Category — Foreign Companies in India

I am privileged to host three good friends at the February 15 meeting of TiE Southern California, The Indus Entrepreneur.   The event, at the Sheraton Cerritos hotel promises to be a unique treat and  I encourage you to register right away since seating is limited.  Register at www.socal.tie.org

My friend and client, Mark Masten who left a brilliant career at General Electric to become  Vice President of Global Sales & Marketing at Paramount Farms International and increase their sales by 300%. Mark will talk about his amazing intraprenuerial journey to selling California pistachios in India. Mark is the keynoter for the event.

My buddy, Ravi Chatwani who is co-CEO of an Inc. 500 company, Prosum Inc. a 300-person IT services provider whose clients include DIRECTV, Levi Strauss, and Warner Bros.  Chatwani, will share his street learning about leadership, things he wishes he had known 15 years ago.

Finally, a co-alumnus of IIT Kanpur like me, Ravi Renduchintala, will share his story as an entrepreneur and an outline their current breakthrough model defines an alternate asset class to revitalize single-family homes for both investors and tenants.

I have known each of these terrific  individuals for more than five years and you will enjoy learning from each of them.

Agenda for Wednesday, February 15, 2012. The Indus Entrepreneur, Southern California

Cerritos Sheraton, 12725 Center Court Dr, Cerritos, CA, 90703

5:30 PM                Registration Begins
5:45 PM                General members Cocktail & networking hour
6:45 PM                Doors open for dinner
7:30 PM                Talks begin, Keynote by Mark Masten; followed by the two Ravi’s
9:00 PM                Adjourn

Register at $35 at http:// www.socal.tie.org I look forward to seeing you

Gunjan Bagla

Managing Director, Amritt, Inc, www.amritt.com

The India Specialists, www.amritt.com

Blog at www.theindiaexpert.com

The focus for captive R&D centers in India has gone up this year and expected to grow between 12-20 per cent in 2012 depending on the source of the estimate.

The country is an emerging destination for automotive R&D;  Renault- Nissan, Suzuki and , Honda have recently set up their engineering centers in India.   In R&D hiring, pharma and defence are the better -paying sectors.  R&D is witnessing large investments not only from foreign companies operating in India but but also from domestic players.  In domestic companies, pharma and automobile have realized that in their ambition to globalize their operations, they have no recourse but to spend on R&D, according to a report in Silicon India.

Meantime, India’s largest information technology (IT) services provider, said it had so far made campus offers to 43,600 engineering freshers for 2012-13, higher than the 37,800 offers made this year. The Business Standard said these numbers represented the offers made to only engineering students at Indian campuses and the final hiring target for 2012-13 would be announced by the end of March. The target will include hiring from foreign campuses and lateral (experienced) offers. The ratio of campus hiring to experienced staff was 70:30 in the  previous quarter.  In FY 2012 TCS will end up hiring around 66,000 employees.

What this means

Career prospects for young professionals look disproportionately bright. If I was an HR professional anywhere in the world, I would want to look at working in India, the experience of hiring more than 10,000 professional people in a year is not something that many companies can offer. In India there are over a dozen company hiring over 10,000 a year. These include TCS, Wipro, Infosys and some other large service providers but also in my estimation western entities such as IBM, Accenture, perhaps Oracle/SAP/HP.

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.

In India, the Unilever towers over all other consumer product brands. Procter and Gamble is starting to make some gains having responded to the needs of the Indian mainstream. Its Gillette Guard razor, for example sells about 44 million units a year. At a retail price of just 30 cents per razor. Blades cost 10 cents. This seems low until you note that India’s largest selling brand, according to GCI Magazine, sells at 3-4 cents a blade.

What this means

To play in the mass market in India, you need to design and sell product that meets the needs of the Indian consumer at their wallet size. This does not mean making shoddy product, but rather using the best minds to squeeze costs out of every aspect of manufacturing and materials.  We call this approach frugal engineering or frugal design.

Earlier this week, India announced that the French built Rafale had beat out the runner-up Typhoon in a $10 billion fighter aircraft contract. The Typhoon, built by the Cassidian unit of EADS would have sustained thousands of jobs in Germany and the United Kingdom. Instead the work and jobs will go to Dassault Aviation, Safran/Snecma and others located outside UK/Germany.

In a shallow complaint, British Conservative  Member of Parliament, David Davis  is quoted as exhorting British Prime Minister Cameron to  “to pull his full weight to get India to change its mind” pointing out that “we give aid to India many times more than what France gives.”

Davis is sometimes touted as a possible future Prime Minister and should know better than to make such absurd statements. First of all, a UK company BAE won an earlier order to deliver 66  Hawk Trainer aircraft to India, valued at 700 million pounds. Second, since India became Independent in 1947, it has bought much British hardware. Third, a billion dollars of aid does not “buy” you ten billion dollars of sales. In fact most people would find such an equation repugnant. Fourth, if Davis checked his own BBC, he would find that India is among the largest inbound investors into the United Kingdom, including such icons as Land Rover, Jaguar and the former British Steel. And finally, some of the richest Brits are actually hard-working people of Indian origin, such as Laxmi Mittal,  Swaraj Paul, and Anil Aggarwal.

What this means

I am an Anglophile and I love English culture, literature and all the good things things the British gave to India, most of all the English language. But MPs like Davis seem to pander to short term political needs and harm the greater interests of alignment between the British and Indian cultures and economies.

Davis’s outburst will probably soon be forgotten by all, and that would be for the best.