Department of Business Administration

University of Lucknow
2021

Subject: INTERNATIONAL MARKETING

Topic: Indian origin MNCs and their Global Market Strategies

Name: Aditya vikram singh

Roll No: 200012135265

1. Entry Strategies in Global Markets

Firms typically approach international marketing cautiously. They must

analyze the market opportunity as well as their internal capabilities to

determine which approach will be the best fit. Often businesses start with a

lower-risk strategy and progress to other strategies involving additional

investment and risk and additional opportunity after they have proven initial

success. The most common market entry strategies are outlined below.

1.1 Exporting

Exporting means sending goods produced in one country to sell them in

another country. Exporting is a low-risk strategy that businesses find attractive

for several reasons. First, mature products in a domestic market might find

new growth opportunities overseas. Second, some firms find it less risky and

more profitable to export existing products, instead of developing new ones.

Third, firms that face seasonal domestic demand might choose to market their

offerings abroad to balance out seasonal demand in their revenue streams.

Finally, some firms might export because there is less competition overseas.

Smaller firms often choose exporting over other strategies because it offers a

degree of control over risk, cost, and resource commitment. Smaller firms

often only export in response to an unsolicited overseas order, which is also

perceived as low risk.

1.2 Licensing/Franchising
Under a licensing agreement, a firm (licensor) provides a product to a foreign

firm (licensee) by granting that firm the right to use the licensor’s

manufacturing process, brand name, patents, or sales knowledge, in return for

payment. The licensee obtains a competitive advantage in this arrangement,

while the licensor obtains inexpensive access to a new market. Scarce capital,

import restrictions, or government restrictions often make this the only way a

firm can market internationally. This method does contain some risks. It’s

typically the least profitable method for entering a foreign market, and it

entails a long-term commitment. Furthermore, if a licensee (franchise) fails to

successfully reproduce a licensed product, or if the licensee markets licensed

products ineffectively, it could tarnish the original product’s brand image.

Holiday Inn, Hertz Car Rental, and McDonald’s have all expanded into foreign

markets through franchising.

1.3 Joint Ventures

A joint venture is a partnership between a domestic and foreign firm. Both

partners invest money, share ownership, and share control of the venture.

Typically the foreign partner provides expertise about the new market,

business connections and networks, and access to other in-country elements of

business like real-estate and regulatory compliance. Joint ventures require a

greater commitment from firms than other methods, because they are riskier

and less flexible. Joint ventures may afford tax advantages in many countries,
particularly where foreign-owned businesses are taxed at higher rates than

locally owned businesses. Some countries require all business ventures to be at

least partially owned by domestic business partners. Joint ventures may also

span multiple countries. This is most common when business partners team up

to conduct business in a world region.

1.4 Direct Investment

Multinational organizations may choose to engage in full-scale production and

marketing abroad by directly investing in wholly-owned subsidiaries. As

opposed to the previously mentioned methods of entry, this type of entry

results in a company directly owning manufacturing or marketing subsidiaries

overseas. This enables firms to compete more aggressively abroad, because

they are literally “in” the marketplace. However, because the subsidiary is

responsible for all the marketing activities in a foreign country, this method

requires a much larger investment. It’s also a risky strategy because it requires

a complete understanding of business conditions and customs in a foreign

country.

1.5 Trade Intermediaries

If a company lacks the resources or expertise to enter a foreign market, it can

hire trade intermediaries, who possess the necessary the contacts and

relationships in those markets. These entrepreneurial middlemen typically

purchase U.S.-produced goods at a rate below a manufacturer’s best discount

and then resell them in overseas markets.

1.6 Piggy backing

A low cost market entry strategy in which two or more firms represent one
another’s complementary (but non-competing) products in their respective
markets.” Companies have engaged in piggyback marketing for a long time, and
more recently, online piggyback marketing (also known as tag redirects, daisy
chains, hops and/or cookie synching) has been effective for brands sharing
each other’s digital content to help increase traffic and brand awareness.

