Executive Summary

During the previous decade, the nature and dynamics of Indian companies engagement with the overseas markets have gone through a shift. Overseas expansion and competitiveness are increasingly dependent on firm level capabilities rather than on national endowments in traditional products or commodities. Two meta-trends are driving the presence, growth, and competitiveness of Indian companies in overseas markets. One, the process of liberalization and globalization of Indian economy has led to the development of competitive capabilities by Indian companies and has brought about intensive interaction with global corporations, professionals, capital, ideas, and practices. Two, the transforming impact of information and communication technology (ICT) on the world of business has resulted in the emergence of new types of businesses and new ways of organizing. The context and timing bestow Indian companies with a set of advantages and challenges. This panel discussion has the benefit of six cogent contributionsfrom academics who have intimately researched the phenomenon to practitioners who have led their organizations and have created substantial presence in overseas markets. Some of the major patterns and conclusions that the colloquium converges upon are as follows: From comparative to competitive advantage: With shift towards advantages based on availability, lower cost and skills of the technical and scientific manpower, Indian companies need to create complementary skills and the success are governed by competencies developed within a company and aspirations of its top management. Favorable push and pull conditions for overseas successes: For an increasing number of industries, Indian companies are reaching the point of having global advantagesfavorable factor conditions, domestic demand characteristics comparable to that overseas, presence of ancillary and supportive skills, and pervasive confidence for looking beyond domestic markets. On the pull side, from the situation of Indian origin being a handicap, the world has come to acknowledge India advantage.

 Three strategy types for Indian companies in overseas markets: Outsourcing, where the domestic market is either very small or unattractive; Internationalization, where companies are aiming to expand market or balance business downturns and risks of domestic market; and, Multinationalization, where companies are aiming to create sustainable competitive position in several geographies. Differing requirements of the institutional and the retail customers: Joint ventures are generally not viable for institutional customers, while being a useful option for reaching the latterwith benefits related to local knowledge, capital, brand, and distribution. Organizing for growth and capability building: Structure for the three strategy types is different and a dual-core model could balance requirements of risk-taking in new areas with efficiency in stabilized activities. While carrying Indian imprint, the culture will be company-specific and should be allowed to evolve in a directed way. Critical role of conviction-laden leadership: This is a common element across all the Indian companies that have made overseas breakthroughs and the leadership traits of being clear, fundamentals oriented, and planned need to be supplemented with international orientation and preparedness for longer haul for success in overseas markets. While the first meta-trend has just started manifesting itself in overseas expansions of Indian companies, ICT positions and embodies them with powerful competitive advantages internationally. The events of last decade are just the beginning towards the emergence of Indian corporations that operate worldwide and, more importantly, hold significant and leading positions globally in a large number of industries. Every exporter has to contend with three levels at which Image works Country Image, Corporate Image and finally, for branded products, the Brand Image. Most of our exporters suffer due to the poor image that buyers have of India as a country, and of Indian companies. India is perceived as backward, and Indian companies have a non-professional image in terms of almost any parameter known to
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affect successful marketing. Our quality is perceived as shoddy, packaging is not up to international standards, and delivery is unreliable and export procedures unfathomable. There are, of course, some bright exceptions to the generally lackadaisical export performance. But there is still an image problem for Indias goods abroad. Issues like child labor, lack of environmental safeguards, and cruelty to animals have also had a negative image contribution to various Indian exports such as carpets, garments and leather goods. The international image of Japan, South Korea, Taiwan or Singapore, on the other hand, is one of an industrialized, highly reliable, quality conscious country, and this now rubs off on all the individual suppliers from those countries. It is however, a point to be noted that this image was not built up easily. It came after years of innovative product design, manufacturing control and automation and of course, marketing. Some of the incremental innovations may have been due to the participatory work culture followed in some of these countries. In other words, these countries have been following good management practices in all the functional areas. Companies like Canon, Toyota, Minolta, Nissan and Honda have all contributed to the powerful image that Japan now has in the world. With the possible exception of biotechnology, pharmaceuticals and computer hardware & software (Microsoft, Intel and IBM) where US companies still hold a better image, almost all other high technology business areas seem to be in the firm grip of Japan today.

Introduction
We have around one-fifths of the worlds people in India. We have been an independent country for the last fifty-four years, free to choose whatever economic and trade policies we want, free to decide how to respond to our economic and social needs. Our country has been an internationally renowned producer of cotton, silk, pepper, tea and leather for centuries and yet today, our share of the global trade is less than one percent. It is pretty obvious that the world has come a long way from the days of ancient trading caravans traveling a long way to reach India, the land of fabulous wealth, and of traders playing a premium to buy Indian spices and gems. Today, it is the manufactured product, not the handcrafted one, which commands attention in the global marketplace. And globalization is by no means easy, as Hastings (1999) has so elaborately explained through the example of Lincoln Electrics expansion into Europe and Asia. They faced several problems, prominent among them a lack of understanding of foreign culture and environment. Das, Quelch and Swartz (2000) in their article also warn about the great amount of preparation and homework required for pricing your products internationally. For example, they ask suppliers to be wary of quoting lower prices (unjustified) due to pressure tactics by a bigger buyer abroad. An Indian manufacturer of lathe machines, which the authors know closely, fell prey to such tactics by supplying high quality at very low prices, made worse by unjustified rejections at the slightest pretext. It was a win-lose game. But if India wants to get ahead, it must have a strategy. Otherwise, it will be an also ran, and its citizens will not reap the benefits of a potentially high economic growth through export growth and imports to match. The second major lacuna our country suffers from in the area of international business is the continuing emphasis on export of raw materials and semi-finished goods (see Fig. 2), to the detriment of our balance of payments position, and therefore our whole economy. Value- addition is now almost passe in other regions of the world. And yet, we refuse to look at the writing on the wall. There are some obvious areas like food
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processing, and branded agricultural commodities or spices that we have not yet exploited to their potential. In some of these like the leather goods industry, we have at least moved in the right direction, recognizing the need for value addition. But in most manufactured goods, we continue to cut a sorry figure in international trade. Our country possesses the potential to manufacture and export almost everything from hairpins to defense equipment. Yet our exports of manufactured goods are insignificant by world standards. Unless we adopt as our strategy the production of quality manufactured goods, both for domestic and export markets, and work on it, little will change. In a small way, Maruti and a few other car manufacturers have started exporting cars. But why is it that we cannot leapfrog into the forefront of any manufactured goods and be number 1, 2 or 3 in the world? It is not entirely beyond the realm of possibility, as some companies like Moser Baer in hi-tech electronics have shown, for Indian companies to be costcompetitive and hi-tech at the same time. Moser Baer is an Indian company, the eighth largest manufacturer of floppy disks in the world. It is also one of the least cost producers of disks, and supplies disks as an original equipment supplier to Sony, BASF, in addition to selling them under its own brand name Xydan (source: various reports in the Economic Times, and the company's website). The only area where our country seems to have progressed considerably is in some select services, as indicated in Fig. 3. For example, RelQ is a provider of verification and validation services to software developers and is doing well in a niche market (the Economic Times, 2001).

