Nortel PLM Transformation Initiative Strategic Intelligence Day 1: Market Analysis

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Nortel PLM Transformation Initiative Strategic Intelligence Day 1: Market Analysis

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Title: Nortel PLM Transformation Initiative Strategic Intelligence Day 1: Market Analysis


1
Assessing Your Companys Readiness for India
Marvin Hough, Telfer School of Management
Montreal - Oct 25, 2012
2
My Experience
  • B. Comm MBA University of Alberta
  • AIESEC Traineeships Denmark, Belgium
  • EDC Career 30 years Assignments in Credits
    Insurance, Financing, Risk Analysis, National
    Business Development and International Business
    Development
  • - Business Development in Canada - Ottawa,
    Toronto and Vancouver
  • - International Business Development
    assignments
  • India ( DFAIT assignment),
  • China ( establishment of EDCs first
    representation )
  • Mexico ( EDC Chief Rep)
  • Regional Vice President, IBD for both
    Asia Pacific and Latin America
  • Telfer School of Management 2008 - Present
  • EMBA/Undergrad Teaching and EMBA International
    Consulting Trips ( China, South Africa,
    Brazil)
  • Executive Programs India Forum, Focus
    India Program

3
Indias Growth on the World Stage
2002
2050
GDP USD trillion
GDP USD trillion
China
US
US
India
Japan
Germany
Russia
China
UK
Japan
UK
India
Brazil
Italy
Germany
Brazil
France
Russia
Italy
France
GDP per capita 000 USD
GDP per capita 000 USD
Bubble size corresponds to GDP size
Source Goldman Sachs Economic Paper 99 BCG
analysis
Slide Source Alan Rosling of Tata Sons
4
Canada Needs to Focus on India
  • As a partner in the global knowledge economy
  • Indian objective to obtain access to proprietary
    ST
  • As a collaborator in infrastructure development
  • Indian objective to invest heavily in domestic
  • infrastructure investment over the next 10 years
  • As a market for Canadian commodities value
    added products and services
  • Indian objective to obtain long-term access to
    natural resources and energy security
  • As an investor and receiver of investment
  • As an outsourcing center and link to global
    supply chains

5
Canadas Trade Strategy for India
  • Achieve the signing of the Comprehensive Economic
    Partnership Agreement
  • Increase bilateral trade to 15 billion within 5
    years
  • Increase investment flows, focusing on
    Infrastructure and Capital Projects, Science and
    Technology, Energy and Education
  • Make Canada an attractive trading partner and
    establish a Canada Brand
  • Double Indian students in Canada within 5 years
  • Continue to promote Canada as a science and
    technology partner
  • Expand multilateral engagement with India in
    forums such as the WTO and G 20

6
Canada India Bilateral Trade
  • Most Promising Business Sectors
  • Agriculture, Food and Beverages
  • Service Industries and Capital Projects
  • Information and Communication Technology (ICT)
  • Oil and Gas Equipment and Services
  • Electric Power Equipment and Services
  • Aerospace and Defence

Source Global Commerce Strategy and DFAIT Office
of the Chief Economist, based on statistics from
Statistics Canada
7
Indian Business Environment
  • Accelerators
  • English language
  • Liberalization and market reforms
  • Strong private sector
  • Intellectual Power and Innovation
  • Cost-competitiveness of labor for services
  • Cost of operations
  • Common law legal system
  • Developed banking sector capital markets
  • Offshore outsourcing center
  • Increasingly attractive foreign investment
    destination
  • Increased integration into the global economy
  • Decelerators
  • Inadequate Infrastructure
  • Distance to market
  • Knowledge barriers
  • Price sensitivity buyers market
  • Up-front cost to develop relationships
  • Red tape ( India ranks 122 out of 181 countries
    in ease of doing business)
  • Onerous labour regulation
  • Bureaucracy and corruption in public sector
  • High tariffs, non-tariff barriers, custom
    processing delays
  • Tax rates and regulations
  • Security Issues

