conducting successful business india new 020508

8/4/2019 Conducting Successful Business India NEW 020508

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Evalueserve, 2008. All Rights Reserved - Privileged and Confidential

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Conducting SuccessfulBusiness in India

- A Perspective


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Presentation Plan

India A Fast Emerging Business Destination

What makes India a Fast Emerging Business Destination?

How to do Business in India?

Challenges Faced by MNCs in India


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Presentation Plan






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Estimated to become the fifthlargest consumer market by2025 (MGI)

Most preferable destinationfor Services sector (ATKearney, 2007)

Top destination in the ATKearney Global RetailDevelopment Index (2007)

Third largest economyGDP in terms of PPP(2007)

Stable 89 percent annualGDP growth rate in the past23 years

Ranks first in the availabilityof qualified engineers in thelabor market (IMD, 2006)

-India ranks high on many macro economicindicators as compared to other emerging nations

India is the second-fastest growing

economy in the world.


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Presentation Plan






7/22 Evalueserve, 2008. All Rights Reserved - Privileged and Confidential

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What makes India a Fast Emerging BusinessDestination?

Special incentives provided by the government to attract investmentsSpecial incentives provided by the government to attract investments

Less time and few procedures required to start a businessLess time and few procedures required to start a business

Growing potential of Tier II and Tier III citiesGrowing potential of Tier II and Tier III cities

Easy availability of skilled talent poolEasy availability of skilled talent pool

Emerging middle classEmerging middle class

Increasing disposable incomeIncreasing disposable income

Number of emerging sectors witnessing growthNumber of emerging sectors witnessing growth



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Special incentives provided by the government toattract investments

The government of India offers a number of incentives to encourage investments in India

Liberal FDI norms: As much as 98 percent of the Indian economy is open to FDI through the automatic route.Special Economic Zones (SEZs), Electronic Hardware Technology Parks (EHTPs) and Software Technology Parks

(STPs): They offer incentives, such as tax exemptions, duty-free imports and low-cost power supply.

Compliance with Trade-Related Aspects of Intellectual Property Rights (TRIPS) (since 2005): This has led to anincrease in the number of R&D centres set up by MNCs in the country.

Reduction of custom duty: In the Budget for 200809, the Government has reduced the custom duty on projects importsfrom 7.5 percent to 5 percent.

Industry associations promoting India: Industry associations such as, CII, ASSOCHAM, and NASSCOM have been setup to promote India as an investment destination.



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Less time and few procedures required to start abusiness

Indias attractiveness as compared to other emerging economies

Starting a BusinessTime Required

22

28

35

35

152

0 20 40 60 80 100 120 140 160

Korea, Reb. Of

Russia

India

China

Brazil

Time (Days )

Starting a BusinessNo. of Procedures Required

7

11

12

13

17

0 2 4 6 8 10 12 14 16 18

Russia

India

Korea, Reb. Of

China

Brazil

Number of Procedures

The time required to start a business in India is the same as that in China and lower than that in Brazil

siness procedures required to start a business in India are less compared to most of the emerging nations



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Growing potential of Tier II and Tier III cities

Tier ICities such as Delhi and Mumbaioffer developed infrastructure, ease of accessibility and availability of talent poolbut includes high costs

Tier IIEmerging cities, such as Pune, Hyderabad and Chennai

Tier IIIPotential cities, such as Nagpur, Ahmedabad, and Chandigarh

Potential of the tier II and tier III cities

Advantagesof tier II and

tier III cities:

Availability of talent pool(presence of academicinstitutions)

Growing infrastructure

Cost advantage (lower laborand real estate costs)

Lower attrition rates


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Increasing disposable income

The per-capita income has grown at a CAGR of 7.24 percent from INR 20,996 in 200203 to INR 29,786 in 200708.

The per capita consumption has grown at a CAGR of 5.1 percent from INR 13,352 in 200203 to INR 17,145 in 200708.

Over the next 20 years, Indias middle class is expected grow from about 5 percent of the population to more than 40percent, creating the worlds fifth-largest consumer market.

Increase in per capita income and consumption

Per-Capita Income and Consumption

13,352 13,918 14,41315,422 16,279

17,145

20,99622,413

23,89025,696

27,78429,786

0

4,500

9,000

13,500

18,000

22,500

27,000

31,500

200203 200304 200405 200506 200607 200708

Year

INR



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1Gartner

Number of emerging sectors witnessing growth

Key sectors witnessing growth

The Indian IT sector witnessed a growth of 30.7 percent in 200607 and accounted for 6570 percentof the global off-shoring market.

India is among the top 30 countries with regard to parameters supporting IT services.1

The Indian IT sector witnessed a growth of 30.7 percent in 200607 and accounted for 6570 percentof the global off-shoring market.

India is among the top 30 countries with regard to parameters supporting IT services.1

IT

India is the fastest growing telecommunications market in the world.

It has the worlds lowest call rates (23 US cents) and fastest growingsubscriber rates (15.31million in just four months in 2007).

Leading global telecom equipment manufacturers, such as Nokia, Samsung, Motorola and SonyEricsson, are setting up their bases in the country.

India is the fastest growing telecommunications market in the world.

It has the worlds lowest call rates (23 US cents) and fastest growingsubscriber rates (15.31million in just four months in 2007).

Leading global telecom equipment manufacturers, such as Nokia, Samsung, Motorola and SonyEricsson, are setting up their bases in the country.