Introduction To The Colloquium

In the last few years, the option to operate beyond domestic territory has become an essential consideration for most of the Indian companies. While some are born global, for many, it is the natural path of growth and expansion. This Colloquium explores the phenomenon of Indian companies in overseas markets in order to identify major facets and aspects and to draw useful conclusions for being successful. The presence, growth, and competitiveness of Indian companies in overseas markets are primarily being driven by two meta-trends. One, the process of liberalization and globalization of the Indian economy has led to the development of competitive capabilities by the Indian companies and has brought about intensive interaction with global corporations, professionals, capital, ideas, and practices. Two, the transforming impact of information and communication technology (ICT) on the world of business has resulted in the emergence of new types of businesses and new ways of organizing. The context and timing bestows Indian companies with a set of advantages and challenges. This will be reflected not only in the business and organizational choices of individual companies but also in the overall patterns of internationalization of Indian companies as a genre. On the other hand, business corporations have operated outside their home territory virtually from the beginning of commercial enterprise and to talk of operating overseas in a seamless and integrated world of today could appear to be an oxymoron. However, till the 1960s, almost all companies operating beyond their home territories were European or American with the latter being slower to go overseas. Japanese companies started emerging internationally in the late 1960s and those from Korea and other East Asian countries in the 1980s. Emerging market multinationals is a recent development (a little more than a decade) and the count of globally significant ones rarely exceeds a dozen or so. Though it is the firms that compete internationally, the competitiveness depends considerably on the natural and skill-based factor endowments, size and sophistication of demand, and psyche and self-belief of the national environment and home base. Emergence of globally competitive companies from a nation is an outcome of the congruous and supportive context and the setting up of an enabling process. The context in the form of two meta-trends is highly favorable now. This will enable
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progressively a larger number of India-based companies to create significant positions in the overseas markets. The process, acting through demonstration effect of an internationalizing company on compatriots within the industry and beyond and through creation of allied institutions and skills, i.e., financial and legal expertise, is gaining momentum and reaching a critical mass. Thus, the Indian business is perhaps close to a historical turning point, in many ways similar to that of the Japanese companies in mid-1960s. The Indian experience could be equally novel and important, globally. This Colloquium has the benefit of six cogent contributions. They represent a diversity to cover the various facets of the Indian companies in overseas markets the academics who have intimately researched the phenomenon and the practitioners who have led their organizations and have created substantial presence in the overseas markets. The contributions together make for a thorough perspective and a fine repository of insights on how Indian companies can emerge as significant global players. J Ramachandran of IIM, Bangalore states that the new genre of companies with international business is different from those in pre-1990 period or anytime before. Unlike commodity exporters, these companies are built upon competitive advantages of knowledge and organizational capabilities which will enable them to penetrate deeper and go up the value chain. They can emerge as globally significant players in their industries, and will also spur companies in their own and other industries. He analyses the dynamics of macro, industry, and company-specific factors for the recent developments and outlines future agenda for the new genre of companies and lessons for the aspirants and potential overseas competitors from India. Habil F Khorakiwala of Wockhardt Ltd. Reckons that India advantage in pharmaceuticals is based on the scientific and professional resources of international caliber, entrepreneurship, and cost advantages in all components of the value chain. Interestingly, foreign companies who came to tap middleclass market discovered these advantages which the Indian companies leveraged aggressively to take positions in overseas markets. They have acquired developed country corporations and no country including China can really compare on the breakthroughs. He emphasizes on a global approach for managing global business with globally integrated management processes,
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manufacturing, information technology, human resources, and supply chain and locally responsive approaches for sales, marketing, regulatory affairs, and intellectual property rights (APRs). Jerry Rao of Mphasis Ltd. rules out short cuts of joint ventures and partnerships if Indian companies are genuine about becoming serious global players. In IT and business process outsourcing where primary markets are outside the country, the DNA of being an India - based company is important it should not be altered and denied but embellished and evolved for success. Pramod Khera of Aptech Ltd. provides a perspective from a business that, unlike most of the Indian overseas forays, needs to deal with retail consumers overseas. He cites the success achieved in China through a joint venture and the importance of having a credible and known partner for brand-based retail businesses. China is a high potential market and Indian companies can succeed if they can effectively gather local knowledge, undertake localization, move up the value chain, merge in local milieu rather than stand out, and handle negotiations appropriately. Niraj Dawar of University of Western Ontario states that besides information technology, marketing is Indias key competency globally. Unlike other emerging economies like China and Russia, Indian companies have built successful brands locally, and equally importantly, Indians are entrusted with managing international brands by even the most centralized of the foreign companies. The world-class skill is there and it needs to be exploited. Infosys needs to and is becoming a global brand. The issues that have to be tackled are ways to acquire knowledge about local consumers in foreign markets and then evolving approaches for creating or adapting brands and means to support the investments required in terms of funds and time. B N Kalyani of Bharat Forge Ltd. says that the companys overseas expansion began with the need to expand market, improve productivity and technology levels, and derisk business across countries. They have become the second largest forging corporation in the world and\ their product range extends to the most complex and high value added products. He believes outsourced manufacturing is a huge and realistic opportunity and says: The world is beginning to believe in India; We need to believe in our ability to compete, perform, and succeed! Innovation is the key to unassailable competitive strength in the global
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market and Indian companies have the requisite wherewithal. He argues for a Toyotalike ambitious and competitive approach in the overseas markets. The major patterns or conclusions and their imperatives for Indian companies are put together in the final section. However, the theme that the stage is set for Indian companies to emerge as players of relevance in a large number of industries globally is unambiguous. Fortune 2004 Global 500 lists four Indian, three Brazilian, three Russian, 15 Chinese, 13 Korean, and 82 Japanese companies. India can aspire to match, if not exceed, the number of Global 500 Japanese companies in a decade or two.

Leverage India Advantage Through Global Approach The single biggest driver behind the globalization of Indian companies is the liberalization process ushered by the government in the early 1990s. Liberalization did several things. High tariff walls were lowered, encouraging imports and opening up the domestic market to international competition. Foreign companies were encouraged to set up shop in India exposing Indian companies to global products and practices. Liberalization also allowed more Indians to travel abroad for business and pleasure. All this led to a great churn in the Indian industryon the one hand; companies started upgrading quality of their products to compete with the worlds best; at the same time, they innovated to cut costs and become globally competitive. Good policies often beget unforeseen beneficial consequences. Overseas companies, which came to India to tap the large Indian middle class market, discovered Indias potential as a low cost but skilled production base to tap overseas markets. Automobiles and auto component industries are perhaps the best examples. Companies like Hyundai have made India a global hub for small cars. The realization of India Advantage emboldened Indian companies to aggressively explore offshore markets. Let me give the example of the pharmaceutical industry. The cost of setting up a modern pharmaceutical plant in India would be one-sixth of what an identical plant in Europe or the US would cost. It is not a question of wages as often made out. Our management costs, our scientists, our legal brains all of international caliber offer a cost to value proposition that cannot be found anywhere else in the world. Even overseas companies have recognized the India Advantage. Leading overseas generic pharmaceutical companies like Teva and Sandoz have set up shop in India to leverage the India Advantage. Indias high value, highly competitive resources offer potential in the global market. But, what helped India harness this potential and catapult us to the global stage is Indian entrepreneurship. Our entrepreneurs, many of them first generation businessmen, have been the driving force behind globalization. Look at the pharmaceutical industry India accounts for less than two per cent of the world market in value terms, despite the fact that we are the fourth largest in volume terms. No ambitious entrepreneur in the pharmaceutical industry can grow big unless he ventures out of India to Europe and the US, the worlds largest and the most

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sophisticated markets. Companies like Ranbaxy, Dr. Reddys and Wockhardt could not have grown to what it are today if they had not successfully tapped global markets. Against the backdrop of India joining the global patent regime with effect from January 2005, today, every player in the pharmaceutical industry is looking at harnessing its inherent strengths to global advantage as a matter of growth as well as survival. Each nation has its country as well as industry specific advantages which it tries to leverage. India is a significant manufacturing base for the pharmaceutical industry we are the worlds fourth largest producer of pharmaceuticals in volume terms. Indian companies live in an intensely competitive environment. Most Indian companies make their own bulk actives. After liberalization, Indian companies have built R&D capabilities that have enhanced their innovative ability. Indian pharmaceutical industry today is knowledge intensive industry. Indian companies also have the advantage of access to the Global Indian scientists of Indian origin play a significant role in leading pharmaceutical and biotechnology companies worldwide. Indian companies have acquired over 15 companies in Europe and the US over the last 10 years. I do not think any other country can compare with India against this backdrop, not even China. Going global and Going international are entirely different. For going global, one requires a global mindset and global aspirations. Becoming international historically meant supplying out of India. You do not have to be globally competitive in the true sense to export out of India. In some areas, you may not be globally competitive. Going international only means leveraging some country and company advantages to tap overseas markets. That does not make you a global organization. These advantages may not last long. It is a slow, limited process of growth. You can fumble. You can be rebuffed. Your terms of reference are different. In one case, you are investing for longterm global competitiveness. You can be an international player without having a global mindset and without creating a global organizational system. Indian pharmaceutical industry has one of the worlds richest resources in manufacturing, research capabilities, and entrepreneurship. Our industry has capacities and capabilities across the value chain and, what is more, we are cost competitive across the value chain. We have taken two approaches in our quest to become a global organization.

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One pertains to our acquisitions. The second pertains to the larger issue of creating a global organization. In the case of acquisitions, we follow a global approach. When it comes to management processes, manufacturing, information technology, human resources and supply chain, we follow a uniform system that is global. This helped Wockhardt become a globally competitive, seamless organization across geographies. We get the value of efficiencies borne out of global buying. We do not have to reinvent the wheel. The same language of management thinking rules the entire organization. At the same time, we follow a local approach when it comes to sales and marketing. In each market, whether it is the UK or Germany, distribution systems and the like are dynamically different. So when it comes to sales and marketing, our approach is customized for local markets. As far as the US is concerned, we have created an organization called Wockhardt USA, Inc. that handles sales, marketing, regulatory affairs, and APRs. Wockhardts Indian operations serve as the research and sourcing hub for the American organization. We follow a similar approach in Russia and South American countries like Brazil. Same is the case in Africa. In other countries, we export out of India with sales and marketing people stationed in these markets.

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Is Indias Marketing Muscle Exportable?

Infosys is building a global brand. The effort is noteworthy not only because there are so few successful Indian brands on the world stage but also because it represents a marriage of two of Indias key competences information technology and marketing. Indeed, India has enormous marketing talent and a reasonably good track record of building brands locally. Nirma, Bajaj, Titan, Mother Dairy, and Dabur are complemented by Lifebuoy, Lipton, Dettol, and Colgate as brands built in India by the Indian talent. The marketing of these brands has always been local even if the products and the initial brand concepts for some of them were imported. In recent years, as liberalized imports have opened the market to a flood of new entrants, many a business has been launched and grown on its marketing acumen. The business of consumer electronics, for example, has Onida, Videocon, and Baron International building businesses on the strength of their marketing while relying entirely on outsourced R&D and manufacturing from companies such as Sony and Samsung. The computer hardware business is another example of business models founded on downstream activities marketing, sales, distribution, and after sales service. All of this marketing activity has led to a considerable pool of marketing talent and capital among Indian firms and managers. It is not surprising then that even the most centralized foreign companies entering India quickly learns to entrust marketing to local managers and that the savviest international marketers quickly come to recognize the formidable local competition they face in India. Indian marketers know not just marketing; they also know their market. They are not just a less expensive resource than expatriate managers; they are better at marketing in India. On the global stage, these marketing strengths clearly differentiate India from other emerging economies such as China and Russia. Those markets have only recently reformed their centrally planned economies. They lack a history of marketing. Even a few years ago, few Russian or Chinese brands had been built on the strength of marketing (although that is changing rapidly) and multinational firms operating there still tend to employ expatriate managers to handle marketing strategy and planning. Indian managers, by contrast, are strong on marketing.
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Yet, Indias marketing strength is conspicuously absent from the global stage. If India has such abundant marketing talent, why have so few Indian brand ventured abroad? Why have Indian companies not leveraged their marketing advantage to compete internationally? Why do Indian brands not adorn the shelves of supermarkets in consuming countries? Why do Indian goods still compete as commodities in price driven markets at the bottom of the value curve? What prevents Indian companies from leveraging their marketing competences outside of India? Aside from the usual rich-country predilection for protectionism, two inter-related reasons come to mind: knowledge and means. Marketing is a downstream activity that requires intimate knowledge of the market. For the same reason that multinationals operating in India prefer to hire Indian managers, these managers talents do not necessarily translate abroad. The Indian managers marketing knowledge and knowledge of the Indian market are intermeshed. Separating them and applying the marketing knowledge to a foreign market is not easy. This is not to say that Indian managers cannot learn about foreign markets, but rather that learning is an expensive activity that requires tremendous commitment and large investment. Opportunistic exports and market entry without a long-term brand building plan are not conducive to building that foreign-market knowledge. Indian brands may be formidable competitors locally, but abroad, where they are unknown entities, they have to work very hard to stand out in a crowded field. Indian managers do have the marketing talent to sell abroad but they lack the means to establish brands in markets where media are fragmented and do not come cheap; any decent share of voice requires a substantial investment. But what of the parade of strong Indian brands? Well, what of them? Despite satellite television and spillover of other media to other countries, Indian brands have dismal awareness and even more limited appeal to consumers there. In the Persian Gulf region, Indian brands may look like they are doing well, but this is brand leveraging, not brand building. Indian brands in the Gulf region rely on awareness and loyalty created in the home market. They are simply exporting to consumers who have been previously exported to these markets.

