the end of 2011,
150.00 new users registered with Audioteka. In Poland audio books were usually purchased by
men in their thirties, with earnings above average, who were mobile, travelled a lot and wanted
to make use of new opportunities created by technology. They amount to 70% of all buyers.
Competitors analysis:
Audible, a global leader and pioneer in the audio-book industry was the main competitor of
Audioteka. Audible was already present in the United States, France, Germany and Great Britain
in 2011. It had been a benchmark for Audioteka that closely follows the news on new concepts.
Audible was among the first companies delivering applications (apps) for Apple. The company
was a trendsetter in the industry. In 2008, Amazon for USD 300 million bought Audible.3 The
company offered 80000 audio books and magazines at that time. At the end of 2007, the
company generated profit of approx. USD 110 million, had 457000 registered users, and more
than 450 collaborating entities publishers and content distributors.4 Audible introduces to the
market about 1000 new titles per year. In 2011 less than 3% of its profit was generated from
markets other than the American.
Internationalization in Europe
After successfully launching Audioteka in France, the company was planning to enter
Scandinavian countries and aimed to open its subsidiary by the first half of 2013. The company
had a view that these countries were potentially less lucrative market. Although, they didnt have
larger scope in terms of population, the positive aspects however were the price of audio book
3

http://www.usatoday.com/tech/techinvestor/industry/2008-01-31-amazon-audible_N.htm website visited on

05/20/2013
4
http://about.audible.com/2008/07/10/audible-announces-fourth-quarter-2007-results/ website visited on 05/20/2013

could be set about four times more expensive than Poland and most probably two times higher
than in France. Company also planned to open new subsidiary in Spain and Portugal by the end
of 2013 and approximately 8-10 European country with possible inclusion of UK. As a part of
near future plan, company aimed on going to big nations such as Russia, India and Turkey.
With the exception of Chez-republic where company created a joint venture, Audioteka had
opened its subsidiary in all the other countries where it entered and was planning to do so for the
new countries in the list. The main reason behind it was the fact that opening a subsidiary would
provide more control and helped in collaborating with many publishers. Joint venture was not
considered by the company to be a good option because, they believed that doing so would limit
the number of publisher with whom they could collaborate. Opening a subsidiary would make
them independent and make them appear neutral in the eye of competing publishers.
Internationalization of Audioteka was filled with different challenges. These challenges came in
the form of cultural difference, criticism about the technology, limitation of infrastructures, lack
of maturity in dealing with international issues etc. For example, in Scandinavian country, the
audio book for children were not popular because people thought that it was more important for
kids to have valuable personal contact rather than engaging them with audio contents. This
perception was due to difference in culture. Those people who believed that audio book was
helping to spread illiteracy among the people by discouraging them to read made criticism about
the technology. The other criticized by saying these kinds of products were more for blind and
disabled people who had problem in reading and should not be encouraged among general
people, as it would make them avoid reading habits.
Internationalization has created large stress on the company as they did not have much exposure
and experience in dealing with different these types of issues. Rapid expansion possessed lots of
risk on infrastructure side as the company had little finance and limited number of core employee
working in the company. For an entrepreneurial company like Audioteka, to be able to transform
the company into mid-sized global business required global experience, good managerial skills
and operational excellence, among its management team without which company could lose its
direction while aggressively moving forward in the path of internationalization.
Despite of all these challenges in European market, Audioteka was still very aggressive in its
approach of internationalization because it was a technology-based company and since
technology was changing rapidly, the company was always willing to take first move advantage
8

to take the leadership position in the market. It wanted to be in large market before the
competition emerges or new technology was introduced. So, Audioteka was accessing all the
possible opportunities in different market to introduce its product.
India had always been in its list. Country so big in size with stable political and economic
environment and immense market potential were its key features of attraction and Audioteka was
interested in capitalizing them. However, the challenges that the country could possess would
possibly be much bigger than what they had anticipated. So, making decision on how and when
to enter Indian market was a big strategic question for Marcin to be answered.

