By:

Prof. (Dr.) P.K. GuptaB.E., MBA, Ph.D, D.Sc, DCE (France), DCA (US)Secretary General,National Foundation of Indian Engineers (NAFEN)NEW DELHI (INDIA)

CHARACTERISTICS OF 21CHARACTERISTICS OF 21STST CCENTURYENTURY

EMERGING TRENDSEMERGING TRENDS

MARKET SCENARIOMARKET SCENARIO

SALIENT FEATURES OF INDIAN ECONOMYSALIENT FEATURES OF INDIAN ECONOMY

HOW INDIA AND CHINA COMPARE?HOW INDIA AND CHINA COMPARE?

INDIA’S GREAT ADVANTAGESINDIA’S GREAT ADVANTAGES

SUGGESTIONSSUGGESTIONS

WIN WIN STRATEGIESWIN WIN STRATEGIES

INDIAN SUCCESS STORIESINDIAN SUCCESS STORIES

CASE STUDYCASE STUDY——Perception PuzzlePerception Puzzle

SOLUTIONS TO CASE STUDYSOLUTIONS TO CASE STUDY

1.1. CHARACTERISTICS OF 21CHARACTERISTICS OF 21STST CCENTURYENTURY21st Century has following Distinct Characteristics :

Knowledge and Information Based Society —Internet, E-mail, E-Commerce, Multi Media, Virtual Reality, Information Super Highways, etc.Global Networking.High Mobility of Populationfrom Rural to Urban Areas.Increasing Productivity.Reliance on Innovation & Creativity.Conscious Society — Customer aware of his rights and obligations.

22.. EMERGING TRENDSEMERGING TRENDS

Emergence of Trade Blockslike EU/EC, SAARC, etc.

Population Explosion

Rapid Technological Changes

Social Changes

Literacy Levels

Entire World as a Global Economic Village

Transport Revolution

Heavy Industrialization

Fast Aging due to hectic life

Fast Developing Political & Economic Changes in Eastern Europe

Shift of Manufacturing bases to Nations like India, South East Asia, etc.

Enhanced Medical Facilities

Multi Media, Information Super Highways

3.3. MARKET SCENARIOMARKET SCENARIO

The entire world is like a Boundryless Global Economic Village due to I.T., Telecom &Transport Revolution.

Customer Needs, Wants, Desires, Values & Ethics are undergoing sea change.

Customer wants more options & alternatives.

There is a shift from "Sellers Market" to "Buyers Market".

Organizations have to look for their Competitive Edge & develop on their Strengths & Explore New & New Opportunities

LPG has brought leading MNCs ofthe World at India’s door steps.

Competition is increasing and, therefore, Innovation & Creativity is the Solution & not the Price Cutting which Leads to Price War.

Organizations have to Offer Value Added Focused Services to attract customers.

Organizations, therefore, have to pursue :

Excellence

Gain Competitive Edge & Advantage

Resort to BPR

Have Mind set for TQM

Down sizing by Air India by US$45000

Outsourcing - Make Vs. Buy Decisions

Employee Motivation

Innovation & Creativity is the Hall Mark

4.4. SALIENT FEATURES OF SALIENT FEATURES OF INDIAN ECONOMYINDIAN ECONOMY

Indian Foreign Trade:Indian Foreign Trade: Export trade with European Union, United States, and Japan. Main commodities agricultural and allied products, gems and jewelry, and ready-made garments. Iron ore, minerals, and leather and leather products.

Import trade with European Union, United States, and Japan. Major imports oil products from Middle East. Other major imports chemicals, dyes, plastics, pharmaceuticals, uncut precious stones, iron and steel, fertilizers, nonferrous metals, and pulp paper and paper products.

Foreign Aid:Foreign Aid: Most aid provided by Aid-to-India Consortium, consisting of World Bank Group and Austria, Belgium, Britain, Canada, Denmark, Germany, France, Italy, Japan, Netherlands, Norway, Sweden, and United States. Japan largest aid granter and lender.

Indian aid program is mainly to Bhutan and Nepal. In addition smaller programs assist Bangladesh and Vietnam.

