The End Of Corporate Imperialism.docx

THE END OF CORPORATE IMPERIALISM INTRODUCTION In 80”s large western companies rushed to enter emerging markets. They entered the market with an imperial mindset. The MNC’S assumed that the big emerging markets were new markets for their old products. They never considered the emerging markets as sources of technical and managerial talent for their global operations. It limited the success in those markets. Great success in the emerging markets will require innovation and resource shifts on such a scale that life within the multinational corporations themselves will inevitably and hugely be transformed. IMPORTANT QUESTIONS TO BE ANSWERED 

Who is the emerging middle class market in these countries and what kind of business model will effectively and efficiently serve their needs?

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What are the key characteristics of the distribution networks in these markets, and how are the networks evolving?

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What mix of local and global leadership is required to foster business opportunities?

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Should the MNC adopt a consistent strategy for all its business units within one country?

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Will local partners accelerate the multinational ability to learn about the market?

WHAT IS THE BUSINESS MODEL FOR THE EMERGING MIDDLE CLASS Big emerging countries like China and India are a new consumer base consisting of hundreds of millions of people. The choice is limited therefore the rising middle class is hungry for consumer goods and a better quality of life. The choice is wide and in a large number. For example in India only there are 50 brands of toothpaste available today and about 250 brands of shoes. The choice of products of consumers are changing rapidly Indians are switching brands very quickly. But the main question arise here is that the growth of consumer demand will add up to the wealth of opportunity for the MNC’s. The answer would be “yes”. But the biggest misconception that MNC’s are making about emerging middle class of India is that they tend to analyze the mindset of emerging middle class of India and China similar to that of Europe or the United States.

Tailoring products to the big emerging markets is not a trivial task. Minor cultural adaptations or marginal cost reductions will not do the job. Instead, to overcome an implicit imperialism, companies must undergo a fundamental rethinking of every element of their business model. POINTS TO DISCUSS 

Rethinking the Price-Performance Equation

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Rethinking Brand Management

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Rethinking the Costs of Market Building

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Rethinking Product Design

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Rethinking Packaging.

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Rethinking Capital Efficiency.

HOW DOES THE DISTRIBUTION SYSTEM WORK Most of the multinational executives had not invested much in distribution before launching their products Access to distribution is often critical to success in emerging markets, and it cannot be taken for granted. In China, many MNC’s have gained access to provincial networks by creating joint ventures. Chinese JV partners protect their turf. This gap between the MNC’s ;need for a national, cost effective distribution system and the more loyally oriented goals of their partners is creating serious tension. MNCs will have to determine who controls national distribution in order to distinguish likely partners from probable competitors. In China, multinationals seeking national distribution of their products must consider the motivations of potential partners before entering relationships that may frustrate their intentions. WILL LOCAL OR EXPATRIATE LEADERSHIP BE MORE EFFECTIVE

Leadership of a multinational’s venture in an emerging market requires a complex blend of local sensitivity and global knowledge. Getting the balance right is critical but never easy. MNCs frequently lack the cultural understanding to get the mix of expatriate and local leader’s right.

Expatriates from the MNC’s host country play multiple roles. They transfer technology and management practices. They ensure that local employees understand and practice the corporate culture. But the expatriate managers have cultural and linguistic difficulties and they are not that much aware about the local market and political system. Local managers have a clear idea about local nuances and they have a great commitment to Indian markets. But they don’t have a strong voice in corporate headquarters and deep knowledge in soft technology. IS IT NECESSARY TO PRESENT ONE FACE? There is no one right answer to this question because of the contrasts between India and China. In China massive governmental interference in the economy makes a uniform country strategy necessary. There is somewhat less need to present one face to India. Since 1991, the Indian government has scaled back its efforts to shape what MNCs do in the country. Business units may therefore act more independently than would be appropriate in China. The strategy for India can be developed on a business-by-business basis. Nonetheless, the market is large and complex. National regulations are onerous, and state-level governments are still so different from one another that MNCs are well advised to develop knowledge that they can share with all their business units in India. Multinationals are finally learning that their local partners often do not have adequate knowledge of the local markets. SUCCESS WILL TRANSFORM THE MULTINATIONALS In order to participate effectively in the big emerging markets, multinationals will increasingly have to reconfigure their resource base, rethink their cost structure, redesign their product development process, and challenge their assumptions about the cultural mix of their top managers. They will have to develop a new mind-set and adopt new business models to achieve global competitiveness in the post imperialist age.