As per Price Water House Coopers (2003)
8
India - What are the challenges?
9
Business Culture
Time as soft and elastic Subject to distractions,
interruptions Overlap talk Ascribed
Status Special privilege Clear Authority
figures Direction and Relationships Tradition
is critical and valued
Time as rigid and exact Focused, concentration on
Task Sequence talking, turn taking Achieved
Status Earned Accomplishment Shared
Authority Consultation and Teamwork Tradition
is interesting
10
World Bank Report Sub-national Doing Business in
India Report 2009
  • 7 topics measured in India
  • Starting a business
  • Dealing with construction permits
  • Registering property
  • Enforcing contracts
  • Trading across borders
  • Paying taxes
  • Closing a business

Data were collected with the help of 280 private
sector contributors and 230 public sector
officials
10
11
Doing Business in India Where is it easiest?
Rank Rank City, State
1 Ludhiana, Punjab (easiest) 10 Mumbai, Maharashtra
2 Hyderabad, Andhra Pradesh 11 Indore, Madhya Pradesh
3 Bhubaneshwar, Orissa 12 Noida, Uttar Pradesh
4 Gurgaon, Haryana 13 Bengaluru, Karnataka
5 Ahmedabad, Gujarat 14 Patna, Bihar
6 New Delhi, Delhi 15 Chennai, Tamil Nadu
7 Jaipur, Rajasthan 16 Kochi, Kerala
8 Guwahati, Assam 17 Kolkata, West Bengal
9 Ranchi, Jharkhand
Source Doing Business database. Source Doing Business database. Source Doing Business database. Source Doing Business database.
11
12
The Need for Innovative Thinking
2500.00
35.00
13
Top 10 - Considerations for Doing Business in
India
  1. Local presence is very important - To help you
    through the challenges including getting through
    the significant number of government permits and
    licenses even now after liberalization.
  2. A strong relationship network is key
    Relationships are important to verify
    information, understand government policies,
    identify tomorrows opportunities, resolve issues
  3. Timelines Understand that things just take
    longer to transact even if approvals are in
    place. Indians act on their own time schedule.
  4. Scope of the market The sheer size and enormity
    of Indias social challenges should not deter
    you.
  5. Willingness to provide technology and knowledge
    transfer will increase your attractiveness as a
    business partner.

14
Top 10 - Considerations for Doing Business in
India
6. Important to be mindful of local sensitivities
(e.g. religion, caste, and Indian pride - Indians
do not like to be spoken down to by the West) 7.
Power/Infrastructure bottlenecks Pay special
attention to ensuring that you have reliable
sources of power and back-up plans 8. Corruption
remains an issue that can slow down approval
processes 9. Labor issues can be a serious
challenge 10. Competition is already tough
Remember that India has a very competitive
offering including from domestic suppliers in
most sectors of the economy
15
Tactics - Doing Business in India
  • Focus on Indian culture and draw on cultural
    training and the Indo-Canadian community in
    Canada. Realize that in Indian culture face to
    face meetings are crucial in developing long term
    business relationships and trust.
  • No decision can be more important than the
    selection of your local partner(s)/agent(s) due
    diligence is critical make sure claims are
    checked out. Dont assume that one agent can be
    effective on a national basis.
  • Western concepts and off-the-shelf solutions do
    not work in India, targeted and client specific
    proposals and solutions do.
  • Be particularly mindful of pricing considerations
    and realize that Indians are very price conscious
    know what your competitors are offering and
    their approach to pricing
  • Doing business with the public and private
    sectors need different approaches. Developing a
    proposal for the public sector requires careful
    consideration of specifications, local content
    requirements, the approval process etc.
    Multi-point lobbying often required

16
Tactics - Doing Business in India
  • Show the commitment of your CEO to India, the
    proposal and your counterpart and realize that
    the decision making process is usually very
    hierarchical
  • Prepare your proposal to meet local challenges
    and marketing needs. Price, quality and the
    overall advantages of your product over the
    present products in the markets should be part of
    your project proposal.
  • Leverage relationships of others including
    Canadian agencies and associations, Indo-Canadian
    community eg EDC relationships
  • Training and Transfer of Technology will be
    important parts of a business proposal and should
    be carefully considered and appropriately
    highlighted.
  • Be mindful of the potential to work with your
    buyer or partner on other projects and that
    relationships are broader than transactions.

