Entry Strategies in Emerging Economies: The Case of the Indian Automobile Industry

In anticipation of rapid growth, the passenger car market in India is crowded with 18 companies trying to establish themselves. Most companies have joint ventures with Indian partners and have entered the market in the last two years. The number of new entrants over a narrow time window of two years is unprecedented. Demand forecasts vary and analysts expect anywhere between 2 and 3.5 million cars to be sold in the next five years. Equity holding for the international partner is usually over 50% and they retain significant managerial control. Most of them have introduced cars in the $13,500 to$33,000 price range, which is viewed as a luxury segment in India. Automobile companies have also chosen to establish exclusive dealerships. Initially, companies have chosen to import completely knocked down (CKD) kits and assemble them in India. However, this strategy is not effective in the long run since such imports attract 50% duty. The major implications are that a shake out is likely and that companies would need to have alternate plans, including introduction of cars in other market segments, lower prices, and exports from India if they cannot establish themselves in the domestic market. The supplier industry is very small and needs to develop simultaneously on all fronts including rapid capacity expansion, acquisition of technology, improvement in manufacturing practices, quality and productivity, adoption of lean manufacturing, and developing product design capabilities to meet the needs of assemblers. Therefore, a critical requirement for rapid growth of the industry is adequate assembler involvement in the suppler industry

Recent Developments and Future Prospects in the Indian Automotive Industry

The automobile market is growing at about 25% for the last three years. The number of persons per car is 200, which is very large compared to other emerging markets like Korea and Brazil which have about 12 persons per car. There is therefore a very huge untapped market. Uncertainty exists about the extent of growth, but a minimum growth rate of 20% is expected until the year 2000. Sales are expected to rise to anywhere between 850,000 to 1.5 million vehicles by the year 2000. Markets are highly price sensitive since a car is about 18 to 24 months salary for the average middle class buyer. However, incomes are rising and the economy has been growing steadily at nearly 6%. Import duties on CKDs and components is 50%. Reduction of prices because of lower duties and taxes and progressive indigenization, and rising middle class incomes are likely to further increase industry growth rates. Penetration in rural and semi urban areas is extremely low and could provide fresh markets. New entrants will have to deal with uncertainty of demand, different and evolving customer needs, a relatively poor supplier base, a market crowded with competition and industry wide capacity shortages. However, if there is a shake out as many analysts expect, further opportunities for survivors will open up. Another implication is that India could emerge as a significant manufacturing base for exports. The supplier industry is also going through massive growth, although from a small initial base. Except for Telco, indigenous product development capabilities are very low, and the industry has some way to go before it becomes world class

Insights into the Indian call centre industry:can internal marketing help tackle high employee turnover?

Purpose – Increasing turnover of frontline staff in call centres is detrimental to the delivery of quality service to customers. This paper aims to present the context for the rapid growth of the business process outsourcing (BPO) sector in India, and to address a critical issue faced by call centre organisations in this sector – the high employee turnover. Design/methodology/approach – Following a triangulation approach, two separate empirical investigations are conducted to examine various aspects of high labour turnover rates in the call centre sector in India. Study one examines the research issue via 51 in-depth interviews in as many units. Study two reports results from a questionnaire survey with 204 frontline agents across 11 call centres regarding employee turnover. Findings – This research reveals a range of reasons – from monotonous work, stressful work environment, adverse working conditions, lack of career development opportunities; to better job opportunities elsewhere, which emerge as the key causes of increasing attrition rates in the Indian call centre industry. Research limitations/implications – The research suggests that there are several issues that need to be handled carefully by management of call centres in India to overcome the problem of increasing employee turnover, and that this also demands support from the Indian government. Originality/value – The contributions of this study untangle the issues underlying a key problem in the call centre industry, i.e. employee turnover in the Indian call centre industry context. Adopting an internal marketing approach, it provides useful information for both academics and practitioners and suggests internal marketing interventions, and avenues for future research to combat the problem of employee turnover

The Automotive Industry in Emerging Economies: A Comparison of Korea, Brazil, China and India

