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Investments Out, Productivity in for Indian firms

With the global economy seeing severe pressures on growth, company leaderships are huddled in a corner to find out ways and means to weather the storm. The impact can be seen on all large and small companies with of course some possible exceptional companies because of their foresight, balance sheet strengths or business model.

By and large many of the firms we work with have become very cautious. They are no more looking at investing in expansion or in companies overseas or buying/investing in assets.  The obsession for growth continues (as the long term belief in Indian Economy continues) but the love for cash seems to have grown much more. They have become careful and cautious as the Indian Economy continues to remain at subdued growth levels. Additionally the rapid expansions which they undertook over last few years have given them a few lessons, and they are now looking at re-focusing on the core.

The key areas of interest for these firms are emerging around Productivity Improvements- leverage existing infrastructure & drive process efficiency

Leverage Existing Infrastructure

  • Do job work for others
  • Attract foreign entrants to use their manufacturing capacities to cater to Indian/ Global market
  • Enter new business/service segments while at the same time minimize investments (markets close to their existing plays)
  • Seek Export Opportunities specially to relatively untapped markets like Africa

Drive Process Efficiency

  • They are working to improve internal processes by utilizing internal resources/ competencies
  • In case they have to take external support the payment model they look for is “deliver & share” for external consultants.

Opportunities

While this environment is giving the creeps to everyone, there could be some pockets of opportunities for companies emerging in the following areas

  • Global firms which are eying India market entry could find it easier and efficient to close deals. The expectations of Indian firms are at a more realistic level than a few years ago. Though the immediate business returns may be far from satisfactory, a sound entry base could ensure a high headroom growth as things turnaround

>> Time to forge partnerships/ collaboration- M&A firms

  • As Indian companies are looking to attract global investors they are willing to
    • Invest in websites, corporate profiles  i.e in dressing up the communication
    • Low cost marketing avenues- Online/Digital marketing
    • Moving from Networking offline to offline

>> Opportunities for SEO, portal, web designing, Corporate Mktg

  • More Indian travelers going overseas to identify companies to collaborate with

>>Opportunities for Exhibitions, Global matchmaking firms

  • Deliver & earn
    • Companies are linking services availed to output. Cash flows are stretched, so conserve cash becomes the theme. More & More service providers (Consultants). Have to help generate cash before firms are willing to pay them in return.
    • Some of these firms are on a reduced C apex mode and in need of external Execution Support- especially around sales & marketing.

>> New business models @ services

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About The Author

Founder & Managing Director at Expand in India, and IIM Lucknow Alumni having close to 20 years experience in business management, industrial management, strategic planning, marketing, operations, team building, leadership , consulting and six sigma process orientation.

Companies/Firms Expanding or Entering in India in 2012 : Google News