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    Globalization & India

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    Rishu Anand Mridula
    Globalization and economic reforms in India since 1991 have led to both positive and negative impacts. Positively, reforms opened India's markets to foreign goods and investment, fueling strong GDP growth. However, reforms also put pressure on domestic industries, leading some large companies to downsize. Indian companies have adopted various approaches to improve profitability in this environment, such as research-based exports, collaborations, building strong brands, and utilizing resources efficiently. Overall, Indian companies that have successfully competed have done so through a spirit of innovation.

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    Globalization & India

    Uploaded by

    Rishu Anand Mridula
    26 views16 pages
    Globalization and economic reforms in India since 1991 have led to both positive and negative impacts. Positively, reforms opened India's markets to foreign goods and investment, fueling strong GDP growth. However, reforms also put pressure on domestic industries, leading some large companies to downsize. Indian companies have adopted various approaches to improve profitability in this environment, such as research-based exports, collaborations, building strong brands, and utilizing resources efficiently. Overall, Indian companies that have successfully competed have done so through a spirit of innovation.

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    Globalization and economic reforms in India since 1991 have led to both positive and negative impacts. Positively, reforms opened India's markets to foreign goods and investment, fueling strong GDP growth. However, reforms also put pressure on domestic industries, leading some large companies to downsize. Indian companies have adopted various approaches to improve profitability in this environment, such as research-based exports, collaborations, building strong brands, and utilizing resources efficiently. Overall, Indian companies that have successfully competed have done so through a spirit of innovation.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    26 views16 pages

    Globalization & India

    Uploaded by

    Rishu Anand Mridula
    Globalization and economic reforms in India since 1991 have led to both positive and negative impacts. Positively, reforms opened India's markets to foreign goods and investment, fueling strong GDP growth. However, reforms also put pressure on domestic industries, leading some large companies to downsize. Indian companies have adopted various approaches to improve profitability in this environment, such as research-based exports, collaborations, building strong brands, and utilizing resources efficiently. Overall, Indian companies that have successfully competed have done so through a spirit of innovation.

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    of 16

    Globalization & India

    India Went Through Economic Reforms From 1991. The


    major ones are:
    • Reductions In Import Duty
    • Removal of restrictions on imports
    • Devaluation of Currency
    • Removal of permissions on setting up enterprises and
    expansion of capacity
    • Removal of permission of Controller of Capital on Share
    Premium Account on issues of Shares
    • Privatization of Public Sector Units
    • Membership of WTO
    • Easier entry of multinationals
    World Perception
    • Visualization of Six Major Global Players (U.S.A.,
    Japan, Europe, Russia, China, India)
    • Goldman Sach’s Report (Brazil, Russia, India, China
    – BRIC major players). Projects India as a potential
    winner ahead of China and would overtake U.S.A.
    and China by 2025 in terms of Real GDP.
    • India huge market – population of 1 Billion with at
    least 250 Million middle class with tremendous
    buying power
    • Economy with 6% Growth Post Liberalization
    India’s Problem
    • High growth but problem of
    unemployment.
    • Need to generate 10 million jobs per year.
    • Multi party rule, hence need to
    accommodate political ideology with
    economic reality (reservation, labour law
    reforms).
    INTERNATIONAL BUYERS APPROACH ON
    COMPLIANCE OF CODE OF CONDUCT BY
    SUPPLIERS
    • COMPANIES HAVE DEVELOPED THEIR OWN CODE OF CONDUCT TO BE
    FOLLOWED BY THE SUPPLIERS COVERING MAINLY THE FOLLOWING THREE:

    - UNIVERSAL DECLARATION OF HUMAN RIGHTS (UN 1948)


    - FUNDAMENTAL PRINCIPLES OF RIGHTS AT WORK (ILO 1998)
    - RIO DECLARATION ON SUSTAINABLE DEVELOPMENT (UN 1992)

    • LEGAL REQUIREMENT:
    - SUPPLIER MUST COMPLY WITH NATIONAL LAWS AND REGULATIONS AND WITH
    INTERNATIONAL CONVENTIONS CONCERNING SOCIAL AND WORKING CONDITIONS,
    CHILD LABOUR AND THE PROTECTION OF THE ENVIRONMENT

