MAJOR GLOBALIZATION INITIATIVES FROM INDIAN COMPANIES

By, RAMKUMAR.K

GLOBALIZATION• Globalization is the process which enables the

geographical, social, cultural, political and economic movement internationally more easily.

• Globalization refers to growing economic interdependence among countries as reflected in increasing cross-border flows of three types of commodities: goods and services, capital, and know how

ENTRY STRATEGY FOR GLOBALIZATION OF COMPANIES

• Exporting ( Direct or Indirect)

• Licensing

• Franchising

• Contract manufacturing/ International subcontracting

• Strategic Alliance

• Joint ventures

• Wholly owned subsidiary

• Mergers & Acquisition

The Elements of Globalization :

Globalization of Markets:It refers to the merging of national markets into one huge global marketplace.

Globalization of Production:It refers to the sourcing of goods and services from locations around the world to take advantage of national differences in the cost and quality of factors of production.

Falling Barriers to Trade and Investment:The falling of barriers to international trade enables firms to view the world as their market.

Technological Innovation:Technological changes have achieved advances in communication, information processing, and transportation technology, including the Internet and the World Wide Web .

INDIA’s GDP GROWTH RATE

FACTORS DETERMINING IN BUILDING GLOBAL COMPANIES

• POLITICAL FACTORS

Stability of the government

Type of government

- Democratic

- Theocracy (religious)

- monarchy ( kingdom)

Control structure

Canada, USA ( decentralized province)

Japan, France( centralized)

POLITICAL FACTORS

Government take over of asset(with or without

permission)

Operational restriction

Remittance/ Repatriation restrictions

Government policies

Opposition parties, pressure groups, external linkages

Economic factors

Economic system ( open / mixed)

Economic development

Standard of living( per capita income)

Sectorial share in GDP

Foreign Exchange reserves

Economic indicators( inflation rate, BOP)

Technological factors

Differentiation strategy

Competitive advantage

Legal factors Home country laws

Host country laws

International lawsUN resolutions, Patents &

Trademark protection & piracy laws, GATT, codes of

conduct

ITCSUBSIDIARIES• ITC Infotech

• Surya Nepal Private Limited

• Landbase

• King Maker Marketing Inc., USA

• Technico Pty Limited. Australia

• Russell Credit Limited

• Wimco Limited

• Srinivasa Resorts Limited

• Fortune Park Hotels Limited

• Bay Islands Hotels Limited

• Gold Flake Corporation Limited

JOINT VENTURES

• Maharaja Heritage Resorts Ltd.

• ITC Filtrona

ASSOCIATE COMPANIES

• Gujarat Hotels Limited

• International Travel House

ITC INFOTECH• The company services industries including,

Banking Financial Services & Insurance (BFSI), Consumer Packaged Goods (CPG), Retail, Manufacturing, Engineering Services, Media & Entertainment, Travel, Hospitality, Life Sciences and Transportation & Logistics.

• Ranked amongst Top 10 Specialty Application Development Providers - Global Services, CMP Media

ITC CIGARETTESMarket Value

The Indian tobacco market grew by 8.9% in 2012 to reach a value of $11.6 billion.

Market Value Forecast

In 2013, the Indian tobacco market is forecast to have a value of $14.9 billion, an increase of 29.4% since 2008.

MAHINDRAMAHINDRA AND MAHINDRA

• Their global presence means that you can find Mahindra vehicles on the roads—both paved and unpaved—of Australia, Europe, Latin America, Malaysia, and South Africa. And they are seeking out new terrain every day

MAHINDRA FORGINGS

• They are one of the largest and most technologically advanced manufacturers of forged and machined components in the world. They create parts like links, knuckles, spindles, shafts, crankshafts, camshafts, pistons, ball joints, and stub axles that are used in automotive, agriculture, railway, mining, construction and other industries throughout the world.

MAHINDRAMAHINDRA SATYAM

• Sathyam is a global player in the global Information, Communication, and Technology (ICT) space. They provide enterprise business solutions, infrastructure services, industry native solutions, integrated engineering solutions, consulting services, application development and management services, and business process outsourcing to more than 350 clients in 35 countries.

