GLOBALIZATION• Globalization is the process which enables the geographical, social, cultural, political and economic movement internationally more easily.• Globalization refers to growing economic interdependence among countries as reflected in increasing cross-border flows of three types of commodities: goods and services, capital, and know how
ENTRY STRATEGY FORGLOBALIZATION OF COMPANIES• Exporting ( Direct or Indirect)• Licensing• Franchising• Contract manufacturing/ International subcontracting• Strategic Alliance• Joint ventures• Wholly owned subsidiary• Mergers & Acquisition
Globalization of Markets:It refers to the merging of national markets into one huge globalmarketplace.Globalization of Production:It refers to the sourcing of goods and services from locations aroundthe world to take advantage of national differences in the cost andquality of factors of production.Falling Barriers to Trade andInvestment:The falling of barriers to international trade enables firms to viewthe world as their market.Technological Innovation:Technological changes have achieved advances in communication,information processing, and transportation technology, including theInternet and the World Wide Web .
FACTORS DETERMINING INBUILDING GLOBAL COMPANIES• POLITICAL FACTORS Stability of the government Type of government - Democratic - Theocracy (religious) - monarchy ( kingdom) Control structure Canada, USA ( decentralized province) Japan, France( centralized)
POLITICAL FACTORS Government take over of asset(with or without permission) Operational restriction Remittance/ Repatriation restrictions Government policies Opposition parties, pressure groups, external linkages
Economic factors Economic system ( open / mixed) Economic development Standard of living( per capita income) Sectorial share in GDP Foreign Exchange reserves Economic indicators( inflation rate, BOP)
Technological factors Differentiation strategy Competitive advantage Legal factors Home country laws Host country laws International lawsUN resolutions, Patents & Trademark protection & piracy laws, GATT, codes of conduct
ITCSUBSIDIARIES JOINT VENTURES• ITC Infotech• Surya Nepal Private Limited • Maharaja Heritage• Landbase Resorts Ltd.• King Maker Marketing Inc., USA • ITC Filtrona• Technico Pty Limited. Australia• Russell Credit Limited ASSOCIATE COMPANIES• Wimco Limited • Gujarat Hotels Limited• Srinivasa Resorts Limited • International Travel• Fortune Park Hotels Limited House• Bay Islands Hotels Limited• Gold Flake Corporation Limited
ITC INFOTECH• The company services industries including, Banking Financial Services & Insurance (BFSI), Consumer Packaged Goods (CPG), Retail, Manufacturing, Engineering Services, Media & Entertainment, Travel, Hospitality, Life Sciences and Transportation & Logistics.• Ranked amongst Top 10 Specialty Application Development Providers - Global Services, CMP Media
ITC CIGARETTESMarket ValueThe Indian tobacco market grew by 8.9% in 2012 to reacha value of $11.6 billion.Market Value ForecastIn 2013, the Indian tobacco market is forecast to have avalue of $14.9 billion, an increase of 29.4% since 2008.
MAHINDRAMAHINDRA AND MAHINDRA FORGINGSMAHINDRA• Their global presence • They are one of the largest and most means that you can find technologically advanced Mahindra vehicles on the manufacturers of forged roads—both paved and and machined components in the world. unpaved—of Australia, They create parts like Europe, Latin America, links, knuckles, spindles, Malaysia, and South shafts, crankshafts, camshafts, pistons, ball Africa. And they are joints, and stub axles that seeking out new terrain are used in automotive, every day agriculture, railway, mining, construction and other industries throughout the world.
MAHINDRAMAHINDRA SATYAM TECH MAHINDRA • Since commencing operations in 1986 as a joint• Sathyam is a global player in venture between Mahindra and the global Information, British Telecom (BT), they have Communication, and Technology (ICT) space. They become one of India’s largest provide enterprise business software exporters and ranked solutions, infrastructure No.1 in the Telecom Software services, industry native Category (Voice & Data 2010-11). solutions, integrated For over two decades, they have engineering solutions, been the chosen transformation consulting services, partner for wireline, wireless and application development and broadband operators in Europe, management services, and Asia-Pacific and North America. business process outsourcing to more than 350 clients in We operate in more than 30 35 countries. countries through 17 sales offices and 13 delivery centers, working with major players like British Telecom, Vodafone, among others
INFOSYS• Infosys is a global leader in consulting, technology and outsourcing with revenues of US$ 7.231 billion• Infosys provides business consulting, technology, engineering and outsourcing services to help clients in over 30 countries build tomorrow’s enterprise.• Infosys and its subsidiaries have 155,629 employees as on Dec 31, 2012.
