Palepu urges focus on global competitiveness

Indian companies should capitalise on the domestic market and then venture into the global market, in order to become world class companies.

Speaking at the CII Partnership Summit 2005, Krishna G Palepu, senior associate dean and director of research at the Harvard Business School said that it was myth that to become world class companies they would have to be present in different geographical territories. He said, globalisation was a mindset and not about geographies.

Palepu explained, in every market there was a global segment but, there was also a very large segment which wants to preserve its tastes and preferences without compromising on quality. This was the segment that Indian companies would have to target to gain over the multinational companies, which were strangers in the market. India's strong point was its huge home market.

"Previous waves of globalisation in Korea, Singapore and Malaysia happened because the home market was small" he said. Scale was the key issue in becoming big brandnames.

Palepu cited the example of Wal-Mart and said that the company for a very long time focus on its home market and was one of the most successful companies in the world.

The mantra for attaining world class standards was, local strategic thinking but, global benchmarking. Palepu also highlighted the importance of execution excellence and the importance of investing in outstanding leadership and governance.

Y C Deveshwar, chairman ITC, earlier said that Indian companies would be truly world class if they could hold their success in a zero tariff scenario.

He said, India had come a long way and the advantage of doing business in India today was not just restricted to cost arbitrage.