Industry:Industry: All Basic industries: textiles, steel, aluminum, fertilizers and petrochemicals, and electronics and motor vehicles.

Minerals:Minerals: Basic minerals: iron, bauxite, copper, lead, zinc, mica, uranium ore, rare earths.

Science and Technology:Science and Technology: Major government investment (80 percent of total) in 200 national laboratories, 200 government-sector research and development institutions, and about 1,000 research and development units in industrial sector supported by both public and private funds. Substantial investments in research and development in defense, nuclear science, space, and agriculture.

5.5. HOW INDIA AND CHINA COMPAREHOW INDIA AND CHINA COMPARE

0.76 billion0.46 billionLabour forcef.

National Income2.

Demography1.

16%43%Literacyg.

31 Nos.67 Nos.Infant mortality per 1,000 live birthsd.

70 Years67 YearsLife expectancye.

1.28 billion1.04 billionPopulationa.

37%28%Urban Populationb.

15%51%35%34%

25%26%16%48%

Share in GDPAgricultureIndustry ManufacturingServices

b.

$1,252 billion9.6

$499 billion5.5

Gross Domestic Products (GDP)Av. GDP Growth Rate (%)

a.

0.87%1.60%Population Growth Ratec.

Parameters(36 Factors)S.No

58,656 kms.62,759 kms.Rail routeb.8 Nos.8 Nos.Motor vehicles (per 1,000 people)c.

182132Ricea.9469Wheatb.2219.3Sugarc.11Tead.21Tobaccoe.

Infrastructure & Communications4.

$1,210 billion 940 US$39%

$502 billion480 US$19%

Gross National Product (GNP)Per Capita GNPPer Capita Income Growth

c.

Agriculture Production (Mn. Tonnes)3.

1,356 bn. Kwh827 Kwh

542 bn. Kwh355 Kwh

Electricity ProductionPer capita consumption

a.

ParametersS.No

2320Export of Services($ Bn)l.29168Forex reserves ($ Bn.)k.29556Imports ($ Bn.)j.

3265%

500.8%

Exports ($ Bn.)(as % of world exports)

l.11R&D Expenditure (% of GNP)k.

545157Scientists & engineers in R&D(per Mn. People)

j.33,7007,000Internet hosts (per 10,000 people)i.19 Nos.6 Nos.Personal Computer (“ “ “)g.

137 Nos.38 Nos.Telephone main lines ( “ “ “)e.110 Nos.6 Nos.Cellular Mobile Subscribers (“ “ “)f.

312 Nos.83 Nos.Television sets (per 1,000 people)d.ParametersS.No

55 million20 millionSize of Diasporap.10%25%Population in poverty o.$44.2 billion$3.4 billionForeign direct investment n.19491947Year of Independencem

ParametersS.No

English speaking nationLow cost trained technical man powerAbundant land and manpowerI.T., Bio Tech and Pharma key sectors of SuccessHard working force at least abroadNO EGO FOR ANY TYPE OF WORKResearch & Development HUB for many MNCsDemocratic Nation

6.6. India’sIndia’s GREAT ADVANTAGESGREAT ADVANTAGES

15 General ElectionsNetwork of SMEs clusters all over the countryCapabilities to take up turn key projectsGood image as a democratic nation all over the globeWorld Bank Report--2004 mentions that India will emerge among as the world’s three largest economies by 2050.

7.7. SUGGESTIONSSUGGESTIONS

World today is getting increasingly competitive by every minute. Being number one today does not guarantee that the position will remain the same tomorrow. The key success factor is not just having competitive advantage.

It is about sustainability - the ability to maintain the competitive advantage. Today's advantage only buys time to create the next one. While successful companies are responding to catch up with the latest innovations, the winning companies are already moving ahead into the next level.

Competitive threats arise from an increasingly wide variety of sources: (a) geographical, (b) across various sectors, (c) and converging new and innovative technologies among others.

Organizations can only take some consolation from the fact that most competitors are also struggling to survive in today’s’ turbulent business environment.