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To truly do well abroad, the brands would need to be (re)built to suit the requirements of local consumers in foreign markets. This is far more expensive than the brand leveraging currently practiced. Few Indian brands have succeeded in replicating their home market success abroad. Even Titan Watchs valiant attempt to build a brand in Europe disappointed. Brand building requires enormous fixed investment before a single unit of the product is sold. This means, the brand builders must not only have deep pockets but a considerable appetite for risk. Few Indian firms have been willing to take the bet. This is not surprising. There is a chicken-and-egg problem here. It is not easy to take on the costs of building a brand abroad without prior experience in brand building in foreign markets. So is Infosys making a huge mistake? I would not bet on it. Betting against Infosys has not been a profitable game in recent years. Infosys has certain advantages. It is building a brand in an industry in which the needs of customers are fairly uniform across the world. Its brand needs little adaptation for different country markets, reducing the costs and risks of brand building. The company knows the needs of its customers and has already made a significant operational commitment to delivering to world-class norms. Brand building is a natural extension of this functional ability. Infosys is already a credible player in the global market. Therefore, brand-building is as much a means of consolidating its position as it is of attracting new customers. Finally, Infosys has the deep pockets required and is willing to take a bet not just on its superior product/service offering but on its marketing talent.

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Literature Review A TwoPronged International Marketing Strategy

Thus, a fresh approach by individual companies is required for international marketing strategy. At its core must be the two factors - value-added, preferably branded products or services, and the cultivation of a high quality image. Then, and only then, can Indian companies hope to achieve the kind of success that their East Asian counterparts have achieved. Value Addition The prescription for adding value to goods is comparatively easy to follow, because the crux of it lies in identification of the correct (in terms of the strategy) goods. After this, the product design and development has to follow the demand patterns from customers. Good rapport with potential buyers is necessary for achieving this, such as keeping track of changing fashions in readymade jeans. One way of providing added value from the perspective of an Indian firm could be to provide unique tastes, flavors, or experiences to global audiences who are bored with the monotony and sameness of their products or experiences. Ger (1999) expounds this thesis with a lot of examples from Turkey, speculating how local products or services can be successfully marketed globally. Some recent successes of Indian films like Taal, Lagaan etc. in global markets seem to indicate that this is a possible route to success. But care should be taken that such products/experiences do not remain a part of exotica, but develop stable and sustainable markets. In the case of services, India is not doing too badly, but care should be taken to keep adding value to our software and other services, to prevent getting stuck in the low-cost services sector. At best, low-cost services can be an entry point into developed-world markets. But we must leverage the entry to graduate to high value service offerings. Lovelock and Yip (1996) have classified services into three types - People-processing, Possession-processing, and Information-based. Among the three categories, India is doing well in the information-based services in the global arena, but can graduate to service "products" eventually. A good place to begin in the goods arena is the finished goods (unbranded) sector and graduate slowly to the branded goods, one level higher. For example, India produces engineering goods, castings, forgings etc. in large quantities. If these products can be
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initially sold to leading global buyers to be marketed by them, Indian companies can gain valuable experience of the designs, and price-quality equations in global markets. These can then be used to sell abroad using Indian brand names. Technological, marketing or strategic alliances such as the one between HMT and Guildemeister of Germany, cited by Bajaj (1991), or Kirloskar Brothers and SPP, could be used to graduate to the next level. Some Indian pharmaceutical companies like Ranbaxy and Dr. Reddy's Labs already have a marketing tie-up with multinational companies to market their products in the American market. Just as multinationals use joint ventures or strategic alliances as entry strategies, Indian companies must learn to do the same. Of course, those who can manage entry single-handed without an alliance can take the leap themselves, and reap richer rewards if successful.

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Image Building
On the other hand, it may not be so easy to start building an image abroad. A variety of factors contribute to the image a company has overseas. Some of these are within the companys control, and some are not. Of the factors which the company cannot entirely control, are the media coverage of a country by the world press and television, the occurrence of extraordinary events such as the unification of East and West Germany, or the breakup of Yugoslavia etc. which may affect international perceptions. Also, tourists from other countries may carry impressions of a country from their personal experience. In the case of India, for example, recent successes of Indian women in beauty pageants have contributed positively to a good image. Considering these factors, the international marketer must give top priority to those image factors which he can control. For instance, if he participates at a trade show, he must have complete details of the products he sells, indicative price lists, photographs or actual products where feasible, and possibly keep a person handy who knows two or three major foreign languages during the trade show, to translate for prospective customers who do not know his language. An order which is received must be treated with utmost care and treated as if his life depends on it in terms of product quality and service. Especially important are the first few orders he receives from a new country. Word of mouth publicity may play both a negative and positive role in international markets. You do not have to be manufacturer of Toyota cars, to have a high quality image in world markets. It could be that you manufacture beer cans (which incidentally, India has the potential to supply the entire western world with) but the image of a top quality beer can manufacturer ultimately helps other suppliers from the country to gain a foothold in the market, and it can have a chain reaction. After all Japanese products have lived with the experience of being known as cheap and third rate. But today their image is enough to sell almost any Japanese product. So much so that someone in the U.S. even prescribed a simple solution for the poor image that U.S. made products now have in their own country - rename the country Japan.

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Indian Firms Shift Focus to the Poor

Indian companies, long dependent on hand-me-down technology from developed nations, are becoming cutting-edge innovators as they target one of the world's last untapped markets: the poor. India's many engineers, whose best-known role is to help Western companies expand or cut costs, are now turning their attention to the purchasing potential of the nation's own 1.1-billion population. The trend that surfaced when Tata Motors' tiny $2,200 car, the Nano, hit Indian roads in July, has resulted in a slew of new products for people with little money who aspire to a taste of a better life. Many products aren't just cheaper versions of well-established models available in the West but have taken design and manufacturing assumptions honed in the developed world and turned them on their heads. For the farmer who wants to save for the future, one Indian entrepreneur has developed what is, in effect, a $200 portable bank branch. For the village housewife, a woodburning stove has been reinvented to make more heat and less smoke for $23. For the slum family struggling to get clean water, there is a $43 water-purification system. For the villager who wants to give his child a cold glass of milk, there is a tiny $70 refrigerator that can run on batteries. And for rural health clinics, whose patients can't spend more than $5 on a visit, there are heart monitors and baby warmers redesigned to cost 10% of what they do elsewhere. Such inventions represent a fundamental shift in the global order of innovation. Until recently, the West served rich consumers and then let its products and technology filter down to poorer countries. Now, with the developed world mired in a slump and the developing world still growing quickly, companies are focusing on how to innovate, and profit, by going straight to the bottom rung of the economic ladder. They are taking advantage of cheap research and development and low-cost manufacturing to innovate for a market that's grown large enough and sophisticated enough to make it worthwhile. "There was a large potential market that all the players have not been able to reach," says G. Sunderraman, a vice president at Mumbai's Godrej & Boyce Manufacturing Co., which developed the inexpensive refrigerator dubbed the "Little Cool." "Now economic factors are making these areas more and more attractive."

