Ieici - Israeli Purchasing

8/22/2019 Ieici - Israeli Purchasing

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Israeli Purchasing and Logistics Managers Association

Telecom ForumMeeting 4

Purchasing in India Tips for the NegotiationProcess & Using Indian Suppliers to ImproveCompetitiveness


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Agenda

BDO-I2I at a Glance

India - Culture

India - Business Culture

India - Intercultural Communication Aspects

India - Telecom Industry


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BDO-I2I Background

BDO-I2I is Israels leading India focused business consulting firm

Joint venture between BDO Consulting Group and I2I Ventures

Combining forces of Israel's leading consulting group and theleading Indo-Israeli business group

Leveraging on BDO international expansion and leadership

Provides Israeli and Indian companies with Business Developmentand professionalOne Stop Shopsolutions

Providing our customers end to end coverage of the servicesrequired for operating cross border

Business and Market Research Strategic and Business Planning

M&A and JV Leadership

Access Strategic Customers and Partners

Setting Sales and Distribution Channels

Complementary Services


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BDO-I2I Executive Management Team

P. Sriganesh Mumbai PartnerA Fellow member of the Institute of Chartered Accountants of Indiaand Institute of Company Secretaries of India. Sriganesh has over 30years of experience in the IT and ITES industry and NBFC sector

having set up several Companies in India. Between 1986 and 2000 heworked in senior financial positions in Citigroup India. He was aPromoter-Director of Citicorp Information Technology (now known asI-Flex) and co-founder and Honorary Treasurer of NASSCOM. AsTreasurer of NASSCOM in the initial years was involved with theGovernment to set up regulations for the then nascent industry.

David Keynan

Founder and CEODavid is heading BDO-I2I. David was a member of the Intel CapitalIndia team since 2003, managing Intels investments there. David hasrelocated to India after spending three years in Intel Capital Israel,leading Intel investments in the telecom space.David was Vice-Chairman of the Israel-India chamber of commerce.He previously joined TiE as a chartered member in the Bangalorechapter. David earned his B.Sc. in Mathematics and Philosophy from

the Hebrew University in Jerusalem.


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BDO Ziv Haft Consulting Group - Business Activities

CorporateFinance &M&A inGeorgia

M&A andInvestmentBanking - US
http://tmc.ge/index.php


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Agenda

BDO-I2I at a Glance

India - Culture





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Flag & Emblem

The saffron stands for courage, sacrifice and the spirit ofrenunciation

The white is for purity and truth

The green is for faith and fertility

The navy blue wheel denotes the continuity of the nation's

progress which is deemed to be as boundless as the blue skyand as fathomless as the deep blue sea.

Truth Alone Triumphs


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Geography

Area: 3,287,590 sq km

World 7th largest

Natural hazards:

Droughts

Flash Floods

Widespread and Destructive

Flooding from MonsoonalRains

Severe Thunderstorms

Earthquakes


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Fact Sheet

Demographics

Population (billion) 1.13

Population growth (%) 1.6

Labor force (million) 516

Less than 30 years (%) 52

Urbanization (%) 28

Economy

GDP (nominal, US$ billion) 1171

Inflation (%) (Aug. 08) 12

Fiscal Deficit (% of GDP) 5.6

FDI (US$ billion) 32

Forex reserve (US$ billion, Jul 08) 307

Social/Developmental

Literacy (%) 61

Unemployment (%) 7.2

Infant mortality (per 1000) 34.6

Life expectancy (years) 68.5

Transport/Telecom

Passenger cars (million) 13

Two wheelers (million) 53

Mobile users (million) 295

Internet users (million) 52

Trade

Exports (US$ billion) 159

Imports (US$ billion) 240

Top 3 export markets US (13%)UAE (10%)China (7%)

Top 3 import partners China (11%)Saudi Arabia (8%)UAE (6%)

FY08 unless indicated otherwiseSources: IBEF, EIU, RBI, CIA fact book


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Geographic Division

Mumbai

South

Center

North East

Kolkata

Delhi


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Population

Ethnic Groups: Indo-Aryan 72%

Dravidian 25%

Mongoloid and other 3% (2000)

Religions:

Hindu 81.3% Muslim 12%

Christian 2.3%

Sikh 1.9%

Buddhist, Jain, Parsi 2.5% (2000)

Languages:

English

Hindi (the national language )

14 other official languages: Bengali, Telugu, Marathi, Tamil, Urdu,Gujarati, Malayalam, Kannada, Oriya, Punjabi, Assamese, Kashmiri,Sindhi and Sanskrit

Hindustani


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History & Religion

Indus Valley Civilization- one of the worlds first great urbancivilizations.

Worlds first university in Takshila 700 B.C

Ayurveda- earliest school of medicine known to humans

OM - The first sound of the Almighty, oneness with the

supreme.The Trinity:

Generates-Brahma

Observes-Vishnu

Destroys-Shiva

Yoga Made in India 5000 BCKalarippayat - Origin of Martial Arts 200 BC


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Culture Fundamentals

Non-Violent Religion

Never invaded any country in her history

The British influence inspired western education and thoughts:

Created a new educated class.

