Category — Market Entry

With 46 percent of its $16 billion in annual revenue hailing from foreign shores, Medtronic, the world’s biggest medical devices company has an ambitious goal to develop new and cost-effective products such as pacemakers for the poor, while simultaneously selling its existing ones to the growing middle classes in emerging markets.

The company’s new CEO, 55-year-old Syed Omar Ishrak was raised in South Asia (Bangladesh) and  believes that Medtronic can expand its reach even more, particularly in the emerging markets of India, China and Latin America. “Huge opportunities,” he says. “Huge.” How exactly Ishrak’s globalization strategy will play out remains to be seen according to the Minneapolis Star Tribune last year.

Syed Omar Ishrak, CEO Medtronic

At the Davos World Economic Forum last month, Ishrak, who was recruited from General Electric and has a PhD from King’s College in London,  continued the theme, “One has to be realistic about affordability in the under-served segment,” he said adding that the new generation of simpler devices should be five to 10 times cheaper than current high-specification products.

“To accelerate healthcare access one has to think about disruptive methods — disruptive technology and disruptive delivery mechanisms,” he said. While the work is still at an early stage, Ishrak has already identified heart pacemakers as the most likely area for initial research and development.

“I’d like to challenge all our businesses to start thinking this way but the area where we are furthest ahead is perhaps pacemakers, where we’re thinking of real disruption in terms of cost and simplicity,” he said.

What this means

At my company, Amritt, we have been advising our clients to look at emerging markets such as India, in exactly this manner not only in medical devices but in many other sectors that affect consumers. I had the good fortune to get to know the late legendary Professory C.K. Prahalad of the University  (the man who first became famous for coining the term “core competence”).  “CK” as he was know to all friends and acquaintances later wrote the ground-breaking “Fortune at the Bottom of the Pyramid” where he pointed out dozens of examples of profitable business models that address wallet sizes different from the American middle class.

It is good to see that Medtronic has aspirations to address the needs of consumers  beyond the richest 1 billion global citizens. They are early in their journey, but doubtless the GE and Bangladesh heritage will carry Ishrak’s vision. We will watch this closely.

UK defense company BAE Systems has appointed its CIO, Dean McCumiskey as Managing Director of its operations in India.

BAE has formed two defense venture companies BAeHAL, a Bangalore-based software engineering joint venture with Hindustan Aeronautics Ltd. (owned  by India’s Ministry of Defense)  and Defence Land Systems India in partnership with automaker Mahindra & Mahindra, which has about 20 employees.

Recent successes of BAE Systems in India include an $80 million contract for provision of spares and ground support equipment to the Indian Air Force to aid the BAE Hawk training aircraft operations. BAE is the supplier of the Hawk aircraft.

I was surprised the First Lady Michelle Obama did not try a sari in India. After all her husband used to hang with the Indian crowd when he was known as Barry and cooked Dal with his roommate Vinai Thummalapally (now the Ambassador to Belize). But so many other Western women try on this versatile garment when they visit India. Here are some celebrity photos

Actress and Indian-Englishman's wife Elizabeth Hurley in sari

Pamela Anderson was wildly popular for the TV Show "BayWatch"

Russian born tennis player Anna Kournikova in Sari

Tennis players visiting India seem to prefer saris, perhaps because no one will ask them to play, once they don this garment. Here are sisters Venus and Serena in a sari

Tennis stars Venus and Serena williams in Saris

Super Model Naomi Campbell in Black Sari

In American today there is a bit of a rush toward India. “The 1.4 trillion dollar economy, growing at 7 percent. They like India. The last three US presidents have visited India, much more so than before.” All this is true.

But some foreign companies have been doing business in India since the early 20th Century. (And I don’t include the colonials of the British East India company).

General Electric supplied a hydroelectric plant in over a hundred years ago. And Nestlé began India operations in 1912.  According to Consumer Goods Technology,Nestlé’s first sales agents in India began work in Chennai and Kolkata in 1912. Today, the company directly employs 6,000 people in India  and tts products are sold in more than 3.5 million outlets across the country. Nestlé recorded sales of CHF 1.4 billion in India in 2010. Its most popular brands are Maggi, the country’s leader in instant noodles, and Nescafé instant coffee. I grew up in (admittedly tea-drinking)north India thinking that coffee and Nescafe were the same thing.

What this means to new entrants:

You’re the new kids on the block in India. Be prepared to pay your dues before you can succeed. In most markets in India, there are smart local and foreign companies who can run you over if you don’t go fully prepared and with good advisors.

Chicago based NAVTEQ has launched real-time traffic service in Mumbai and Delhi, India with a combined population of 26 million.

The company claims that is its research shows that drivers in India who use traffic-enabled navigation on a regular basis can spend 18% less time sitting in congestion over those that don’t — the equivalent to almost three days saved on the road each year. Additionally, the company’s findings show that drivers with real-time traffic experience reductions in distance traveled as well as increase fuel efficiency.

The latest NAVTEQ map of India is available for more than 2,200 cities throughout India, covers 6.47 million Points of Interest across 1.2 million km of the national road network.

What this means

I will have to try this to believe it. Somehow, I feel that traffic information is unlikely to speed up my movement in the congestion of India’s streets today and that maps won’t prevent me from getting lost. A knowledgeable driver continues to be my major asset as I travel about my native country.