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Unexpectedly strong demand for cheap cell phones in recent years revealed the untapped markets in India's villages and slums. Thanks to $20 cell phones and twocent-a-minute call rates, Indian cell phone companies are signing up more than five million new subscribers a month, most of them consumers no one would have considered serving only five years ago. At the same time, many of the nation's poor have become aware of material goods available in developed economies thanks to a proliferation of television networks, radio stations, newspapers and magazines. As with all innovations, many of these new products will fail to make their mark. But with so many unlikely products aimed at overlooked consumers, the trend could bolster bottom lines over time, create new companies and lead to a new kind of multinational corporation that thrives outside of the developed world. Unilever NV and General Electric Co. are taking notice. GE's chairman, Jeffrey Immelt, on a recent tour of Asia, outlined how the global giant is restructuring to take advantage of what he calls "reverse innovation." While in India this month, he said the innovations in medical equipment here could eventually help bring down the cost of health care in the U.S. "The biggest threat for U.S. multinationals is not existing competitors," says Vijay Govindarajan, professor at Dartmouth's Tuck School of Business and chief innovation consultant to GE. "It is going to be emerging-market competitors." What is happening today is much different than the so-called "sachet revolution" of the 1980s when Unilever and other consumer-goods companies realized they could sell hundreds of millions of dollars more of their shampoo, detergent, toothpaste and snacks just by selling them in tiny packets. This time, Indian engineers are reinventing products to cut costs and reach the billions of people world-wide who live on less than $2 a day. The growing awareness of this new market has sparked start-ups as well as new business divisions in established Indian companies. Everyone from small local players -- looking to go national then global with their low-price inventions -- to the country's biggest conglomerate, the Tata Group, are in the race. They are trying to figure out what the poor want and how much they are willing to pay for it. Then the companies are going back to their research teams and crafting new products and unprecedented price points. "These are not cheap
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knockoffs of Western products, they are in many cases very different products," says Arindam Bhattacharya the Delhi-based managing director of the Boston Consulting Group. "Western companies have not often explored these segments so they are untapped markets." Western companies as well as most large Indian companies have long ignored poor markets because any potential profits seemed too slim. It was too expensive to create a distribution system that could serve the consumer who shops from closet-size kiosks or weekly country markets. But instead of using traditional supply chains, many companies are distributing through rural self-help groups and micro lenders that are already plugged into villages. And while profit margins are slim, companies are counting on volume to compensate. Many hope to sell to other poor and underserved markets in Asia and Africa eventually. Hindustan Unilever spent four years developing its battery-powered portable waterpurification system called Pureit. The $43 water-cooler-size system is now in more than three million Indian homes, many in hard-to-reach rural areas, thanks to its network of 45,000 women, who demonstrate the Pureit and other Unilever products in their own homes. They then sell door to door around their villages, often from the back of bicycles. Some of the products may end up in developed markets. One of the Nano's first export markets, for example, will be Europe. The European version of the car will have better interiors and safety features and cost more than the Indian version but will still be cheaper than almost anything in Europe. Godrej, one of India's oldest groups, which is involved in everything from padlocks to pest management, saw cell phone companies sell millions of new handsets a month in India's rural backwaters and wanted in on the action. Fewer than one in five Indian homes has a refrigerator, so Godrej figured it could attract a huge new group of consumers if it could get the price right. It sent surveyors into village huts for months at a time to discover the needs of farm families. The result: The "ChotuKool," or "Little Cool" in Hindi, looks more like a cooler. It opens from the top and is about 1.5 feet tall by 2 feet wide. It is tiny because the poor live in small homes and don't buy food in bulk. It has handles to make it
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portable for the migrant workers who move a lot. It has no compressor to break or make noise. Instead, it runs on a cooling chip and fan similar to those used to cool computers. It can survive power surges and outages common in the country kitchen and even has the option of running on batteries. While designed with cost in mind, it uses high-end insulation to stay cool for hours without power. By keeping it small and reducing the number of parts to around 20 instead of the 200 that go into regular refrigerators, Godrej has been able to sell it for only $70, which is less than one third of the price of a regular bottom-of-the-line fridge. It also consumes only half the power so it keeps electricity bills at a level the poor can afford. "No one in our family has ever had a refrigerator," said Sangeeta Harshvardhan, a housewife in Udgir, a remote rural village in the western state of Maharasthra. "But at this price even we can afford one now." While they have only had the fridge a month, her family is already used to the convenience. It allows her to stock up on the cucumbers her husband munches three times day, put cool water in her son's thermos before he goes to grade school, and avoid having to boil milk to purify it every time she makes tea. A start-up company, First Energy, which was launched with the help of BP PLC, had to reinvent the wood burning stove to come up with a product that had the convenience and the price to crack the same market. Hoping to help village women who spend hours a day looking for wood and keeping a fire going to cook for their families, the Pune-based company adopted the gasifier technology used in power plants to make a stove that would burn more efficiently and with less smoke. Engineers from the Indian Institute of Science in Bangalore designed a stove with a perforated chamber that uses a small fan to get just the right amount of air to keep a fire burning at a high temperature, meaning less smoke and quicker cooking. It has sold around 400,000 of the $23 stoves across India. "A lot of innovation has gone into the stove as well as the fuel," which is dry pellets made of agricultural waste like corn husks and peanut shells, says Mahesh Yagnaraman, head of First Energy. "This is not a gizmo like a cell phone. But it is definitely a life-changing product because the houses will not be smoky."
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To bring banking services to villages, Anurag Gupta, a telecommunications entrepreneur, distilled a bank branch down to a smart phone and a fingerprint scanner. A bank representative goes directly to a village and can set up shop anywhere there is shade. Savers line up and give an identification number, scan their fingers and then deposit or withdraw small amounts of rupees. The transactions are recorded through the phone and the representative later visits a standard branch to pick up or drop off rupees as needed. Mr. Gupta named his innovation Zero, after what he says is India's most important innovation -- the number zero -- which many believe was invented by Indian mathematician Aryabhata in the sixth century. Indian banks already are using his system to open millions of new accounts. The running cost of his "branches" is about $50 a month to serve hundreds of people daily. A standard branch or ATM costs thousands to run. "We made this phone into a branch of a bank," said Mr. Gupta, holding up the smart cell phone his system uses to keep data on accounts, depositors' fingerprints, photos and voices. The Zero system is already helping Indian construction workers in Bahrain open bank accounts and sends money home. Much of this is possible because engineers are so plentiful and inexpensive in India. It took close to 300 engineers around four years to develop the Tata Nano, which required rethinking everything from the engine to the seats to the supply chain to keep the sticker price at around $2,200. GE tapped the same pool of inexpensive expertise to target Indian hospitals and clinics that cannot afford its equipment designed for the U.S. GE Healthcare has used Indian software engineers to develop an electrocardiograph that costs $1,000, one-tenth the standard models used in the past. GE hopes to sell the technology in the U.S. eventually and elsewhere. "In India we have the engineers that have the brainpower and the bandwidth to deliver on these types of projects," said V. Raja, chief executive of GE Healthcare's business in India.
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Overseas Investments by Indian companies - Evolution of Policy and Trends

Globalization and non-discriminatory multilateral trade have opened new doors for Indian corporate. Earlier, there was an accent on inward flows - FDI, portfolio investments, joint ventures and collaborations to tap the growing Indian market, and also technology transfers for enhancing competitiveness of Indian firms. Exports were predominantly the main door to step out towards globalization. Now, the scenario has changed. There is a growing realization that the future growth of Indian companies will be influenced by the share that they can garner in the world market, not only by producing in the country and exporting, but also by acquiring overseas assets, including intangibles like brands and goodwill, to establish overseas presence and to upgrade their competitive strength in the overseas markets. The policy regime in respect of outward capital flows has accordingly evolved in spirit with the above trend. In line with our calibrated approach to capital account, greater freedom is now available to corporate to make remittances overseas for their overseas expansion. This is reflected in the increasing global operations of Indian corporate in search of global synergies and domain knowledge. Phased liberalization in the policy of overseas investments has enabled Indian corporate to establish presence in overseas markets on an unprecedented scale redefining the global outreach of Indian entities. Behind this push in overseas acquisitions lies a combination of forces domestic boom, competitive strength, access to credit, keen desire to achieve global scale and above all self confidence about Indian business's ability to add managerial value on a global scale. As per data available with RBI, during the financial year 2005-06 the total value of Indian direct investments abroad was USD 2.7 billion, mainly accounted for by the manufacturing sector. I may hasten to add that this figure doesnt reflect the actual acquisition value. Many acquisitions are taking place through an overseas SPV set up to raise finances from international market and such transactions are not captured in the overseas investment statistics. Evolution of Overseas Investment Policy It would be interesting to trace the evolution of public policy in respect of liberalizing outward investments, within the broader ambit of capital account management. Indian overseas investment policies has been progressively liberalized and simplified to meet
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the changing needs of a growing economy. The policy, which was evolved as one of the strategies for export promotion and for strengthening economic linkages with other countries, has expanded significantly in scope and size, especially after the introduction of FEMA in June 2000. The evolution has taken place in a sustained manner and could be classified into two distinct phases: the pre 2003 phase and the post 2003 phase. The first phase was export oriented and with restrictions of cash flows from the country reflecting the need to manage capital outflows to conserve foreign exchange resources. An important development during this phase was the transfer of work relating to overseas investment from Ministry of Commerce to RBI in 1995 to provide a single window.

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The Pre 2003 Policy Regime

In December 1969, the Govt. of India for the first time issued formal guidelines for overseas direct investment. Indian parties were permitted minority participation in turnkey projects involving no cash remittances. In April 1978, an Inter - Ministerial Committee in the Ministry of Commerce was set up to clear proposals for Overseas Investments. There was a requirement for repatriation of dividend of 50% of the declared profits. In 1992 an Automatic Route for overseas investments was introduced, and cash remittances were allowed for the first time. The total value was restricted to $2 million with a cash component not exceeding $0.5 million in a block of 3 years. In 1995 the work relating to overseas investment was transferred from Ministry of Commerce to RBI in 1995 to provide a single window, while laying down a policy framework. In terms of the policy, a fast track route was introduced where limits were raised from $ 2 million to $ 4 million and linked to average export earnings of the preceding three years. Cash remittance continued to be restricted to $0.5 million. Beyond USD 4 million, approvals are considered under Normal Route at the Special Committee level. Investment proposals in excess of US $ 15.00 million were considered by MoF with the recommendations of the Special Committee and generally approved if the required resources were raised through the GDR route. In March 1997, Exchange Earners other than exporters were also brought under the Fast track Route Indian promoters were allowed to set up second and subsequent generation companies, provided the first generation company was set up under the Fast Track Route. A series of measures to encourage the software industry in India to expand capacity, reduce costs, improve quality and also invest abroad were put in place. In 2000, the introduction of FEMA changed the entire perspective on foreign exchange. The revised policies reflected this. The limit for investment up to US$ 50 million, which was earlier available in a block of three years, made available annually without any profitability condition. Companies were allowed to invest 100 per cent of
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the proceeds of their ADR/GDR issues for acquisitions of foreign companies and direct investments in JVs and WOSs. In March 2002, Automatic route was further liberalized wherein Indian parties investing in JVs / WOSs outside India were permitted to invest an amount not exceeding USD 100 million as against the earlier limit of USD 50 million in a financial year. Also the investments under the automatic route could be funded by withdrawal of foreign exchange from an AD not exceeding 50% of the net worth of the Indian party.

