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SHOULD EVERY INDIAN COMPANY PLAN TO GO GLOBAL

GOING GLOBAL???
A Global Corporation Explores and Capitalizes on building a Customer Base and Investment Strategy in every Market possible. Global corporations leverage a network of entities in these markets to work toward maximizing profitability Remember going global is different from internationalizing

WHY SHOULD INDIAN COMPANIES GO GLOBAL???


 Greater Market Share.  Improved Technological Edge.  Advantage of Local Resources (factors of production).  Improve the Production Capacity Drastically.  Improve the Potential Customer Base.  Proximity of Customers.  Secure the availability of Resources in Internal Market.

How Favorable is Indian Environment to go global???


 Competent Workforce. The Indian workforce offers you technological agility, quality, and flexibility; cost control, time-to-market and competitive advantage in all related services.  Legal and Financial Framework: IFRS IR  IT: Growth in terms of revenue, profit
Source: wikipedia

Free Market Economy:

Cost Effective Resources:


Cost effective man power Low cost raw materials High knowledge base

Increasing brand awareness: The recognition index of Indian brands is slowly increasing all the world.  Lowered tariff barriers: WTO Increased Internet and Communication Technologies  Humanitarian Approach
2008 2006 2004 2002 2000 1998 1996 1 2 3

2010

4 5 Series1

Source: www.wto.org

Management:
Adaptability to Diverse Culture Understanding Customer needs. Competent skills Ethically strong Indian TOP LEVEL managers now handle global level operations.

Examples of Indian MNC s


1) Acquisitions Eg: Corus by Tata group 2) Joint Ventures Eg: Birla Eastern Ltd ITC Ltd 3) Organic Growth Eg: Manufacturing Sector

PRESENT INDIAN COMPANY SCENARIO MAJOR INDUSTRIES


Textiles Mining Transportation Equipment Chemicals Steel Bio technology Pharmaceuticals

telecommunication Machinery

Software

BUT .
Two way effect: While Indian companies can go Global, International Companies can ALSO target India....

Pitfalls while Going Global


DUNNING KRUGER Effect Pitfalls could be primarily because of : Lack of knowledge about the Country Lack of knowledge about the Company Lack of knowledge about Working Culture

Lack of knowledge about laws, relating to company operations, labour, tax etc.; Lack of knowledge about investment laws, both in the country of investment and in India, notified and amended by Government, time to time.

Precautions
 Spend time to understand the Country History & Culture.  Involve professionals, with international exposure to assist  Take personal interest in acquiring knowledge of corporate laws on macro level.  Rationalize tax planning with the help of professionals from these countries.  Work closely with professionals on various aspects of agreement

 Undertake due diligence before entering into business relationship;  Put their concerns about mode of payment, time and quantum clearly on table, before closing the deal;  Be careful about third party exposure -take commitment from foreign party on this aspect;  Be careful about governing law, jurisdiction of Court, mode of dispute resolution

So .
In our opinion, to compete effectively both in India and abroad, INDIAN companies need to start thinking seriously about going global. Provided :  They Identify their Competencies  Develop Core and Distinctive Competencies before turning Global .

THANK YOU