Created a common language English

Inspired freedom and exchange of ideas

Religious tolerance and freedom of worship: Hindus and Muslims live side by side but inter-religious marriages are

rare

Gandhis Non-Violence Movement for freedom appealed to thecivilized world

Caste System Brahmins: Highest caste, most privileged - lawyers, doctors,businessmen

Ksatriyas: Warriors and rulers had to give their lives to protect theBrahmins and sacred animals (cows).

Vaisyas: Farmers and traders. Encouraged to give money to Brahmins& build temples

Sudras: Serve the other three classes. Weavers and carpenters

The Untouchables/Dalit Caste


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Meals, Drink & Snack

Varies from region to region Hindus do not eat beef

Muslims do not eat pork or drink alcohol

Vegetarian Cuisine

Meat for the non-vegetarians

(mainly lamb, chicken, and fish) Ingredients: mainly use herbs and spices

Curry Pan -Asian Dish

In favor of tea (most famous: Chai)


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Local Culture Essentials

Respect elderly and touch their feet for blessing Right Hand

Eat with fingers and always use right hand to eat

Wash their hands immediately after and before eating a meal

Believed that food tastes better when eating with ones hands

Can't Say No

Take your footwear off when you enter a private house or temple

Indian names vary based upon religion, social class, and region of thecountry

Frangipani and white flowers cannot be the gifts

Yellow, green and red are lucky colors

Strong bonds with family members as well as relatives (Respect the elders)

Sons are always more preferred than daughters

Most marriages are still arranged by parents Extremely low divorce - rate with only 1.1%

Woman Status


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Agenda

BDO-I2I at a Glance

India - Culture





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Business Dress Code

Normal Business Dress Code for Man Suit and Tie

Due to a warm climate, often full-sleeved shirt and tie arealso acceptable

Business Dress Code for Woman Pantsuits and skirtswhich cover the knees; neckline of the blouse and topshould be high and sleeves should cover the shoulders

Select neutral colors that are subdued and not very bright


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Greeting

Greeting

When doing business in India, business etiquette requires ahandshake

Indians among themselves use Namaste the palms are broughttogether ant chest level with slight bow of the head

Using Namaste is a sign of Indian Etiquette understanding

Business Cards

Business cards should be exchanged at the first meeting

Be sure to receive and give with the right hand

Make sure the card is put away respectfully and not simplypushed into your shirt/trousers pocket


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Meeting

Meetings

Meetings should be arranged well in advance in writing and confirmedlater on by phone

Avoid meetings near national holidays Independence Day, Diwali, etc.

Punctuality is expected however being late usually will not have disastrousconsequences

Flexibility is paramount

Last minute cancellations are possible and not a sign for anything

Meetings Flow

When entering a room always greet the most senior figure first

Start from commencing a a conversation latest business news,stock exchange and sports (mostly, cricket)

Avoid talking about:

Personal matters

Poverty/beggars

Politics, caste system & religion issues

Woman rights


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Agenda

BDO-I2I at a Glance

India - Culture





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Most Important

In India,Relationship Comes Before

Business


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India Top 10 Business Principals

Time is measured by years, not weeks Long term approach will create significant impact

Partnering and win-win is were it all starts

India and its people are very diverse

Need to adjust to the right people/team

Listening is much more appreciated than talking The land of good enough

Nois never said

Government/official relations are important

Business India is corruption free

If you are asked, you are in the wrong place Regulations are simple, but very strictly enforced


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India Geographic Business Corridors

80% of IndiaGDP


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The Land of Good Enough

India has very interesting view on brand and technology Brand representshardvalues:

Reliability, complexity, cost, suitability for multi-user

With very few exceptions, luxury and Name are lessimportant

Example Nokia cell phones: Reliable and hard working

Though much more expensive than Chinese brands

>60% market share in India

Another example - fashion brands:

Very low penetration of global brands

Very strong local brands

Opposite to China

Reason no value inGlobaltags
http://images.google.com/imgres?imgurl=http://mall.coimbatore.com/giftvouchers/allensolylogo.jpg&imgrefurl=http://mall.coimbatore.com/giftvouchers/allensollyoutlets.html&usg=__gYubf4SA6lVxuilwVScIiF9frbA=&h=115&w=188&sz=21&hl=en&start=3&sig2=Le6dZiVAtSe5e217d842Ng&um=1&tbnid=Bl4qSXE0mjvGGM:&tbnh=62&tbnw=102&prev=/images%3Fq%3Dallen%2Bsolly%26hl%3Den%26rlz%3D1T4GGLL_enIL316IL317%26sa%3DX%26um%3D1&ei=SAgTSpveNY-T_QaYjYS9Dwhttp://images.google.com/imgres?imgurl=http://www.stick-stan.com/images/shop/filebrowser/Image/levis.png&imgrefurl=http://www.stick-stan.com/brands.html&usg=__-77Bz35AocrMroVx_WaAOH1PwZw=&h=413&w=843&sz=21&hl=en&start=4&sig2=ngY5IHNTegJG9SSAIR3oBg&um=1&tbnid=liQGVvy4ykynhM:&tbnh=71&tbnw=145&prev=/images%3Fq%3Dlevis%26hl%3Den%26rlz%3D1T4GGLL_enIL316IL317%26um%3D1&ei=_QcTSoLLPI-E_AaOwui1Dwhttp://images.google.com/imgres?imgurl=http://www.groupe-procab.com/blog/wp-content/uploads/2008/07/new_iphone.jpg&imgrefurl=http://www.groupe-procab.com/blog/index.php%3Ftag%3Dinternet&usg=__tJAWEoynvP2J2VybK64ZIyosKbA=&h=401&w=300&sz=18&hl=en&start=14&sig2=hn1oJ9PA2TGqYDn2mDQ9hw&um=1&tbnid=uyQzwqF1HVM1wM:&tbnh=124&tbnw=93&prev=/images%3Fq%3Diphone%2B3g%26hl%3Den%26rlz%3D1T4GGLL_enIL316IL317%26um%3D1&ei=cgcTSojpIMKD_Qa9ze22Dwhttp://images.google.com/imgres?imgurl=http://fonearena.com/blog/wp-content/uploads/2006/11/n2626_03_lowres.jpg&imgrefurl=http://www.fonearena.com/blog/2006/11/28/nokia-announces-6300-6290-6086-and-2626.html&usg=__HBTu-T57EkF9xA_dc5navdrzOyE=&h=550&w=300&sz=54&hl=en&start=9&sig2=ilnLeW_aWYMSXIr8E3GZEQ&um=1&tbnid=HEJW-89_txsz3M:&tbnh=133&tbnw=73&prev=/images%3Fq%3DNokia%2B2626%26hl%3Den%26rlz%3D1T4GGLL_enIL316IL317%26sa%3DX%26um%3D1&ei=NwcTSp7ZE8uv_AbepMS4Dw


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Negotiations - How to Start?

Send a detailed product overview in advance

Prepare your initial offer to allow bargaining later on

Respect Indian Business Hierarchy

Hospitality is part of the business culture accept anyhospitality offers (tea/coffee/snacks)

Presentations are generally accepted to start a discussions

Declare long term, and mean it Learn first, talk later

Tough issues:

Learn first

Raise when discussed, resolve last

The time between raising and resolving is reserved torelationship, internal contemplations andproduct/technology international presence

Indians tend to take larger risks with person they trust -> Credibility and Trustworthiness are Critical


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Decision Criteria

It is all personal

The business reason is key

Technology is being looked at from business perspective

Innovation per se is a mixed bag

Risk aversion - major issue

In Indian organizations, size matters As many employees, as good

Automation is Necessary to deal with scale

Product/Technology WW Spread

Trust relationship

Relationship/Emotions


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CEO Role

In India:

CEO, Managing Director, Promoter

All alternate names to same function

CEO - Potential Decision Maker

The most superior company executive -> Respect

Must be addressed with appropriate title -> Mr. Exhibit positive traits -> Honor, Trustworthiness

Being most senior -> Must be greeted first

Concentrate efforts on building relationship with the CEO

You should leave space for escalations

Chairman, Large share holder etc.


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On the Discussion Table

Silence is blessed

Let the VP talk, CEO to close

Listen to the music

Dont push

Dont insist on any commitment at the first meetings

Do not use strict expressions

Nois not being said,Yesis hardly used

Indians value flexibility during negotiations

Express disagreement openly considered rude -> We willdiscuss this issue later on

Disturbances during the meetings doesnt show lack ofinterest or respect

Be prepared for questions/enquiries that seem not related


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Business Hierarchy

One of the most significant influences on Indian BusinessCulture

Mostly One decision maker in the company

Managers and executives still will wait for approval byCEO/owner

Sometimes decisions are maid by people who are not presentduring negotiations


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Agenda

BDO-I2I at a Glance

India - Culture





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India Technology Boost Present

Israeli TechnologyExport

RevenuesIndian

IT industry

U

S$

bn

CAGR: 27 per cent


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India Technological M&A Trend - Telecom

3

5

12

18

0

2

4

6

8

10

12

14

16

18

20

2007 2008 2009 2010

No.

ofDe

als

Year


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Electronic Manufacturing Services are among the mostrapidly growing industries in India, with the capacity forfulfillment of large series of orders

Indian manufacturers started to operate in quantities andqualities which can easily compete with the Chinesemanufacturers.

Two major players:

Vinyas Innovative Technologies Pvt. Ltd

Centum Electronics

India is one of the biggest target market for telecomequipment. Close to 15% of all productions are sold to India.

Using an Indian EMS company lower your costs and bringyou closer to your final customer

India Electronics Manufacturing Services


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David Keynan

CEO

BDO-I2I India Business Consulting

Menachem Begin Road 46-48Tel Aviv, Israel

Israel (O)+972-3-6382508Israel (F)+972-3-6374801India (O)+91-80-4330-1999

[email protected]

Thank You !
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]

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Ieici - Israeli Purchasing