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India: Inflections on a Growth Journey: The Internationalization Strategies of Emerging Markets Firms

Apr 18-2013   



—— TATA – BiMBA Workshop

 

On October 13th, 2011, National School of Development and Beijing International MBA Programs (BiMBA) at Peking University welcomed the guest speaker, Mr. R Gopalakrishnan, Chief Executive Officer of TATA Group, to deliver a lively speech entitled “India: Inflections on a Growth Journey”. Mr. John Yang, Dean of BiMBA, hosted the event at Lang Runyuan. 

Tata Group is one of the most respected business houses in India, with over 90 operating companies in seven business sectors, providing products and service exports for 85 countries all over the world. The Tata name has been respected in India for over 140 years for its adherence to strong values and business ethics. 

Mr. Gopal’s speech consisted of mainly three sections: India is a unique and enigmatic market; India: peek into the future and the TATA journey. 

India is a unique and enigmatic market 
Mr. Gopal presented the uniqueness of Indian market and analyzed its causes from political, economical and cultural aspects. 
The uniqueness of Indian market is formed because of the distinct political journey the country has followed. Mr. Gopal pointed out that there are two sequences in political development: one is classical sequence—from capitalism, constitutional liberalism to full-franchise democracy; and the other is unclassical sequence—from full-franchise democracy, constitutional liberalism to capitalism. The first sequence is common and followed by many counties of the world, but India has followed the different sequence, that is the second sequence. Some countries also follow the second sequence, such as South Africa. Mr. Gopal gave a definition to each phase. He said making profit is the characteristic of capitalism, while emphasizing individual’s rights is the feature of full-franchise democracy. Mr. Gopal noted that there is connection between political system, legal system and the economical system. It’s the political and legal systems that affect the economy. Co-existence of free enterprise and democracy in forms of Indian market is quite different from the west. 

The second thing is economic factor of India. Mr. Gopal made a comparison of India and US about their need for soda ash, cement and steel in 2010 and 1950s. The need for cement and steel and other constructional material is huge headroom for growth in India compared to US currently and in its heyday of 1950s, to show that Indian market is of a huge consumption economy. 

Third, India is multi-cultural country. Mr. Gopal took Meiyang Chang as example, who is a pop singer in India with Chinese appearance, because his family has lived in India for several generations, he even can’t speak Chinese. Meiyang Chang is a typical example to illustrate that India is the original flat world where there is an easy transport of various ideas and cultures. 

After talking about the distinct features of India from the perspective of politics, economy and culture, Mr. Gopal stated the consequence of the distinction: the Benjamin button phenomenon. He used four examples to explain this phenomenon: 1: Sequence of job growth; the employment in IT and information industry is increasing greatly, while the employment in manufacturing industry is keeping stable. This situation is different from China and many other countries. 2: India with 1.2 bn PhDs! PHD refers to people who are poor, hungry and driven, which reaches a large amount in the countryside. 3: There is no concentration on retail grocery trade. People go into the big shop and supermarket instead of retail grocery. 4: Individual liberty is more important than economic growth. 

India: peek into the future 
Mr. Gopal compared the capitalist democracy of India to an “adolescent”, which means the democracy in India has not developed into mature. The immaturity of political system results in many social problems, such as corruption. There is a lot of corruption in India, the cost of which is to be about 2%of GDP. But Mr. Gopal also pointed that corruption is inevitable in human society. England and America also went through this period. To solve these problems, there are some policies in India, for instance, Strengthening role of civil societies that demand changes from the government, increasing contribution from chambers of commerce, etc. In Mr. Gopal‘s opinion, the next generation is very lucky, because they can witness the changes of society, and they can see a different and wonderful world. 

The TATA journey 
Mr. Gopal talked about the development of TATA. TATA is a company, which is very distinctive. In the early 1990s, the company met many challenges, for example, there were too many businesses, lack of common identity of TATA brand and so on. Then the company came to the transformation journey, through promoting the brand, renewing the purpose and unifying the group, it becomes what it is now. Now, the company has more tightly knit group, common defined standard and so on. TATA also learned lessons from the development, such as Evolutionary change is an attractive option compared to revolutionary change. 

In the Q&A session, the students and teachers present had a heated discussion about Indian education and the developing strategies of TATA with Mr. Gopal. 

When the activity reached the end, Prof. John Yang, on behalf of the National School of Development thanked the guests with lecture poster and BiMBA souvenir. The entire event concluded in a warm and harmonious atmosphere.

