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\gc006.doc

  1. 1. Proposed tile: - Internationalization of Indian Business Names: - Anil Kumar Tripathi MBA (IT) Yousuf Khan MBA (IT) Address: - SICSR, MODEL COLONY, ATUR CENTER, PUNE (MH) Contact no.:- 9860642173, 9960684743 E-mail ids: - anil_symbi82@yahoo.co.in, Yk_symbi@yahoo.co.in
  2. 2. Internationalization of Indian Business India is on the rise; our economy is among the fastest growing in the world, with foreign money pouring into the Indian stock market. India is now aid provider, not a recipient. Hindi film industry in charming the world and Indian novelists are capturing space in every book store. Now it is the right time for India to internationalize its business. The Indian business and businessmen are not remained confine to the country but they are looking for new opportunities in international market. They are forming many joint ventures, acquisitions, mergers. The recent example is set TATA Steel. The Tatas on 31-01-07 pipped Brazil's CSN to acquire Anglo-Dutch steelmaker Corus Group Plc at slightly more than $11 billion. This example not only boosts the confidence of other Indian players but also help in branding the Indian business in world market. Indian has the potential to produce global champions but Internationalization is never easy for new companies, The global business community should respect their corporate governance standards, management practices, organizational culture and company values. Why go global? 1. Mutual need of both developed and developing countries. 2. There is money in overseas market hence increase profit and market share. 3. To get their technology (I.T, Pharma, B.T) and managerial skills. 4. Some industries have to spend heavily on R&D; these industries need to globalize to recover their investments on R&D. 5. Emergence of service sector due to new technology/products. 6. Consumer demands and consumer focus. 7. Extending product life cycle in other countries. 8. Protect old market and seek new market. 9. Rapid shrinking of time/distance 10.Asia ,Africa, Latin America; Emerging markets(“BRIC”).
  3. 3. Key Factors for building a global champion. 1. Global Ambition: - Samnsung’s chairman Lee decided in the mid of 1990s that Samngsung had to become a world leader and out-compete Sony. Laxmi Miital set out to build the world’s largest steel company. Indian corporate leaders have to be equally bold and aggressive to reach the top league. 2. Developing a winning formula that generates sustainable competitive advantage:- Cemex (The Mexican cement company) has been able to acquire companies around the world and improve their operating margins dramatically. Dell has expended rapidly around the world because of its direct delivery modal. Once investors gain confidence that the company can run operations more profitably then its competitors, they provide capital and the acquisition currency to pursue rapid global expansion. 3. Global leadership capacity:- Initially , it may be possible to manage foreign operation with Expatriates sent out from India. However local executives will eventually be required to enable the company to continue to grow in these new markets. To truly build customer loyalty, companies have to be seen as market insider within array of products and services that fit local market conditions. Hyundai motors is hiring US executives and investing over a billion dollars in factories and design studios in the US. Hence, an Indian company looking to have 50-100 trusted US executives in the next few years, needs to be hire them now. 4. Acquisitions and Integration:- Indian companies aspiring to become global champions have to be prepared to make several global acquisition and integrate them effectively . Most global players have reached the top because they were ready and willing to acquire other companies. Doing such acquisition requires cash for sure , but it also requires confidence and self assurance. These days, even the boldest move appear possible. How else do you explain LENOVA(a $ 3 billion Chinese company) acquiring IBM’s $10 billion PC business for $1.75 billion in cash, stock and assumed liabilities?
  4. 4. Companies in India V/S Indian companies In the new globalize world of business, ownership is in extinct issue. “Today the definition of Indian industry can not be Indian own companies. GE may no be an Indian owned company but it is very much part of India and has a growing presence.” Says representative of confederation of Indian industry. The debate is now about Indian companies V/S MNCs but efficient V/S inefficient Competitive V/S uncompetitive players. In this battle efficient and professionally managed companies like INFOSYS, ASIAN PAINTS and RANBAXY will score over any efficient and uncompetitive players. Hence we should not waste our time in deciding about ownership rather we should get rid of ideological baggage and acquire an attitude that is more in tune with new millennium. Lurking Threat It is a simple philosophy of ‘if you can’t beat them join them’. Having enjoyed undisputed hegemony in the protected domestic market earlier. The Indian businessmen are now feeling threatened by the way the markets are sleeping away to the MNCs. JVs with the competitors thus appears to be the easiest solution. Indian companies can’t hope to match the financial muscle, technological know how and management culture of MNCs. While for the MNCs the only incentives in the JVs are some real estate, government contacts and distribution networks provided by the Indian partners. For the Indian companies JVs are more compulsion then a choice. Technology is easily the strongest incentive for the Indian companies the lurking threat that Indian brands will not survive against the superior brand power and patents of the MNCs also make them ally with the competitors. The KWALITY HLL and LAKME lever tie-ups or PARLE’S sellout to COKE. GLAXO’S family products to HJ HEINZ and TOMCO to HLL only proves that Indian firms lack confidence in the ability of their local managements to hold on to the market share of their brands.
  5. 5. Conclusion:- We can’t be a great country if we don’t have great companies that straddle the world. The US has EXXONMOBIL, DELL, GE, MICROSOFT etc. France has FRANCE TELECOM, L’OREAL, CARREFOUR etc. India needs to go beyond labor arbitrage and entrench itself among global customers as a provider of top-of- the-line, highly skilled, high quality, specialized and domain specific outsourcing services, unparalleled by other competing nations. likewise WIPRO, INFOSYS, TATA, BIRLA……………………………..

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