EMERGING GIANTS: BUILDING WORLD CLASS COMPANIES IN DEVELOPING COUNTRIES INTRODUCTION Liberalization made developing countries to open up to foreign competition loosen up their protectionist barriers. By the storming in of companies from N. America, W. Europe, Japan and S. Korea, most of the local companies lost market share and sold off businesses. The authors identified 134 major companies in 10 emerging markets viz. Argentina, Brazil, Chile, India, Indonesia, Mexico, Poland, South Africa and Turkey and studied their strategies business models, stock market performance, etc. BLUNTING THE MULTINATIONAL EDGE At first glance, Western, Japanese, and South Korean companies appear to hold nearinsurmountable advantages over businesses in newly industrializing countries. Most European and American corporations can access capital and talent easily as when compared to contract enforcing mechanisms corporations in emerging markets. That often makes it tough for businesses in developing countries to invest in R&D or to build global brands. But the emerging markets have certain advantages over these MNC’s which if utilized effectively can prove fruitful. 

Managers at local companies know how to work around the institutional voids which is difficult for the MNC’s.

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If the countries get themselves listed on NYSE or NASDAQ after demonstrating a degree of success, it becomes easy for them to sell equity shares or bonds as they then become the investors’ favorites. Also the intermediaries from developed countries who want to fill the gaps help these local businesses to become more competitive.

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MNC’s are reluctant to tailor their strategies, products, services, and communications for every developing market as its costly, cumbersome and risky. MARKET STRUCTURE IN DEVELOPING COUNTRIES

Market structure in developing countries consist of 4 tiers viz. Global, Glocal, Local, and Bottom. MNC’s find it difficult to serve anything other than the Global tier because of the institutional voids, insufficient knowledge about the customers tastes and of the local talent pool. The emerging giants overcome these difficulties and also adapt their strategies to the local markets and hence gain an edge over their foreign competitors. They do so by adopting any 3 of these strategies. EXPLOIT UNDERSTANDING OF PRODUCT MARKETS The emerging companies use their understanding of local preferences to cater to the tastes of the Diaspora from their home markets. For example: Jollibee foods of Philippines, S. Africa’s Nandos, China’s Haier. BUILDING ON FAMILIARITY WITH RESOURCE MARKETS Some companies capitalize their knowledge about the supply chains. For example: Taiwan based inventec, Bunge. Businesses built around raw materials are global from their inception either because they serve customers in advanced markets or they are a part of global value chain. IMPORTANCE OF EXECUTION AND GOVERNANCE Execution and governance is as important as the identifying the right growth strategy. The research suggests that excellent execution and good governance are especially important in newly industrializing countries. The manner of achieving good governance varies in different emerging markets. The companies who earnestly protect the interests of shareholders and employees and ensure that they both get the worthy return on investment become emerging giants. CONCLUSION

According to the research there are many ways of achieving success for emerging companies. The research shows that financial performance of world class companies is not any superior than those who haven’t diversified across countries.Thus emerging giants can be successful even if they don’t have global footprints.

GLOBALIZATION OF PRODUCTION AND MARKETS OF INDIAN MOTION PICTURES-A CASE OF KRISH SUMMARY According to the article the credit of the film industry goes to Louis Lumiere who invented the cinematograph, a portable single unit camera developer, and movie projector 4 1894 after Thomas Edison who invented a thing called a kinetoscope in 1891, but which had a drawback that it allowed only one person to see a movie at a time. Lumiere brothers introduced Motion picture technology in 1896 in India. The world started to look at an Indian movie industry when in the year 1999 Sir Laurence Oliver and Sir Alec Guinness lost to an Indian movie legend Mr. Amitabh Bachchan in the “BBC Super Star of the Millennium”. The success of DDLJ showed the world is the Market for Indian films. Indian film industry has showed an annual growth of 12.6 percent when compared To Hollywood which is 5.6 percent. The Indian diaspora which are there in 156 countries around the world has now new technological means to see Indian films. People of Afghanistan and Pakistan like Indian movies due to its songs and portrait of righteousness.