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Post 2003 Regime

In March 2003, Automatic Route was significantly liberalized to enable Indian parties to fund to the extent of 100% of their net worth, which was later increased to 200%. As per a recent FICCI study, While India Inc's international acquisitions were rising gradually till 2004, the liberalization in the policy regime for outward investment in 2005, which allowed Indian firms to invest in entities abroad up to 200% of their net worth in a year, triggered a sharp rise in cross-border acquisitions with the number of acquisitions rising from 46 in 2004 to a whopping 130 in 2005. Present framework Proposals for investment overseas by Indian companies/registered partnership firms upto 200 per cent of their net worth as per the last audited balance sheet, in any bona fide business activity are permitted by ADs irrespective of the export/exchange earnings of the entity concerned within this limit loans and guarantees by the parent company and associates are also permitted. The condition regarding dividend balancing has been dispensed with. No prior approval of RBI is required for opening offices abroad. For initial expenses, AD banks have been permitted to allow remittance upto 15 per cent of the average annual sales/income or turnover during last two financial years or up to 25 per cent of the net worth, whichever is higher. For recurring expenses, remittance upto 10 per cent of the average annual sales/income or turnover during last two financial years is allowed. Within these limits, ADs can allow remittance by a company even to acquire immovable property outside India for its business and for residential purpose of its staff. Partnership firms registered under the Indian Partnership Act, 1932 and having a good track record are permitted to make direct investments outside India in any bona fide activity 200 per cent of their net worth under the automatic route. I must mention that that the liberalization in the policy on overseas investments has been very much informed by the detailed framework set out by the Government in 1995 when the work was transferred to Reserve Bank of India. For the first time the framework articulated a cohesive policy in regard to overseas investment policy, flexible enough to respond to likely future trends. To quote from the guidelines, they
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reflected the "need for transparency, recognition of global developments, capturing of Indian realities and learning of lessons from the past". The basic objectives of the policy, as laid out in the notification, were as follows: o recognizing the link between trade and investment flows, to provide a framework for Indian industry and business to access global networks. o to ensure that such flows, though determined by commercial interests, are consistent with the macroeconomic and balance of payment compulsions of the country, particularly in terms of the magnitude of the capital flows; and o to give liberal access to Indian business for technology-sourcing or resource-seeking or market-seeking as strategic responses to the emerging global opportunities for trade in goods or services. o to give a signal that there is a qualitative change in the approach of the Government, from one of regulator or controller to one of facilitator. o to encourage the Indian industry to adopt a spirit of self-regulation and collective effort for improving the image of Indian industry abroad. Experience and trends The overseas acquisitions, which started of on a small scale, have reached to globally visible levels with big ticket acquisitions being announced by large corporate regularly. A report of the Boston Consulting Group (BCG) on the emerging multinationals in the world puts 21 Indian companies among the top 100 such multinationals. Only China with 44 companies is ahead of India. Tata group, Bharat Forge, Infosys, Wipro, ONGC, Ranbaxy and such Indian companies are venturing overseas and expanding at breakneck speed. Industrial goods, steel, automotive components, resource extraction, beverages, cosmetics, pharmaceuticals, mobile communications, software and financial services are some of the sectors where considerable interest has been shown by Indian corporate. The BCG research has shown that 88% of the emerging market global players are driven by the need to gain access to new markets and profit pools. Overseas markets are expected to bring higher margins, revenue and volumes, besides opportunities for further growth. Energy security is another driving force behind global acquisitions.
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 Liberalized guidelines for overseas investment coupled with lower interest rate hitherto facilitated Indian corporate to invest overseas. The capex undertaken by Indian industry coupled with buoyancy in economy has strengthened the balance sheet of corporate enabling them to look for inorganic growth by way of acquisitions outside India. The confidence shown by the global business community, particularly, availability of foreign funds at competitive rates and acceptance of managerial skills of Indian workforce has led to surge in LBO activities. Another trend which is prominent in Indias overseas investment is market access. By undertaking overseas acquisition transactions, Indian corporate is gaining entry into regulated market of developed countries. The best example is pharmaceutical industry, where Indian corporate equipped with USFDA approved facilities is looking for acquisition in the regulated market for ease of registration processes. The manufacturing activities will still be in India entailing low cost advantage. Transfer of technology is another issue driving for overseas investments. The manufacture of certain products requires technology that is not available to the Indian companies. By acquiring companies abroad, they also acquire advanced manufacturing technologies that further help reduction in the cost of production. Indian companies are also going abroad to obtain a new product mix or to acquire products that will otherwise require huge investments and a long time to manufacture indigenously. Deployment of excess production resources or better yield on assets is another driving force. The Indian corporate engaged in oil exploration / drilling / rig manufacturing are getting good returns on their assets by deploying their assets in the companies acquired in the high yield market.

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 Development of natural resources like mining, oil exploration etc. has given an opportunity to Indian corporate, rich with cash and need for energy, to expand their wings in unchartered territory. Post quota regime has also given an impetus to Indian corporate to look for overseas ventures for enhancing their R&D and logistics to cater to developed markets. Indian textile industry with scalable capacities to cater developed markets is feeling handicapped because of logistics issue and delivery frame. However, with bases in and around the European and US market, textile industry is capable of meeting its commitments as well as going for high end designing studios to meet fashion requirements. The IT industry, showcase of emergence of Indian economy, has its presence across the globe by way of subsidiaries to cater to business in a particular region. The acquisitions made by IT companies are primarily for backward or forward value addition in their product profile. Funding Overseas acquisitions are funded through a variety of sources such as drawal foreign exchange in India, capitalization of exports, balances held in EEFC accounts, share swaps, ECBs/FCCBs, ADRs/GDRs, etc. A substantial portion of investments takes place through special purpose vehicles (SPVs) set up for the purpose abroad. Existing WOS / JVs or the SPVs are being used to fund acquisitions through LBO route and such transactions are not currently captured in overseas investment statistics. The major investment destinations appear to be the US and European markets. Tax havens like Mauritius and Cayman Islands also feature significantly in the Indian acquisitions or setting up of new WOS/JVs. In recent times, sustained growth in corporate earnings has boosted the profitability and strengthened the balance sheets of Indian companies. This has, in turn, strengthened their credit ratings and ability to raise funds overseas.

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 Unlike most international M&A transactions that typically feature stock swaps in the financing arithmetic, Indian acquirers have for the most part paid cash for their targets, helped by a combination of internal resources and borrowings. Share swaps have not yet emerged as a favored payment option in India, except in a couple of large transactions in the software industry. Finance by Indian banks: As per existing instructions banks are not allowed to finance the promoters contribution towards the equity capital of a company as it should come from their own resources. However, in view of the expertise in certain areas developed by Indian corporate over the years and the importance attached to leveraging of such expertise for enhancing the international presence of Indian corporate, w.e.f June 7, 2005, banks have been allowed to extend financial assistance to Indian companies for acquisition of equity in overseas joint ventures/wholly owned subsidiaries or in other overseas companies, new or existing, as strategic investment, in terms of a Board approved policy, duly incorporated in the loan policy of the bank. Such policy should include overall limit on such financing, terms and conditions of eligibility of borrowers, security, margin, etc. While the Board may frame its own guidelines and safeguards for such lending, such acquisition(s) should be beneficial to the company and the country. The finance would be subject to compliance with the statutory requirements under Section 19(2) of the Banking Regulation Act, 1949. In April 2003 banks were permitted to extend credit/non-credit facilities to Indian Joint Ventures (JVs) (where the holding by the Indian company is more than 51%) / Wholly Owned Subsidiaries (WOS) abroad up to the extent of 10 per cent of their unimpaired capital funds (Tier I and Tier II capital), subject to certain terms and conditions. On November 6, 2006, in order to facilitate the expansion of Indian corporate business abroad, it was decided to enhance the prudential limit on credit and noncredit facilities extended by banks to Indian Joint Ventures (where the holding by the Indian company is more than 51%) /Wholly Owned Subsidiaries abroad from the existing limit of 10 per cent to 20 per cent of their unimpaired capital funds (Tier I and Tier II capital). Banking Presence Overseas It is not very surprising that in the very period when Indian companies have increased overseas presence significantly, in parallel the operations of Indian banks overseas has also increased. There are generally four forms of banking presence abroad, viz.
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(i) Representative Office, (ii) Branch [including specialized branch like Off-shore Banking Units (OBUs)] (iii) Subsidiary and (iv) Joint Ventures. The choice of any particular form of presence is guided mostly by the objective of the bank seeking presence in a particular country/location, the laws and regulations of the host country and the cost and return from the proposed venture, which in turn is a factor of regulatory prescriptions and business potential. As on December 31, 2006, nine public sector banks and three private sector banks have 113 overseas branches spread over 27 countries. Out of these, three banks viz. BOB (40), SBI (30), and BOI (21) have got 80.5 % of the overseas branches. As regards geographical spread, Indian banks have branch presence of 22 in UK, 9 each in Singapore, Mauritius, Fiji, 8 in Hong Kong, 7 in Sri Lanka and 6 in USA. In terms of total asset size, the operations of Indian banks overseas have increased by a significant 113.5% over the last five years i.e. 2002-06. As on March 31, 2006, total assets of all Indian bank branches overseas stood at USD 29.34 billion. There is great dynamism amongst Indian corporate to globalize and in the years to come we are going to have more Indian multinationals. These will include not only the large corporate but also medium size corporate. Companies have to determine the most optimal method for funding these acquisitions as this has implications for the domestic balance sheets of the Indian companies and external debt profile depending on the source of funding. In case of investments financed through debt in the books of domestic entity and/or against guarantees issued by the Indian entity, it could involve a full or partial recourse to the Indian entity. In case there is recourse to the company, it is a direct external liability of the company to that extent. Indian companies appear to have so far balanced all these considerations and raised bulk of these funds through LBO for large acquisitions which reduces the risk on the domestic balance sheet. As regards external debt, the policy on ECBs allows ECBs for overseas acquisitions within the overall limit of USD 500 million per year under the automatic route. The

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overall remittances from India and non-funded exposures should, however, not exceed 200 percent of the net worth. In general, this policy has served us well so far. Another issue relates to capturing the data in respect of overseas remittances taking into account the innovative funding structures being adopted in many cases. Accuracy and timeliness in reporting has to be ensured to enable meaningful monitoring at our end. The requirements of compilation of BoP statistics have to be kept in mind, in view of the significance of contribution of overseas investments. We are working on revising the existing reporting formats, in consultation with some of the leading corporate, to first, rationalize and simplify these and second, to make them e-enabled.

