Challenges to Indian Multinational Cos. P. M. Kelkar 18 th March, 2006 Thorale Bajirao Peshwe Sabhagruha, Thane
Business challenges Business Plan Objectives, short & long term Local & Indian Govt. Clearances (e.g. Export Code No. DGFT Code No.) Industrial Policy & Import Policy of the Country Financial Policies, Banking Channels Incentives, Export Processing Zones Local Duties & Taxes
Business challenges contd. Selecting Authorized Agent/ Partner/ Distributor Negotiations & Acquisition of local business Policies regarding Ownership of Property Divestiture if things don’t work out
People & Organizational challenges HR & Recruitment Policies Organization Structure, Business Teams to support new business needs: Defined, Capable & mix of local & Indian Developing team of well-trained executives to transfer core skills & organizational structure Incentive & Compensation to such executives Selecting Manufacturing, Sales & R & D employees Developing distinctive capabilities
Customer Knowledge Knowledge of Business Culture Knowledge of local Customer Requirements Knowledge of customer base Establishing closeness to customer (less intermediaries preferred) Customer relationship management plans
Benchmark Business Practices Communication & Coordination: Clear, timely & efficient Faster decision making. Speed to Market Focus Behavior in Competitive vs. protected market Be global, act local practices Seamless Integration of new business
Environmental challenges Insurance: Facility/ People/ General Labor Regulations. Knowledge of worker compensation rules Knowledge & implementation of Factory Rules Industrial Safety & Hygiene Environmental Regulations: Air, Water Pollution & Waste Handling Permits Medical Reimbursement Policies Healthcare Compliance Policies Litigations & infringement issues
Health Authority challenges Regulatory & FDA Clearances, Licenses GMP Certification of plant, machinery & people Product registration, Product Testing Requirement for CE Marking Certificate of Free Sale/ CFG Clinical Trials Regulations Labeling (country of origin, mfg. address, distributor/ agent/ local partner) Local Language Labeling
Health Authority challenges Unit of Packaging/ Kits Bar Coding & lot traceability Standard Weights & Measures Acts Narcotics Act, Wildlife Act, Natural Products Act, Pesticides Act, Control of Animal Origin products Price Controls
IPR challenges Identifying Patented vs. out of Patent products Patent situation, validity of Process/ Product/ Method Patents in foreign country (e.g. reduction of PAT for Indian Cos. due to Product Patents) Royalty to Inventor. Compulsory Licensing Trademarks & Industrial Design Developing hard to copy technology Infringement Issues, Litigation
Manufacturing & selling challenges Location selection, facility construction & technology implementation Contract Agreements Superior, state-of-the- art technology Raw/ packaging & packing material availability, quality & costs Economies of scale, Lean manufacturing, Optimal processes
Manufacturing & selling challenges Quality Assurance Testing & Release IM Business Models SAP, JDE, BPCS Robust Supply Chain. Just-in-time inventory Shipping, Storage, Transportation & Delivery Good distribution practices Inventory & Receivables Management
Manufacturing & selling challenges Labor & sales cost vs. productivity After sales service, customer service Advertising & Sales Promotion Issues Handling Product Complaints & compliance to Adverse Events Regulations Post-market Surveillance Management of Field Actions
Any questions? Thank You!