8.8. WIN WIN STRATEGIESWIN WIN STRATEGIES

Offer Customized solutions wherever possible.Have a definite system of customer feed backDiscover customer needs

Try their shoes on and try to walkTake time to make friends first with the customer

A win win strategy can be :-

Never get complacentCompetition is just a phone call awayConstantly raise customers’ expectationsTry to deliver more

I. I. GENERAL STEPSGENERAL STEPS

”To satisfy the customers must be a mission of the organization in this era of competition.”

------ Peter Drucker

“Customer is a strategic partner, a change agent, a process facilitator and above all a champion of

corporate excellence.”

“Do whatever possible to make your customer successful.”

II.II. CONTINIOUSLY REVISIT & REDESIGN CONTINIOUSLY REVISIT & REDESIGN YOUR MARKETING MIX (4PS)YOUR MARKETING MIX (4PS)

HOW?CONVERT 4PS’ INTO 4TSOffer Technologies (T) of tomorrow todayMaintain Least Lead Time (T)Adopt new Transport (T) means (Quick)Follow new Communication Techniques (T)(Internet, E-mail Marketing, E-commerce, E-business, Multi Media, and Information Super Highways etc.)

III.III. EXPLORE HIDDEN NEEDS OF YOUR EXPLORE HIDDEN NEEDS OF YOUR CUSTOMERSCUSTOMERS——(TERMINAL MARKETING)(TERMINAL MARKETING)

► This will enable you to offer your products and services in the market much before your competitors –This will create competitive edge for your organization. Customer desire intelligent products like Mobile Phone, Palm Top Computers, CDMA Mobile Phones etc., say ten years ago, some body could predict requirements of such products well in advance.

► In terminal marketing, we offer products and services not immediately but in future. Customer is given the information presently but the product will be in the market after some time. This is to create a lobby, inquisitiveness for your product. However, keep in mind that your product / service must meet some new hidden/ latent need of the customer.

IV. As a marketer, you must always:-

Strive

Seek

Never yield

• Always think about your customer• Create Trust and Value

A. THE NIRMA STORY"It all started to earn a side income, and at that stage, I had never imaginedthis kind of success.”

-- Karsanbhai Patel, CMD, Nirma Ltd.

In the early 1970s, when Nirma washing powder was introduced in the low-income market, Hindustan Lever Limited (HLL) –A MNC reacted in a way typical of many multinational companies. Senior executives were dismissive of the new product: "That is not our market", "We need not be concerned." But very soon, Nirma's success in the detergents market convinced HLL that it really needed to take a closer look at the low-income market.

9.9. INDIAN SUCCESS STORIESINDIAN SUCCESS STORIES

Starting as a one-product one-man outfit in 1969, Nirma became a Rs 17 billion company within three decades. The company had multi-locational manufacturing facilities, and a broad product portfolio under an umbrella brand - Nirma. The company's mission to provide, "Better Products, Better Value, Better Living" contributed a great deal to its success.

Nirma successfully countered competition from HLL and carved a niche for itself in the lower-end of the detergents and toilet soap market. The brand name became almost synonymous with low-priced detergents and toilet soaps. However, Nirma realized that it would have to launch products for the upper end of the market to retain its middle class consumers who would graduate to the upper end. The company launched toilet soaps for the premium segment. However, analysts felt that Nirma would not be able to repeat its success story in the premium segment.

In 2000, Nirma had a 15% share in the toilet soap segment and more than 30% share in the detergent market. Aided by growth in volumes and commissioning of backward integration projects, Nirma's turnover for the year ended March 2000 increased by 17% over the previous fiscal, to Rs. 17.17 bn.

A HUMBLE BEGINNINGIn 1969, Karsanbhai Patel (Patel), a chemist at the Gujarat Government's Department of Mining and Geology manufactured phosphate free Synthetic Detergent Powder, and started selling it locally. The new yellow powder was priced at Rs. 3.50 per kg, at a time when HLL's Surf was priced at Rs. 15. Soon, there was a huge demand for Nirma in Kishnapur (Gujarat), Patel's hometown. He started packing the formulation in a 10x12ft room in his house. Patel named the powder as Nirma, after his daughter Nirupama. Patel was able to sell about 15-20 packets a day on his way to the office on bicycle, some 15 km away. Thus began the great journey. By 1985, Nirma washing powder had become one of the most popular detergent brands in many parts of the country...........