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Why Indian Tech Companies Need To Understand Web 2.0

Traditionally a lot of the bigger American and European companies had tremendous success when they outsourced back office operations to India. The outsourced model helped those large outsourced accounts keep their customer pricing competitive compared to their small and medium business (SMB) competitors because of low IT costs. Now a lot of the SMBs from all over the world are turning to outsourcing. This new wave of smaller companies outsourcing operations have made lower IT costs the de facto standard and not necessarily a strategic advantage. With lower costs already in place, many customers are looking for other differentiators to outdo their competitors. This new phenomenon has created more pressure to Indian outsourced vendors to deliver services or products better, faster, cheaper while putting a lot of emphasis on innovation in delivery. In this new demanding environment, Indian tech companies are looking for creative ways to deliver services to their customers while adding value and keeping the costs down. One such way would be to leverage different components of web 2.0. Web 2.0 Simplified The term Web 2.0, also coined as enterprise 2.0 refers to the second generation of services available on the Web. Web 2.0 sites are more services where some work is being done real time and in most cases, the work is done collaboratively with other users. Many web 2.0 websites demand virtual active participation and social mingling. Most of these web 2.0 sites uses mass publishing software and are free form where role based positions do not exist. There are no built in workflows or authorization check points. Below is a look at some most common terms used in web 2.0 worlds and how they fit together? Blog, the shortened form of weblog, is a type of website where entries are made. A typical blog combines text, images, and links to other blogs, web pages, etc. A mashup, is another type of website or web application that uses content from more than one source to create a completely new service. Mashups are revolutionizing web development by allowing anyone to combine existing data from sources like Amazon.com, eBay, Google etc to create on time, on demand relevant content. Wikis are websites that allow users easily to add, remove, or otherwise edit and change most
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available content, sometimes without the need for registration. This ease of interaction and operation makes a wiki an effective tool for collaborative writing. A "folksonomy" is a collaborative internet based tagging system that enables users to categorize content like web pages, links etc. The user driven tags help improve the search engine's effectiveness. Del.icio.us is a popular example of folksonomy in use. RSS which stands for RDF Site Summary but is often referred as Real Simple Syndication is a family of web feed formats, specified in XML and used for Web syndication. RSS is used by Web sites, weblogs and podcasting to constantly feed interested users relevant content. AJAX (Asynchronous JavaScript and XML) is a web development technique for creating interactive web applications. The intent is to make web pages feel more responsive by exchanging small amounts of data with the server behind the scenes, so that the entire web page does not have to be reloaded each time the user makes a change. This is meant to increase the web page's interactivity, speed, and usability. Most web 2.0 sites uses AJAX as the underlying programming tool. Below are some reasons why Indian tech executives need to care about web 2.0. How Web 2.0 can benefit Indian Tech Companies 1) Speed of Execution and Effectiveness Most web 2.0 vendors provide easy to execute tooling that helps create applications and do back office efforts faster and cheaper and in many cases better. Indian best of breed workforce coupled with best of breed web 2.0 tools and mashups of applications can keep Indians outsourcing drive front of the curve. 2) Developing Creative Services A lot of Indian companies are trying to be creative service providers. An example would be Tutor Vista, which uses web 2.0 like services in Skype, Google talk etc. to provide tutoring over the web. In todays flat world, Indian Companies can use their tech savvy to its advantage by creating interesting new services that can be delivered via low cost web 2.0 technologies over the web. Web 2.0s very low to free cost models for services offered will bring in new businesses out in the open business that were not given access to delivering and selling because of high infrastructure costs in the past.
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3) Leveraging Community in Solution Building A lot of the web 2.0 participants are techies who love solving other peoples technical problems online especially if they are challenging. Using blogs, wikis and other web 2.0 sources, engineers working in India can leverage global tech talents in solving critical= technical issues for the client. 4) Create Consumer Driven Cult Following If you look at the most popular TV shows in America today, you will get a glimpse of how consumers are true bosses. Most popular shows like American Idol, So You Think You Can Dance etc. are literally driven by consumer votes. This power harnessed by the people and not by some buttoned down judge helps create a cult following. For the first time ever, a un released movie called Snakes On a Plane has received mass publicity through blogs, podcasts etc. all of which were driven by fans (read consumers). Heck they even made demands through web 2.0 forums on what some dialogues would be in the movie. The production unit went back and shot scenes as demanded in blogs showing true power in the hands of consumers. Drawing parallel to it in the tech world, active open communication and mind sharing through blogs, or managing requirements real time without putting a structural workflow around it can provide you a pathway to make a true connection with your customers and create a sense of stakeholder ownership. 5) Being Early Adopters A lot of the Indian tech Companies have been in business for less than 10 years. They maintain a dynamic culture, which is willing to try out things. This highly contrasts some traditional IT shops in American where change is resisted in all possible ways. Industry trends suggest that web 2.0 s the way of the future. Time will tell if this analysis will hold true. However, if web 2.0 reigns supreme in the years to come, Indian companies will leap to the forefront of that movement by being early adopters of web 2.0 technology and fine tuning it to fit their existing business model. This may be an opportunity for Indian tech companies to be leaders in web 2.0 movement by not only being power users but being lead developers of new tools and content.

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Faster, cheaper and better is the web 2.0 mantra that gets people excited. However, just like any new trend, there is a lot of buzz around web 2.0, when the reality is that a lot of the players will get strike out very soon. Besides, the web 2.0 architecture needs some work. Developers still struggle from switching between APIs. RSS have competing formats and so on. Beyond all the hype, the emerging web 2.0 standard, combined with cheap tools, AJAX programming and open source platform may truly reshape the tech industry of the future.

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Road Ahead for Indian Telecom

During the last 15 years, the Indian telecom industry has made the mobile phone a mass market device at affordable rates. We are in the midst of a revolution that is changing the way we communicate, work and live. The penetration has reached 60% and there are 680 million subscribers and the industry is adding 15 million subscribers every month. But the industry is going through a very difficult phase in terms of financial health which is reflecting in enterprise valuation. The unprecedented competition triggered by the entry of new players, resulted in huge fall in tariff and revenue. The industry has borrowed heavily for network roll out and for new acquisitions which in turn adversely affected the profitability of the telecom sector. In order to overcome the profit margin pressure, the industry is struggling to invent new ways to increase the revenue and reduce the cost. 1. Rural Penetration The telecom industry has covered about 90% of the population and 80% of the geography. More than 50% of the new additions are coming from the rural areas. However the concern is the low ARPU customers from rural areas and the additional cost incurred for network roll out in rural areas. The industry seeks support from the Government for sustaining operations in rural areas. 2. Price wars Every industry has seen a price war and it is a global phenomenon. But the telecom tariffs in India have fallen to a ridiculous level which is not sustainable any more. The 3G launch and MNP are the two major events and the industry's reaction to these events will decide the future course of Indian telecom price war. It is time now for TRAI to regulate the telecom tariff in the long term interest of the industry. In 2004 it moved to forbearance regime in which there is no prior approval required before launching a new tariff plan. This policy needs review. 3. Shift from Voice to Data Today voice contributes to 80% of the revenue and data contributes to 20%. Competition and the price wars reduced the share of voice during the last few quarters.