Part II: Introduction of India

Just like many foreign companies who were attracted by huge market potential of India,
Audioteka was also willing to enter the market to maximize its potential. The country also
proved to be strategically best for entering South Asian market because it is bordering with seven
countries5 and India plays a key influential role in economic welfare of the region. Success in
India ensured easy access to these countries. With over 1.2 billion people and the population
growth rate of 1.3% per year, India on its own could be bigger market than whole of Europe for
Audioteka. The country had 30% of urban population (2010) and the rate of urbanization was
2.4% (2010-15)6, which added more value for Audioteka because most of their successes in
Europe were based on urban population.
Stable political situation supported by strong economic growth rate and worldwide
reorganization in technological sector made the county very attractive market for Audioteka. In
terms of political ideology, India enjoyed being the biggest and very stable democratic country in
the world. As per World Banks worldwide governance indices, India ranked in the 59.2
percentile in voice and accountability7 in 2010. Economic growth of 10.3%, 6.8% and 6.5% was
one of the brightest aspects of India economy over the last three year (2010, 2011 and 2012)8.
Significance of this growth rate became even higher when compared with American and
European economy at the same period of time. Even when the world economy was facing one of
the biggest financial and economic crises of recent time, Indian economy was growing on a
steady phase mainly driven by its services sector, which accounted for more than 50% of its
output. Around 65% of the population is aged 15 to 65, so this large working age population is
expected to provide sustained momentum to economic growth in the country, which indicated
very positive signs for investment, and Audioteka was eager to take the opportunity. In terms of
social settings, India has multicultural ethnic foundation, and maintained uniformity in secular
ideas, with the freedom to follow any religion. India has a fast growing urban English-speaking
5

India has border with Afghanistan, Pakistan, China, Bhutan, Nepal, Myanmar and Bangladesh. The country is
separated from Sri Lanka by a narrow channel of sea formed by the Palk Strait and the Gulf of Mannar. Except
China, all the other countries are part of South Asian Association for Regional Cooperation (SAARC). They
represent as a South Asian Countries and have lot of similarities in terms of soci-cultural, political and economical
structure.
6
https://www.cia.gov/library/publications/the-world-factbook/geos/in.html website visited on 11/05/2013
7
Voice and accountability measures the extent to which a countrys citizens are able to participate in selecting their
government as well as freedom of expression, freedom of association, and freedom of the media. in comparison,
China and Russia scored percentile ranks of 5.2 and 20.9 in the same year.
8
https://www.cia.gov/library/publications/the-world-factbook/geos/in.html website visited on 11/05/2013

10

middle class, which made it a preferred investment destination for information technology and
outsourcing services9. India made strong progress and received global recognition in areas such
as the telecoms, IT, and IT-enabled services sectors. Government policy on technology was prodevelopment, with a significantly higher allocation for the development of the technological
knowledge base and industries. Because of these reasons, India was a host for 32.685 million
main line telephone subscriber and 89.862 million of mobile cellular phone subscriber for the
year 2011. It ranked 2 in terms of mobile phone users after China for the same year. India has
emerged as one of the world fastest growing telecom markets because of recent deregulation and
liberalization of telecommunication laws and policies. For the year 2011, tele-density was
roughly 75% and subscribership was growing more than 20 million per month. There were 13
major operators providing services among which Airtel had the maximum subscriber (December
2012) followed by, Reliance communication, Vodafone, Idea Cellular, BSNL. This information
related to telecom market provided more encouragement for Audioteka because their success in
Europe depended a lot on availability and accessibility of mobile phone users. So, having such a
well-set infrastructure could make it easier for company to establish itself in India. Creating
partnership with one of these big telecom service providers, company could gain access to
millions of subscribers who could possibly be their potential customer.
Publication industry10 and Audio book market in India:
To produce an audio book, it was also important for the company to tie up with book publication
companies because they were the one who had the ownership and copyright of books. In India,
publishing industry was growing at an impressive pace and it was one of the few places in the
world where there is still growth in both print and digital publishing and the value of it is
estimated to be $2 billion with a growth rate of around 15% for the year 2012. There are around
19,000 publishers in the country with only around 12400 having ISBNs and it is estimated that
about 90000 titles were published every year which includes books across all genres. Around
one third of young population identify themselves as book readers. 25% of books that are sold
were based in Hindi11 language and 20% of sales volume came from English language books,
9

Country analysis report India, In-depth PESTLE insights, Data monitor , publication date, October 2011
Frankfurter B, Information on publishing industry in India, GBO New Delhi, German book office
11
There were 22 major languages recognized by the constitution of India of which Hindi was the official language
spoken by 41% of the people and English enjoyed the status of subsidiary official languages. Besides these there
10