The automotive industry in Korea, Brazil, China and India is currently going through impressive growth. Governments have played a key role in the evolution of the industry in all these countries. The Korean industry has made the most significant progress, and is now exporting cars to developed markets. It is the only country that invested in R&D for product development, retained management control in joint ventures with multinational companies (MNCs), and had ambitious export targets. The industry in Brazil is controlled entirely by MNCs. Although this has led to growth and adoption of lean production, indigenous product development is lacking. Tariff barriers have come down, forcing domestic production to become more market responsive. Fluctuating tariffs and taxes, and cyclical demand have characterized the industry. Indian industry is experiencing a revolution with rapid growth and the entry of 9 MNCs and plans for 3 more to enter in the next two years. The Chinese industry is also growing very rapidly although it is still highly fragmented. Passenger cars are only 15% of total vehicle production in China. Demand in Brazil, India and China is highly price sensitive and growth is led by the demand for a small car. Higher taxes on mid and large size cars give the small car a big price advantage. Import duties for components imply that the supplier base in these countries needs to develop fast. The supplier industry could become a bottleneck for growth

Identification of linkage between strategic group and performance of Indian commercial banks : a combined approach using DEA and Co-Plot

This paper explores the linkage between strategic grouping and performance of the Indian banking sector. Strategic grouping and performance were identified using published financial information for all public sector banks. Grouping of Indian public sector banks following comparable financial strategy – with similar asset quality, operational efficiency and profitability – was operationalized using the graphical display method of Co-plot. From their position in the two dimensional conceptual map, banks with identical financial performance formed strategic groups with significant positive linkage between better groups and their superior financial performance, which showed their inherent homogeneity in business policy decisions. Relative performance of the banks in terms of their efficiency in converting the resources to financial outputs was obtained using data envelopment analysis technique. The measures for potential financial improvements were obtained from the output slacks calculated. Efficient banks were found to be more profitable and their grouping as observed in the efficiency-profitability matrix was found to be identical to the strategic groups obtained using financial ratios. This paper offers a framework to commercial banks to make informed policy decisions about their competitive positioning in the target market, develop long-term strategic focus and identify a benchmark for improving their performance.Este artículo explora el vínculo entre el agrupamiento estratégico y el rendimiento del sector bancario indio. El agrupamiento estratégico y el rendimiento fueron identificados mediante el uso de información financiera publicada perteneciente a todos los bancos de los sectores públicos. El agrupamiento de los bancos del sector público indio siguió una estrategia financiera comparable (con una calidad de activos similar, eficiencia operativa y rentabilidad) se puso en funcionamiento utilizando el método de visualización gráfica de Co-plot. Desde su posición en el mapa conceptual bidimensional, los bancos con rendimiento financiero idéntico formaron grupos estratégicos con una relación significativamente positiva entre los mejores grupos y su rendimiento financiero superior, que mostraron su homogeneidad inherente en las decisiones de política de negocios. El rendimiento relativo de los bancos en términos de su eficiencia en la conversión de los recursos a productos financieros se obtuvo utilizando la técnica de análisis envolvente de datos. Las medidas para las potenciales mejoras financieras se obtuvieron del cálculo de producciones no utilizadas. Los bancos eficientes en este aspecto resultaron ser más rentables, y en su agrupamiento se observó cómo la matriz eficiencia-rentabilidad era idéntica a la de los grupos estratégicos obtenidos utilizando ratios financieros. Este artículo ofrece un contexto de trabajo para que los bancos comerciales realicen decisiones informadas sobre su posicionamiento competitivo en el mercado objetivo, desarrollando técnicas de concentración a largo plazo e identificando un punto de referencia para mejorar su rendimiento

Is Upcoding Anesthesia Time the Tip of the Iceberg in Insurance Fraud?

The question of whether there is anomalous billing in anesthesia care is beginning to be asked by operating room managers, health care administrators, policy makers, and regulators. This question may arise when an anesthesia case seems to take more time to complete than it should. Audits, when conducted, have found that an unusual number of claims end with the digits 0 or 5 as if large numbers of cases start or end on the 5-minute mark. Such a finding serves as a red flag for that practice to undergo an audit. Questions may also be raised because the percentage of patients coded as having a higher anesthesia risk, using the American Society of Anesthesiologists Physical Status Classification System, has increased from 2.9% in 2005 to 13.2% in 2013, mainly because coding a patient’s physical status at a higher classification or anesthesia risk in a claim ensures better payment of the claim