    • COMMUNICATION METHODOLOGY TO SUB-SUPPLIERS AND WORKERS. ALSO


    CODE AVAILABLE ON WEB SITE

    • AUDITS AND ACTION ON REDUCING/ELIMINATING DEVIATIONS IN TIME FRAME

    • EXAMPLES OF IKEA, NIKE


    Interests of Stake Holders

    • Enterprises In Wealth Creation


    • Government In Revenue And Employment
    • Employees In Development And Increase In
    Standard Of Living
    • Customers - Value For Money (Choice,
    Affordability And Speed)
    IMPACT OF REFORMS IN INDIA
    Positive :
    • Easy Availability Of Imported/Foreign
    Collaborated Locally Produced Consumer Items
    Plus Consumer Durables.
    • Reliable Communication System Of Telephone
    (Landline And Mobile), E-mail
    • Availability Of Large Number Of Qualified Youth
    In Most Disciplines
    • State Governments Trying To Attract Investment
    By Offering Incentives / Benefits
    Continued …
    • Speedy Mode Of Travel And Transportation
    • Economic Growth Of 6%
    • MNCs Have Entered The Market Both For
    Sourcing As Well As Selling Their Products
    • Well Established And Developed Stock Exchange
    • Growth In Automobile, IT, Construction, Pharma,
    Telecom, Energy, Entertainment And Service
    Sectors
    • Foreign Exchange Reserves Presently At US$ 120
    Billion With US$ Pegged Between Rs. 45/- And
    Rs. 46/-
    IMPACT OF REFORMS

    Negative :
    • Presently No Change In Existing Labour Laws
    • Manufacturing Companies have restructured and
    downsized (Engineering, Metals, Cement,
    Electrical Machinery, Textiles)
    • Lot Of Companies Offered Voluntary Retirement
    Schemes (VRS) And Reduced The Number Of
    Employees.
    Continued …
    • Shift In Employment From Large Companies To
    Medium And Small Companies
    • Shortage Of Power Continues In Spite of
    Investment in Power
    • Qualified Persons Are Prepared to Work at Lower
    Level Jobs
    Value Chain Migration
    Problem for Indian Companies
    • Professionally vs. Family Managed
    • MNCs vs. Local Corporate
    • Marketing/ Distribution vs. Manufacturing
    • Branded vs. Commodity Products
    • Low vs. High Capital Intensity
    Challenges To Indian Industry
    • Threat Of Imports
    • Easy Availability Of International Brand
    • MNC’s Have Deeper Pockets
    • MNC’s R&D, Systems
    • Pressure To Improve Operational Efficiency
    • Business Houses Also Expanding (Reliance,
    Adity Birla, M&M, Tata Motors, Asian Paints,
    Ranbaxy, Cipla, Dr Reddy’s)
    • Export Market Potential
    • Innovative Marketing Strategy
    • Innovative IR And HR
    APPROACHES ADOPTED BY INDIAN
    COMPANIES TO IMPROVE PROFITABILITY
    Post Globalisation
    1. Strategy To Be Effective, Price Sensitive, Market
    Adaptive And Customer Friendly Through :
    • Restructure Sources And Uses Of Funds
    • No Place For NPAs
    • Tight Control On Working Capital
    • Efficient Management Of Raw Material, WIP, Finished Goods
    • Suppliers And Subcontractors
    • Utilization Of Manufacturing Plants
    • Distribution Channel
    • Manpower
    Continued …
    2. Research Based Export By Pharma Companies
    • DRF Licensed DRF 4158 To Novartis For $ 55
    Million Plus When Drug Is Marketed
    • Ranbaxy Ciprofloxacin For $ 65 Million To
    Bayer
    • Torrent, Wockhardt, Sun, Cadila, Orhid, Lupin,
    Cipla With Potential

    3. The BPO-ITES Industry in India revenue $ 3.6


    Billion in 2004 expected to fetch $ 21 to 28
    Billion in 2008
    4. Value Addition Approach by a Milk Cooperation
    in India (i.e.Amul)
    • Concept Of Value Added
    • Milk, Flavoured Milk, Condensed Milk, Curd, Cottage Cheese
    (Paneer), Khoya, Butter, Cheese, Ghee, Dairy Whitener, Baby
    Milk Powder.

    Market Share

    Item Market Size Amul Share Britannia Others


    Rs. Million Share
    Butter 6500 85% 5% 10%
    Dairy 2750 45% 15% 30%
    Cheese 1400 60% 33% 7%
    5. Collaborations, Mergers, Acquisitions (Eg.
    Pharma, Cement, Aluminium, Telecom)
    6. Niche Markets
    7. World Class Manufacturers (Titan, Sundaram
    Clayton)
    8. Tackled Onslaught Large Companies
    (Reliance, Nirma, Piramal Health Care, Dr.
    Reddy’s Laboratories, Ambuja Cement, Bajaj
    Auto, Jet Airways, NTPC, BHEL, L&T,
    Aditya Birla Group, Asian Paints)
    9. Strong Brands (Wagh-bakri, Vadilal, Frooti,
    Real, Rasna, Bisleri, Haldiram)
    Conclusion
    • Companies in India That Have
    Successfully Met Competition by
    Multinationals & Domestic Companies
    Had A Spirit Of Innovation Not Only In
    Their Products And Services But Also
    With Reference To All Their Resources
    And Effectively Restructured Them In A
    Time And Cost Frame And Met
    Customer Needs And Improved Their
    Top And Bottom Line

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