6895798 Negative Impact of Mncs

8/8/2019 6895798 Negative Impact of Mncs

1/22

Negative impacts of MNCsin Indian markets

General ManagementGeneral Management


2/22

Problems brought by MNCProblems brought by MNC

(to host countries)(to host countries) TheThe hosthost countycounty isis likelylikely toto loselose itsits economiceconomic

sovereigntysovereignty

TheThe hosthost nationnation maymay alsoalso experienceexperience somesome losslossofof controlcontrol overover itsits ownown economyeconomy

FeelingFeeling thatthat labourlabour isis beingbeing exploitedexploited byby thetheMNC/MNC/ OutsourcingOutsourcing

LostLost ofof culturalcultural mooringsmoorings TheThe problemproblem ofof DumpingDumping

ExampleExample ChineseChinese lowlow qualityquality productsproducts ininIndianIndian marketmarket


3/22

Industry Chosen :Industry Chosen :

Colour Television (CTV)


4/22

Colour Television (CTV)Colour Television (CTV)

TheThe IndianIndian colourcolour TVTV (CTV)(CTV) marketmarket isis arguablyarguably oneone ofofthethe mostmost fascinatingfascinating marketsmarkets nownow inin AsiaAsia oror perhapsperhapseveneven thethe worldworld..

SizeSize ofof thethe IndianIndian marketmarket :: 55 millionmillion--setssets--markmark 19841984--8585 growthgrowth raterate waswas140140..33%% 19851985--8686 fellfell toto 6868..66%%,, 19881988--8989 waswas 1515%% 19891989--9090 itit touchedtouched aa levellevel ofof 55%% 19911991--9292 thethe salessales ofof colorcolor televisionstelevisions atat --1414..55%%..

AfterAfter decliningdeclining inin 20002000 andand 20012001,, thethe IndianIndian consumerconsumerelectronicselectronics marketmarket grewgrew byby 1212..44%% inin currentcurrent valuevalue inin20032003,, toto reachreach RsRs129129..55 billionbillion..

AA recentrecent trendtrend showsshows thatthat TVTV marketmarket hashas growngrown toto 373373..55perper centcent betweenbetween JanuaryJanuary--MarchMarch 20032003..


5/22

Contd..Contd..

SonySony India,India, SamsungSamsung andand LGLG areare thethe dominantdominantplayersplayers inin thethe CTVCTV segmentsegment..

InIn MarchMarch 20032003 thethe CTVCTV segmentsegment grewgrew byby 389389..11perper centcent SamsungSamsung leadingleading thethe racerace withwith aa marketmarket shareshare

ofof 2727 perper centcent

SonySony atat 2020..11 perper centcent andand

LGLG atat 1919..99 perper centcent..


6/22

Main players in theMain players in the

Indian marketIndian market

Indian:Indian: BPL, Onida, VideoconBPL, Onida, Videocon

European:European:P

hilipsP

hilipsAmerican:American: ThomsonThomson

Korean:Korean: Samsung, LGSamsung, LG

Chinese:Chinese: Akai, SansuiAkai, Sansui

Japanese:Japanese: Aiwa, Sony, Panasonic, SharpAiwa, Sony, Panasonic, Sharp


7/22


8/22

CTV Sales over the yearsCTV Sales over the years

AFTERAFTER aa periodperiod ofof slumpslump inin 19991999 andand 20012001,, colourcolourtelevisiontelevision (CTV)(CTV) salessales hadhad pickedpicked upup againagain

FYFY 20032003 thethe industryindustry reportedreported anan upwardupward movementmovement ininsalessales

TheThe CTVCTV marketmarket hashas growngrown rapidlyrapidly inin thethe lastlast oneonedecadedecade inin IndiaIndia OnOn thethe supplysupply side,side, overover thethe lastlast twotwo toto threethree years,years,

therethere hashas beenbeen somesome intenseintense activityactivity inin thethe CTVCTV market,market,withwith increasedincreased competitioncompetition andand playersplayers launchinglaunchingpremiumpremium productsproducts incorporatingincorporating superiorsuperior technologytechnology

TillTill thethe latelate 19901990s,s, thethe marketmarket waswas dominateddominated byby olderolderdomesticdomestic playersplayers suchsuch asas BPL,BPL, VideoconVideocon andand OnidaOnida..

AlthoughAlthough theythey areare stillstill presentpresent inin thethe market,market, theythey arearesteadilysteadily losinglosing groundground toto multinationalmultinational playersplayers suchsuch asasLGLG andand SamsungSamsung..