Telecommunications

The Indian health care sector is valued at USD 34 billion.

The sector attracted 6.3 percent of the total PE investment in India in 2006, amounting to USD 379million.

The Indian health care sector is valued at USD 34 billion.

The sector attracted 6.3 percent of the total PE investment in India in 2006, amounting to USD 379million.

Health Care
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Presentation Plan





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Penetrating domestic markets and leveraging India presence

India offers both domestic market opportunity-and off shoring opportunity for MNCs

Business Opportunity in India

Domestic Market Opportunity Off-shoring Opportunity Sourcing Opportunity

Vast population

Increasing purchasingPower

Growing size of middle andhigher consumer class

Availability of skilled talentpool

Cost Savings

Knowledge/R&D hub

Availability of raw materials

Presence of strong industryinfrastructure

Developed technology

Cost savings



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Case Study Domestic Market Opportunity

Steps taken by McDonalds:

Menu customised to Indian taste McAloo Tikki,Paneer Salsa Wrap, Chicken Maharaja Mac andVeg McCurry Pan.

Advertisements that appeal to Indian customers.

Menu priced to suit Indian pockets with burger price

as low as INR 20.

Success in India:

Made its debut by opening two restaurants in Delhiand Mumbai in 1996.

Currently, the company has around 132 restaurantsin India.

Planning to increase the number of outlets to about220 by the end of 2008.

Steps taken by McDonalds:

Menu customised to Indian taste McAloo Tikki,Paneer Salsa Wrap, Chicken Maharaja Mac andVeg McCurry Pan.

Advertisements that appeal to Indian customers.

Menu priced to suit Indian pockets with burger price

as low as INR 20.

Success in India:

Made its debut by opening two restaurants in Delhiand Mumbai in 1996.

Currently, the company has around 132 restaurantsin India.

Planning to increase the number of outlets to about220 by the end of 2008.

McDonalds is one of the worlds leading fast food restaurant chain.


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Case Study Sourcing Opportunity

Steps taken by Piaggio:

Localized 100 percent of its 3-wheeler product inIndia in order to compete effectively

Set up a predominant Indian management team forIndia operations

Setting up of R&D operations in India

Success in India:

Introduced, new 3- and 4- wheeler models, superiorengine technology, and innovative customisedsolutions in India.

Leveraging India:

Planning to make India a global hub for 3-wheeler

manufacturing and export products components tothe EU

Steps taken by Piaggio:

Localized 100 percent of its 3-wheeler product inIndia in order to compete effectively

Set up a predominant Indian management team forIndia operations

Setting up of R&D operations in India

Success in India:

Introduced, new 3- and 4- wheeler models, superiorengine technology, and innovative customisedsolutions in India.

Leveraging India:

Planning to make India a global hub for 3-wheeler

manufacturing and export products components tothe EU

Piaggio is an Italy-based company that specialises in the design and manufacture of

two-wheel motor vehicles.

ase u y ene ra ng omes c mar e s an


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ase u y ene ra ng omes c mar e s anleveraging its India presence for exporting to

other countries

Steps taken by Cadbury:

Tailored products to suit Indian consumers (almondsare more preferred in India as compared topeanuts).

Innovative distribution strategy and advertisementsthat appeal to Indian consumers.

Products sold at lower margins as the companybelieves high penetration compensates for thereduced margins.

A predominant Indian management team for Indiaoperations.

Success in India:

Leads the chocolate and confectionary market inIndia.

Leveraging India:

Exports finished goods and innovative concepts toits other branches around the world.

Steps taken by Cadbury:

Tailored products to suit Indian consumers (almondsare more preferred in India as compared topeanuts).

Innovative distribution strategy and advertisementsthat appeal to Indian consumers.

Products sold at lower margins as the companybelieves high penetration compensates for thereduced margins.

A predominant Indian management team for Indiaoperations.

Success in India:

Leads the chocolate and confectionary market inIndia.

Leveraging India:

Exports finished goods and innovative concepts toits other branches around the world.

Cadbury is one of the worlds leading confectionery and non-alcoholic beverage

companies..


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Presentation Plan






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E l 2008 All Ri ht R d P i il d d C fid ti l

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Challenges Faced by MNCs

Distinct taste and habits from rest of the world and variationswithin IndiaMcDonalds solved this problem by bringing outcustomized menu for the Indian market.

Large variation in Paying capacityPhillips addressed the problemby using the right value proposition. It cut the prices of itsacclaimed Compact Fluorescent Lamps.

Reaching target customers in a cost effective wayCompanies,such as Allianz-Bajaj, GSK, and Danfoss, follow partnership modelswith local organisations to increase their reach

Large number of supply chain intermediariesPiaggio addressedthe problem by localising 100 percent of its 3-wheeler products in

India.

Distinct taste and habits from rest of the world and variationswithin IndiaMcDonalds solved this problem by bringing outcustomized menu for the Indian market.

Large variation in Paying capacityPhillips addressed the problemby using the right value proposition. It cut the prices of itsacclaimed Compact Fluorescent Lamps.

Reaching target customers in a cost effective wayCompanies,such as Allianz-Bajaj, GSK, and Danfoss, follow partnership modelswith local organisations to increase their reach

Large number of supply chain intermediariesPiaggio addressedthe problem by localising 100 percent of its 3-wheeler products in

India.

conducting successful business india new 020508

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