THE FILM MAKING PROCESS It all begins with the idea. The director or producer or even writer comes up with a GEM of an idea which is considered worth making into a movie.

PREPRODUCTION Here the planning and designing of the movie happens. Technicians are brought on board. Casting is finalized. Costumes, sets, music, and so on are worked out.

PRODUCTION Actual creation and shooting of the movie begins in this process of film making. Sometimes, feature films have many shooting schedules- depending on various factors like actors, locations, and so on. Once all the shooting is complete the film moves into:

POSTPRODUCTION Here the film is assembled by the film editor. The various pieces of the film is put together in the script order so as to generate a flow. Once this is done the work begins on the films soundtrack – dialogues, effects, music’s. Special effects are also handled at this stage. Krrish was a very big success also overtaking Hollywood movies like Superman returns and also World cup football matches could not stop krrish’s success.

SPECIAL FX TEAM The film was supported with a highly trained special effects team which was the team of Craig mumma and Marc Kolbe who had films like Godzilla and Independence Day. The costs were going high with each foreign team coming on board but Mr. Roshan was ready to take it.

SELECTING PERFECT LOCATIONS Script need two big locations one was in the Himalayas and other has to be in Asia somewhere because he needed skyscrapers and flyovers for the shoot. Also there was need for government permission as the stunts on the skyscrapers and flyover were to be done live which was a tough call. Mr. Roshan was approached by many tourism boards to shoot in their country but only Singapore fitted the budget, the government was also keen to support the shoot. Singapore was 7 times costlier than India and 3times costlier than any other popular foreign country. After many discussions Singapore was chosen and Mr. Roshan undertook five recesses to the country with 15 key crew members.

SPECIAL RECRUITMENT An Australian sound company was hired for sound designing whose work Mr. Roshan had noticed in several Hollywood movies. The experts flew to India discussed the sequences with him and then created it in the studio in Australia. Premiere shows were organized in Dubai, press conference and premiere in London and press conference in Singapore. Pantaloons handled the merchandizing of Krrish internationally.

Krrish faced two major competitions at the time of release which was Superman returns and the World cup Football but neither affected the success of krrish. Everyone appreciated the film for uplifting the standards of techniques, imagery, and quality in Indian Cinema. QUESTIONS 1. How has Indian Film industry evolved through ages? As the technology is getting developed Indian movie are creating a mile stone in Film Industry. Today Indian film Industry playing an important role in Indian economy. The Indian film Industry can be divided into four major generations. They are 

1920-1950 The Early Days of Indian Cinema

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1950-1960 Golden Age of Indian Cinema

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1970-1980 The Angry young man awakens

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1990-2000 Bollywood Gains global popularity

2. How the project (Krrish) did created taking into consideration Indian Diaspora abroad? The movie followed by a simple strategy that is world as one market and more than the 30 million people are NRI in 156 different countries and mainly in Europe and America which use to watch movie because of having Indian origin Overseas income is already contributing more to the $2.3 billion Indian movie industry, with foreign box office revenues jumping from 5.3% of total revenue in 2005 to 9.8% in 2009 Already success movie in global market showed a new path & dimension to Indian Film Industry. And globalization open the gate into enter the business of global market and makes movie with the of Foreign technology and people and gain good experience. 3. How Mr. Rakesh Roshan did used two countries competitiveness for the project (India and Singapore)? Mr. Rakesh Roshan used two countries competitveness in a very efficient manner for the project:

Low corporate tax As a trade blocs of ASEAN states Singapore is India’s largest trading, investment and export partner. The pro- business environment, stable government, work- force and strategic location truly ideal for any business.

4. What are the globalization factors that influenced the production of Krrish in Singapore? How many countries representatives helped in creation of mega success film Krrish? Mr. Roshan was approached by many tourism boards to shoot in their country but of the lot only Singapore fitted the bill on every count. The government was also keen to support the shoot and the landscape was ideal. Some factor that influenced the production of Krrish production these are: 1. Economical Factor 2. Political Factor 3. Technological Factor