Post liberalisation, MNCs gatecrashed without the due diligence
Titan-Timex, TVS-Whirlpool, British Telecom-Bharti, Escorts-Yamaha and Lufthansa-Modi Group are just few examples of clashes. In fact, Lufthansa is a classic example of tying up with a partner, who was not only a misfit in their work culture, but was also totally new in the field of aviation. And within three years of this deal, Lufthansa broke off with the Modis and filed a suit against them.
There are also cases where MNCs suffered when they did not Indianise their strategies. Electrolux was a perfect example, whose decline aided the rise of Samsung & LG. Apart from McDonald’s, all QSR giants perfectly fit in this bill, of companies who pay the price for not following the time-honoured management strategy of ‘Go global, act local.’ Stalwarts like Yum! Brands, in fact, have had to shut shop after launching their flagship brand, KFC in India. “We made certain mistakes and we had our lessons to learn. We stuck it out with Pizza Hut and we made sure we were relevant to Indian consumers,” explains Niren Chaudhary, MD, Yum! Restaurants India Pvt. Ltd. Domino’s and Kelloggs also made the same blunder of not Indianising their product and prices. As a result, their initial ventures were browbeaten by the Indian market. Electrolux went down miserably due to the aggressive product, pricing and marketing strategies of Korean chaebols. Many of these players learned their lessons and came back with a strategy suitable for the Indian market. But they chose to learn it the hard way, when they could have easily taken the freeway.
There are also cases where MNCs suffered when they did not Indianise their strategies. Electrolux was a perfect example, whose decline aided the rise of Samsung & LG. Apart from McDonald’s, all QSR giants perfectly fit in this bill, of companies who pay the price for not following the time-honoured management strategy of ‘Go global, act local.’ Stalwarts like Yum! Brands, in fact, have had to shut shop after launching their flagship brand, KFC in India. “We made certain mistakes and we had our lessons to learn. We stuck it out with Pizza Hut and we made sure we were relevant to Indian consumers,” explains Niren Chaudhary, MD, Yum! Restaurants India Pvt. Ltd. Domino’s and Kelloggs also made the same blunder of not Indianising their product and prices. As a result, their initial ventures were browbeaten by the Indian market. Electrolux went down miserably due to the aggressive product, pricing and marketing strategies of Korean chaebols. Many of these players learned their lessons and came back with a strategy suitable for the Indian market. But they chose to learn it the hard way, when they could have easily taken the freeway.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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