17
Negotiation
  • People may tell you what you want to hear. Dont
    assume a smiling face means acceptance. Stress
    your common aims
  • Indians are inclined to say yes to anything (
    Its up to you to figure out if they can actually
    deliver on their promises)
  • The most senior person will make the decisions.
    If he is not at the meeting, you are at the early
    stage of negotiation.
  • Dont lose your temper as that means you lose
    face and are seen as untrustworthy.
  • Concessions are expected in price and terms.
    Expect them in return.
  • Politeness, praise and respect are important
  • Don't assume anything - find ways of checking
    progress without causing the other party to 'lose
    face'.

18
India Readiness Assessment
  • Management Commitment/ India Champion
  • Researched the Opportunity and Completed the
    Environmental and Target Market Scan
  • Consulted with key specialists in Canada and
    India Trade Commissioners, EDC, Legal and Tax
    experts, Financing, Consultants
  • Financial Commitment for Market Research and
    Travel next 2 3 years
  • Indian Cultural Training or Exposure

19
India Readiness Assessment
  • Completed Skills Audit including India cultural
    and market expertise
  • Plan for securing and maintaining local agent,
    distributor or partner
  • Decided on degree of technology transfer
  • Risk Management Strategy including credit
    risks, political risks, security risks
  • Draft India Business Plan

20
Drafting the Business Plan
  • Table of Contents
  • Executive Summary
  • Corporate Profile and Nature of the Business
  • Management and Human Resources
  • Environmental and Target Market Scan
  • Market Entry and Marketing Strategy
  • Operations Overview
  • Financial and Risk Management Strategy
  • India Readiness Assessment
  • Conclusion and Recommendation
  • Bibliography
  • Appendices

21

TFIP Environmental and Target Market Scan
  • Environmental Scan
  • Market Size, Composition and Growth
  • Political Characteristics and Stability
  • Cultural and Linguistic Issues
  • Government Policies Affecting Business
  • Legal Issues
  • Costs and Resource Availability
  • Commercial Infrastructure
  • Geographic Factors
  • Target Market Scan
  • Customer Profiles wealth and ability to pay
  • Product /Service Fit with Customer Preferences
  • Strength of Demand for Product/Service
  • Competitive Barriers to Entry

22
Sources Canadian Government Sites
  • Department of Foreign Affairs and International
    Trade www.tradecommissioner.gc.ca
  • Export Development Canada www.edc.ca
  • Industry Canada www.ic.gc.ca
  • Canadian Commercial Corporation www.ccc.ca
  • Canadian International Development Agency
    www.acdi-cida.gc.ca
  • Business Development Bank of Canada www.bdc.ca
  • Statistics Canada www.statcan.ca
  • Trade Team Canada www.exportsource.ca

23
DFAIT www.tradecommissioner.gc.ca
  • Select - Country Info Market Reports, Asia
    Pacific, India
  • Aerospace Sector Profile - India  2011/01/04
  • Defence and Security Sector Profile - India
     2011/01/04
  • Agriculture, Food and Beverage Sector Profile -
    India  2011/01/05
  • Automotive Sector Profile - India  2010/12/29
  • Life Sciences Sector Profile - India  2010/12/30
  • The International Education Market in India
     2012/06/04
  • Studying in Canada - Frequently Asked Questions
    and Answers from the High Commission of Canada,
    New Delhi  2011/11/02
  • Guidance on the Submission of Study Permit
    Applications  2011/10/25
  • Canadian Universities Generating Science and
    Technology Opportunities with Indian Companies
    and Universities  2011/10/12
  • Education Sector Profile - India  2010/12/30
  • Electric Power Equipment and Services Sector
    Profile - India  2011/01/04
  • Environmental Industries Sector Profile - Inde
     2010/12/15
  • Life Sciences Sector Profile - India  2010/12/30
  • Information and Communications Technologies -
    Software and Services Sector Profile - India
     2011/01/04
  • Telecommunication Sector Profile - India
     2011/01/04
  • Metals, Minerals and Related Equipment, Services
    and Technology Sector Profile - India  2010/12/30
  • Oil Gas Equipment Services Sector Profile -
    India  2010/12/28

