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STRATEGY TRADING PRODUCTION
EFAC-Conference Davos, 18.01.2013
Successful Market Entry &
Market Expansion
in India
STRATEGY TRADING PRODUCTION
• India specialist since 12 years
• More than 150 employees
• M+V Competence centres in
Delhi, Bangalore, Chennai, Pune
supported by country-wide sales offices.
• Consulting office in Cologne, Germany
PUNE
BENGALURU
CHENNAI
NEW DELHI
COLOGNE
SUCCESS IN INDIA
Benefit from our strategic knowledge
and operational experience
– use this competitive advantage!
AHMEDABAD VADODARA
HYDERABAD
INDORE
KOLKATA JAMSHEDPUR
MUMBAI NAGPUR
JAMMU
CHANDIGARH
LUCKNOW KANPUR
JAIPUR
GOA
PONDICHERY
KOCHIN
STRATEGY TRADING PRODUCTION
Strategic Inputs
for your Indian Business
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STRATEGY TRADING PRODUCTION
Future Markets are Outside Europe...
4 Source: IMF, World Economic and Financial Surveys, World Economic Outlook Database (all 2009)
Global economic growth in %
Goldman Sachs currently identifies 8 countries contributing to 70% of the future economic growth: BRICS Turkey Indonesia Korea
STRATEGY TRADING PRODUCTION
5 Source: http://abcnews.go.com/International/slideshow/population-hit-billion-mark-14836187
Who are our new customers?
STRATEGY TRADING PRODUCTION
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Income p.a. Population 2010.
INR 100,00,000 ($220,000)
Super Rich 1,22 Mio.
INR 50,00,000 ($110,000)
Rich 1,22 Mio.
INR 20,00,000 ($44,000)
Affluent 4,88 Mio.
INR 10,00,000 ($22,000)
Upper Middle Class 12,19 Mio.
INR 3,40,000 ($7,500)
Middle Class 158,47 Mio.
INR 1,50,000 ($3,200)
Lower Middle Class 365,70 Mio.
INR 52,00 ($1,000)
Poor 219,42 Mio.
INR 52,000
Below poverty line 451,03 Mio.
Source: M+V Research 2012
The Indian Middle Class in 2010
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STRATEGY TRADING PRODUCTION
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Income p.a. Population 2010. Population 2020
INR 100,00,000 ($220,000)
Super Rich 1,22 Mio. 5,6 Mio.
INR 50,00,000 ($110,000)
Rich 1,22 Mio. 13,99 Mio.
INR 20,00,000 ($44,000)
Affluent 4,88 Mio. 41,97 Mio.
INR 10,00,000 ($22,000)
Upper Middle Class 12,19 Mio. 97,93 Mio.
INR 3,40,000 ($7,500)
Middle Class 158,47 Mio. 265,81 Mio.
INR 1,50,000 ($3,200)
Lower Middle Class 365,70 Mio. 503,64 Mio.
INR 52,00 ($1,000)
Poor 219,42 Mio. 83,94 Mio.
INR 52,000
Below poverty line 451,03 Mio. 391,72 Mio.
Source: M+V Research 2012
The Indian Middle Class in 2020
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STRATEGY TRADING PRODUCTION Structure of the ‚organized‘ Automotive Component Suppliers (turn over in Euro)
Quelle: ACMA 2012 8
120 Companies
290 Companies
240 Companies
Ab € 40 Mio.
€ 4 – 40 Mio.
Bis € 4 Mio.
• Automotive Industry is one of the most organized industries in India • There are approx. 7000 Component Manufacturers out of which less than 10 %
(650) would be considered as ‚organized‘ • The organized segment counts for 3/4 of total annual sales of approx. Euro 40
Billion
STRATEGY TRADING PRODUCTION
What does that mean for Robot Installations
Source: IFR Statistical Department 9
Sales in 2011 • 1547 Units (double of 2010) • Share of total supply: Handling 33 % - Welding %
Operational Stock • 6350 Robots (31 % up from 2010) • Share of total supply Handling 33 % - Welding 43 %
STRATEGY TRADING PRODUCTION
What does that mean for Robot Installations
Source: IFR Statistical Department 10
STRATEGY TRADING PRODUCTION
Knowing and understanding today‘s potential
Source: RBI, Department of Commerce, Government of India, EUROSTAT and M+V Research 2012; Fiskal year 2011-12
16 %
38%
46%
Premium
Good-Enough Market (approx. € 196 Bill.)
Low-End Market (approx. € 236 Bill.)
Total imports to India: € 360 Bill. share of products: 23 % resp. € 83 Bill.
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€ 515 Mrd.
