VS Ramachandran on your mind | Video on TED.com

VS Ramachandran on your mind | Video on TED.com

In India, a Factory Model for Hospitals Is Cutting Costs and Yielding Profits

Foreign CPG Company in India: Success Factors

I was recently asked to provide inputs and share my views on the success factors for doing business in India. The company is in the food and drink sector that is thinking about entering the market. I have tried to address this question based on my experience working in India with a major consumer durable corporation and the largest automobile company in the Indian sub-continent. While the list can go endless, it is an honest attempt to highlight critical success factors for entering the Indian CPG market.

1. Understand the target segment: Foreign companies tend to lose focus as they enter India and either become too narrow in their target segment or too broad. The trick is to understand your target segment and stick to it.

2. Go Rural: If the company is not operating in a niche, then going rural will always help. As such majority of our consumers are still in the rural markets. Undermining the strength of rural India can cost a fortune.

3. Focus on small SKU's: While companies particularly in the food and drink industry feel that SKU's do not matter, but in India they do. Traditionally India is a very fragmented market with a variety of tiers available, unlike the supermarket concept here in the US. Also, considering the difference in the needs of customers, it is very important for companies to realize the importance of volume based approach. So the concept that works in India is to sell more of less for less.

4. Be local: While Indians do have an affinity for foreign products, advertising locally and catering to the local people helps. If the advertising and communication approach is not in line with the culture / needs / wants of people, it is bound to fail.

5. Launch in phases: While some products may be launched at a national level. However, it is always good to conduct a phased launch and develop that market pull for instant market development.

6. Focus on quality: Gone are the days when Indians were able to accept poor quality products for lack of choice. Today's Indian consumer is much more conscious about his/her surroundings and products available.

Again, there could be a zillion factors contributing to the success and/or failure of a foreign enterprise in India and this just provides a framework.

National Anthem of India

IIT's: Way to go

A TV program telecasted in US (CBS 60 minutes) about Indian Institute of Technology (IIT), a pioneer in the field of engineering education in India. IIT's have also been regarded as the engineering school having the largest number of applicants in the world and the toughest to get in.

The graduates from IIT's opened the doors to the US and proved the worth of Indians in fields of technology, education and management. With the technology revolution and the rise of companies like Infosys, TCS and Wipro, Indians are globally recognized and are undoubtedly a force to reckon with. The video provides insights into the passion of Indians for education and a spirit to rise up against all odds.

While I was growing up, my mother used to tell me, you have to go to IIT and there was no dearth of examples around me. I still do not remember what the world was from 1993-1995 when I was preparing for the Joint Entrance Examinations (JEE) for IIT's. Although, unfortunately I was unable to make it to an IIT, I do not have any regrets at this stage. The passion was so high that till date I consider not clearing the JEE as the biggest set-back of my life.

The years I spent focusing on the fundamentals and preparing for one of the most difficult entrance examinations in the world gave me the courage to excel. Today, I still have a lot of respect for IIT's and this video is a tribute to Pandit Jawaharlal Nehru whose vision helped create this world-class institution.

Interview- N.R. Narayana Murthy, Founder & Chairman, Infosys

In an interview with Nayan Chanda of YaleGlobal Online, N.R. Narayana Murthy, founder of Infosys, discusses the challenges and opportunities for firms operating in India, and also identifies the factors required for success in a global market.

For transcripts of the interview, please visit: YaleGlobal Online

Interview - Azim Premji & Nandan Nilekani

Azim Premji, Chairman, Wipro and Nandan Nilekani, CEO, Infosys talk about the growth of India beyond IT support. In conversation with Charlie Rose, both entrepreneurs release their view point on US Visa norms, Indo-China competition, and the success factors.

NRI's: Call Home Now

Non-Resident Indians (NRI's) and Persons of Indian Origin (PIO) have all the reasons to rejoice even while staying away from home and family. The improvement in communication infrastructure and the omnipresent Internet has created several opportunities to talk to family and friends back home. It is becoming cheaper to call home with each passing day.

About 3 years back, there were a host of small companies selling unreliable calling cards online as well as in stores and each catered to a loyal set of customers with varying needs. It was annoying to dial a 10 digit toll-free number followed by a 8-12 digit PIN (depending on the calling card) and a 15 digit telephone number(including the international dialing code and country code) to hear "The number you are calling is busy, please dial after sometime" or "All lines in this route are busy, please dial after sometime". It was a continuous test of patience and required courage to attempt to dial again.