India: Inflections on a Growth Journey: The Internationalization Strategies of Emerging Markets Firms

Apr 18-2013   



—— TATA – BiMBA Workshop

 

On October 13th, 2011, National School of Development and Beijing International MBA Programs (BiMBA) at Peking University welcomed the guest speaker, Mr. R Gopalakrishnan, Chief Executive Officer of TATA Group, to deliver a lively speech entitled “India: Inflections on a Growth Journey”. Mr. John Yang, Dean of BiMBA, hosted the event at Lang Runyuan. 

Tata Group is one of the most respected business houses in India, with over 90 operating companies in seven business sectors, providing products and service exports for 85 countries all over the world. The Tata name has been respected in India for over 140 years for its adherence to strong values and business ethics. 

Mr. Gopal’s speech consisted of mainly three sections: India is a unique and enigmatic market; India: peek into the future and the TATA journey. 

India is a unique and enigmatic market 
Mr. Gopal presented the uniqueness of Indian market and analyzed its causes from political, economical and cultural aspects. 
The uniqueness of Indian market is formed because of the distinct political journey the country has followed. Mr. Gopal pointed out that there are two sequences in political development: one is classical sequence—from capitalism, constitutional liberalism to full-franchise democracy; and the other is unclassical sequence—from full-franchise democracy, constitutional liberalism to capitalism. The first sequence is common and followed by many counties of the world, but India has followed the different sequence, that is the second sequence. Some countries also follow the second sequence, such as South Africa. Mr. Gopal gave a definition to each phase. He said making profit is the characteristic of capitalism, while emphasizing individual’s rights is the feature of full-franchise democracy. Mr. Gopal noted that there is connection between political system, legal system and the economical system. It’s the political and legal systems that affect the economy. Co-existence of free enterprise and democracy in forms of Indian market is quite different from the west. 

The second thing is economic factor of India. Mr. Gopal made a comparison of India and US about their need for soda ash, cement and steel in 2010 and 1950s. The need for cement and steel and other constructional material is huge headroom for growth in India compared to US currently and in its heyday of 1950s, to show that Indian market is of a huge consumption economy. 

Third, India is multi-cultural country. Mr. Gopal took Meiyang Chang as example, who is a pop singer in India with Chinese appearance, because his family has lived in India for several generations, he even can’t speak Chinese. Meiyang Chang is a typical example to illustrate that India is the original flat world where there is an easy transport of various ideas and cultures. 

After talking about the distinct features of India from the perspective of politics, economy and culture, Mr. Gopal stated the consequence of the distinction: the Benjamin button phenomenon. He used four examples to explain this phenomenon: 1: Sequence of job growth; the employment in IT and information industry is increasing greatly, while the employment in manufacturing industry is keeping stable. This situation is different from China and many other countries. 2: India with 1.2 bn PhDs! PHD refers to people who are poor, hungry and driven, which reaches a large amount in the countryside. 3: There is no concentration on retail grocery trade. People go into the big shop and supermarket instead of retail grocery. 4: Individual liberty is more important than economic growth. 

India: peek into the future 
Mr. Gopal compared the capitalist democracy of India to an “adolescent”, which means the democracy in India has not developed into mature. The immaturity of political system results in many social problems, such as corruption. There is a lot of corruption in India, the cost of which is to be about 2%of GDP. But Mr. Gopal also pointed that corruption is inevitable in human society. England and America also went through this period. To solve these problems, there are some policies in India, for instance, Strengthening role of civil societies that demand changes from the government, increasing contribution from chambers of commerce, etc. In Mr. Gopal‘s opinion, the next generation is very lucky, because they can witness the changes of society, and they can see a different and wonderful world. 

The TATA journey 
Mr. Gopal talked about the development of TATA. TATA is a company, which is very distinctive. In the early 1990s, the company met many challenges, for example, there were too many businesses, lack of common identity of TATA brand and so on. Then the company came to the transformation journey, through promoting the brand, renewing the purpose and unifying the group, it becomes what it is now. Now, the company has more tightly knit group, common defined standard and so on. TATA also learned lessons from the development, such as Evolutionary change is an attractive option compared to revolutionary change. 

In the Q&A session, the students and teachers present had a heated discussion about Indian education and the developing strategies of TATA with Mr. Gopal. 

When the activity reached the end, Prof. John Yang, on behalf of the National School of Development thanked the guests with lecture poster and BiMBA souvenir. The entire event concluded in a warm and harmonious atmosphere.