Given the poor economic conditions in various markets across the world, many global companies are finding it difficult to be in the black. In stark contrast, some of the Indian subsidiaries of Multinational Companies (MNCs) are churning out profits at rates better than their parent companies. How?
In
the past, it was the Indian subsidiaries of the MNCs
who had to depend on their parent companies for financial
support. Though, many of the Indian subsidiaries still
do that, a new phenomenon is also gaining ground. Many
of the Indian subsidiaries of major MNCs like ABB, LG,
Samsung, Nestlé and Siemens, to name a few, are
all beating their parent companies on the performance
scale, and India is fast emerging as the growth engine
for MNCs. Some of these Indian subsidiaries are even
clocking double-digit growth even when their parent
companies are recording losses.
Though
the vast Indian market of billion plus population holds
great opportunity for the consumer goods companies,
this phenomenon is not restricted to that sector only.
Indian subsidiaries for the MNCs in non-consumer goods
sectors such as engineering and pharmaceuticals are
also showing the same phenomenon. Global sales for Siemens
(Siemens AG) has decreased by 3.4% in 2002 while the
Indian subsidiary of Siemens showed an increase in net
sales by 13.8%.
The
success of these companies can be attributed to strategic
focus, indentifying the changes taking place in the
external environment and adopting that, instead of tactical
and internal focus. Strategic in the sense, these companies
have long-term planning for the Indian market and their
parent companies have India in their global context.
These companies have constantly scanned the external
environment to look for opportunities and restructured
and reinvented themselves rather than follow a smooth
and predictable process. |
