Prof Marti Subrahmanyam of the Stern School of Business, New York University, feels infrastructure problems, sub-optimal scale and scope constraints and predatory external competition in the domestic environment are the factors prompting Indian companies to go global.
He said accessing new markets, learning about international technology and quality standards, accessing international managerial talent and gaining credibility with global investors were the major objectives of globalisation.
Subrahmanyam said, so far most of Indian industry's globalisation experience had come in the IT industry where the biggest market, the US, is an 'acultural' country.
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He was speaking at a session on "Nuts & Bolts of Globalisation of Indian Industry" at the Partnership Summit, organised by the Confederation of Indian Industry (CII), here today.
The refrain among speakers was that Indian companies aspiring to access international markets will have to face the challenge of setting up new organisational structures, understanding alien cultures, accessing global talent and technology, tapping global financial markets and upgrading key business processes.
Citing the example of an Indian telecom software company which had relocated to the US and had hired an American CEO, CFO as well as an international marketing team, Subrahmanyam said the experience of that company had taught that products or services should have a key competitive advantage, management should be aware of the substantial capital requirements for entering even a niche market, establishing a brand was a time consuming process and cultural issues of managing international executives were complex.
The executive vice chairman and CEO, Dr Reddy's Laboratories, G V Prasad, said his company's international experience had highlighted the importance of focussing on select strategic markets, accessing global talent, innovation and technology, meeting global standards of quality and manufacturing, upgrading key business processes, accessing financial resources and building expertise in international legal and contracting practices.
He said the Indian pharmaceutical market represented a small proportion of the global pharma market and doing well in the Indian market was necessary but not sufficient.
Presenting a case study of TCS, executive vice president, TCS, and chairman, CII-southern region, S Mahalingam said when his company had started its operations, it was clear that the market for software services was global and the company had chosen to be an Indian organisation with a global mindset.
The company, he said, was constantly innovating as it developed global partners, learnt global best practices and set up global development centres.
Earlier, vice president, CII, and chairman & CEO, MindTree Consulting Ltd, Ashok Soota, introduced the theme of the session and highlighted few issues that confronted Indian industry as it moves towards globalisation. He said Indian companies would have to formulate strategies that would differentiate them from their competition and would enable them to overcome the "country disadvantage."