1.7 International strategic alliance

International strategic alliance is typically defined as a collaborative

arrangement between firms headquartered in different countries. Partnering
firms remain legally independent after the formation of alliance and the
alliance relationship is relatively enduring. International strategic alliances can
be categorized along multiple dimensions. First, based on the type of activities
of collaboration, international strategic alliances can be categorized into
licensing, franchising, management service, supply, research and development,
manufacturing, marketing, and others. An international strategic alliance can
engage in one activity or a combination of activities. Second, based on the
number of partners involved, an international strategic alliance can be bilateral
or multilateral; the existing body of literature on international strategic
alliances has largely focused on bilateral alliances. Third, based on the
nationalities involved, an international strategic alliance can be broadly defined
as a collaborative arrangement between firms one of which is headquartered
outside the country of alliance; therefore an international strategic alliance can
be categorized as home-home, home-host, or home-third country alliance. The
majority of existing studies are about international strategic alliances formed
between a foreign firm and a local firm (i.e., home-host). Fourth, based on the
involvement of equity investment, international strategic alliances can be
categorized into non-equity-based and equity-based alliances. Non-equity-
based international strategic alliances are also called contract-based; equity-
based international strategic alliances are often referred to as international
joint ventures.

1.8 Joint Ventures and Strategic Alliances

Within each market entry option, a firm must choose between maintaining

strong control of operations (wholly owned subsidiary) or turning most control

over to a local firm (exporting, franchising, and licensing). In some cases,

however, executives find it beneficial to work closely with one or more local

partners in a joint venture or a strategic alliance. In a joint venture, two or

more organizations each contribute to the creation of a new entity. In a

strategic alliance, firms work together cooperatively, but no new organization

is formed. In both cases, the firm and its local partner or partners share

decision-making authority, control of the operation, and any profits that the

relationship creates.

1.9 Wholly Owned Subsidiary

A wholly owned subsidiary is a business operation in a foreign country that a

firm fully owns. A firm can develop a wholly owned subsidiary through a

greenfield venture, meaning that the firm creates the entire operation itself.

Another possibility is purchasing an existing operation from a local company

or another foreign operator.

1.10 Greenfield Venture

Greenfield Venture is a form of market entry strategy with establishment of a

new wholly owned subsidiary in a foreign country by constructing its facilities

from start.

Through Greenfield Venture, a business enters a new market without the help

of another business which is already present there. Although the process of

setting up a Greenfield Venture, in most cases, is complex and more expensive,

yet it provides maximum control to the firm. This is because the firm develops

the project from the beginning thereby building its own culture and structure.

A firm therefore has full control over the operations of its Greenfield Venture.

However the costs and risks are high because to set up a new business

operation in a new country, the firm needs to acquire knowledge and expertise

regarding the local market and build various stakeholder relationships which

adds to the cost as well as exposes the firm to various risks.

1.11Turnkey projects
A turnkey project is a way for a foreign company to export its process and

technology to other countries by building a plant in that country. Industrial

companies that specialize in complex production technologies normally use

turnkey projects as an entry strategy.

2.Indian origin MNCs and their Global Marketing

Strategies

2.1 WIPRO LIMITED

ABOUT

Background Wipro Limited (formerly Western India Vegetable Products

Limited) was incorporated in 1945 and it commenced operations of vegetable

oils business in 1946. In the mid-seventies, it diversified into newer businesses,

