India Inc. & Globalization DR. JAGDISH N. SHETH Charles H. Kellstadt Professor of Marketing Emory University [email protected].

India Inc. & GlobalizationIndia Inc. & Globalization

DR. JAGDISH N. SHETH

Charles H. Kellstadt Professor of MarketingEmory University

[email protected]

©2006 Dr. Jagdish N. Sheth. All rights reserved.India Inc. & Globalization April 2006

2

Forces Shaping Global Economy

AGING OF AFFLUENT MARKETS

WHY FOCUS ON EMERGING MARKETS

WORLD IS FLATCOLLAPSE OF COMMUNISM

ECONOMIC PRAGMATISM


3

Economic Growth Engines for the World

WESTERN EUROPE

U.S. / CANADA

LARGE EMERGING NATIONS

1800s

1900s

21stCENTURY


4

New Measures of World Economies

The new measure is Purchasing Power Parity (PPP)

1. U.S. $12.4 trillion2. China $ 8.2 trillion3. Japan $ 3.9 trillion4. India $ 3.7 trillion5. Germany $ 2.5 trillion6. U.K. $ 1.9 trillion7. France $ 1.8 trillion8. Italy $ 1.6 trillion9. Brazil $ 1.6 trillion10.Russia $ 1.5 trillion

Source: CIA Factbook

THE BRIC REPORT

2005 (estimated)


5

New Measures of World Economies (cont.)

• China is the second largest economy based on PPP index and just surpassed Japan. It will be the largest single economy by the year 2020.

• India is the fourth largest economy, and it will become the third largest economy by the year 2010.

• BRIC Report (Goldman Sachs)


6

Repositioning of India, Inc.

FOCUSED GLOBALBUSINESS

INTEGRATEDGLOBA

ECONOMY

New India

DIVERSIFIEDDOMESTIC

CONGLOMERATE

ISOLATEDDOMESTIC ECONOMY

Old India


7

Global Evolution of a Company

Global Evolution

TIME

SUBSIDIARY BASED

GLOBAL

INTEGRATED GLOBAL

COMPANY

EXPORT BASED

GLOBAL


8

Global Evolution of a Company (con’t.)

• Export Based Global– French Champagne, Rolex watches,

Indian diamonds, Granite, Leather goods, Textiles

• Subsidiary Based Global– General Motors, Siemens, Wipro, Infosys,

Mahindra & Mahindra, Tata Motors

• Integrated Global Company– Toyota, Microsoft, Mittal Steel


9

What Makes a Truly Global Company or Brand?

• A truly global company or brand loses its country of origin identity among all its stakeholders: customers, employees, suppliers, investors and communities.

• A brand or company becomes truly a global brand or company when the whole world embraces and takes ownership without country of origin bias.– Olympics, Internet, MTV

• New technologies and products often become global faster than brands or companies.– Television, Mobile phones, Broadband


10

Why are the Heavyweights of India Lightweights Abroad?

Domestic diversified business

Lack of global mindset

Lack of scale

Lack of capitalLack of global

strategy

Government rules &

regulations

Ethnocentric culture

Limited experience in international marketing

1

2

345

6

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11

Global Repositioning of India Inc.

HighLow

HighPREMIUM MARKET

VALUE MARKET

HIT & RUN COUNTRY(Emerging Economies)

PRICE MARKETLow

Quality

Price

• India Inc. must aspire and globally compete in Best Value as well as Premium markets.


12

What Will it Take to Succeed?

Global mindset

Global acquisitions & integration

Quality reputation

Differentiation through design

& innovation

Nurture worldwide talent

& leadership

Global branding & positioning

Global segmentation &

targeting

Worldwide supply chain

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2

345

6

78


13

How Can Marketing Play a Key Role in Globalization of India Inc.?

• Identify targeted geographies and segments based on market attractiveness.

• Develop competitive brand positioning.– Price– Value– Presitge

• Prepare entry plan including market access.


14

How Can Marketing Play a Key Role in Globalization of India Inc.?

DifferentSimilar

Different

Similar

Customer

Resources

Product & Promotion Adjustment

Adjust All 4P’s of Marketing

Extension ofMarketing

Price andDistributionAdjustment

CustomerNeeds

• Extend or adjust the marketing mix depending on customer needs and customer resources.

• Manage local suppliers. Marketing is the most outsourced function.


15

How Can Marketing Play a Key Role in Globalization of India, Inc.?

• Is the acquisition for growth or transformation of marketing?

• Prepare a blueprint for integration of acquired companies.

• Integration will impact branding and product rationalization.

• How to integrate outside suppliers of marketing services, ad agencies, public relations, direct marketing, web based marketing and merchandising.

BOTH ORGANIC AND INORGANIC OPTIONS FOR GLOBALIZATION WILL REQUIRE MARKETING TO BE

AT THE HEAD TABLE.


16

Conclusions• India is destined to become a major economic power in

the 21st Century.• The heavyweights or India are lightweight globally

primarily because they lack global mindset, global strategy, scale and capital.

• However, India Inc. will aspire to compete globally.• To be globally competitive, Indian industry needs to

invest in quality reputation, global branding, design & innovation, worldwide talent and global supply chain.

• Marketing will play a key role in identifying the right target market and competitively positioning the company’s brand. If the strategy is inorganic growth, marketing must integrate brands and products as well as outside suppliers of marketing services.

India Inc. & Globalization DR. JAGDISH N. SHETH Charles H. Kellstadt Professor of Marketing Emory University [email protected].

Documents

globalization of india

global slide

global repositioning

global company toyota

global general motors

global french champagne

estimated slide

broadband slide