HOW DID HE ACHIEVE"Like other FMCGs, we did not concentrate only on marketing strategy. From the very beginning, operational strategy was cost containment, backward integration, economies of scale, innovative production techniques and packaging and market penetration schemes. All given equal importance by the company.

B.Mr. Lakshmi Niwas B.Mr. Lakshmi Niwas MittalMittal

If the name Lakshmi Niwas Mittal does not ring any bells, the chances are that you have not been reading newspapers and magazines for a while now. For, the Kolkata - born, London-settled Indian tycoon has made more headlines in international media in recent months than perhaps any other Indian. In 1992, when Mittal snapped up Mexico’s state-owned Sibalsa Mill, hardly anyone outside India had heard of him. A decade later, in 2004, Mittal took-over steel investor Wilbur Ross’s International Steel group for an eye-popping $17.8 billion, to become world’s largest producer of steel. The recently-christened Mittal Steel is also the world’s most geographically diverse steel company, with a footprint across Central Asia, Africa, Europe and Central and North Africa. Choosing him as 2004 Europe’s Businessman of the Year recently, Fortune described Mittal as the “Henry Ford of 21st Century steel.”

A large part of Mittal’s growth is attributable to less-riskier acquisitions, an art that L.N. Mittal has mastered over the years. And in the process, he has created the first genuine Indian transnational corporation by seamlessly knitting together 15 plants across 13 countries, with geographical extension, worldwide markets and a global management team.

Lakshmi Mittal creates news by making money. And spending it. Consider this: in May 2004, he brought a 12-bedroom home in London for a staggering $125 million. Later that year, he spent close to $80 million on his daughter Vanisha’s fairy-tale wedding.

C.Mr. N.R. Narayana Murthy.

Strictly speaking, the chief mentor of Infosys Technologies is not the Chief Executive Officer. That’s a designation he has handedover to Nandan Nilekani. But make no mistake. Narayana Murthy may have assigned to himself the role of organisational cheerleader and visionary. But very little happens in Infosys without his knowledge; such is the respect his colleagues relatively young and active has added to his stature. This is at a time when other high-profile companies are witnessing struggles for power.

Narayana Murthy’s achievements are well known. What really makes him stand out from the crowd of most-respected CEOs is that he hasn’t allowed them to go to his head.

He still leads the same simple life he did a few decades ago. He is today spearheading a campaign for good corporate governance and an end to the disparity in executive and worker pay. Infosys is also a company that believes in a strong independent board, a sharp contrast to some of the other giants of Indian industry.

Learning is a continuous process at Infosys. As is lack of discrimination. Narayana Murthy and his chauffeur (also a millionaire because of his stock options) have been attending the same course on leadership at the company’s training campus.

D.Mr. Ratan TataTatas have all along been failed as India’s most respected business empire, through the road to reverence has been tough and tardy. Just a few years ago, the conglomerate found itself in a rather bad shape, with two of group’s biggest companies – Tata Steel and Tata Motors (erstwhile, TELCO) – bleeding red. The Indica car project was not moving anywhere and the proposal of Tata-sia airlines had been grounded. Above all, throughout 1990s Tatas were plagued by internal warfare wherein aging and old titans of various group companies resisted changes and refused to bow out.

Ratan Tata, who took over the reins in 1991, needed nothing lessthan a shock therapy to transform the group perceived to be outof synch with the 21st century.

And, he did it without a compromise, turning companies after companies profitable and changing the rules of management across the group forever- and for good. Ratan Tata has worked tirelessly and single-handedly to help the family conglomerate regain its place as India’s most beloved business group. Tatas, under him, have not only doubled their revenues in the last decade, but have been modernised and transformed into a global player.

Ratan Tata loves his dogs, and his love for canines is shared by some group companies. Tata Motors and Tata Steel have eight dogs each patrolling their plans and townships. And each one of them has a name beginning with T. Some branding, this!

THANK YOU ALL VERY MUCH. ANY QUESTIONS PLEASE?