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ESTABLISHING MNC
OPERATIONS IN INDIA
PUSHPENDRA SINGH
JULY 2013
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
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
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
Launching a Rocket
• Like first stage of
rocket.
• Uses maximum energy
and resources.
• High Inertia. Slow and
imperceptible
movements.
• Period of frustration
and disappointment.
Marooned and Shipwrecked
• No Home
• No Office
• No Legal permissions
• No Staff.
• Poor Communications.
• No Bank Account &
Money.
Genesis
• Three Options
• Laision
• Branch
• Full Subsidiary
• Consultants
• Lawyers
• CA Firms
• Working for a Third
Party
Sea of Tranquility
• Ease of travel.
• Availability & Cost of
manpower / power /
communications./
infrastructure
• Closeness to ports /
markets / vendors / banks
/ institutions / government.
• Human Factors
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.
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.
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
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
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.
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.
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.
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
Cultural Differences
• Language Issues
• Yes = Yes, Maybe, No
• Communication Issues
• Cultural Issues
• Concept of time
• Speed of
implementation
• Deadlines
• Rules
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.
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.
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.
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.

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Establishing MNC Operations in India

  • 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.
  • 21.
  • 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.