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Evalueserve, 2008. All Rights Reserved - Privileged and Confidential
Conducting SuccessfulBusiness in India
- A Perspective
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Evalueserve, 2008. All Rights Reserved - Privileged and Confidential
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Presentation Plan
India A Fast Emerging Business Destination
What makes India a Fast Emerging Business Destination?
How to do Business in India?
Challenges Faced by MNCs in India
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Evalueserve, 2008. All Rights Reserved - Privileged and Confidential
Slide
Presentation Plan
India A Fast Emerging Business Destination
What makes India a Fast Emerging Business Destination?
How to do Business in India?
Challenges Faced by MNCs in India
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Estimated to become the fifthlargest consumer market by2025 (MGI)
Most preferable destinationfor Services sector (ATKearney, 2007)
Top destination in the ATKearney Global RetailDevelopment Index (2007)
Third largest economyGDP in terms of PPP(2007)
Stable 89 percent annualGDP growth rate in the past23 years
Ranks first in the availabilityof qualified engineers in thelabor market (IMD, 2006)
-India ranks high on many macro economicindicators as compared to other emerging nations
India is the second-fastest growing
economy in the world.
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Evalueserve, 2008. All Rights Reserved - Privileged and Confidential
Slide
Presentation Plan
India A Fast Emerging Business Destination
What makes India a Fast Emerging Business Destination?
How to do Business in India?
Challenges Faced by MNCs in India
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What makes India a Fast Emerging BusinessDestination?
Special incentives provided by the government to attract investmentsSpecial incentives provided by the government to attract investments
Less time and few procedures required to start a businessLess time and few procedures required to start a business
Growing potential of Tier II and Tier III citiesGrowing potential of Tier II and Tier III cities
Easy availability of skilled talent poolEasy availability of skilled talent pool
Emerging middle classEmerging middle class
Increasing disposable incomeIncreasing disposable income
Number of emerging sectors witnessing growthNumber of emerging sectors witnessing growth
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Special incentives provided by the government toattract investments
The government of India offers a number of incentives to encourage investments in India
Liberal FDI norms: As much as 98 percent of the Indian economy is open to FDI through the automatic route.Special Economic Zones (SEZs), Electronic Hardware Technology Parks (EHTPs) and Software Technology Parks
(STPs): They offer incentives, such as tax exemptions, duty-free imports and low-cost power supply.
Compliance with Trade-Related Aspects of Intellectual Property Rights (TRIPS) (since 2005): This has led to anincrease in the number of R&D centres set up by MNCs in the country.
Reduction of custom duty: In the Budget for 200809, the Government has reduced the custom duty on projects importsfrom 7.5 percent to 5 percent.
Industry associations promoting India: Industry associations such as, CII, ASSOCHAM, and NASSCOM have been setup to promote India as an investment destination.
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Less time and few procedures required to start abusiness
Indias attractiveness as compared to other emerging economies
Starting a BusinessTime Required
22
28
35
35
152
0 20 40 60 80 100 120 140 160
Korea, Reb. Of
Russia
India
China
Brazil
Time (Days )
Starting a BusinessNo. of Procedures Required
7
11
12
13
17
0 2 4 6 8 10 12 14 16 18
Russia
India
Korea, Reb. Of
China
Brazil
Number of Procedures
The time required to start a business in India is the same as that in China and lower than that in Brazil
siness procedures required to start a business in India are less compared to most of the emerging nations
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Slide 1
Growing potential of Tier II and Tier III cities
Tier ICities such as Delhi and Mumbaioffer developed infrastructure, ease of accessibility and availability of talent poolbut includes high costs
Tier IIEmerging cities, such as Pune, Hyderabad and Chennai
Tier IIIPotential cities, such as Nagpur, Ahmedabad, and Chandigarh
Potential of the tier II and tier III cities
Advantagesof tier II and
tier III cities:
Availability of talent pool(presence of academicinstitutions)
Growing infrastructure
Cost advantage (lower laborand real estate costs)
Lower attrition rates
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Increasing disposable income
The per-capita income has grown at a CAGR of 7.24 percent from INR 20,996 in 200203 to INR 29,786 in 200708.
The per capita consumption has grown at a CAGR of 5.1 percent from INR 13,352 in 200203 to INR 17,145 in 200708.
Over the next 20 years, Indias middle class is expected grow from about 5 percent of the population to more than 40percent, creating the worlds fifth-largest consumer market.
Increase in per capita income and consumption
Per-Capita Income and Consumption
13,352 13,918 14,41315,422 16,279
17,145
20,99622,413
23,89025,696
27,78429,786
0
4,500
9,000
13,500
18,000
22,500
27,000
31,500
200203 200304 200405 200506 200607 200708
Year
INR
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1Gartner
Number of emerging sectors witnessing growth
Key sectors witnessing growth
The Indian IT sector witnessed a growth of 30.7 percent in 200607 and accounted for 6570 percentof the global off-shoring market.
India is among the top 30 countries with regard to parameters supporting IT services.1
The Indian IT sector witnessed a growth of 30.7 percent in 200607 and accounted for 6570 percentof the global off-shoring market.
India is among the top 30 countries with regard to parameters supporting IT services.1
IT
India is the fastest growing telecommunications market in the world.
It has the worlds lowest call rates (23 US cents) and fastest growingsubscriber rates (15.31million in just four months in 2007).
Leading global telecom equipment manufacturers, such as Nokia, Samsung, Motorola and SonyEricsson, are setting up their bases in the country.
India is the fastest growing telecommunications market in the world.
It has the worlds lowest call rates (23 US cents) and fastest growingsubscriber rates (15.31million in just four months in 2007).
Leading global telecom equipment manufacturers, such as Nokia, Samsung, Motorola and SonyEricsson, are setting up their bases in the country.
