The MNC world is flat too

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  • LBNL Books

    114 BUSINESS TODAY September 2 2012

    The book is worth not just a single read but many. It should set off some robust soul searching among companies that harbour emerging MNC ambitions

    The MNC World Is Flat TooThe book analyses 39 cases of multinational corporations coming out of emerging markets

    Until the 1990s, multinational companies from the devel-oped world were the ones with all the advantages. They lorded it over markets with their mammoth budgets, their vast reach and capac-ity to spend on research. Local com-panies were mostly restricted to ei-ther throwing price challenges at these MNCs or offering a local cus-tomisation the bigger companies did not care to pursue.

    But much has changed since. Some erstwhile local companies from the emerging markets have themselves turned MNCs. I remem-ber once speaking to Praveen Jaipuriar, Daburs Senior General Manager for Marketing, who had this to say: We know if we do not have a certain capability, we can acquire it or even pay and get the best in the field to do the research for us. It sums up the approach of the emerging market MNCs. That is not all. These emerging giants are also swooping down to buy compa-nies in other countries.

    They are making many strate-gic moves while competing in a global setting. Most of them, for instance, are aware the advantage in pricing they enjoyed is now getting constrained. Only a combi-nation of initiatives welded seamlessly together will keep them flourishing. Today the foreign players can match and compete (with us) on any parameter, says Parag Desai, Executive Director of Gujarat Tea Processors and Packers owner of the Wagh Bakri brand.

    An early book on the subject was Emerging Multinationals in Emerging Markets edited by Ravi Ramamurti and Jitendra V. Singh. It noted the emergence of the new MNCs and the reasons for their spread. There

    was also another book, Winning in Emerging Markets by Tarun Khanna and Krishna G. Palepu, which ad-dressed foreign companies interested in entering territories such as Brazil, India and China. The latest, the one under review, looks at 39 cases of emerging MNCs (EMNCs) from India, Sri Lanka, China, Turkey, Taiwan, Thailand, S. Korea, Singapore, Brazil, Mexico, Saudi Arabia and Jordan.

    The authors have spliced and diced the strategy pursued by the EMNCs in numerous ways, analysing closely how they tackle manage-ment and human resource related issues overseas to their advantage. After examining each aspect of their functioning, the key takeaways are listed at the end which can serve as a useful handbook for managers. Every angle of the business has been analysed, including the way EMNCs have forged successful partnerships even with third-party vendors over-seas, and how they work under the radar to improve quality.

    Sometimes the poor image of the country the EMNCs originates from

    can affect its performance. Titans Bhaskar Bhat explic-itly said to us that his company thought its Indian coun-try of origin was a major reason why its seven-year effort in Europe to market a global watch did not succeed, say the authors. But they do not stop at merely highlighting the problem, they also show how another company, Temsa, one of Turkeys leading automotive firms, tackled it. Saying more would be giving away too much. It is enough to say this book is worth not just a single read but many, and should set off some robust soul searching among companies that harbour EMNC ambitions. ~

    S H A M N I P A N D E

    The New Emerging Market Multinationals

    By Amitava Chattopadhyay and Rajeev Batra with Aysegul Ozsomer

    Tata McGraw-Hill Pages: 335Price: $35

    LBNL-Books.indd 2LBNL-Books.indd 2 8/9/2012 3:53:29 PM8/9/2012 3:53:29 PM

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