For An Indian Company To Be Among The World's 10 Largest?
"The illiterate of the 21st century will not be those who cannot read and write but those who cannot learn unlearn and relearn."
Alvin Toffler
These are exciting times for the Indian economy. Never have we had it so good. A liberal economic environment has seen phenomenal growth rates over the last decade-and-a-half. What has been most exciting is the emergence of a strong service sector and the manufacturing sector reinventing itself to make a strong comeback. Having said that, I must also add that the best is yet to come. The Indian economy can and must go a long way forward.
Indian companies have started making their mark on the world map. Already, Indian it and ITEs companies are among the most sought after in the world and are busy creating a global footprint through both organic growth as well as acquisitions. Telecom companies have become benchmarks for offering the lowest rates in the world. Even Indian manufacturing companies are now producing world-class products and exploring international markets. As an Indian, one is really proud to see a Tata Indica being driven in the UK under the Rover badge. I hope and believe that as infrastructure bottlenecks get removed and trade policies get liberalised, the Indian economy will gain momentum.
But before we try and delve into the future to find out if an Indian company can be amongst the 10 largest companies in the world, it is essential that we analyse what's so special about the companies that currently constitute this Top 10 club. The Top 10 companies are from varied business sectors, countries and continents and have different business philosophies, but all of them have some common traits that separate the boys from the men.
Why are these companies right up there? They are there because they had a strong vision and a clear focus. All these companies have kept one eye on their growth and the other on the ever-changing business environment and kept evolving. This ensured that they could respond to challenges of new technologies, trends and changing customer needs. What's most important is the fact that they have braved and captured new markets to become transnational and have invested considerable resources to create powerful and enduring brands. This is similar to the story of some natural species that have continuously evolved and survived thousands of years of change, while others have become extinct.
Take the example of Wal-Mart. It started its retailing business with a single focus: to bring the lowest possible prices to its customers. Today, it is not just the world's largest retailer, it is also the world's largest company. Toyota Motors, through a constant focus on quality, innovation and process efficiency, is close to reaching the summit of international auto industry.
While we admire these companies, we must also learn from how they have managed to get to the top and stay there.
Asia has arrived on the world scene and is destined to be the growth engine of the world economy. Indian companies today stand at a very important juncture and will represent this new Asia, along with China, in the days to come. Globalisation has changed the current economic landscape and while it has opened up a box of opportunities, it also exposes us to several challenges. With trade barriers continuing to evaporate and access to new technology getting simpler, the world, in the not too distant future, will become a common marketplace. Everyone will compete for the same market and the same consumer and only the fittest would survive. For example, a Benarasi sari, which an Indian bride would wear, could be produced on a power loom in China. Fruits and vegetables at an American store can and are being produced at Indian farms.
So, what do Indian companies need to do to manage this change and move ahead? As our economy expands further, it will present everyone with ample growth opportunities. Though Indian companies are well placed to make the most of these opportunities, they will, at some point, need to move out of the comfort of their own backyard and explore new markets. I believe that over the next decade or so, several Indian companies will have acquired a considerable level of scale and competitiveness on account of a large and strong domestic economy. The natural transition from this stage will be the emergence of the Indian multinational. This could be achieved largely through a combination of acquisitions and exports. We have witnessed some of these developments at Mittal Steel, which has acquired steel plants and turned them around to become a truly global steel company. It is such combination of entrepreneurship and vision that will be required for growth.
In India, we have some very capable entrepreneurs, who have the ambition and can make it to the very top. I believe companies that can create their business models around delivering quality products and services while remaining cost competitive, will be at a distinct advantage when they move to new markets. The key, however, will be innovation and a global mindset. Companies will need to invest more and more in research & development and acquiring business know-how.
Indian companies will need to innovate new products and services or invent completely new product categories. As the world economy moves towards becoming a knowledge-driven one, Indian companies that can acquire knowledge quickly and adapt to or create new technology will have a clear advantage. Let us, for a moment, assume that there is technological parity and a level playing field across all markets, then the key will be innovation. Companies that move into completely new product categories and business segments and create new demand will be able to seize growth and profit opportunities.
Last, but not least, Indian companies must be able to create powerful global brands, which are one of the key drivers of growth for a top company. Powerful Indian brands will be those that cut across geographical and cultural borders and connect with consumers in the global market.
Possibly, no brand has done a better job of mining the potential of brand building than Samsung Electronics Co. A little over a decade ago, it was seen as a maker of low-end consumer electronics and a poor cousin of top Japanese consumer electronics brands. But a clear focus and investments in the brand have seen Samsung move up the value chain. Today, it is up there with the best in the world, and, according to the BusinessWeek-Interbrand survey of Top 100 brands 2005, has even surpassed Sony in terms of brand value. Another example is Google, a global brand built up in no time, riding on simplicity.
Can a product breakthrough, such as Apple iPod, be achieved in India and take the whole world by storm? Can an Indian pharma company be the first to invent a vaccine for aids? Can an Indian it major create the next Windows? Having said that, we also need to keep in mind that the next decade will be critical for Indian companies to create a springboard for global operations. The government will play a critical role in this by providing adequate policy support and checking the infrastructure inefficiencies. It is only fair to say that we must learn to live in a globally integrated economy and be globally competitive before taking the big leap. We may be ready at the moment to make a mark in emerging economies, but the real challenge is to compete with the best in their very own territory. A policy environment that encourages a 360-degree approach to social and economic development of India will help prepare this ground. Only such an environment would give us thought leaders and entrepreneurs of tomorrow.
Will an Indian Company be amongst the world's 10 largest? We have a mountain to climb but all ingredients for that recipe are there and turning the Great Indian Dream into reality is only a matter of time.
The author is Chairman & Group Managing Director of Bharti Enterprises Ltd