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To maintain the revenue growth the only option left to the telecom companies is to focus more on the data products. The emerging popularity of the new smart phones and the launch of 3G products will provide a new opportunity to drive growth and revenue in the telecom industry. Data services are already popular in metros and big cities. It will reach smaller towns through its popular products like video streaming and access to social networks. 4. Mobile Commerce The banking and telecom sectors will come closer to reach the large number of rural population who are yet to avail the banking services. Opening of new branches and ATM are an expensive option and the cost effective and faster way to reach the masses is to introduce mobile banking and mobile based money transfer. 5. Spectrum Management The recent auction of 3G and BWA has changed the spectrum allocation policy of the Government of India. The industry has moved towards a market based approach for pricing of spectrum which ensured that the government realized true value of this precious resource. There will be a fair pricing of 2G and the operators are expected to utilize the spectrum more effectively to keep their cost low. 6. 3G and 4G Even though 3G services of MTNL and BSNL are already operational, the launch of 3G by private operators will make a major difference. Tata Docomo is the first private operator to launch the 3G services in its 10 circles in India during November 2010. Availability of 3G enabled handsets, improved customer services and 3G applications are the pre-requisites for a successful launch of 3G services. The 3G services offer huge potential for the VAS industry. In some countries like US, the share of VAS increased to 25% of the revenue after 3G launches. In India the share of VAS is around 7% now. TRAI has already begun consultations with the various stakeholders on 4G and the industry is expecting the 4G roll out by 2013. 7. MNP
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The subscribers are expected to move towards the operators who provide better network and customer services. However Indian telecom market is predominantly a prepaid market where the churn is already very high. MNP will not create any major impact in this prepaid segment. However there will be tough competition to retain the existing postpaid subscribers by the old operators and the new operators may take up an aggressive stand to grab these subscribers. Most of the operators lag behind in providing quality customer services in India. This is expected to change in future. 8. Broadband evolution In India while mobile penetration is 60%, the internet penetration is less than 5%. Even though there is an improvement in the quality of broadband services during the last decade, Broadband growth continues to lag behind due to high cost of network roll out and regulatory hurdles. However the spectrum allocation for Broadband Wireless Access is expected to take up the broadband penetration to new heights in India. 9. Mergers and Acquisitions There are 14 telecom operators in the country and majority of the new entrants are bleeding after the recent price wars initiated by them. The decline in revenue growth and resultant pressure on the profit margins has forced many of the operators to revisit their future plans. While the strong players with large free cash flow will survive, many other operators will sell their stakes or merge with stronger players. The new players with international partners may also stay. The number of players is expected to come down to 7 or 8 operators in the next 3 years. The consolidation will take place not only among the service providers but also among the tower companies. The tower companies will play a more significant role after the introduction of active sharing of sites. This may also lead to Mobile virtual network operators entering the market, after the Government comes out with policy guidelines. 10. Regulatory Reforms The open licensing policy of the Government of India resulted in an unprecedented competition. It is a major setback for the government as all these new entrants are
41

finding themselves in a financial mess and many of them planning to quit the industry by surrendering license. The government should find out a way for these new entrants to merge with other stronger players in the long term interest of the industry. It needs to review its policies on lock in period and M&A guidelines to facilitate faster consolidation. The other policies which require review are the taxes and levies and the utilization of USO fund. The industry pays approximately 25% of its revenue to the government towards various taxes and duties including revenue share and service tax. The industry is demanding a uniform license fee.There should be better utilization of USO Fund which is lying unutilized due to rigid rules. This fund should be used for improving the broadband penetration and incentivizing rural penetration. 11. Convergence The convergence of voice, video and data is called Triple Play. 3G technology will drive the next round of sustainable growth through convergence of entertainment, infotainment and voice communication in one single device. The innovative value added services will bring all services under just one convergent device. 12. Mobile Cloud Computing Cloud Computing has made an impact on mobile industry also. The increased network connectivity and popularity of the smart phones and tablet devices like iPad have considerably increased the usage of applications on mobile devices. In the next few years Cloud computing is going to bring major shift in the mobile application technology. In Mobile Cloud Computing the data storage and data processing occurs outside the mobile device and results are displayed through screen or speakers. GPRS, Gmail, and Google Maps are some of the mobile cloud computing applications which are already in use. The major challenge for mobile cloud computing is the limitations inherent to the mobile devices like processing power, memory, network bandwidth and storage capacity as compared to a fixed device like PC. As there is a huge scope for mobile
42

cloud computing, large investments are being made in this technology. It is projected that in the next 5 years mobile cloud computing will become a significant contributor to the revenue pie of the telecom industry. Conclusion The telecom industry makes a significant contribution to the country's GDP growth. It has a direct impact on the socio economic growth in India. Telecom is Government's poster boy of economic reforms. The industry has always surpassed the targets set the Government and policy makers. The last 15 years history speaks volumes about the dynamism and capability of the industry leaders. No doubt the Government's policies and support played a major role in this success story. The industry needs more of it now.

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Research Methodology
Research Methodology: Exploratory Research Type of Data: Secondary Data Source: o Fortune 2000 list o Indias Most Respected Companies Survey by Business World Data Analysis : SPSS (Version 16)

44

Data Analysis And Key Findings Rank Correlation:

In statistics, rank correlation is the study of relationships between different rankings on the same set of items. A rank correlation coefficient measures the correspondence between two rankings and assesses its significance.

Correlations
Most Respected India Rank of Companies Fortune List Spearman's rho India Rank of Fortune Correlation List Coefficient Sig. (2-tailed) N Most Respected Correlation Coefficient Sig. (2-tailed) N List

1.000

.131

. 18

.604 18

Companies List

.131

1.000

.604 18

. 18

Test of Significance: 60.4% probability is this data is obtained by chance. It is not possible to obtain the same result again if the experiment is repeated. Test of Correlation: 13.1% correlation exists in the data. Low degree of correlation and low significance means that collectively mean that there is no significant correlation exists between Fortune List ranking and Most Respected Companies ranking.

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Test of Reliability:
Cronbach's (alpha) is a coefficient of reliability. It is commonly used as a measure of the internal consistency or reliability.

Case Processing Summary

N Cases Valid Excluded Total 18 0 18 % 100.0 .0 100.0

a. List wise deletion based on all variables in the procedure.

Reliability Statistics Cronbach's Alpha .993 N of Items 7

Cronbachs Alpha: Here in this case the value is 0.993, which is a very value for the test of reliability, hence it can be concluded that the test is highly reliable. It is possible to calculate correlation between the factors.

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Item-Total Statistics
Scale Scale Mean Variance if Item Item Deleted 36.173 Deleted Innovativeness Depth & Quality of Top 22.94 if Corrected Item-Total Correlation .994 Cronbach's Alpha if Item Deleted .991

Management

22.94

36.173

.994

.991

Financial Performance & Returns 23.06 Ethics and Transparency Quality of Product and Services People Practices / Talent 22.94 23.11

36.173 36.173 37.516

.952 .994 .938

.993 .991 .994

Management Global Competitiveness

23.06

36.173

.952

.993

22.94

36.173

.994

.991

Cronbach's Alpha if Item Deleted: The result shows that all the parameters are very reliable to conduct factor analysis. It also shows that the scale used is highly reliable.

Scale Statistics
Std. Mean 27.22 Variance Deviation 51.242 7.158 N of Items 7

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Correlation:
In statistics, correlation is any of a broad class of statistical relationships between two or more random variables or observed data values. In general statistical usage, correlation or co-relation can refer to any departure of two or more random variables from independence, but most commonly refers to a more specialized type of relationship between mean values.

Quality of Depth Total Score Pearson Correlatio n Total Score 1.000 1.000 1.000 .998 .999 .999 .999 .999 ess & Financial Ethics cy and Product Services People Practices / Global Talent Management Competitiven ess Innovativen Quality of Top Performance Transparen and Management & Returns

Sig. tailed)

(1- Total Score

.000

.000

.000

.000

.000

.000

.000

Correlation: Correlation of each parameter with the total score is very high (More than 0.99) in all the cases. It shows a very high degree of relationship between the parameters under study and total score.

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Regression:
In statistics, regression analysis includes any techniques for modeling and analyzing several variables, when the focus is on the relationship between a dependent variable and one or more independent variables. More specifically, regression analysis helps us understand how the typical value of the dependent variable changes when any one of the independent variables is varied, while the other independent variables are held fixed. Most commonly, regression analysis estimates the conditional expectation of the dependent variable given the independent variables that is, the average value of the dependent variable when the independent variables are held fixed.

Model Summary
Change Statistics R Model R 1 Adjusted Std. Error of R Square F Change df1 . 7 df2 10 Sig. F Change .

Square R Square the Estimate Change 1.000 .000 1.000

1.000a 1.000

a. Predictors: (Constant), Global Competitiveness, Financial Performance & Returns, Ethics and Transparency, People Practices / Talent Management, Quality of Product and Services, Depth & Quality of Top Management, Innovativeness

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Coefficients
Standardi zed Unstandardized Coefficients Std. Model 1 (Constant) B -1.022E10 Innovativeness Depth & Quality of Management Financial Performance Returns Ethics Transparency Quality Product Services People Practices / Talent Management Global Competitiveness a. Dependent 1.000 .000 .139 . . .999 1.000 .005 of and 1.000 .000 .142 . . .999 1.000 .004 and & 1.000 .000 .142 . . .998 1.000 .008 Top 1.000 .000 .145 . . 1.000 1.000 .004 1.000 Error Beta t Coefficien ts Correlations ZeroSig. order Partial Part

.000

.000

.146

1.000

1.000 .004

1.000

.000

.139

.999

1.000 .006

1.000

.000

.148

.999

1.000 .005

Variable:

Total

Score

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Regression: It is a very good model for regression because the value of constant is very small, -1.022 X 10 independent variables. The equation we obtain from this is,
-10

. It means that the variables are capable of determining the

value of total score, i.e. the value of total score is highly dependent on the

Total Score = 0.146 X Innovativeness + 0.145 X Depth & Quality of Top Management + 0.142 X Financial Performance & Returns + 0.139 X Ethics and Transparency + 0.139 X Ethics and Transparency + 0.142 X Quality of Product and Services + 0.139 X People Practices / Talent Management + 0.148 X Global Competitiveness

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ANOVA: In statistics, analysis of variance (ANOVA) is a collection of statistical models, and

their associated procedures, in which the observed variance in a particular variable is partitioned into components attributable to different sources of variation. In its simplest form ANOVA provides a statistical test of whether or not the means of several groups are all equal, and therefore generalizes t-test to more than two groups.