such as computer hardware, fluid power, and finally into software/hardware

products and systems integration/ software solutions provider, and eventually

developed into a comprehensive IT company from India, by the start of the

next century. The story of Wipro's phenomenal and uncharacteristic journey of

unrelated, but successful diversification is a unique case study in corporate

wealth creation, which has primarily, been through successful information

technology businesses being run on global scale. In 1977 Wipro perceived a

supply-constrained market in computer hardware in India, and it set up Wipro

Infotech Ltd. to address this business by way sourcing components and

packaged software from small US based firms.Wipro entered the nascent “mini

computer” market in India, and soon become a market leader in rapidly

expanding institutional computing market.With the emergence of personal

computing era in the early eighties it became imperative for Wipro to address

this need, and it forged an alliance with Sun Micro Systems for selling Sun

workstations in India.The personal computing segment was Wipro’s major

business for many years through various technical and marketing tie-ups till it

finally entered into joint venture with Acer for manufacturing PCs in India. In

another somewhat unrelated diversification it formed a joint venture with GE,

for addressing the medical diagnostics imaging market in 1989. Having

identified healthcare equipment segment as an emerging business

opportunity,Wipro set up a group company called Wipro Biomed Ltd to

address the healthcare instruments market outside the diagnostic

segment.Wipro's forays continued further in the field of technology and IT

applications with tie-ups in packed software products such as spreadsheet, and

database applications through another group company called Wipro Systems. It

also entered the field of medical/healthcare software in association with GE

and eventually acquired the healthcare software applications business GE

Healthcare IT Systems in India. The company's promoters hold the majority

stake in Wipro (81.7 per cent).The next largest shareholders are the Indian

public (with 7.5 per cent stake) followed by foreign institutional investors (with
4.7 per cent stake). Foreign companies, domestic financial institutions, private

corporate bodies, trusts and mutual funds hold the residual shares.

Products

Wipro is a diversified conglomerate with a presence in businesses as diverse as

information technology, vegetable oils & soaps, financial services, medical

systems, lighting and hydraulic cylinders.Wipro's strategic classification of its

businesses follows a combination of product-market and geography on

typical transnational dimensions, which are Global IT Services and Products,

India and Asia-Pac IT services, Consumer Care and Lighting and Fluid

Power.Wipro's businesses are run through divisions and subsidiaries of Wipro

Limited, and its corporate organisation is structured along strategic business

lines such as Wipro Infotech,Wipro Technologies, Wipro Fluid Power,Wipro GE

Medical Systems (now known as GE Healthcare) and Wipro Consumer Care and

Lighting. Global IT Services and Products Segment contributes to over 75 per

cent of revenues, followed by India and Asia-Pac IT services and products with

16 per cent and the remaining by Consumer Care and Lighting and Fluid

Power. While it has done fairly well in most of its businesses, it is Wipro's IT

business which has made a significant impact on global dimensions. Within the

IT business of Wipro, it offers the entire range of services, which includes

software products, an enterprise solution, system integration and IT enabled

services. In terms of vertical distribution, the company operates in diverse

areas encompassing manufacturing, telecom, retail, finance, and energy &

utilities.
Wipro's global marketing initiatives

The key factors which have enabled Wipro to globalise its operations are both

intrinsic and extrinsic.The growing need for customised IT applications

required skilled manpower at competitive costs.With most product software

companies finding it difficult to provide downstream support and installation

and maintenance services, an opportunity was created for existing Indian IT

companies.Availability of low cost skilled manpower, early entry in the

business life cycle coupled with increasing demand for IT services and

solutions enabled Wipro capture a significant market share of both the systems

integration and software solutions pieces.The company also set high quality

standards through successive SEI-CMM levels, and created an organisation-

wide quality culture by adopting Six Sigma tools and processes. The key factors

behind global success of Wipro are as follows:

• Comprehensive range of IT services: Wipro provides a comprehensive and

integrated suite of IT solutions, ranging from consulting to application

development and maintenance and end-to-end responsibility for project

execution and delivery.This is done through a combination of offshore

development centres in India and several near shore development centres

located in countries closer to clients ' offices. This integrated approach is

primarily to take advantage of key growth areas in enterprise solutions,

including IT services data warehousing, implementation of enterprise package

application software such as enterprise resource planning, supply chain

management and customer relationship management.

 • World-class quality as measured by SEICMM and Six Sigma initiatives:

Wipro is the first IT services provider in the world to achieve this standard.

SEI-CMM is widely accepted in the software industry as a standard to measure

the maturity and effectiveness of software processes.

• Service offerings in emerging growth areas: Another important factor,

which is driving the performance of Wipro, is its ability to identify the key

value drivers. For example, it identified technology infrastructure outsourcing

as an emerging growth area in 1998.