INFOSYS• Infosys takes pride in building strategic long-term client relationships. 97.5% of our revenues come from existing customers• Infosys has a global footprint with 67 offices and 69 development centers in US, India, China, Australia, Japan, Middle East, UK, Germany, France, Switzerland, Netherlands, Poland, Canada and many other countries.
DABUR• Dabur has a special herbal health care and personal care range successfully selling in markets ranging from the Middle East, Far East, North Africa and Europe• Inroads into several European and American markets that have good potential due to resurgence of the back-to-nature movement• Export of Active Pharmaceutical Ingredients (APIs), manufactured under strict international quality benchmarks, to Europe, Latin America, Africa, and other Asian countries• Export of food and textile grade natural gums, extracted from traditional plant sources• Six modern manufacturing facilities spread across South Asia, Middle East and Africa to optimize production by utilizing local resources and the most modern technology available
TATA• Corus Group (U.K.) Tata Steel, one of the leading steel producers in India, acquired Corus Group for U.S. $12.11 billion (€ 8.5 billion) on January 31, 2007 This acquisition is considered to be one of the biggest foreign acquisitions by an Indian company, and after this only TATA Steel came out to be the fifth largest steel producer in the whole world.
TATA• Jaguar Cars and Land Rover (U.K.) Tata Motors has acquired both Jaguar and Land Rover, which are two iconic British brands with worldwide growth prospects This deal was for a whooping U.S. $ 2.3 billion with Ford, the previous American owners. The deal was effective from May 2008. The deal is seen as yet another endeavor of the fast growing Indian industries, also the latest in a string of foreign acquisitions by Tata.
Bharti Airtel• Zain Africa Bharti Airtel had acquired Zain Africa for a value of U.S. $10.7 billion. The acquisition gives Bharti Airtel a total customer base of 180 million, including 131 million subscribers it had in India at the end of April By expanding its business outside the country, Bharti Airtel can in the long term benefit from economies of scale, including getting better deals from suppliers
Aditya Birla• Novelis (U.S.)• Has acquired the entire stake in the Atlanta based aluminium company Novelis for U.S. $6 billion• This company had separated from Alcan, a global aluminium company
ONGC• Imperial Energy (U.K.)• Oil and Natural Gas Corp (ONGC) has acquired Imperial Energy. This deal was for 1.3 billion pounds (U.S. $1.9 billion).• The company owed the acquisition to government support, which in the past seven years increase its number of projects to 39 in 17 countries, from just a single project in Vietnam
Essar Steel Global• Algoma Steel (Canada)Ruias owned Essar Steel Global acquires theCanadian steel company Algoma Steel at a valuation ofCanadian $1.85 billion.Essar Steel Holding, Essar Groups overseas investmentarm made the investment possible and easy. Algomawould definitely provide Essar an excellent platform forthe Canadian and North American market
Reliance• Marcellus ShaleReliance, led by Indian billionaire Mukesh Ambani, got theright to buy 40 percent of all new Marcellus Shale leasesthat Atlas acquires, after this purchase acquisition andagreement was completed.
Acquisition summaryCompany Acquisition Price ($m)Reliance Industries Flag Telecom, Bermuda 212 Trevira, Germany 95Tata Motors Daewoo, Korea 118Infosys Technologies Expert Information 3.1 Services, AustraliaWockhardt CP Pharmaceuticals, UK 18Cadila Health Alpharma SAS, France 5.7Hindalco Straits Ply, Australia 56.4Wipro NerveWire Inc, US 18.5Aditya Birla Dashiqiao Chem, China 8.5United Phosphorus Oryzalin Herbicide, US 21.3Bharat Forge Carl Dan Peddinghaus Gmbh, Germany 28Ranbaxy RPG Aventis, France 80