Knowledge@Wharton -- Strategic Management

New Shores: Indian Investors Set Their Sights on Vietnam

Thu, 19 Nov 2009 16:25:50 EST

India has always been friendly with Vietnam, even when the latter was at war with the U.S. Still, many feel that Indian industry has, by and large, failed to capitalize on the strong historic bond between the two countries. But that could change soon: A US$5 billion Tata Group project to set up a steel plant in the Vung Anh Economic Zone in Ha Tinh province, and other Indian investments on the horizon, signal a change in how Indian investors are seeing Vietnam.

Hero Group's Sunil Kant Munjal: 'India's Model Is to Build a Domestic Business, and Then Go Global'

Thu, 08 Oct 2009 14:49:41 EST

Among the growing group of Indian companies that have made a global impact in recent years is the New Delhi-based Hero Group. Launched in 1984 to make motorcycles in collaboration with Japan's Honda, the US$3.2 billion company has emerged as India's largest two-wheeler maker. By some measures, such as production volume, it is the world's largest two-wheeler company. How can Indian manufacturers leverage their capabilities to grow into successful global players? How has India's economic history affected their strategy? India Knowledge@Wharton discussed these questions and more with Sunil Kant Munjal, chairman of Hero Corporate Services, the services business arm of the Hero Group.

Driving Ambition: India's Emergence as a Hub for Compact Cars

Thu, 08 Oct 2009 14:49:41 EST

R.C. Bhargava, chairman of India's number-one passenger car manufacturer, Maruti Suzuki, has just returned from Rohtak, in northern India, where his company is building an R&D showpiece that will soon roll out a small car created on a brand-new platform with a 1.2-liter engine. The new Maruti offering is a sign of the times amid predictions that India will soon become the world's small-car hub. Other major auto manufacturers are joining the charge, hoping to take advantage of low labor and raw material costs as well as recent signs of an economic rebound.

Turbulent Times: What's Next for the Indian Airline Industry?

Thu, 24 Sep 2009 14:56:03 EST

Trouble has been brewing for Indian airline carriers for some time, and recently, the horizon looks even darker. Private-sector airline owners have threatened to go on strike, pilots have protested firings by calling in sick, and Air India, the national carrier, is seeking a government bailout of US$1 billion. According to industry experts, moving forward will require a combination of cost controls, lower tariffs on fuel and more rational pricing and flight routes.

Ambani vs. Ambani: A Dispute over Natural Gas Prices Flares Up

Thu, 10 Sep 2009 15:46:29 EST

The Ambani brothers -- Mukesh and Anil -- are at loggerheads. While the sons of Reliance Group founder Dhirubhai Ambani have often competed hard after a family agreement was reached in 2005, their present dispute -- which concerns the price of natural gas -- threatens to have national and international repercussions. According to experts from Wharton, the presence of such disputes in business families indicates a weakness in governance structure. The solution is to set up a governance process that can minimize conflict.

Strong Signals: India's FM Radio Stations Brace for New Competition

Thu, 27 Aug 2009 14:09:36 EST

Regulatory restrictions have been tough on India's nascent private FM radio businesses, but the current global economic downturn has also taken its toll. Radio in India -- like TV, print and other media -- has had to reinvent its growth strategies as corporate clients slash marketing budgets. But now as the government prepares to auction radio licenses, India's FM radio bosses need to be ready to face what could be their biggest challenge yet to turn competitive threats into opportunities.

From Chulhas to Defibrillators: Can Philips India Be All Things to All People?

Thu, 30 Jul 2009 20:13:41 EST

Philips India was once unchallenged in India's lighting and electronics arena. But after more than 75 years in the country, competition has eroded its vaunted position, and today the company has redefined itself as a "health and well-being company." What remains after two years of strategic acquisitions and divestitures of non-core businesses are three areas of focus: health care, lighting and consumer lifestyle. For marketing experts, the move raises a debate about the value of offering diverse products under one umbrella: Can a smokeless chulha, or stove, be sold under the same brand as sophisticated medical equipment?

