1.

0 Introduction

The ordinary idea of exchanging the business sectors has now changed quickly with developing
period of contest, globalization of organizations and the worldwide exchange systems. The
homegrown business sectors of assembling of merchandise and additionally benefits are perused
to be made an interpretation of from into fulfilling the worldwide needs of individuals residing in
rest of the nations. Subsequently, the change of the homegrown business sectors into the
worldwide business sectors achieved various difficulties on the approach to doing the business,
creation, and quality worries, homegrown and global strategies and the global market rivalry.

Regarding context, Digital Moneybox Limited is a private limited company with headquarter
situated in London, United Kingdom. This organization offers consumer a flexible save assets
and speculation application that offers scope of investment funds and venture products including
Lifetime Individual Venture accounts (ISAs), and Benefits (Crunchbase, 2022). They help UK
consumers with creating financial momentum with assurance. Today, they offers an extent of
staggering worth product and services across save reserves, compelling monetary preparation,
home credits, and advantages, to help people manage and achieve their short, mid, and longer-
term financial targets commonly inside one easy to-use and interfacing with application
(Bloomberg, 2022). The business was incorporated in 2019.

Chart 1: Digital Moneybox Limited Annual Report: Uk-Globaldatabase, 2021)

Digital Moneybox Limited has a labor force of 110 - 224 workers. As per diagram 1, the 2021
yearly turnover of the business is £5 million, Net Benefit of £4 million while the cash is £25
million (UK-Globaldatabase, 2021). Contrasted and the earlier year, the organization detailed a
turnover increment of 50.34% (UK-Globaldatabase, 2021). Presently, the administration of the
organization is attempting to extend its administrations to India.
 Chart 2: Digital Moneybox Limited Key Financial Report: Companycheck, 2021)

2.0 Country Analysis

PESL Analysis

As part of the PESL (Political, Economic, Social, and Legal) Analysis of India, we will consider
the most important aspects of the external environment that might affect Digital Moneybox.

Political

Foreign Direct Investment (FDI)

Based on the country's size and level of development, foreign direct investment for 2022 will
double the amount of foreign direct investment recorded in 2021 (IIFL Group, 2022). The
attraction of foreign investment comes from a liberal and transparent policy, which allows
foreign direct investment to flow into most economic sectors automatically. This will help
Digital Moneybox establish a presence in the country.

This element presents an opportunity for the company.

Economic

Growth Domestic Product (GDP)

This element presents an opportunity to Digital Moneybox.

Chart 3: India’s Economy GDP growth (Source: Statista, 2022)

Growth National Income (GNI)

It is estimated that India's GNI was $2,170 in 2021, a 13.6% increase over 2020. As a result of
India's remarkable economic growth in the last decade, a moderate number of international
businesses are operating in India since its GDP is slightly higher than its GNI (Bondareko,
2022), which accommodates Moneybox as well.

This element presents an opportunity to Moneybox.

Purchasing power parity (PPP)

In 2021, the Indian purchasing power parity increased to 23.1 LCU per international dollar from
10.3 LCU per international dollar in 2002 (Knoema, 2022). The increasing PPP puts
international businesses at an advantage, as it increases at an average annual rate of 3.93%.

This element presents an opportunity to Moneybox.

Inflation

Patnaik et. al. (2011) suggest that inflation is crucial to determining one's purchasing power.
According to the CPI and WPI indicators, the Indian market remained largely unaffected by the
ongoing conflict. There are good measures in place to ease inflation in cutting excise duties on
food, petrol, and diesel. However, a higher rate will lead to lower disposable income, which may
negatively impact Moneybox and user confidence.

As a result, Moneybox has to deal with this element.

Social

Education

Based on the 2011 census, India's literacy rate increased from 12% in 2001 to 74.04% in 2011.
In addition to this notable shift, (OxfamIndia, 2015) also reports that 95% of the youth
population is a basic education recipient. Having a high education rate in basic education will
make India's labour force highly productive. Investors, including Moneybox, prefer to invest in a
skilled and educated labour force.
This element presents an opportunity for the company.

Demographics

India has more than 1.39 billion people at the moment, a number twenty times greater than the
UK's population (United Nation, 2021). Among these, 672 million are working age (15 to 59).
Moneybox benefits from this young population because it will help expand the consumer base.

This element presents an opportunity for the company.

Chart 5: India’s demographic representation (Source: unfpa.org)

Legal

Health/Safety law

The Occupational Safety and Health Act of 2009 in India regulates workplace health, safety, and
welfare for employees. Moneybox must be committed to the health and safety of all of its
workers.

This element presents an opportunity for the company.

3.0 Justification for Internationalisation

Business direction can be characterized as globalization in light of the belief that the world is
becoming more homogenous and that differentiations between public business sectors will
eventually disappear, Czinkota and Ronkainen (2002). Having started Moneybox in the UK, it
has accumulated more than 650,000 customers and holds more than £1.5 billion in client
accounts. Through venture and retirement items showcased successfully in all UK locales, the
company made contracts and coordinating assets accessible for consumers, making £7.1m in
crowdfunding for consumers. Although fast walks have taken place, the lack of monetary
extending remains a challenge, particularly when it comes to private company support programs.
With a great deal of internet smart phone usage among the young Indian populace, Digital
Moneybox will benefit reciprocally.

