should every Indian company plan to go global

8/3/2019 should every Indian company plan to go global

http://slidepdf.com/reader/full/should-every-indian-company-plan-to-go-global 1/17

SHOULD EVERYINDIAN COMPANY

PLAN TO GO GLOBAL



GOING GLOBAL???

A Global Corporation Exploresand Capitalizes on building aCustomer Base andInvestment Strategy in every

Market possible. Global corporations leverage a

network of entities in thesemarkets to work toward

maximizing profitability

Remember going global isdifferent frominternationalizing



WHY SHOULD INDIAN COMPANIES GO

GLOBAL???

Greater Market Share.

Improved Technological Edge.

Advantage of Local Resources

(factors of production).

Improve the Production CapacityDrastically.

Improve the Potential CustomerBase.

Proximity of Customers.

Secure the availability of

Resources in Internal Market.



How Favorable is Indian Environment to

go global???

CompetentWorkforce.

The Indian workforce offers youtechnological agility, quality, and

flexibility; cost control, time-to-marketand competitive advantage in all relatedservices.

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

Series1

1996

1998

2000

2002

2004

2006

2008

2010

1

2

3

4

5



Source: www.wto.org



Management:

Adaptability to Diverse Culture

Understanding Customer needs.

Competent skills

Ethically strong

Indian TOP LEVEL managers nowhandle global level operations.



Examples of Indian MNCs

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 INDUSTRIESTextiles Chemicals

Mining Steel

Transportation Equipment Bio technology

telecommunication Pharmaceuticals

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 primarilybecause of :

Lack of knowledge about theCountry

Lack of knowledge about the

CompanyLack of knowledge aboutWorking Culture



Lack of knowledge aboutlaws, 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 totime.



Precautions

Spend time to understand the Country History &Culture.

Involve professionals, with international exposureto 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 variousaspects of agreement



Undertake due diligence before

entering into businessrelationship;

Put their concerns about mode of

payment, time and quantum

clearly on table, before closingthe deal;

Be careful about third partyexposure -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 competeeffectively both in India andabroad, INDIAN companiesneed to start thinkingseriously about going global.

Provided :

They Identify theirCompetencies

Develop Core and DistinctiveCompetencies

before turning Global.



THANK YOU

Documents

should every Indian company plan to go global