Conquering the Chaos: Win in India, Win Everywhere Read Online Free PDF Page B

strategic partnerships to enter the market . JCB entered India through a joint venture with the Indian company Escorts because
     regulations required it. The JV was a powerful advantage because it resulted in a
     completely localized business. The disadvantage was that the JV failed to innovate
     and improve, and the value of the partnership diminished over time. When strategic
     objectives began to diverge and regulations allowed, JCB bought out its partner. What
     JCB did right was not to overly integrate the India business after it became a 100
     percent subsidiary; it empowered Escorts to run under a new team.
Localized leadership and empowered the local organization to win . JCB created an entrepreneurial leadership team and empowered it to build the business
     in a way that made local sense. India is a geographic profit center in JCB, and the
     India CEO Sondhi reports directly to the global CEO Blake with complete responsibility
     for the business in India. Accountability for results is ensured through the execution
     of a rolling three-year plan around which everyone is aligned. Seventy percent of
     the operating decisions are made locally and the balance, consultatively. Strong local
     accountability for the business and the traditional JCB value of jamais contente (never satisfied)—a sense of urgency about getting things done—has allowed it to
     be much more agile than competitors that have failed to create local empowerment.
Leveraged India for global products, services, and talent . Having built significant capability on the ground, JCB is now using India to win
     globally. Exports of components and machines from India are giving it a global cost
     advantage. JCB is leveraging a large engineering center and success with frugal engineering
     globally. It is using India to develop global leaders and sending high-potential young
     Indians to other parts of the world.
    The reason some companies are extremely successful in India is simply their extraordinary
     commitment; this commitment comes from seeing the potential of the market rather than its problems. Many years ago, one of my marketing professors
     told the class the apocryphal story of two shoe salesmen who are sent to Africa. One
     comes back in despair because he found that Africans don’t wear shoes; there simply
     wasn’t a market. The other sent a telegram back, “Natives are friendly STOP No one
     wears shoes STOP Huge potential STOP Am staying on STOP Send container load of cheap
     durable sandals END.” Companies like Samsung or JCB are winning in India because they
     are focused on India’s potential rather than its many problems. Determined to build
     a leadership position in what they are convinced will be one of the world’s largest
     markets, they are willing to prioritize India over other markets. They make market-shaping
     investments and sustain their commitment through the tumultuous cycles of the Indian
     economy. In the process, they create new markets or categories that they then dominate.
    In contrast, their competitors take the same low-risk, low- commitment approach to
     India as they do to all emerging markets. The strategy in India, as in all markets,
     is selling to the affluent top of the pyramid, which requires the least adaptation
     of products, business models, and operating procedures. It is easier to skim the top
     of the Indian market than to figure out how to crack the challenging middle market.
     They invest cautiously, in proportion to current revenues rather than the potential.
     They expect India to operate at the same net profit margin as developed countries,
     grow profits faster than revenues, and fund most investments out of the annual budget.
     This, of course, results in systematic underinvestment in anything that has a payback
     of over a year—building brands or localizing products, for instance. They tightly
     control employee head count, even if the cost of an employee in India is one-tenth
     that of an