24
Canadian Representation in India
25
Sources Canadian Trade Associations
  • Canada-India Business Council www.canada-indiabusi
    ness.ca
  • Indo-Canada Ottawa Business Chamber www.icobc.org
  • Indo-Canadian Chamber of Commerce www.iccc.org
  • Canadian Society of Customs Brokers www.cscb.ca
  • Canadian Chamber of Commerce www.chamber.ca
  • Canadian Manufacturers and Exporters ( CME)
    www.cme-mec.ca
  • Canadian Association of Importers and Exporters
    www.importers.ca or www.caie.ca
  • Canadian International Freight Forwarders
    Association www.ciffa.com
  • Asia Pacific Foundation of Canada
    www.asiapacific.ca

26
Sources Indian Government Sites
  • High Commission of India, Ottawa www.hciottawa.ca
  • Directory of official Indian Government websites
    www.goidirectory.nic.in
  • The Directorate General of Commercial
    Intelligence and Statistics www.dgciskol.nic.in
  • Directorate General of Foreign Trade
    www.dgft.delhi.nic.in
  • India Brand Equity Foundation (IBEF) www.ibef.org
  • India Finance and Investment Guide
    www.finance.indiamart.com
  • Ministry of Commerce and Industry
    www.commerce.nic.in

27
Sources Indian Trade Associations
  • Federation of Indian Chambers of Commerce and
    Industry www.ficci.com
  • All India Association of Industries
    www.aiaionline.org
  • Associated Chambers of Commerce and Industry of
    India www.assocham.org
  • Confederation of Indian Industry
    www.ciionline.org

28
Sources International Organizations
  • Dun and Bradstreet www.dnb.com
  • International Monetary Fund www.imf.org
  • Economist Intelligence Unit www.eiu.com
  • International Chamber of Commerce
    www.iccwbo.org
  • Multilateral Investment Guarantee Agency ( MIGA)
    www.miga.org
  • OECD www.oecd.org
  • CIA www.cia.gov
  • World Bank www.worldbank.org
  • World Trade Centres www.wtca.org

29
Telfer Focus India Online Program
  • The Telfer Focus India Online Program is a
  • comprehensive web-based program for business
    executives offered by the Telfer School of
    Management at the University of Ottawa. It is
    comprised of three parts Session 1 provides an
    introduction to business opportunities and
    challenges in India Session 2 offers a
    comprehensive review of business intelligence and
    guidance on key aspects of doing business in
    India and Session 3 engages you in developing a
    Strategic Business Plan with advice and feedback
    from the program experts
  • hough_at_telfer.uottawa.ca

30
National Capital India Forum Feb 21/2013
Adapting your Business to India
  • The Telfer School of Management at the University
    of Ottawa and the Sprott School of Business at
    Carleton University in collaboration with
    Sponsoring Organizations presents the 2013
    National Capital India Forum. Topics of the
    Conference will include
  • The current economic and political situation in
    India and the implications for Canadian
    companies.
  • The state of Indo-Canadian commercial relations
    and the significance of the proposed
    Comprehensive Economic Partnership Agreement
    (CEPA).
  • The need for adapting your Business Plan and
    approach to India from the perspective of the 4
    Ps -product, price, promotion and place.
  • Who can help Canadian firms succeed in the Indian
    market.
  • For more information contact (613) 562-5800 ext
    2396
  • nationalcapitalindiaforum_at_telfer.uOttawa.ca

31
Are you ready for India?
Marine Drive, Mumbai, India