In this presentation to Executive MBA students of Symbiosis the experience in starting up different MNCs in India was shared. These were of German Origin and in Electrical Industry. The locations were Bangalore, Chennai and Pune in India. The two are manufacturing operations and third one was trading.

1. ESTABLISHING MNC
OPERATIONS IN INDIA
PUSHPENDRA SINGH
JULY 2013

2. Most Important Decision
• Joint Venture – mutual benefit
• Fast and easy entry.
• Less Investment and risk
• Managing long term relationship issues
• Acquisition
• Fast and easy access.
• Initially costly but gives huge advantage.
• Finding right target not easy.
• Alone
• Most difficult route.
• Freedom to plan, invest and take risks.
• Long term most beneficial

3. Most Critical Factor
• Selection of Key
Person or Team
• Indian or Expat.
• Single Person or Team
• Experience of setting
up new organisations.
• Team Builder and
Leader.
• Judgment in selection

4. Excitement of Adventure
• Opportunity to be the
first employee.
• Tremendous sense of
freedom and
independence
• Create an ideal
organisation according
to your own ideas.
• Build a great team
• Sense of achievement in
building a successful
enterprise

5. Launching a Rocket
• Like first stage of
rocket.
• Uses maximum energy
and resources.
• High Inertia. Slow and
imperceptible
movements.
• Period of frustration
and disappointment.

6. Marooned and Shipwrecked
• No Home
• No Office
• No Legal permissions
• No Staff.
• Poor Communications.
• No Bank Account &
Money.

7. Genesis
• Three Options
• Laision
• Branch
• Full Subsidiary
• Consultants
• Lawyers
• CA Firms
• Working for a Third
Party

8. Sea of Tranquility
• Ease of travel.
• Availability & Cost of
manpower / power /
communications./
infrastructure
• Closeness to ports /
markets / vendors / banks
/ institutions / government.
• Human Factors

9. Manufacturing Site Selection
• Time to be Operational
• Lease or Buy.
Government or Pvt.
• Taxes & Subsidy
• Climate – Labour /
• Political / Business.
• Employee Retention
• Natural Calamities.
• Future Expansion.

10. Vallam Kali
• Diversity of Sources
• Single level or multilevel
process
• Same field or different
• Create a New Team
• Avoid Ex-colleagues,
friends, relatives.
• Extensive Training
• Work with the team.
• Be available and open.

11. Model T: 1908-27
• Most markets are served with
some product.
• Partially (Dis) satisfied.
• Special or targeted or focus
products.
• Identify the segments and focus
on them.
• Customers expect latest
technology
• Listen to your customer and
understand the message.
• Outside the Parent Markets
• Customise the products
• Innovate for India

12. Finance
• Asset Light/ Mobility
• Low Equity & High Debt
• Domestic/Foreign
Source
• MNC Banks – reach /
links to govt. payments.
• SVB and TP issues.
• Deduction of TDS
• PROFITABILITY VS
GROWTH

13. Dead Inventory
• Forecasts going
wrong.
• Sales Managers Euphoria
• Eagerness to serve
• Past / Other Experience
• Lack of knowledge
• Re-export issues.
• Documentation
• Losses
• FTWZ – free trade
warehousing zones.

14. The Trap
• Easy credit leads to
• Overspending
• Excess Inventory
• Bad Debts
• Credit is applied for
and needs to be
checked.
• Most companies are
reluctant to share
information.

15. It Only Goes Down
• Once you sell / even
offer at a price it is
almost impossible to
increase.
• Indian customers expect
European Quality at
Indian prices.
• Innovate to match -
small changes in
features but bigger
reduction in prices.

16. Making it profitable
Breaking Even
• Monitor and Control Non-
Productive Expenses
• Develop local suppliers.
• Manpower Productivity.
• Asset turnover
• Revaluate Business
Model
• Improve Sales Margin
• Increase Turnover

17. Cultural Differences
• Language Issues
• Yes = Yes, Maybe, No
• Communication Issues
• Cultural Issues
• Concept of time
• Speed of
implementation
• Deadlines
• Rules

18. Compliance Issues
• Govt. – it is not as much
as we think and not
everybody. Put your
house in order.
• Private – is not clean as
we expect.
• Internal – set example,
watch out for the signs,
discourage immediately.
• You are responsible. You
will face action.

19. Guide
Key Co-ordinator Abroad
• Guides local team to
• Whom to interact with
counterparts abroad.
• Understand procedures./ rules
of MNC.
• Represents and explains
abroad
• Indian Situation
• Matches Expectations
• Bridge Communication Gap
• Understands India
• Mature.
• Comfortable with India.

20. Time to Say Goodbye
• Spent several years of
your life in building the
organisation.
• It is more than just
time. It more than
physical effort. It is
more than intellectual
effort.
• It is your whole being.
• It affects you and your
whole team.

22. THANK YOU
IT WAS GREAT PLEASURE TO INTERACT WITH FRIENDS
WHO HAVE DESIRE TO LEARN & IMPROVE AND ARE
COMMITING EXTRA TIME, MONEY AND EFFORT
SNATCHED AWAY FROM ALTERNATIVE PERSONAL USE.