Telecommunications
The Indian health care sector is valued at USD 34 billion.
The sector attracted 6.3 percent of the total PE investment in India in 2006, amounting to USD 379million.
The Indian health care sector is valued at USD 34 billion.
The sector attracted 6.3 percent of the total PE investment in India in 2006, amounting to USD 379million.
Health Care
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Slide 1
Presentation Plan
India A Fast Emerging Business Destination
What makes India a Fast Emerging Business Destination?
How to do Business in India?
Challenges Faced by MNCs in India
ff
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Penetrating domestic markets and leveraging India presence
India offers both domestic market opportunity-and off shoring opportunity for MNCs
Business Opportunity in India
Domestic Market Opportunity Off-shoring Opportunity Sourcing Opportunity
Vast population
Increasing purchasingPower
Growing size of middle andhigher consumer class
Availability of skilled talentpool
Cost Savings
Knowledge/R&D hub
Availability of raw materials
Presence of strong industryinfrastructure
Developed technology
Cost savings
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Case Study Domestic Market Opportunity
Steps taken by McDonalds:
Menu customised to Indian taste McAloo Tikki,Paneer Salsa Wrap, Chicken Maharaja Mac andVeg McCurry Pan.
Advertisements that appeal to Indian customers.
Menu priced to suit Indian pockets with burger price
as low as INR 20.
Success in India:
Made its debut by opening two restaurants in Delhiand Mumbai in 1996.
Currently, the company has around 132 restaurantsin India.
Planning to increase the number of outlets to about220 by the end of 2008.
Steps taken by McDonalds:
Menu customised to Indian taste McAloo Tikki,Paneer Salsa Wrap, Chicken Maharaja Mac andVeg McCurry Pan.
Advertisements that appeal to Indian customers.
Menu priced to suit Indian pockets with burger price
as low as INR 20.
Success in India:
Made its debut by opening two restaurants in Delhiand Mumbai in 1996.
Currently, the company has around 132 restaurantsin India.
Planning to increase the number of outlets to about220 by the end of 2008.
McDonalds is one of the worlds leading fast food restaurant chain.
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Case Study Sourcing Opportunity
Steps taken by Piaggio:
Localized 100 percent of its 3-wheeler product inIndia in order to compete effectively
Set up a predominant Indian management team forIndia operations
Setting up of R&D operations in India
Success in India:
Introduced, new 3- and 4- wheeler models, superiorengine technology, and innovative customisedsolutions in India.
Leveraging India:
Planning to make India a global hub for 3-wheeler
manufacturing and export products components tothe EU
Steps taken by Piaggio:
Localized 100 percent of its 3-wheeler product inIndia in order to compete effectively
Set up a predominant Indian management team forIndia operations
Setting up of R&D operations in India
Success in India:
Introduced, new 3- and 4- wheeler models, superiorengine technology, and innovative customisedsolutions in India.
Leveraging India:
Planning to make India a global hub for 3-wheeler
manufacturing and export products components tothe EU
Piaggio is an Italy-based company that specialises in the design and manufacture of
two-wheel motor vehicles.
ase u y ene ra ng omes c mar e s an
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ase u y ene ra ng omes c mar e s anleveraging its India presence for exporting to
other countries
Steps taken by Cadbury:
Tailored products to suit Indian consumers (almondsare more preferred in India as compared topeanuts).
Innovative distribution strategy and advertisementsthat appeal to Indian consumers.
Products sold at lower margins as the companybelieves high penetration compensates for thereduced margins.
A predominant Indian management team for Indiaoperations.
Success in India:
Leads the chocolate and confectionary market inIndia.
Leveraging India:
Exports finished goods and innovative concepts toits other branches around the world.
Steps taken by Cadbury:
Tailored products to suit Indian consumers (almondsare more preferred in India as compared topeanuts).
Innovative distribution strategy and advertisementsthat appeal to Indian consumers.
Products sold at lower margins as the companybelieves high penetration compensates for thereduced margins.
A predominant Indian management team for Indiaoperations.
Success in India:
Leads the chocolate and confectionary market inIndia.
Leveraging India:
Exports finished goods and innovative concepts toits other branches around the world.
Cadbury is one of the worlds leading confectionery and non-alcoholic beverage
companies..
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Slide 2
Presentation Plan
India A Fast Emerging Business Destination
What makes India a Fast Emerging Business Destination?
How to do Business in India?
Challenges Faced by MNCs in India
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E l 2008 All Ri ht R d P i il d d C fid ti l
Slide 2
Challenges Faced by MNCs
Distinct taste and habits from rest of the world and variationswithin IndiaMcDonalds solved this problem by bringing outcustomized menu for the Indian market.
Large variation in Paying capacityPhillips addressed the problemby using the right value proposition. It cut the prices of itsacclaimed Compact Fluorescent Lamps.
Reaching target customers in a cost effective wayCompanies,such as Allianz-Bajaj, GSK, and Danfoss, follow partnership modelswith local organisations to increase their reach
Large number of supply chain intermediariesPiaggio addressedthe problem by localising 100 percent of its 3-wheeler products in
India.
Distinct taste and habits from rest of the world and variationswithin IndiaMcDonalds solved this problem by bringing outcustomized menu for the Indian market.
Large variation in Paying capacityPhillips addressed the problemby using the right value proposition. It cut the prices of itsacclaimed Compact Fluorescent Lamps.
Reaching target customers in a cost effective wayCompanies,such as Allianz-Bajaj, GSK, and Danfoss, follow partnership modelswith local organisations to increase their reach
Large number of supply chain intermediariesPiaggio addressedthe problem by localising 100 percent of its 3-wheeler products in
India.
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