Global Trade: How will Indian companies leverage international markets?

Indian companies will have to build future models that are orchestrated for high performance where the multi-polar world and technology meets. Companies adopt single or multiple strategies each of which are handled by a separate vertical viz. Go to market, Go for technology and assets, Go for talent, Go for infrastructure, Go to partner, Go for funding, Go to mitigate risks.  Companies also build world standard execution capability; strategy do not succeed without execution; execution delivers customer value and brings sustainable profits.

Most companies drive its growth to leverage on infrastructure, capacities and technologies. As scale is achieved companies partner for innovation, technology, customer acquisition, and diversification of Emerging market risks.  Sourcing of capital equipments coupled with long term financing and sourcing investments from international markets helps deepen financial pockets. Companies also setup global hubs and office in countries with bilateral FTA’s to take advantage of treaties, tax benefits and harness talent.

In order to diversify risks, companies increasingly partner with sovereign wealth funds, government linked companies, private equity funds, and developed market MNC’s. Companies also increase outbound foreign investments to acquire resources, technology and suppliers. 

As trade helps local economies, companies also invest in infrastructure in the local markets and participate in spin offs from trade with increasing investments in hotels, infrastructure, services, local trade, and banking.

Essential lessons can be leant from the success and failures of local MNC’s: Companies that have been successful in creating a multinational brand are Infosys, Tata Consultancy Services, Wipro, Bharati Airtel, Reliance, GVK, GMR, etc. Developed market MNC’s that have also gone local and adapted themselves to local markets viz. HUL, Cadbury’s, Nestle, Cargill, PepsiCo

Changing mindset, build a multinational: 

Corporate have to have changes its mindset while exploring frontier markets.  Company and its employees must view the world as a giant super mart and the company as a multinational. A single minded focus on building trust and a reputable brand earns sustainable growth and rewards. Doing business the right way not only attracts people to our company, but creates loyalty to the organization as well.  

Corporate reputation stems from its strong brand image that is backed by every employee’s commitment and adherence to honor its obligations, compliance with guiding principles, commitment to corporate social responsibility and environment. 

Build a multinational company: 

Companies have to invest and develop world class talent, process, and systems. It has to adopt international corporate governance systems that helps in creating a learning and adaptable organization coupled with ability to manage global complexities, ambiguity, risks, and volatility. Investments in talent and information communication technologies are essential to building a multinational. A truly multinational company should have values, systems and people that bind the company together, helps operate the business 24x7, and manage operations that are spread thousands of miles away from the head quarters.

Connect dots and collaborate: 

Connecting dots between local and global markets are essential. There are many linkages that help connect dots i.e. Trade, services and technology; trade and resources; human capital, talent and Emerging market markets; innovation and customer needs; human capital and services.

Develop a laser focused robust business strategy and execution capability: 

New market development may result in companies spreading its resources in multiple directions.  A laser focused robust strategy calibrated to return, risks and execution capability is necessary.

Assume social and environment responsibility: 

A good corporate citizen that cares and invests in the local communities and environmentally friendly practices achieves sustainable and long term success.   Initiatives on social and environmental projects help build brand and reputation.

Local markets are anchor tenants which cannot be ignored: 

Lastly, as international trade increases, the growth of trade and services within home markets provides a scale that cannot be ignored.  As strategies of many companies fatten out, a right balance between global and local strategies is essential.

Emerging markets are developing at a phenomenal pace and are set to reshape the world trade patterns in the coming years. Indian companies have historically managed complex and volatile socio-economic, political and legal systems, demanding consumers in a highly differentiated market.  

Emerging market footprints, opportunities, and challenges are no different than a complex and diverse India market.  With a right approach and attitude, Indian companies and managers are equipped to succeed in emerging markets. Large numbers of Indian companies have also established international brands and reputation.