11

which made the country as the third largest market for English books consumption after US and
UK market. Market share for different types of books are classified as 40% for academic books,
30% for childrens book and 30% for trade publishing. Major book distributors in India are a)
International book house12 b) India book House13 c) India Book Distributors. Retailers for online
distributions were flipkart.come, infiBean and Amazon. The market for eBooks in India has been
miniscule because of high price associated with it. Audioteka considered this information to be
very positive for entering Indian market. Growth in publication industry provided opportunity for
the company to create a new market segment for audio book. However, pricing could be very
important factor for their success because as pointed out earlier, consumers were still not willing
to pay for expensive eBooks in India, so to make the product attractive to the Indian consumer,
Audioteka should be able to price their book in a very appropriate manner. Prices quoted for
audio book in Europe were far more than average for Indian consumer to buy it. Also India is a
developing country and books are allowed to be printed in low price edition could add more
pressure on lowering the price of audio book.
The other encouraging factor for Audioteka was the study conducted by Professor Philip M.
Parker14 on audio book market in India. The report presented latent demand15 (in million of
USD) or Potential Industry Earning (PIE) for estimated 5100 cities across the country. For each
state or union territory, estimate of how the PIE grows over time was also presented in the study.
Based on the study, latent demand for audio books in India was estimated to be $363.7 million in
2009. Maharashtra was the largest market with $49.5 million (13.6% of total market) followed
by Uttar Pradesh with $ 42.2 million (11.6%) and the Gujarat with $29.9 million (8.23%). These
top three regions covered almost 33.43% of the latent demand for audio book in India.
(Appendix 1) presents list of stats with latent demand in dollars and percentage of share in Indian

were 844 different dialects that were spoken in various parts of the country- source of information: Country analysis
report India, In-depth PESTLE insights, Data monitor , publication date, October 2011
12
They have more than 90 publishers as their clients and distribute books in all major and local book shops in major
city of India. They also have alliance with 10,000 international publishers in the UK, US and other part of world.
13
They are one of the largest distributors of books and magazines in India. it is representative for around 50 national/
international book publishers. it has its center in most of the major cities in India.
14
Philip M., The 2009-2014 outlook for Audio books in India, INSEAD Singapore and Fontainebleau, France 2008.
15
Economists commonly define the term Latent demand: as the industry earnings of a market when that market
becomes accessible and attractive to serve by competing firms. It is a measure, therefore, of potential industry
earnings (P.I.E.) or total revenues (not profit) if India is served in an efficient manner. It is typically expressed as the
total revenues potentially extracted by firms. (Source www.icongrouponline.com)

12

market). Among the cities, Mumbai (major city of Maharashtra region) was with 13 million
populations was ranked number 1 with latent demand of $ 14.45 million, followed by Delhi
(Delhi state) with 12 million population and $9.817 million latent demand. Similarly
Ahmedabad, Kolkata and Chennai followed the list with latent demand worth $6.143, $5.856,
$5.338 million (Appendix 2). Reflecting on to these figures, it was quite obvious that success in
the Indian market were very likely once the company started their operation. Even if Audioteka
were able to fulfill the latent demand for two major cities (Delhi and Mumbai) the company
would make $27.45 million.
Challenges in India
Despite being such an attractive market, India was still a developing nation very different from
most of the developed countries of Europe. Corruption and Terrorism had been two major
factors causing problems in the political system of the country. Even though the country is one of
the fastest growing economies in the world, there exists a huge gap between rich and poor people
and India is among one of the countries having highest numbers of individuals living below the
poverty line. Economic growth and investment has crippled by poor infrastructure and
widespread corruption. Indias poor performance on social indicators was reflected in its 2010
Human Development Index ranking. It was placed 119th out of 169 countries in terms of human
development. Its low rank was mainly attributed to poor healthcare and educational
infrastructure. Poor implementation of patent laws and the appreciating Indian currency (rupee)
were the key risks associated with IT-based companies.
Even though India seems to be very attractive market, not many international organizations had
been able to successfully capitalize its market potential. Because of liberalized government
policies, in recent time we have seen may international organization entering Indian market but
still they are struggling to establish themselves well. This is because of the fact that there exist
huge complexities in terms of ease of doing business in India for foreign companies. According
to World Bank and IFCs report on Ease of Doing business in India the country ranked 132nd
position out of 185 countries (Appendix 3). Despite Indian government effort in supporting FDI
the Ease of doing business ranking for the country was very poor compared to an average
ranking of countries from South Asian Region and European Union. In Table number 1, it can
be seen how different variables contributed in the overall ranking of the country and also what
were the respective ranks for the same variable in other regions.
13

Table 1:
India ranking

South Asia

European
Union

a) Starting a Business in India:

86

72

Construction 182

111

69

c) Getting Electricity

105

128

74

d) Registering Property

94

121

62

e) Getting Credit:

23

96

54

f) Protecting Investors

49

82

68

g) Paying Taxes

152

115

62

h) Trading across the boarder

127

131

36

i) Enforcing Contracts

184

136

47

j) Resolving Insolvency

116

103

36

OVERALL RANKING

132

121

40

b)

Dealing

with

173

Permits

Country ranking16 for most of the European countries is below 60 with Scandinavian country
being on the top of the list and country like Poland and Switzerland having raking of 55 and 28
respectively. Huge difference in ranking between Indian and most of the European countries
(including Poland) shows the complexity associated with establishing business in India.
Cultural dimension of India
For a business to establish itself well in any country or region, it should be able to better
understand cultural values and social settings of that place. India, with its background of 5000
years old civilization, has different social and cultural settings than most of European countries.
Culture is the collective programming of the mind distinguishing the members of one group or
category of people from other17. Values in work place were greatly influenced by culture. So, it
was very important to understand cultural dimension of society before entering into new market.
Professor Geert Hofstede, a Dutch social psychologist, conducted most comprehensive studies

16
17

Source: http://www.doingbusiness.org/rankings website visited on 13/05/2013

Source: http://geert-hofstede.com/national-culture.html visited on 13/05/2013

14

on cultural and provided five dimensions on the basis of which we could understand behavior of
individual and their value system at workplace.
What makes India so different was its culture. Understanding culture could help Audioteka to
know the difference and adapt to Indian business environment based on which they could make
decisions. Hofstede five cultural dimension traits could provide the best way to explain culture.
The score provided for each of the traits can define culture of India.
In terms of Power distance18 India has a score of 77 out of 100, which meant power was
centralized, and managers count on the obedience of their team members. Communication
flowed in top down manner. The employees expected clear direction of work from the managers.
Audioteka had a strategy of opening subsidiary as a part of internationalization strategy, so this
information could help them understand the behavior of their employee if they opened a
subsidiary in India.
In terms of Individualism19, India has a score of 48 and was a collective society with high
preference for belonging to a larger social framework in which individuals were expected to act
in accordance to the greater good of group or society. The employer/employee relationship was
one of expectations based on expectations Loyalty by the employee and almost familial
protection by the employer. Hiring and promotion decisions were often made based on
relationships, which were the key to everything in a Collectivist society.
With a score of 56 in Masculine dimension, India is considered to be a masculine
society20. India is very masculine in terms of visual display of success and power. The designer
brand label, and the glamour that went with advertising ones success, was widely
practiced. This information could help Audioteka for advertising its product and positioning
itself well in the market.
18

Power distance is defined as the extent to which the less powerful members of institutions and organizations
within a country expect and accept that power is distributed unequally. source: http://geert-hofstede.com/india.html
visited on 13/05/2013.
19
Higher value in this dimension means people were more individualist, associating themselves more in terms of
their personal need and benefits where as lower value indicates collectivists who are more willing to do things that
are based on group values.
20
A high score (masculine) on this dimension indicates that the society will be driven by competition, achievement
and success, with success being defined by the winner / best in field a value system that starts in school and
continues throughout organizational behavior. In more Masculine countries the focus is on success and
achievements, validated by material gains. A feminine society is one where quality of life is the sign of success and
standing out from the crowd is not admirable. The fundamental issue here is what motivates people, wanting to be
the best (masculine) or liking what you do (feminine). For more information also see http://geerthofstede.com/india.html (visited on 13/05/2013)

15

India scores 40 in Uncertainty avoidance21 dimension and has a medium low preference for
avoiding uncertainty. Acceptance for uncertainty among the people neither made them believe
that nothing had to be perfect nor had to go exactly as planned. Tolerance for the unexpected was
high even welcomed as a break from repetitiveness. A word used often was adjust and means a
wide range of things, from turning a blind eye to rules being disregarded to finding a unique
solution to a seemingly impossible problem.
In terms of Long-term orientation22 India score is 61, making it a long term, pragmatic culture. In
India the concept of karma23 dominates religious and philosophical thought. Time is not linear,
and thus not as important as to western societies, which typically score low on this
dimension. India has a great tolerance for religious beliefs. Societies that have a high score on
Long Term Orientation, typically forgive lack of punctuality, a changing game plan based on
changing reality and a general comfort with discovering the fated path.
Comparing India and Poland in terms of these dimensions could help in understanding difference
between culture and value system of people living in both the countries. As presented in
(Appendix 4), the figure showed that both the country had huge difference in terms of cultural
traits. Power distance is higher in India than Poland, India is collectivist society where as Poland
is more individualist, both the countries are masculine but Poland is more masculine than India,
Poland is highly uncertainty avoidance where as India is more acceptable to uncertainty and
India is long term oriented where as Poland is short term oriented. Such information could play
important role in understanding differences in culture between two countries and help Audioteka
to understand the behavior of Indian consumer. It could also help in determining international
strategies for Audioteka while entering Indian market.