ANOVA
Sum Model 1 Regression Residual Total Squares 1.648E8 .000 1.648E8 of df 7 10 17 Mean Square 2.354E7 .000 F . Sig. .000a

a. Predictors: (Constant), Global Competitiveness, Financial Performance & Returns, Ethics and Transparency, People Practices / Talent Management, Quality of Product and Services, Depth & Quality of Top Management, Innovativeness b. Dependent Variable: Total Score

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Conclusion
The contributions present an extensive exploration of the phenomenon of Indian companies in overseas markets, which is multi-faceted in terms of activities and issues and is variegated among industries and companies. As the proportion of Indian companies engaging substantively with overseas markets is not more than a tenth, and for these too the experience is less than a decade long, these are very early stages of the phenomenon. However, the breakthroughs and aspirations of Indian companies that have ventured overseas portend major two-way engagement between Indian business and the world economy. The context of overseas expansion of Indian companies is different either with respect to American and European companies or Japanese and Korean companies and so the process will be unique and could be unprecedented in terms of pace and impact. The Colloquium does identify some issues and patterns. These are analysed for extending and drawing implications and for addressing apparent contradictions. Major conclusions on the phenomenon of Indian companies in the overseas markets, which can be converged upon are as follows: From comparative to competitive advantage: Historically or till about 1990, the engagement of Indian companies with overseas markets was with the export of traditional products like tea, coffee, iron ore, leather, apparel, gems and jewellery, etc. These were based on natural endowments or on first-level comparative advantages of India and the companies played a role of little more than intermediaries or traders. There was a shift during the previous decade when companies found and deployed second-level advantages availability, lower cost, and skills of the technical and scientific manpower in India. The second-level advantages, though comparative in nature, required creation of complementary capabilities in sales and marketing and in production systems which needed to be evolved within the companies or firms. Software companies that primarily operated with posting of professionals in overseas assignments or body shopping till the mid-1990s started moving to projects and offshore production units by late-1990s. As a result, companies moved beyond India-based comparative advantages to create firm-based competitive advantages. The competitive advantages are more expandable in terms of scale and

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scope as they are governed by the competencies developed within a company and the aspirations of its top management. The trajectories are relatively similar in case of pharmaceuticals and auto components companies, though on a smaller magnitude and with a lag of few years, and many other industries are likely to move along the path in coming years. While India-based comparative advantages are critical for entering international markets and may remain important long after, overseas expansion of Indian companies is now primarily based and driven by firm-level competitive advantages. This makes for emergence of globally significant Indian companies and for enlargement of phenomenon of overseas forays to new industries and companies having perhaps weak or no India based comparative advantages. Favourable push and pull conditions for overseas successes: For an increasing number of industries, Indian business is reaching the point of having global advantages on all the four determinants (Porter, 1990) favorable factor conditions with respect to natural resources, skills, capital, and infrastructure; demand conditions in domestic market comparable to that overseas in terms of presence of global players, quality of products, and customer expectations; presence of ancillary industries and supportive skills like finance, banking, and legal; and, intensity of competition and aspirations of looking beyond domestic markets. This is best illustrated by the intent of highly diversified Tata group which is committing itself to building overseas operations in each of the businesses besides software, from automobiles to steel, chemicals, hotels, watches, branded tea, and consultancy. The four determinants tend to have a bandwagon effect in a country on two counts one, stoking aspirations among other players as the pioneers in an industry start operating overseas, and two, facilitating creation of suitable conditions in other related industries. On the pull side, from the situation of Indian origin being a handicap and often a disqualifier, the world has come to acknowledge India advantage. The rub-off effect of software successes on perception of Indian companies is significant as evident from India startingoff virtually as the first and most credible choice when outsourcing of professional services to overseas destinations emerged at the turn of century. In outsourcing of services, India is currently not only the leader but also the potential is barely scratched currently. Outsourcing of manufacturing seems to be and can ride on the formidable positioning created in services. On the other hand, the globally competitive companies that emerged during the last decade have the critical mass to go up the value chain and become leading

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corporations in the world and be rooted in more substantive and enduring higher-level competitive advantages of intellectual capital. These favourable conditions could mean crossing the tipping point for Indian industry at an aggregate level when being present and competitive in overseas markets is not out of ordinary but a regulation choice.

Three strategy types for Indian companies in overseas markets: Based on the product markets and the current size and proportion of overseas business, Indian companies are following three strategic trajectories. The first is outsourcing, where the domestic market is relatively both very small or unattractive, e.g., Software services, business process outsourcing, and pharmaceutical clinical trials or the company has made a choice to be primarily focused on overseas opportunities, e.g., Sundaram Fasteners and Bharat Forge. The second overseas strategy type is internationalization, where companies are aiming to expand market or balance business downturns and risks of domestic market, e.g., Jindal Iron and Steel and Bajaj Auto. The third type is multinationalization, where companies having substantial overseas business and after operating for a few years are aiming to create sustainable competitive position in several geographies, e.g., Wockhardt, and Asian Paints. While internationalization and multinationalization broadly fall into a continuum and follow traditional models of overseas expansion (Hymer, 1976; Hamel and Prahalad, 1985), outsourcing is a new strategy type made possible by developments in information and communication technologies. No strategy type is intrinsically superior and a major proportion of Indian companies will be following the first or the second type and increasingly larger number will be evolving into the third type. However, the requirements and imperatives of being successful, for the individual types, are distinct. Differing requirements of the institutional and the retail customers: Outsourcing strategy type companies in most of the cases do business with institutional customers. These customers are generally corporations who use the outsourced service and manufactured product as part of their value chain or final output. The relationship is based on references and track record, so brand plays virtually no role. Besides, the customer wants to interact directly and requires a certain comfort level and predictability, so the joint ventures as an intermediary are generally not viable. However, brand, local knowledge, and distribution reach are important for success when a company deals

55

with retail or individual customers overseas. As these call for large investment of time and resources, the joint venture is a useful route. The speed of entry and expansion resulting from joint ventures can outweigh the costs related to coordinating divergent interests of partners and the fears of one partner capturing adverse share of value (Inkpen and Beamish, 1997). Marketing alliances can be useful in internationalization strategy as in the case of Tatas and Rover for sale of cars in the UK. The alliances can be more broad-based in the multinationalization strategy as shown by the highly successful and stable Aptechs China joint venture. However, unlike other emerging economies like China and Russia, Indian companies and professionals have demonstrated capabilities in building brands. This could be a source of additional strength as Indian companies carve bigger and wider presence overseas and they can afford the required investments and time to build brands in product markets they operate overseas. On a different plane, all the three strategy types would benefit from building and nurturing corporate brands which will enhance their positioning and attractiveness in the market for capital and skills. In addition, overseas acquisitions that fit well with strategic objectives and organizational characteristics can be an important vehicle for facilitating entry into overseas markets or for moving to higher value-added segments in the case of all the three strategy types. Organizing for growth and capability building: The debate on organization of global corporations have revolved around two conflicting requirements pressures for global integration and pressures for national responsiveness (Prahalad and Doz, 1987). An organization needs to choose to focus on one by going for either global product- based or geographybased structure. When both integration and responsiveness are essential, then a management systems and processes led transnational organization is proposed as a solution (Bartlett and Ghoshal, 1989). The debate though germane is of limited concern to Indian companies as they are in very early or entry stages of overseas activities related to which unfortunately there is little research work (Westney and Zaheer, 2001). Structure for internationalization companies is relatively simple as they would tend to operate with one or more overseas or export functions. Multinationalization companies will tend to go for a few centralized functions like research, finance, IT systems, and human resources to provide for integration benefits and geographically defined sales and marketing functions for local responsiveness.

56

Outsourcing companies will have operations and customer service functions centrally located though grouped as per customer or technology segments and sales and marketing teams directly led by top management. However, organization designs will tend to be flexible for seeking opportunities and incorporating learnings and some level of institutionalization around roles will follow as overseas operations reach a degree of stability. A dual-core organization could be appropriate for some cases with one core tuned to entrepreneurial risk taking and frontier expanding and other core for managing stabilized activities efficiently. One can be only approximate in defining a countrys culture (Hofstede, 1980; House, 2000), and more so of a diverse country like India. In any case, a national DNA cannot be an adequate guide (Graham, 2001) for understanding or designing organizations. As the locus of competitiveness is primarily at the firm level and as there are wide differences in operating requirements, the Indian companies should define their own appropriate culturedependent on size of business, nature of products, market characteristics, etc. An Indian organization will always have undeniable and salient imprint of its origin. However, cultural components should preferably be defined clearly in terms of desired and undesirable aspects and they should be allowed to evolve in a directed way. Critical role of conviction-laden leadership: A common element across all the Indian companies that have made overseas breakthroughs is the presence of a strong leader who believes in the ability of the organization to succeed in international markets and who creates the necessary business and organizational wherewithal. The leadership approach is clearly pioneering and innovative (Khandwalla,1987)moving into unchartered waters but also covering for the risks, through setting high standards of performance and organizational functioning. Strong and conviction-laden leadership will continue to be essential for the success of Indian companies operating in overseas marketswhether they are starting to enter overseas markets or moving along the long journey of building upon the breakthrough of previous decade. However, the number of leaders who can inspire other individuals is increasing which was not so when Fakirchand Kohli of Tata Consultancy Services and Parvinder Singh of Ranbaxy started going overseas. The presence of inspirational experience and learning, whileproviding for basic confidence, is not a substitute for inherent risks and protracted challenge of creating sustainable positions in international markets. The leadership traits of being clear, fundamentals oriented and planned, need to be supplemented with international orientation and preparedness for longer haul for taking an Indian company successfully into overseas markets.

57

This colloquium intensely covers most of the critical aspects and touches upon a majority of concerns. Some of the areas that remain inadequately dealt with relate to managing for the market and financial risks which fortunately are not very different than in case of domestic markets. To conclude, the phenomenon is being driven by the two metatrendsthe process of liberalization and globalization of Indian economy and the transforming impact of information and communication technology (ICT) on the world of business. While the first trend has just started manifesting itself in overseas expansion of Indian companies, the second trend positions and embodies them with powerful competitive advantages internationally. The events of last decade are just a beginning towards the emergence of Indian corporations that operate worldwide and, more importantly, hold significant and leading positions globally in a large number of industries.

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