• Broad range of research and development services: Wipro is one of the few

major IT services companies in the world capable of providing an entire range

of research and development services from concept to product

realisation.Wipro provides IT services for designing, enhancing and

maintaining platform technologies including servers and operating systems,

communication subsystems, local area and wide area network protocols,

optical networking systems, Internet protocol based switches, routers and

embedded software, including software used in mobile phones, home or office

appliances, industrial automation and automobiles.

• Global delivery model: Wipro is the first India-based IT services companies

to implement the offshore development model as a method for delivering high-

quality services at a relatively low cost to international clients.

SWOT Analysis of Wipro
Strengths
● Diversifies product offerings
● Early strategic alliances &
boosted credibility.
● Multi domestic market philosophy
● Stronger dealer community
● Well established infrastructure
● Low-price benefits and high-
quality standards
● Wide range of developmental
services, and one of the top IT
Companies
Weaknesses
● A small player in the global
market.
● Investment in research &
development is below the fastest
growing operations.
● Not a proactive company.
● Low operating margin of other
companies
Opportunities
● New company strategy leads to
greater profits.
● Expand from pure tech to a
broad-based vendor that solves
business problems.
● Diversify brand products and
consultancy service.
● Huge global market and domestic
market.
● Rising exports from the industry.
● New varieties of products.
●
Threats
● Huge competition from its rivals
● New entrants
● The increasing cost of human
capital
● Rising raw materials
● No regular supply of innovative
products
● Shortage of skilled workforce
2.2ARVIND MILLS LIMITED

ABOUT

Arvind Mills Ltd. (AML), the flagship company of the US$ 500 million Lalbhai

Group, was incorporated in 1931. It aimed at manufacturing high-end superfine

fabrics with imported state-ofthe-art machinery.With 52,560 ring spindles, 2552

doubling spindles and 1122 looms, it was one of the few companies in the early

period of India’s industrialisation to have spinning and weaving facilities along

with full-fledged facilities for dyeing, bleaching, finishing and mercerising. In

the mid 1980s the Indian textile industry was faced with a crisis on account of

the power loom sector churning out vast quantities of inexpensive fabric which

led to many large composite mills losing their markets.While the company was

operating at its highest level of profitability during this period, it took a

proactive measure to increase its focus on the international markets to counter

the threat from the power loom sector. In 1988, the company entered the

export market for two segments, denim for leisure & fashion wear and high

quality fabric for cotton shirting and trousers. By 1991, the company had

become the third largest producer of denim in the world.

The company has carved out an aggressive strategy to further expand its

current operations by setting up world-class garment manufacturing facilities

and offering a one-stop shop, offering complete garment packages to its

international and domestic customers.Apart from this, the company with a

host of international and domestic brands like Lee, Wrangler,Arrow, Flying

Machine, Newport, Ruf & Tuf etc in its portfolio is focusing on becoming the
largest branded apparel company in India. The Indian promoters hold 37.0 per

cent of the total equity in the company. Foreign institutional investors, non-

resident Indians and overseas corporate bodies hold 24.4 per cent stake in the

company while the Indian public holds 20.03 per cent stake. Mutual funds,

banks, financial institutions, insurance companies and private corporate

bodies hold the remaining stake in the company.

Products and brands Arvind Mills has been one of the leading textile producers

in India.The company is present in both the fabrics and garments segments of

the textiles industry value chain. In fabrics, the items of manufacture include

denim, shirting, khakis, knitwear and voiles. Denim contributes more than 60

per cent to the company’s turnover. In the garments segment, it is present in

both the domestic and international markets for formal and casual clothing.

The company is one of the leading players in the domestic ready-to-wear

garments segment. It has successfully launched and established multiple

brands - own as well as international ones (under license from the respective

companies). Its own brands are managed by its subsidiary Arvind Brands

Limited and are marketed in India and some neighbouring countries. Own

brands include Flying Machine, Newport and Ruf & Tuf in jeans and Excalibur

in shirts. Licensed brands include Arrow (formals and casuals), Lee

(jeans),Wrangler (jeans) and Tommy Hilfiger (fashion).