Growing MindTree: Can Added Services and a 'Gardener' Help the IT Firm Reach New Heights?

Thu, 02 Jul 2009 12:45:51 EST

When Bangalore-based information technology (IT) firm MindTree began operations in August 1999, some investors believed it had the potential to be a US$1 billion company in 10 years. Today, the company is nowhere near that figure, projecting US$290 million to US$300 million in revenues for the current year. While some view MindTree as not having lived up to its potential, others say the company is poised to become a major player in India's IT industry through the addition of new businesses and its innovative approach to leadership, which includes an official "gardener" focused on developing its executives.

Frame by Frame, Indian Animators Move Up the Value Chain

Thu, 02 Jul 2009 12:45:51 EST

In April 2010, the box-office fate of the first animated Hollywood film to be produced by an Indian company -- Crest Animation's Alpha and Omega -- could well define how the world looks at Indian animators. According to a report by Nasscom and Ernst & Young, the Indian animation industry generates annual revenues of US$400 million to US$500 million, and is poised to cross US$1 billion by 2012. Long viewed as service providers for established film companies, studios like Crest are now moving into pre- and post-production work that could help establish India as a global animation hub. Along the way, experts say, the industry will need to adapt its artistic sensibilities to a more global audience and invest heavily in educating the next generation of animators.

Indian IT Plugs into a Growing Market of Small and Midsize Enterprises

Thu, 18 Jun 2009 17:25:08 EST

Despite the economic slowdown, the potential of India's vast sector of small and midsize enterprises (SMEs) has caught the attention of the country's information technology players. Increasing domestic and global competition, a rise in partnerships with larger firms and government initiatives to increase IT awareness among SMEs are motivating smaller companies to beef up their IT processes. But in order to tap into this potentially enormous market, IT firms will need to move away from "one size fits all" products and develop networks of sales partners who can tackle the segment's geographic spread and effectively communicate the benefits of adopting IT among smaller companies, many of which don't own a single PC.

New Investors and Foreign Audiences Are Creating a New Script for Bollywood

Thu, 21 May 2009 17:26:19 EST

India's US$2.2 billion "Bollywood" film industry, as the Hindi movie-making business is called, is finding its script rewritten as the world around it changes. A more professional business rigor, driven by institutional investment, has replaced informal, bootstrap funding and drawn-out production processes. Foreign consumers are increasingly patronizing its offerings, adding to the industry's already massive domestic audience. According to speakers at the recent Wharton India Economic Forum in Philadelphia, the new environment calls for more refined business models that focus on untapped revenue streams, global and digitized distribution networks, improved filmmaking technology and ways to counter piracy.

GlaxoSmithKline's Hasit Joshipura: Seeing a Healthy Future for India's Pharma Industry

Thu, 07 May 2009 16:26:54 EST

GlaxoSmithKline (GSK) was among the first foreign pharmaceutical companies to enter India decades ago and is viewed "almost like an Indian company," according to Hasit Joshipura, vice president-south Asia and managing director for GSK in India. During an interview with India Knowledge@Wharton at the recent Wharton India Economic Forum in Philadelphia, Joshipura suggested that GSK's years of experience in India may soon pay significant dividends as it prepares to create a "branded generics portfolio, apart from our own pipeline, in emerging markets." He also spoke about the future of pharmaceutical regulation in India, which he believes will align more closely with Western models in terms of monitoring drug development and new product launches.

The Tech Mahindra-Satyam Deal: What Challenges Lie Ahead?

Thu, 23 Apr 2009 20:59:43 EST

On April 13, Satyam Computer Services saw some resolution to an ongoing scandal that has shaken the firm and roiled India's information technology industry. Pune-based Tech Mahindra, a mid-tier IT services provider focused on the telecom sector, outbid competitors for a 31% stake in the company, at a price of US$351 million. What does Tech Mahindra hope to gain from its acquisition, and how will the company integrate its own, lesser-known brand with Satyam's now-tarnished image? India Knowledge@Wharton spoke with Wharton management professor Saikat Chaudhuri about the potential complications that come with this deal, the government's role in containing the scandal's fallout, and what the sale of Satyam will mean for India's IT sector.