The India market, where Digital Moneybox is expanding, will be evaluated using Porter's
Diamond Model.

4.0 Porter’s Diamond Model

This model explains why some industries perform better in some countries than others based on
the industry and country they operate in (Investopedia, 2022).

Figure 1: Porter’s Diamond Model

(Source: Consuunt, 2022)

Demand Condition

Interest conditions refer to the advantages that certain countries and groups have due to specific
factors. The web and IT have completely changed how organizations are done with the client
insight towards organizations also transforming (Vipin, 2020). Digital financial organizations are
definitely standing out in India as business people are eager to keep their businesses. Due to
increasing expectations from clients and a growing number of small and medium sized
businesses in India, the financial industry plays a very important role in this market.

Factors Conditions

Digital banking in India is estimated to be worth approximately US$776.7 million in 2021 and to
reach US$1.4 billion by 2028, corresponding to a significant 9.8% growth rate (Pranav, 2022).
Online financial services in India are also growing due to the advancement in technology and
research as well as foreign direct investment. Several factors have contributed to the growth of
this industry, including the appetite of Indian small to medium-sized businesses (SMEs) for
digital banking, the penetration of smartphones with internet connections, the age of the Indian
population - 68% of the Indian population is young, and initiatives to promote financial inclusion
(InvestIndia, 2022).

Firm Strategy, Structure, and Rivalry

A country's competitive landscape is driven by firm strategy, structure, and rivalry. There are
approximately 7460 high-growth companies and 23 unicorns providing online financial services
in India (Business Standard, 2022). Existing digital banks will likely compete with Digital
Moneybox by extending their reach to serve the unbanked and underbanked, particularly in semi-
urban and rural areas. (MstarProject, 2018) In the online financial services industry in India,
Coverfox, Groww, Paytm, PhonePe, MobiKwik, PayU, and FreeCharge are the key players.
However, focusing on entrepreneurs in rural and semi-urban areas will be an interesting way to
distinguish itself from the existing digital banks via good branding and technology.

Related and Supporting Industry

With companies supporting and related to the industry in India, companies are encouraged to
innovate and expand through internationalization and excel. As the new generation of customers
demand more efficient and user-friendly solutions, innovation in the financial services industry is
crucial. The new generation of customers is well aware of their needs and prefers a solution that
is both intuitive and user-friendly. The development of technology architecture has been
supported by research industries such as HDFC Bank, YES BANK, and others in India, resulting
in the advancement of business operations and digitization across the value chain that has
enhanced India's competitive advantage in digital banking.

5.0 Mode of Entry

Going to a new target market, companies needs to choose the right and most suitable entry mode
in order to be successful. Choosing insufficient or wrong entry mode will have a greater impact
to the company which can lead to financial loses.

Merger and Acquisition

The acquisition strategy is the fastest and largest method of expanding internationally among the
alternatives. Due to its advantage of quick access, mergers and acquisitions have become a
popular method of entering overseas markets. As a result of acquisitions, market share is often
influenced by market power, so they have increased because it is a way to gain greater market
power in less time. Due to the fact that acquisitions are more easily and more accurately
estimated, they are less risky than new investments. When one acquires a competitor, supplier,
distributor or business in an industry, the results can be more easily and more accurately
estimated.
Franchise

Kotler and Armstrong (2012) define franchising as an arrangement, a corporation gives foreign
business the right to use its name and market its goods or services. The selling of franchises is
one more typical technique for global expansion. A franchise model is a coherent course for
global expansion for organizations working locally. The following associations have been
successful in expanding into foreign markets by utilizing diversification: Pepsi, Coca-Cola, Pizza
Cabin, and McDonald's. It is common for associations to utilize franchising as a cross-border
market passage technique, but associations seeking this mode should take into account both its
positives and negatives.

Joint Venture

An organization might pick a joint venture as their foreign market entry mode for various
reasons, for instance: to isolate the risk with other parties, to use of one another's assets and so
on. To succeed, joint ventures must/should have common objectives, including determining the
market where they plan to enter, deciding on the level of risk and reward they expect to
experience in the market entered, sharing technology, developing joint products, and complying
with local laws (Kotler & Armstrong, 2012).

6.0 Recommendation

Taking M&A, Digital Moneybox Limited may experience cultural conflicts within the company
due to the difference in organizational culture. Since India has a corrupt system and many
obsolete Fintechs, choosing licensing for the company is a significant risk. Despite the
incompetence of their licensing, Digital Moneybox would not want to tarnish its brand image
and reputation in the India market. It is also possible for franchisees to use the learned skills to
compete with Digital Moneybox in the future.

For Digital Moneybox, a joint venture would be an appropriate entry mode to the Indian market
based on the aforementioned entry modes. This is because it reduces the PESL analysis's
economic risk. In addition to sharing risk/rewards, Digital Moneybox and its partners can also
create joint products, comply with government regulations, and establish political connections.
With this mode of entry, Digital Moneybox can reach success in the Indian market, since the five
forces model shows there are several related companies.

References

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Bondarenko, P. (2022) Economics & Economic Systems. Available from:

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Pranav Karnard (2022). The Future of Digital Banking in India. Available from:
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