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The dimension Uncertainty Avoidance has to do with the way that a society deals with the fact that the future can
never be known: should we try to control the future or just let it happen? This ambiguity brings with it anxiety and
different cultures have learnt to deal with this anxiety in different ways. For more information also see http://geerthofstede.com/india.html (visited on 13/05/2013)
22
The long term orientation dimension is closely related to the teachings of Confucius and can be interpreted as
dealing with societys search for virtue, the extent to which a society shows a pragmatic future-oriented perspective
rather than a conventional historical short-term point of view. For more information also see http://geerthofstede.com/india.html (visited on 13/05/2013)
23
According to online Oxford dictionary http://oxforddictionaries.com/definition/english/karma karma is defined as
The sum of a persons actions in this and previous states of existence, viewed as deciding their fate in future
existences.

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Part III: Closing Paragraph

Success in European market had given Marcin lot of confident and he believes he could repeat
his success story in India. Favorable economic growth supported by liberalized government
policies and well set democratic norms, higher percentage of young people who are very
supportive of technological products, higher urbanization rate with increasing trend of accepting
western culture, growth in publication industry, high latent demand for audio book in urban cities
are few of many factors that made the country very attractive market for Audioteka. Without
much effort, Audioteka could directly apply its current business model of internationalization to
enter Indian market and hope for its success. However, doing so it would ignore different risk
factors those could possibly hinder in the path of success. These risk factors could be different
cultural factors that have very high influence in the market place or it could be associated with
various components essential to establish a business in the country.
Many small cultural factors could play big influential role in success of Audioteka in India.
Answers to questions like, which type of audio book should be launched in India? When would
be the right timing for launching it? Who could possibly be the target customer? How much are
they willing to pay for the product? could come from socio-cultural factors. For example, since
more than 80% of people living in the country are Hindu, and they have strong faith in the
religion, audio book related with religious book could possibly be very attractive product.
Launching audio book at that period of festival seasons could be best timing because being a
collective society people like to give gifts to their friends and family. Average middle class
Indian consumer is very price sensitive and the purchase decision made by them is highly
influenced by the price of product. Audioteka should be very clear in its approach on whether to
target urban population or rural population in India. Both sets of population have different
demand for audio book. As in Europe, urban population of India could be served with audio
books related with entertainment (best sellers books of India) where as the rural population
would be better served by audio books related to education and religion.
For Marcin, India in one hand is the country filled with opportunities and huge market potential
and on the other hand it is a mysterious land with very different business environment; one that
he had never experienced in Europe. He wondered with excitement and a bit of nervousness
about how his business journey to India would be like.

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PART IV: Assignment questions:

Will Audioteka be able to achieve success in India? What according to you could be the
key success factor or reason for failure of the company? Based on SWOT analysis of the
company present your point of view?

What according to you should be the internationalization strategy for technology-based

company like Audioteka, reflect your answer based on mode of entry and ease of doing
business?

What could possibly be the most challenging factor for Audioteka while entering Indian
market a) Business environment (business laws, complexity related with business
operation, lack of proper infrastructure etc.) or b) Cultural environment (difference in
language, work ethics, belief system, social values etc.)?

Do you think Audioteka has the potential of accomplishing its objective and becoming a
Global company? What is your prediction about its future and what suggestions would
you like to give to Marcin for becoming successful worldwide?

18

Bibliography and References:

Mhlbacher, H., Leihs, H. & Dahringer, L. (2006). International marketing: a global perspective
(3rd edition) Thomson learning.
Johnson G., Scholes K., Whittington R (2005), Exploring Corporate strategy (8th edition), FT
Prentice Hall.
Data monitor, Country analysis report India, In-depth PESTLE insights, publication date,
October 2011
Frankfurter B, Information on publishing industry in India, GBO New Delhi, German book
office
Philip M., The 2009-2014 outlook for Audio books in India, INSEAD Singapore and
Fontainebleau, France 2008.
http://www.doingbusiness.org/data/exploreeconomies/india/
http://geert-hofstede.com/national-culture.html

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Appendix 1:

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Appendix 2:

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Appendix 3:

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Appendix 4:

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