Factors fuelling Arvind Mills’ global initiatives

Till mid 1980s,Arvind Mills’ focus was more on marketing its products in the

domestic market. Its major change in strategy came about in 1987 when the
company established its Denim manufacturing division with the primary aim of

marketing denim in international markets. In the last two decades, the

company has become the world’s third largest manufacturer of denim with a

capacity of 110 million metres per year. In order to strengthen its international

presence, the company has focused on producing the highest quality of

products, both fabrics and garments, while incorporating the latest designs at

the same time.The company has its own dedicated teams of designers in its

various offices who work in close co-operation with international designers

based in Italy, UK etc.

Apart from the above, the company has adhered to its aggressive strategy to

expand its operations by setting up world class manufacturing facilities, which

offer complete packages to its international and domestic customers. Its woven

garments unit for example has been set up in technical collaboration with the

Italian apparel consultancy firm, CF ITALIA, while its Knitwear garments unit

has been set up in technical collaboration with Alamac Knits Inc. of USA. In

order to capture the maximum market share globally and to create new

markets, the company has continuously expanded its product portfolio and

manufactures denim fabric and jeans, cotton shirting, khakis, shirts/tops,

knitted garments etc to market them in international markets. Under this

scenario, the company’s exports, which already account for more than 45 per

cent of its gross sales, are set to increase further in the future.
Arvind Mills Marketing Strategy & Marketing Mix
(4Ps)

Marketing Strategy of Arvind Mills analyses the brand with the marketing mix

framework which covers the 4Ps (Product, Price, Place, Promotion). There are

several marketing strategies like product innovation, pricing approach, promotion

planning etc. These business strategies, based on Arvind Mills marketing mix, help

the brand succeed.

Arvind Mills marketing strategy helps the brand/company to position itself

competitively in the market and achieve its business goals & objectives.

1. Arvind Mills Product Strategy: Arvind Mills is one of the most popular
apparel brand bases out of India offering jeans and other denim products.

Arvind Mills has a wide product offering as a part of its marketing mix product

strategy. Its product portfolio includes Denim, wovens, knits, woven, voiles, real

estate, retail, telecom, engineering agri-business, advanced material, and the

Arvind Store. Arvind Mills has a strong portfolio which is a mix of Indian and
International brands, hence more variety. It is one of the largest denim

producer in India and has a strong worldwide sale as well. The company has

consistently invested in technology used for producing denim for its products.

2. Arvind Mills Price/Pricing Strategy: Arvind Mills offers high quality

products but keeps its products affordable and competitive.Some of its

products are slightly highly priced as compared to other brands. But products

from Arvind Mills are priced lesser than global premium brands offering similar
 products like denims and jeans. The pricing strategy in its marketing mix

focuses on offering competitive rates vis-à-vis competitors. This can be

attributed to the fact that is has associations with multiple international brands,

thereby incurring additional cost. Also, many of the products are sold at a

reasonable rate by economies of scale.

3. Arvind Mills Place & Distribution Strategy: Arvind Mills and its

products are available across several geographies across India. Most of the

brands of Arvind have their own outlets they own. Apart from that, they have

tie-ups with other retail chains including Megamart- one of the biggest

retailers in the world. It has its own Arvind Store (with over 200 stores) for all

the brands.It has positioned itself as a brand anyone can afford, and targets

middle to higher income groups.

4. Arvind Mills Promotion & Advertising Strategy: Arvind Mills uses

all types of media channels to promote itself as well as its brands. The company

has used media channels like TVCs, print ads, online ads etc. The clothing and

apparel brand also advertises through OOH as well as hoardings at important

locations in prominent cities. Arvind Mills promoted itself with famous film

celebrity brand ambassadors for its sub-brands Ruf-n-Tuf, NewPort and Flying

Machine respectively. The brand has also organized several fashion events

showing its product offerings. Also, it does a lot of CSR activities like Sharda

Trust for the poor, hence enhancing their brand image. Hence this completes

the marketing mix of Arvind Mills.