TECH MAHINDRA

• Since commencing operations in 1986 as a joint venture between Mahindra and British Telecom (BT), they have become one of India’s largest software exporters and ranked No.1 in the Telecom Software Category (Voice & Data 2010-11). For over two decades, they have been the chosen transformation partner for wireline, wireless and broadband operators in Europe, Asia-Pacific and North America. We operate in more than 30 countries through 17 sales offices and 13 delivery centers, working with major players like British Telecom, Vodafone, among others

INFOSYS• Infosys is a global leader in consulting, technology and

outsourcing with revenues of US$ 7.231 billion

• Infosys provides business consulting, technology, engineering and outsourcing services to help clients in over 30 countries build tomorrow’s enterprise.

• Infosys and its subsidiaries have 155,629 employees as on Dec 31, 2012.

INFOSYS• Infosys takes pride in building strategic long-

term client relationships. 97.5% of our revenues come from existing customers

• Infosys has a global footprint with 67 offices and 69 development centers in US, India, China, Australia, Japan, Middle East, UK, Germany, France, Switzerland, Netherlands, Poland, Canada and many other countries.

DABUR• Dabur has a special herbal health care and personal

care range successfully selling in markets ranging from the Middle East, Far East, North Africa and Europe

• Inroads into several European and American markets that have good potential due to resurgence of the back-to-nature movement

• Export of Active Pharmaceutical Ingredients (APIs), manufactured under strict international quality benchmarks, to Europe, Latin America, Africa, and other Asian countries

• Export of food and textile grade natural gums, extracted from traditional plant sources

• Six modern manufacturing facilities spread across South Asia, Middle East and Africa to optimize production by utilizing local resources and the most modern technology available

Acquisition

TATA• Corus Group (U.K.)

Tata Steel, one of the leading steel producers in India, acquired Corus Group for U.S. $12.11 billion (€ 8.5 billion) on January 31, 2007

This acquisition is considered to be one of the biggest foreign acquisitions by an Indian company, and after this only TATA Steel came out to be the fifth largest steel producer in the whole world.

TATA• Jaguar Cars and Land Rover (U.K.)

Tata Motors has acquired both Jaguar and Land Rover, which are two iconic British brands with worldwide growth prospects

This deal was for a whooping U.S. $ 2.3 billion with Ford, the previous American owners.

The deal was effective from May 2008. The deal is seen as yet another endeavor of the fast growing Indian industries, also the latest in a string of foreign acquisitions by Tata.

Bharti Airtel• Zain Africa

Bharti Airtel had acquired Zain Africa for a value of U.S. $10.7 billion. The acquisition gives Bharti Airtel a total customer base of 180 million, including 131 million subscribers it had in India at the end of April

By expanding its business outside the country, Bharti Airtel can in the long term benefit from economies of scale, including getting better deals from suppliers

Aditya Birla• Novelis (U.S.)

• Has acquired the entire stake in the Atlanta based aluminium company Novelis for U.S. $6 billion

• This company had separated from Alcan, a global aluminium company

ONGC• Imperial Energy (U.K.) 

• Oil and Natural Gas Corp (ONGC) has acquired Imperial Energy. This deal was for 1.3 billion pounds (U.S. $1.9 billion).

• The company owed the acquisition to government support, which in the past seven years increase its number of projects to 39 in 17 countries, from just a single project in Vietnam

Essar Steel Global• Algoma Steel (Canada)

Ruias owned Essar Steel Global acquires the Canadian steel company Algoma Steel at a valuation of Canadian $1.85 billion.

Essar Steel Holding, Essar Group's overseas investment arm made the investment possible and easy. Algoma would definitely provide Essar an excellent platform for the Canadian and North American market

Reliance• Marcellus Shale

Reliance, led by Indian billionaire Mukesh Ambani, got the right to buy 40 percent of all new Marcellus Shale leases that Atlas acquires, after this purchase acquisition and agreement was completed.

Acquisition summaryCompany Acquisition Price ($m)

Reliance Industries Flag Telecom, BermudaTrevira, Germany

21295

Tata Motors Daewoo, Korea 118

Infosys Technologies Expert Information Services, Australia 

3.1

Wockhardt CP Pharmaceuticals, UK 18

Cadila Health Alpharma SAS, France 5.7

Hindalco Straits Ply, Australia 56.4

Wipro NerveWire Inc, US 18.5

Aditya Birla Dashiqiao Chem, China 8.5

United Phosphorus Oryzalin Herbicide, US 21.3Bharat Forge Carl Dan Peddinghaus Gmbh, Germany 28

Ranbaxy RPG Aventis, France 80

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