THL

Insights from Three Headed Lion

The recent celebration of India’s potential as presented by McKinsey in Reimagining India: Unlocking the Potential of Asia’s Next Superpower is a timely reminder of the promise of India. Unfortunately, because the book consists of essays by various parties, it does not do justice to the enormity of the challenges we still face.

In fact, the Indian dilemma is captured quite well by Muhtar Kent, Chairman and CEO of Coca-Cola, “global companies are drawn to India by the promise of adventure and extraordinary opportunity it offers. However, in India, appearances can be deceiving. Even if you live and work there as an expat, you can never be entirely sure you understand the market completely. It is best to assume that you do not. If you come to India with some grand, predetermined strategy or master plan, prepare to be distracted, deterred, and even demoralized. Coca Cola has a built a very successful business in India. The key to this success has been learning to see the Indian market as it is, not as we wished it to be.”

It was for this very reason that we founded Three Headed Lion: to help businesses effectively navigate India’s challenges by understanding the true nature of the market – at the local level – across all India.

Despite the confusion and seeming chaos, businesses must not lose sight of the future. India, the world’s largest democracy, is a major economy with 1.2 billion consumers and one of the most attractive destinations for investment & business expansion. India’s growth impetus is summed up in Victor Hugo’s famous quote:“All the forces in the world are not so powerful as an idea whose time has come.”

So has India’s time come? Here’s what the key sectors look like:

  • Automobile: One of the largest and fastest growing.
  • Aviation: Third largest by 2020.
  • Consumer: Likely to be the world’s largest by 2030.
  • Infrastructure: Currently seeking USD 514 billion in investment.
  • Manufacturing: Expected to grow six-fold to USD 1 trillion, by 2025.
  • Pharmaceutical: Sixth largest market in the world by 2020.
  • Retail: One of the world’s top five markets.
  • Steel: Second-largest producer by 2015.
  • Foreign Direct Investment: USD 22.42 billion received during 2012-13.
  • PE and VC Investment: Increased by more than 46 per cent in the first half of FY14, raising USD 609.39 million through 51 deals.

Of course,  realizing the true potential of your investments in India may not be an easy task. Despite the best market strategies and people, the complex nature of India keeps success elusive for many global businesses and investors.

The following factors make it very difficult for companies, investors and institutions to understand the hidden risks in the Indian economy; thus hurting their ability to take advantage of India’s tremendous market potential:

  • Diversity: Further compounding complexity is India’s diversity. India is a classic case of countries within a country model. With 28 states and 7 union territories, 22 official languages and several more dialects, multi-culture, multi-religious, and multi-cuisine, India is a truly diverse country. Global businesses must recognize that doing business in India is different from doing business in any developed market. There are distinct differences in terms of business practices as well as consumer preferences.
  • India’s Opaque Triangle: Global companies, investors and institutions looking to participate in India have generally found that the three key elements of success – Market Potential, Enabling Policies and Ground Realities – seldom align in India, making the market opaque. This misalignment between the trinity of Market Potential, Policy and Reality is India’s Opaque Triangle.
  • Lack of Ground-Level Intelligence and Data: Another critical complexity driver is the lack of ground-level intelligence and detailed micro-level data on sectors, consumers and competition. This is a major issue in the ability to decipher and understand significant differences between what may appear at the macro level and reality on the ground. Additionally, global companies are used to leveraging quality data for planning as well operational purposes find it very hard to plan for India.
  • Governance Conflict: Last but by no means any less important is the constant tension between central and state governments that are led by different political outfits, and with conflicting political ideologies.

As part of our advisory blueprint, we follow a process that brings clarity to decision-making:

We help you ask the right questions as part of our Executive Journey to India workshops:

  1. Do you have complete market visibility, from perceived opportunity to ground level realities?
  2. Do you have access to ongoing actionable data and intelligence for strategic planning and ongoing execution?
    a)  Do you know where your market opportunity is?
    b)  Do you know who and where your customer is?
    c)   Do you know who you should and should not partner with?
    d)  Do you know what kind of employees you need and how to find and retain them?
  3. Have you clearly outlined your supply chain, including all stakeholders? Do you know if your supply chain is exposed to manipulation? If yes, what is your plan to mitigate the risk from manipulation?
  4. Do you know what kind of market forces act on your business? Do you have a plan to manage them?
  5. Do you foresee threat to your company’s reputation? If yes, what actions are required to protect it?
  6. Does your global management understand the complexity of India? Are they equipped to manage it?

Learning to succeed in India is a core-competence for future global executives. And then there’s the branding integrity issue as well.

Learn more about us, and let us know how we can help >>

P.S. Best wishes to all on this Republic Day!