9/22

Most selling CTV brandMost selling CTV brand

2003


10/22

BPLBPL

BPLBPL isis anan IndianIndian electronicselectronics companycompany.. TheThe acronymacronymstandsstands forfor "British"British PhysicalPhysical Laboratories"Laboratories".. ItIt dealsdeals withwithconsumerconsumer electronicselectronics (such(such asas refrigeratorsrefrigerators andand washingwashingmachines),machines), mobilemobile networksnetworks etcetc..

TheThe companycompany waswas startedstarted atat aa timetime whenwhen thethegovernmentgovernment hadhad reservedreserved manymany areasareas ofof businessbusiness forfor thethepublicpublic sectorsector

BPL,BPL, CTVsCTVs havehave beenbeen thethe flagshipflagship businessbusiness OverOver thethe years,years, BPL'sBPL's growthgrowth hashas beenbeen subjectsubject toto

constantconstant challengeschallenges UsingUsing itsits experienceexperience ofof thethe marketmarket andand thethe consumer,consumer,BPLBPL concentratedconcentrated onon importingimporting technology,technology, improvingimprovingproductproduct quality,quality, innovationsinnovations andand manufacturemanufacture ofofelectronicelectronic productsproducts thatthat enhancedenhanced thethe qualityquality ofof lifelife


11/22

nidaOnida

Onida,Onida, aa leadingleading televisiontelevision brand,brand, isis stillstill wellwell knownknown forforitsits brandbrand mascotmascot TheThe OnidaOnida DevilDevil andand itsits punchpunch linelineNeighbor'sNeighbor's EnvyEnvy OwnersOwners PridePride..

OnidaOnida launchedlaunched itsits advertisingadvertising campaigncampaign inin thethe 19801980sswhenwhen owningowning aa televisiontelevision setset waswas consideredconsidered aa luxury,luxury,

TheThe mascotmascot helpedhelped OnidaOnida gaingain substantialsubstantial marketmarket shareshareandand brandbrand recallrecall amongamong thethe customerscustomers andand becomebecome oneoneofof thethe toptop threethree televisiontelevision brandsbrands inin thethe countrycountry..

InIn 19981998,, MircMirc ElectronicsElectronics (the(the ownerowner ofof OnidaOnida brand)brand)decideddecided toto abandonabandon thethe OnidaOnida DevilDevil inin itsitscommunicationcommunication campaignscampaigns asas thethe brandbrand mascotmascot nonolongerlonger appealedappealed toto thethe IndianIndian consumerconsumer..


12/22

SamsungSamsung

SamsungSamsung IndiaIndia isis thethe hubhub forfor SamsungsSamsungs SouthSouth WestWestAsiaAsia RegionalRegional operationsoperations

SportsSports MarketingMarketing andand EntertainmentEntertainment MarketingMarketing havehavebeenbeen thethe keykey elementselements ofof thethe CompanysCompanys BrandBrandMarketingMarketing StrategyStrategy

SamsungsSamsungs usesuses statestate ofof thethe artart highlyhighly automatedautomatedmanufacturingmanufacturing facilitiesfacilities

SamsungSamsung hashas beenbeen awardedawarded asas thethe BestBest RetailerRetailer ofof thethe

yearyear 20052005 SamsungSamsung IndiaIndia commencescommences exportsexports ofof 'Made'Made inin India'India'

ColourColour televisionstelevisions toto WesternWestern EuropeEurope

AA SecondSecond ProductionProduction LineLine setset upup atat NoidaNoida forfor thethemanufacturemanufacture ofof ProjectionProjection TVsTVs inin IndiaIndia


13/22

LGLG lifes goodlifes good

LGLG ElectronicsElectronics IndiaIndia PvtPvt.. LtdLtd..,, aa whollywholly ownedownedsubsidiarysubsidiary ofof LGLG Electronics,Electronics, SouthSouth KoreaKorea waswasestablishedestablished inin January,January, 19971997..

LGLG hashas beenbeen ableable toto craftcraft outout inin eighteight years,years, aa premiumpremium

brandbrand positioningpositioning inin thethe IndianIndian marketmarket andand isis todaytoday thethemostmost preferredpreferred brandbrand inin thethe segmentsegment.. InIn 20032003,, LGLG hashas emergedemerged asas thethe leaderleader inin ColourColour

Televisions,Televisions, SemiSemi AutomaticAutomatic WashingWashing Machines,Machines, AirAirConditioners,Conditioners, FrostFrost--FreeFree RefrigeratorsRefrigerators andand MicrowavesMicrowaves

OvensOvens.. TheThe companycompany hashas achievedachieved aa turnoverturnover ofof RsRs 65006500 crorecroreinin 20042004 andand aimsaims toto touchtouch aa turnoverturnover ofof 1010 BillionBillion USUSDollarsDollars byby 20102010

AsAs onon today,today, LGLG isis thethe NoNo 11 brandbrand inin thethe CTVCTV marketmarket..


