Ravi Venkatesan's Conquering the Chaos (2013) is written with Western CEOs in mind but I found it an easy read and it was somewhat reminiscent of C. K. Prahalad's The Fortune at the Bottom of the Pyramid (2004) (and indeed, Venkatesan does talk of straddling the pyramid).
Venkatesan, an IIT-Bombay and Harvard Business School alumus, has been Chairman of Cummins India and Microsoft India. He says that for a company like Microsoft, India just contributes 1.5 percent of its global revenues. If Microsoft grows globally by 7 to 10 percent over the decade while the India business expands at 20 or 25 percent CAGR, by 2022, India's contribution to Microsoft will still remain modest. Other companies such as Caterpillar, Toyota and Daimler face the same situation. Hence they would tend to take India not so seriously.
But that would be a mistake, argues Venkatesan. Firstly, these businesses are tapping the affluent population, "the Australia on top of India". There is a quickly growing middle market segment (which has the same amount of households as Germany and the UK combined) that represent a huge opportunity.
Secondly, India is exemplary of many emerging markets, especially democratic ones. It is a good place for multinationals to learn to deal with corruption, volatility, chaos and poor infrastructure which are the hallmarks of most emerging markets.
Venkatesan says that the current wave of globalization is based on an export-oriented model in which emerging economies exported to the developed economies. Venkatesan writes, "The next wave of globalization will be qualitatively different. With markets in the developed countries saturated and competitive, and with many of those economies slowing down, growth tomorrow will have to come from emerging markets. The center is rapidly shifting from the West; growth will come mainly from the rapidly growing middle class in the developing countries. However, most companies' current business models do not address them effectively. To do well in emerging markets, global companies will have to learn to do things differently."
As Venkatesan points out, most multinational companies allocate resources and investments based on their current revenues in each market. This has to undergo a paradigm shift. Venkatesan offers the example of JCB, Cummins, Unilever and Nestle as those who have understood the Indian market well and managed to achieve success. They have also transferred their successes to other emerging markets.
Ravi Venkatesan offers a lot of points to ponder about on the role of India as a beacon among emerging markets and how by winning in India, multinationals can win everywhere. An excellent book that is bound to make an impact.
Venkatesan, an IIT-Bombay and Harvard Business School alumus, has been Chairman of Cummins India and Microsoft India. He says that for a company like Microsoft, India just contributes 1.5 percent of its global revenues. If Microsoft grows globally by 7 to 10 percent over the decade while the India business expands at 20 or 25 percent CAGR, by 2022, India's contribution to Microsoft will still remain modest. Other companies such as Caterpillar, Toyota and Daimler face the same situation. Hence they would tend to take India not so seriously.
But that would be a mistake, argues Venkatesan. Firstly, these businesses are tapping the affluent population, "the Australia on top of India". There is a quickly growing middle market segment (which has the same amount of households as Germany and the UK combined) that represent a huge opportunity.
Secondly, India is exemplary of many emerging markets, especially democratic ones. It is a good place for multinationals to learn to deal with corruption, volatility, chaos and poor infrastructure which are the hallmarks of most emerging markets.
Venkatesan says that the current wave of globalization is based on an export-oriented model in which emerging economies exported to the developed economies. Venkatesan writes, "The next wave of globalization will be qualitatively different. With markets in the developed countries saturated and competitive, and with many of those economies slowing down, growth tomorrow will have to come from emerging markets. The center is rapidly shifting from the West; growth will come mainly from the rapidly growing middle class in the developing countries. However, most companies' current business models do not address them effectively. To do well in emerging markets, global companies will have to learn to do things differently."
As Venkatesan points out, most multinational companies allocate resources and investments based on their current revenues in each market. This has to undergo a paradigm shift. Venkatesan offers the example of JCB, Cummins, Unilever and Nestle as those who have understood the Indian market well and managed to achieve success. They have also transferred their successes to other emerging markets.
Ravi Venkatesan offers a lot of points to ponder about on the role of India as a beacon among emerging markets and how by winning in India, multinationals can win everywhere. An excellent book that is bound to make an impact.
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