INDIAN CORPORATE CHALLENGE PENETRATING WORLD MARKETS
An international study has revealed that some of the most-feared challengers to global corporate fiefdoms are growing in India. The study revealed that there are about 21 companies from India challenging the global conglomerates. The reason being each one had a unique vision and strategy for capturing new markets. Some of them such as M&M and Tata Motors anchored themselves on home turf and reached out to new shores.
A dozen rapidly developing economies (RDE) including India, China, Russia, Brazil, Hungary and Turkey are home to about 100 companies that are tearing down old business bastions reports the study by Boston Consultancy Group (BCG) and the Confederation of Indian Industry. It has hinted that out of the 100 there are 21Indian and 44 Chinese firms are leading the challenge to the Global entities. BCG chairman says that the most feared attackers are from India.
The RDE-100 grew at a rate of 24% per year from 2000 to 2004. Collectively, they grew 10 times quicker than the US GDP, 24 times than Japanâ€™s and 34 times than Germanyâ€™s. The Indian 21 grew at a faster rate of 30%. They also earned the operating revenue of $15 billion, a margin of 25% of sales compared to the RDE-100 average of 20%. An interesting fact found is that of the 44 Chinese companies, only one was privately owned. But all except ONGC in the Indian 21 companies were privately owned.
M&M with seven manufacturing bases across India and a local sales of over 1.2 lac utility vehicles and about 70,000 tractors a year with a gross revenues of $1.9 billion. M&M entered China and the US, the worldâ€™s largest tractor markets. Today it is the fourth-largest tractor maker globally. Entering China and successfully Marketing proves the vision & strategy with which M&M is operating. China is always feared in international markets for its price competitiveness, delivery and quality. M&M could penetrate into Chinaâ€™s tractor market proves the Indian firmâ€™s competency.
Another example of an innovative company is Bharat Forge. Adopting a different strategy, vision and anticipation of future automobile markets, Bharat Forge developed its expertise in tooling and design of the 80s and 90s into mastery during late 90s. A few acquisitions in the key markets later, it emerged as the worldâ€™s second largest forging firm. Today it is able to supply critical automobile and heavy machinery components where forging is involved all over the world. Almost all the automobile companies in India procure the forged components from this company.
WIPRO a leading software Indian company, expanded rapidly by providing software coding support to the companies world over to make a smooth millennium switch in Y2K. After getting its foot in the door, it progressed to create much of its value by redesigning business processes, a task that needs immense innovative abilities. Others from the earlier mentioned 21 companies prospered, by being on the cutting edge of technology and engineering.
While the world talks of high productivity levels in the west and countries like Japan, it was found that Indian and Chinese companies are the best users of the capital. Indian companies are able to reduce capital costs by using cheap labor instead of sophisticated machinery wherever economical. It does not mean Indian companies are no taking the advantage of automation or sophisticated state of the art machinery where he output can be increased multifold. The Indian firms systematically work out the costing prior to setting up the manufacturing facility whether to go in for labor intensive methods o automation keeping in minf future markets
Indian firms must remember that they follow three imperatives to continue the success story. They are:
* Must rely on their ability to innovate at low cost.
* They should utilize large pool of local talent.
* Most importantly the Indian corporations should learn to live as a member of the Indian society and work with it.
India has the ability to be much more competitive than China to enter world markets with its products and it could surely do better. India is already looked upon by western countries as super economic power in Asia along with China.