STRATEGY TRADING PRODUCTION
Product Price
Different Products for different Market Segments
Market size
Competitor (market share)
Customer segment
Product (features)
Price (level)
Quality level
Premium market
MNC
Niche applications
Higher affordability
level
High end & additional features
High, international
Very quality-concious, long
lasting products
Middle market „Good-Enough Market“
Local organized
companies & International
local manufacturers
Affordable standard quality
applications
Features only crucial
for purchase decision
Lower than premium price
High quality expectations
Low-end market „Bottom of the Pyramid“
Local unorganized companies
Less quality- conscious
Serving basic needs Low price
Lower quality, shorter period
of use expected
Source: M+V Research (2012) 12
STRATEGY TRADING PRODUCTION Bait the hook to suit the fish, not the fisherman
Source: M+V Research (2012)
„Identify markets“ instead of
„Create markets“
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STRATEGY TRADING PRODUCTION
Marketing „Target here is much less to sell the right soap brand, but rather to convince whole rural target groups of the benefits of using this soap.“ Distribution Close to local customers, in required quantities and local knowledge: Home-Delivery, rural communities and small packaging
Financing Flexible financing models – Trade-in options, renting and part-time usage option
Product ‚Indians don‘t want ordinary German standard‘s trucks - what they need are simply robust, inexpensive carriages instead‘ (Mercedes TestEngineer Jochen Mast)
Business model Changing market approach: from manufacturing to service provider From manufacturing machines to operating it and selling output
14 Source: M+V Research 2012
Strategic Challenges - ‚Indianize‘ Your Business: Marketing - Distribution - Product - Business Model
STRATEGY TRADING PRODUCTION
Operational Inputs
for your Indian Business
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STRATEGY TRADING PRODUCTION
Market Conditions in India
India is as big as the old EU-15 (NW Europe)
Individual taxation laws in the different states
Different languages, cultures, mindsets and
hierarchical society
Significant bureaucracy, demanding administration, overextended legal system
Intransparent Market Structures
Bargaining culture, price sensitiveness and quality
consciousness
Increasing cost: Rent @ 5 % / year
Salaries @ 10-15 % / year
Special warehousing requirements
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STRATEGY TRADING PRODUCTION
Market penetration challenges in India
Selling of High-Value Products • Strategy • Team Structuring and Management • Marketing & Service
Fast & Efficient Supply of Goods • Management of Service Providers • Complex Indirect Taxation System • ERP • Cross-Border Aspect (Customs / SVB)
Administration of Bureaucracy • Accounting & taxation • Company Law • Financing • Controlling & Reporting • Cross-Border Aspect (IFRS / RBI / Transfer Pricing)
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STRATEGY TRADING PRODUCTION
• National Sales Manager (NSM): 30-... lakhs* Strategy, Development & Co-ordination of Country-Wide Sales Activities
• Regional Sales Manager (RSM): 10-24 lakhs* Co-ordination of ASM, Development of Regional Sales (like South India)
• Area Sales Manager (ASM): 4-8 lakhs* Coordination & Controle of SE & „Trouble Shooting“,
Identification of new customers and Dealers
• Sales Executive/Sales Engineer (SE): 2-4 lakhs*
Active Selling *1 Lakh = ca. Euro 1.450/- 18
Structuring Your Sales Team
STRATEGY TRADING PRODUCTION Sales are the basis of your success Smooth administration is essential
Company „XYZ“
Sales Strategy Marketing
CRM Distribution
Price
Supply chain Distribution
Inventory management Sales Coordination Order management
Logistics
Accounting Accounting & Bookkeeping
Intelligence & Systems ERP
Sales Consulting Quality Management System
Compliance Legal & secretarial
Internal Audit
Finance Cash Management
Financial Management Treasury
Sales Team Management Regional Sales Teams
Area Sales Team Sales Executives
Servicing Management Servicing Strategy
Technical Sales Support After Sales Servicing
Human Resources Payroll, Benefits & reimbursements
Personnel Management & Development
Infrastructure Office(s)
Warehousing After Sales Services
Meeting Rooms
Front Office Support Reception
IT equipment & support Travel Desk
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Sales Operations Finance & Admin
STRATEGY TRADING PRODUCTION
You concentrate on sales - M+V takes care of the rest
National Sales Manager Chief Operating Officer Chief Finance Officer
Sales Strategy Marketing
CRM Distribution
Price
Supply chain Distribution
Inventory management Sales Coordination Order management
Logistics
Accounting Accounting & Bookkeeping
Intelligence & Systems ERP
Sales Consulting Quality Management System
Compliance Legal & secretarial
Internal Audit
Finance Cash Management
Financial Management Treasury
Sales Team Management Regional Sales Teams
Area Sales Team Sales Executives
Servicing Management Servicing Strategy
Technical Sales Support After Sales Servicing
Human Resources Payroll, Benefits & reimbursements
Personnel Management & Development
Infrastructure Office(s)
Warehousing After Sales Services
Meeting Rooms
Front Office Support Reception
IT equipment & support Travel Desk
Company „XYZ“
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STRATEGY TRADING PRODUCTION
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• Defining of „achievable“ targets
• Planning/: Budget Strategy Milestones
Target Segments
• Implementation: Price Product Distribution Sales Team
• Quick reaction in case required
• Review of Strategy
• Continuous Performance Review of Sales Team • Appropriate Controlling Instruments in order to see deviations of Mile-Stone Achievements immediately
Plan
Review &
Reward
Perform
ACTIVE Sales-Management and Controlling: Time which you need to invest!
STRATEGY TRADING PRODUCTION
Your Markets - Today
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STRATEGY TRADING PRODUCTION
Your Markets - Tomorrow
Future Potential The future buyers in Emerging Markets
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STRATEGY TRADING PRODUCTION
KALDEWEI
Almost 25 % of all German Market Entrants to India within the last 5 years work with M+V…
STRATEGY TRADING PRODUCTION
Thank you very much for your attention!
Tel (DE): + 49.221.880 4080 Tel (IN): + 91.124.434 2300 E-Mail: [email protected]
Klaus Maier
Managing Director
Köln / New Delhi
This document is protected under the copyright laws of Germany and other countries as an unpublished work. This document contains information that is proprietary and confidential to Maier + Vidorno or its technical alliance partners, which shall not be disclosed outside or duplicated, used, or disclosed in whole or in part for any purpose other than to evaluate Maier + Vidorno. Any use or disclosure in whole or in part of this information without the written permission of Maier + Vidorno is prohibited. © 2013 Maier + Vidorno. (Unpublished). All rights reserved
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