India Inc. & Globalization DR. JAGDISH N. SHETH Charles H. Kellstadt Professor of Marketing Emory...
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Transcript of India Inc. & Globalization DR. JAGDISH N. SHETH Charles H. Kellstadt Professor of Marketing Emory...
India Inc. & GlobalizationIndia Inc. & Globalization
DR. JAGDISH N. SHETH
Charles H. Kellstadt Professor of MarketingEmory University
©2006 Dr. Jagdish N. Sheth. All rights reserved.India Inc. & Globalization April 2006
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Forces Shaping Global Economy
AGING OF AFFLUENT MARKETS
WHY FOCUS ON EMERGING MARKETS
WORLD IS FLATCOLLAPSE OF COMMUNISM
ECONOMIC PRAGMATISM
©2006 Dr. Jagdish N. Sheth. All rights reserved.India Inc. & Globalization April 2006
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Economic Growth Engines for the World
WESTERN EUROPE
U.S. / CANADA
LARGE EMERGING NATIONS
1800s
1900s
21stCENTURY
©2006 Dr. Jagdish N. Sheth. All rights reserved.India Inc. & Globalization April 2006
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New Measures of World Economies
The new measure is Purchasing Power Parity (PPP)
1. U.S. $12.4 trillion2. China $ 8.2 trillion3. Japan $ 3.9 trillion4. India $ 3.7 trillion5. Germany $ 2.5 trillion6. U.K. $ 1.9 trillion7. France $ 1.8 trillion8. Italy $ 1.6 trillion9. Brazil $ 1.6 trillion10.Russia $ 1.5 trillion
Source: CIA Factbook
THE BRIC REPORT
2005 (estimated)
©2006 Dr. Jagdish N. Sheth. All rights reserved.India Inc. & Globalization April 2006
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New Measures of World Economies (cont.)
• China is the second largest economy based on PPP index and just surpassed Japan. It will be the largest single economy by the year 2020.
• India is the fourth largest economy, and it will become the third largest economy by the year 2010.
• BRIC Report (Goldman Sachs)
©2006 Dr. Jagdish N. Sheth. All rights reserved.India Inc. & Globalization April 2006
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Repositioning of India, Inc.
FOCUSED GLOBALBUSINESS
INTEGRATEDGLOBA
ECONOMY
New India
DIVERSIFIEDDOMESTIC
CONGLOMERATE
ISOLATEDDOMESTIC ECONOMY
Old India
©2006 Dr. Jagdish N. Sheth. All rights reserved.India Inc. & Globalization April 2006
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Global Evolution of a Company
Global Evolution
TIME
SUBSIDIARY BASED
GLOBAL
INTEGRATED GLOBAL
COMPANY
EXPORT BASED
GLOBAL
©2006 Dr. Jagdish N. Sheth. All rights reserved.India Inc. & Globalization April 2006
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Global Evolution of a Company (con’t.)
• Export Based Global– French Champagne, Rolex watches,
Indian diamonds, Granite, Leather goods, Textiles
• Subsidiary Based Global– General Motors, Siemens, Wipro, Infosys,
Mahindra & Mahindra, Tata Motors
• Integrated Global Company– Toyota, Microsoft, Mittal Steel
©2006 Dr. Jagdish N. Sheth. All rights reserved.India Inc. & Globalization April 2006
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What Makes a Truly Global Company or Brand?
• A truly global company or brand loses its country of origin identity among all its stakeholders: customers, employees, suppliers, investors and communities.
• A brand or company becomes truly a global brand or company when the whole world embraces and takes ownership without country of origin bias.– Olympics, Internet, MTV
• New technologies and products often become global faster than brands or companies.– Television, Mobile phones, Broadband
©2006 Dr. Jagdish N. Sheth. All rights reserved.India Inc. & Globalization April 2006
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Why are the Heavyweights of India Lightweights Abroad?
Domestic diversified business
Lack of global mindset
Lack of scale
Lack of capitalLack of global
strategy
Government rules &
regulations
Ethnocentric culture
Limited experience in international marketing
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©2006 Dr. Jagdish N. Sheth. All rights reserved.India Inc. & Globalization April 2006
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Global Repositioning of India Inc.
HighLow
HighPREMIUM MARKET
VALUE MARKET
HIT & RUN COUNTRY(Emerging Economies)
PRICE MARKETLow
Quality
Price
• India Inc. must aspire and globally compete in Best Value as well as Premium markets.
©2006 Dr. Jagdish N. Sheth. All rights reserved.India Inc. & Globalization April 2006
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What Will it Take to Succeed?
Global mindset
Global acquisitions & integration
Quality reputation
Differentiation through design
& innovation
Nurture worldwide talent
& leadership
Global branding & positioning
Global segmentation &
targeting
Worldwide supply chain
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©2006 Dr. Jagdish N. Sheth. All rights reserved.India Inc. & Globalization April 2006
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How Can Marketing Play a Key Role in Globalization of India Inc.?
• Identify targeted geographies and segments based on market attractiveness.
• Develop competitive brand positioning.– Price– Value– Presitge
• Prepare entry plan including market access.
©2006 Dr. Jagdish N. Sheth. All rights reserved.India Inc. & Globalization April 2006
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How Can Marketing Play a Key Role in Globalization of India Inc.?
DifferentSimilar
Different
Similar
Customer
Resources
Product & Promotion Adjustment
Adjust All 4P’s of Marketing
Extension ofMarketing
Price andDistributionAdjustment
CustomerNeeds
• Extend or adjust the marketing mix depending on customer needs and customer resources.
• Manage local suppliers. Marketing is the most outsourced function.
©2006 Dr. Jagdish N. Sheth. All rights reserved.India Inc. & Globalization April 2006
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How Can Marketing Play a Key Role in Globalization of India, Inc.?
• Is the acquisition for growth or transformation of marketing?
• Prepare a blueprint for integration of acquired companies.
• Integration will impact branding and product rationalization.
• How to integrate outside suppliers of marketing services, ad agencies, public relations, direct marketing, web based marketing and merchandising.
BOTH ORGANIC AND INORGANIC OPTIONS FOR GLOBALIZATION WILL REQUIRE MARKETING TO BE
AT THE HEAD TABLE.
©2006 Dr. Jagdish N. Sheth. All rights reserved.India Inc. & Globalization April 2006
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Conclusions• India is destined to become a major economic power in
the 21st Century.• The heavyweights or India are lightweight globally
primarily because they lack global mindset, global strategy, scale and capital.
• However, India Inc. will aspire to compete globally.• To be globally competitive, Indian industry needs to
invest in quality reputation, global branding, design & innovation, worldwide talent and global supply chain.
• Marketing will play a key role in identifying the right target market and competitively positioning the company’s brand. If the strategy is inorganic growth, marketing must integrate brands and products as well as outside suppliers of marketing services.