Beginning of THE END of MNCs or at least the MNC Mind-set?
Why and How MNCs succeeded in the past century in general and under the shadow of globalisation in particular?
Why the very proponents of globalisation turning their back and discussing about going back to their shell in the name of nationalistic protectionist measures ?
What is wrong with them now?
How MNCs from most developed nations, American as well as European, think about the emerging market ?
How growth strategies of MNCs are formulated?
What kind of elements go in those Business Plans – global or local flavour?
How Business opportunities are identified and attacked?
As they search for the global growth engines, multinational corporations will have little choice but to compete with locals or among themselves in the ever burgeoning emerging markets of India, China, Brazil or Indonesia. While it is still common to question how such corporations will change life in those markets, Developed Market Executives would be smart enough to turn the question around and ask how multinationals themselves will be transformed by operating in these markets. To be successful in these markets, MNCs will have to rethink about every element of their business models.
History would remember the decade of 1980s as the gateway for the first wave of market entry of MNCs in the emerging market. Multinationals operated with what might be termed as imperialist mind-set, assuming that the emerging markets would merely be new markets for their old products. But this mind-set limited their success- What is truly big and emerging in countries like India and China is a new consumer base comprising hundreds of millions of people – what was to be added by even bigger number of bottom of the pyramid in the coming decades. To tap into this attractive opportunity, MNCs need to ask themselves some basic questions :
· Who is in the emerging middle class in these countries ?
· How do the distribution networks operate?
· What mix of local and global leadership do you need to foster business opportunities?
· Should you adopt a consistent strategy for all your business units within one country or diverse strategies for diverse mix of cultures within a country like India ?
· Should you take on local partners?
Surgical Strike is the need of the hour. The transformation that multinational corporations must undergo is not cosmetic. Simply developing greater sensitivity to local culture will not do the tricks. To compete in the big emerging markets, multinationals must recognise their true strengths and weaknesses, must reconfigure their resources, rethink their cost structures, redesign their product development processes, and challenge their assumptions about who their top-level managers should be !
Co-Founder & CEO - Environomics Projects LLP
7yNice article, Yes, just a tick mark by promoting a "local leader" and getting carried away by his and his close ones views as great knowledge about respective local culture or customer needs or perceptions, have seen many remotely monitored exceptionally good companies operate at mediocre performance level and every year, one or other story is sold for an average or poor performance.. Whether MNC or National, the good organisations driven by passion, ethics, commitment and vision with fine execution wins .. Artificial engagements, fake presentations, manipulated data, superficial reviews without touching heart of people and in absence of hard work - no organisation can grow !
Diversification || New Products || Energy Storage
7yIt's Cyclical everywhere...yes names do change always! Business history is filled with roman candles - companies that flash brightly for a while but then explode in a shower of sparks. I think it's also historical that a very small percentage of companies survive getting into 3rd generation onwards...on one side there is ever increasing pressure on top executives to keep improving the top as well as bottom line and on other side are the ever increasing expectations of the employees and masses in general, in all they have to operate in most competitive market ever wherein their current year profitability is leveraged out of future in a hope that things will turn favourable soon but than they get challenged by a new un-leveraged corporation ready to compete! Localization, Nationalization whatever they only seems to be name of new excuses, but definitely there would be few who can re-light the candle when business situation improves or say consolidation, suppression of expectations? MNCs are there because there are boundaries and boundaries will remain forever and hence the MNCs...with some ups and downs AND executives who are able to gauge and manage the Flavours of Time.