Tata Sons' David Good: 'We Want to Be Known as a Global Company Rooted in India'

Thu, 09 Apr 2009 15:46:33 EST

Following a 34-year career in the United States Foreign Service, David Good joined Tata Sons, Ltd., in 2005 as the company's chief representative for North America -- a role Tata Group chairman Ratan Tata likened to being "an ambassador" for the Tatas in the United States. At the recent Wharton India Economic Forum in Philadelphia, Good spoke with India Knowledge@Wharton about Tata Sons' objectives in the U.S. and other markets outside India, the Nano launch, the economic downturn and the Obama administration's recently announced restrictions on hiring H-1B visa holders at firms receiving TARP funding, among other issues.

No Small Wonder: The Tatas Launch the Nano

Thu, 09 Apr 2009 15:46:33 EST

On March 23, the day Tata Motors launched the Nano -- its long-awaited small car priced at US$2,000 -- the company's web site crashed. It had received more than 40 million hits in a short span of time and was unable to cope with the traffic. But while Indian consumers and industry observers have shown great interest in what is probably the world's most economical car, the Nano's introduction comes at a time when things are not going very smoothly for the Tata Group, and Tata Motors in particular. Now that the Nano has arrived, experts weigh in on the likely impact it will have on the company's future and the auto industry.

An Industry on the Line: Telecommunications in Afghanistan

Thu, 26 Mar 2009 16:41:36 EST

It wasn't so long ago that Afghans would have to travel to neighboring Pakistan to make an international call. Today, Afghanistan's mobile phone industry has five million users, and four providers have invested more than US$1 billion in building a network throughout the country. But battered infrastructure, unpredictable tax policies and other obstacles -- such as attacks by the Taliban on cell phone towers -- have taken their toll on industry growth.

Shooting in the Dark: How Much Is Satyam Worth?

Thu, 26 Mar 2009 16:41:36 EST

Bidders for the fraud-hit Satyam Computer Services have limited information on what they are trying to buy. Is a realistic valuation possible? Could there have been a better solution? Opinions vary widely on issues ranging from the right price for the company to the involvement of multinationals and private equity players in the deal.

After Years of Rah-Rah Growth, Media Firms Present a Grim Picture

Thu, 12 Mar 2009 17:12:09 EST

Barely 12 months ago, media and entertainment was one of the hottest segments for investors. Now, as television channels and print publications face declining advertising rates, media firms appear to be in trouble. Profits are under pressure and layoffs have begun. Some of the problems are of the media's own making. Experts, however, see the slowdown as a temporary phase; they believe growth prospects over the next five years could exceed 12%.

Trouble in Store: A Setback for India's Organized Retail Sector

Thu, 26 Feb 2009 19:59:53 EST

Subhiksha is India's largest retail chain -- or some would prefer to say "it was." A victim of the current credit crunch, most of its outlets are now closed, and the company has been unable to pay salaries for the past few months. Subhiksha, of course, is not alone in facing a recent reverse. The woes of India's organized retail sector -- or "modern trade," as it is called -- have many causes that go beyond the current financial downturn. Among them: an ongoing backlash by supporters of India's huge farmer-shopkeeper segment and a culture in which "one-size-fits-all" Western-style retail strategies won't win access to customers who are used to their local kiranas.

Japan's Renewed Interest in India: An 'Upward Trajectory'

Thu, 22 Jan 2009 16:52:37 EST

After years of subdued ties following India's nuclear tests in 1998, two large deals last year appear to have set the stage for a renewed wave of Japanese investment in India. First, Japanese pharmaceutical major Daiichi Sankyo bought a 34.8% controlling stake in India's largest pharmaceutical firm, Ranbaxy Laboratories. A few months later, Japanese telecom giant NTT DoCoMo bought a 26% stake in Tata Teleservices Ltd. While some observers question whether Japan is overpaying to gain a foothold on the subcontinent, others note that regional trade concerns and strategic initiatives are fueling the country's moves.