There are approx. 25 million NRI's living in different parts of the world of which an estimated 2.5 million NRI's currently reside in the US (Source: Wikipedia article on NRIs and PIO). This excludes the burgeoning population of short-term visitors coming to the US for business who stay for less than six months. Assuming that an NRI spends an average of $10 per month to call home, a conservative estimate on market size for calling India from the US is $300 million per year. This is a sizable market for which phone companies should fight for and make it competitive. It's happening now and NRI's are again the winners.

It all started about 2.5 years back when Reliance Communications International (A Reliance Group Company) launched Reliance India Call , a reliable means to call India using PINless dialing. The service spread like wild-fire largely with word of mouth publicity. Although, it is currently offering a rate of 12.9 cents/minute which is on the higher side, there are no arguments that they provided excellent service. They tried to address and resolve two major issues:

1. Reliability: The use of archaic phone cards did not guarantee the promised minutes. Additionally, problems with connectivity, clarity and pulse-rate were too complex to make calling home a pleasing experience. Reliance hit it on the dot, offered instant reliable connectivity and PINless dialing. Moreover, they made sure that the pulse rate is kept at 60 seconds and offered standardization in the fragmented India Calling market.

2. Simplicity of Recharge and Postpaid option: Reliance India Call realized that the only way to grow is to provide excellent customer service. They designed an automated telephonic recharge system that would run parallel to the on-line recharge facility already available. It provided an opportunity for people on the move to recharge their Reliance account and call home. It was easy to use and was fully operational 24 hrs.

With the expansion of Yahoo! India and their focus on the Indian market, Yahoo took consideration of the India calling market while introducing Yahoo! Voice services. About 6 months back, Yahoo started offering a facility to call anywhere in the world at lower costs through Yahoo! Messenger. While there are a lot of companies such as Skype and MSN essentially providing the same service, Yahoo! took special consideration for Indian customers by offering calling India at 9.9 cents/min. They even offered free minutes to each of their users to call India on Diwali, the festival of lights and a popular Indian festival. The only flip side of using Yahoo! Messenger to call is to use a headphone and a microphone. However, the voice quality and cheaper rate (compared with Reliance India Call) makes it my choice. Additionally, it is really easy to dial from your computer as you do not need to input the phone numbers over and again.

Although the offerings above are pretty competitive and we have come a long way from the unreliable phone card services. The latest offering from Bharti Airtel, India's leading telecommunications company serving over 30 million customers swept the show by introducing Airtel Call Home service. They are offering 7.9 cents/min to call anywhere in India. With the initial promotion (valid till January 7, 2007) of doubling the introductory charge amount the effective per minute cost would be approx. 4 cents/min.

There are other calling services available that are equally reliable and readers might provide references to some of their pet peeves in the comments section. Having said that, the India Calling market is booming and in a few months we will see the rates drop to a level that all of us can keep in touch with our friends and families using reliable and affordable communication means. With the ready availability of telephones in India, folks in India are just a call away. While it is good for NRI's , there should be services to reasonably call US from India as well from regular land lines and cell phones. That would make the world really flat and small. Long Live the Indian Telecom Revolution !!

Wal-Mart's Entry in India

BusinessWeek Article on Wal-Mart's entry in India

With reference to the article posted above, here are some of my opinions.

I still remember graduating out of one of the top business schools in India in 2001 and Bharti was one of the last choices to start your career with. Although it was a major player in the mobile communication market, it was still seen with an awry eye. Now with the tie-up with Wal-Mart, I feel that Sunil Mittal is doing all the right things to diversify and bring value to the large Indian population. He is undoubtedly the fore bearer of the mobile revolution in India followed by Reliance. It would be good to see the Walmartization of Indian cities. There would be a huge impact on the traditional mom-pop stores. I am sure there would also be a drift between the shop keepers and retail chains followed by lobbying and political pressure. However, in the midst of all this, India is rising and now there is no looking back. Kudos to Sunil Bharti Mittal !!

Also, while a lot of Indians have become globe trotters and have seen the affect of Wal-Mart on the US society, they are also expecting similar goods and services in their home country. In all India is a huge market and the premature entry of lot of CPG companies in the early and mid 90's led to a considerable burn out. This is the right time to exploit the great Indian middle class which is growing at a frantic pace. Also, Indians should have the right of choice to buy world class products. Although, I agree that not all that Wal-Mart sells is gold. However, the standardization of Indian retail market will push consumers to plan appropriately and lead to an increased consumption which is always good for the economy. On the other hand, it could be a blessing in disguise for the not so popular Indian manufacturing industry. With Wal-Mart, new sourcing opportunities would be created and local sourcing would create more jobs and increased quality. If India has to beat China in FDI and growth numbers, manufacturing has to be boosted. IMO, the entry of Wal-Mart sooner or later will push towards this end goal.