14/22

Why Indian companies lostWhy Indian companies lost

its market share to MNCsits market share to MNCsPrimarilyPrimarily becausebecause ofof thethe followingfollowing reasonsreasons::

TheyThey laggedlagged behindbehind inin technologytechnology TheyThey offeredoffered aa smallsmall rangerange ofof productsproducts ProvidedProvided lessless marginmargin toto dealersdealers LessLess numbernumber ofof outletsoutlets..

PoorPoor afterafter salessales servicesservices MostMost ofof thethe BPLBPL galleriesgalleries werewere transformedtransformed byby

thethe dealersdealers intointo aa gallerygallery withwith aa rangerange ofofproductsproducts fromfrom differentdifferent manufacturersmanufacturers


15/22

ContdContd

WhatWhat MNCsMNCs did?did?

MultinationalsMultinationals suchsuch asas LGLG andand SamsungSamsung

managedmanaged toto increaseincrease theirtheir marketmarket shareshare onon thethestrengthstrength ofof aggressiveaggressive marketingmarketing


16/22

What Indian companiesWhat Indian companies

are now doing to regainare now doing to regain

their market sharetheir market share

BetterBetter InnovationsInnovations toto productsproducts

BetterBetter pricingpricing techniquestechniques BetterBetter positioningpositioning ofof thethe brandbrand FollowingFollowing anan aggressiveaggressive marketingmarketing TryingTrying toto movemove thethe afterafter salessales serviceservice toto aa newnew

levellevel SegmentationSegmentation ofof thethe productproduct rangerange byby creatingcreating

specificspecific subsub--brandsbrands


17/22

What did BPLdo?What did BPLdo?

BPLBPL tiedtied upup withwith SanyoSanyo (a(a FortuneFortune 500500 consumerconsumerelectronicselectronics majormajor )).. TheThe keykey pointspoints toto theirtheir strategystrategytoto gaingain aa goodgood marketmarket shareshare areare asas followsfollows--

RightRight pricingpricing andand thethe rightright productproduct..

ProductProduct positioningpositioning

StrongStrong regionalregional presencepresence

DifferentDifferent pricesprices inin differentdifferent showshow roomsrooms


18/22

Benefits from MNCBenefits from MNC


19/22

To Host CountriesTo Host Countries

Transfer of technology, capital andTransfer of technology, capital andentrepreneurship to the host countryentrepreneurship to the host country

EmploymentEmployment

ImprovedImproved competitioncompetition inin thethe hosthost countrycountry andandultimatelyultimately betterbetter utilizationutilization ofof availableavailableresourcesresources

MoreMore productsproducts forfor locallocal consumersconsumers GreaterGreater accessaccess toto highhigh qualityquality managerialmanagerial talenttalent

thatthat tendstends toto bebe scarcescarce inin thethe hosthost country,country,particularlyparticularly developingdeveloping onesones EncouragesEncourages thethe worldworld unityunity andand allall resultingresulting inin

worldworld harmonyharmony


20/22

To home countriesTo home countries

AcquisitionAcquisition ofof rawraw materialsmaterials fromfrom abroad,abroad,steadysteady supplysupply ofof rawraw materialmaterial atat aa lowerlower pricepricethatthat cancan bebe foundfound domesticallydomestically

TechnologyTechnology andand managementmanagement expertiseexpertise acquiredacquiredfromfrom competingcompeting inin globalglobal marketsmarkets

ExportExport ofof componentscomponents andand finishedfinished goodsgoods forforassemblyassembly oror distributiondistribution inin foreignforeign marketsmarkets

InflowInflow ofof incomeincome fromfrom overseasoverseas profits,profits, royaltiesroyaltieslicensinglicensing feesfees andand managementmanagement contractscontracts

Job Job andand careercareer opportunitiesopportunities atat homehome andandabroadabroad inin connectionconnection withwith overseasoverseas operationsoperations..


21/22

Thank you!!Thank you!!

Darshna Iyer

Sampada Chavan

Deepak Agarwal

Shantanu Chaubal MinalDamle

Amit Chavan

VinayDhake

By-


22/22

Questions???Questions???

6895798 Negative Impact of Mncs

Documents

Transcript of 6895798 Negative Impact of Mncs