Op-ed: Make in India and do it right | Business| Economy and finance news from a German perspective | DW | 30.05.2017
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Op-ed: Make in India and do it right

The welcome afforded to India's Prime Minister Narendra Modi by German Chancellor Angela Merkel is a sign of the potential Germany sees in India, says Wilfried Aulbur from Roland Berger consultants.

Long considered a sleeping giant, since Modi took office the Indian subcontinent with its population of almost 1.3 billion has been brimming with an unprecedented sense of optimism. With the country's gross domestic product forecast by the International Monetary Fund (IMF) to grow 7 percent per annum, India should see itself catapulted from the world's seventh biggest economy to the third largest on the planet by 2030. This does not even take into account any additional catalysts such as the free trade agreement between India and the EU, currently on ice.

It is figures like these that make India an exciting destination for foreign companies, particularly those in the automotive business, the chemical and pharmaceutical industry and the medical technology sector. India's passenger car market, for example, has already reached a similar volume to the market in Germany - with much more dynamic growth.

Integrated approaches to tackle the complexity of the Indian market  

India has made impressive progress since the liberalization of its economy in 1991. But companies doing business in India still face numerous challenges on a daily basis: political developments that change the regulatory framework at short notice, government and private sector corruption, difficulties finding suitable plots of land - the list of barriers to doing business in India is long. Added to that is the fact that a great many individual criteria come into every buying decision Indian consumers make.

So integrated approaches are what companies need if they want to be successful in India's volatile and complex environment. A strong focus on efficiency, for instance, must go hand in hand with innovations that suit the specifics of the market. Companies with a good understanding of their own value proposition are in turn able to concentrate on key issues and avoid getting caught up in the confusion of potential business opportunities and business models. Having a clear direction enables firms to make a fast and flexible response to changes in the market. And strong leadership coupled with good market knowledge make it possible to successfully exploit new opportunities as they arise.

Wilfried Aulbur

Wilfried Aulbur drew on more than 12 years of experience in India for his recent book "Riding the Tiger - How to Execute Business Strategy in India"

Innovation in particular must be customer centric, because business in emerging nations like India is driven not by technology but by consumers. Companies should offer them real benefit by carefully weighing up cost and service, functionality and design, and a host of other factors. Businesses operating in India's pulsating markets cannot get by without a finely tuned understanding of how they can create added value for customers. They especially need to avoid taking on too much at once and getting bogged down in the resulting complexity. Indian firms that manage to strike this balance between focus and opportunity have been hugely successful. Like the Indian automotive company which abandoned its highly successful business in the scooter market to concentrate instead on motorbikes and now counts as one of the most profitable automotive manufacturers in the world.

Organizing the business along designated guidelines, a distinct culture and a defined strategy is a matter of course for German companies. And these aspects are no less important in India. In the highly volatile environment of the subcontinent, it is crucial for staff to understand and internalize what the essence of the company they work for really is. The creative chaos that frequently seems to prevail in India makes it impossible for employees to have precise instructions to hand for how to deal with every situation they may face. That is why they need this deep understanding of the corporate mission and philosophy in order to be able to make decisions. A case in point is the Indian airline whose advertising makes a big deal of the fact that its flight connections are always on time. In order to anchor this mindset in the corporate DNA, punctuality is writ big, not only for flight times but for everything the company does - be it meetings, training sessions or paying its suppliers.

Tap the potential of India and take your own management model to the next level 

India's size and its continual strong growth make it a market that global companies need to be in, especially given the softening of growth momentum in other parts of the world. However, success and profitable growth in India are achieved not by chance but by good management. The tool that can navigate companies safely through the Indian market already exists and is just waiting to be used systematically.

What's more, this tool is increasingly transferable to other countries too. With its complexity and its creative chaos, India is the perfect mirror of today's VUCA world - ever more volatile, uncertain, complex and ambiguous. Things that might once have been dismissed as unique to India are now a reality not only in other developing and emerging nations but also in the Western world. The nuclear phase-out, refugee crisis, Brexit and Donald Trump's presidency are but a few examples of how unimagined momentum and uncertainty have gripped the Western world. Against this backdrop, the recipe for business success in India is just as relevant for navigating complexity in other emerging markets as it is in the VUCA world now facing the West. 

 

Dr. Wilfried Aulbur is Managing Partner India and a member of the supervisory board at Roland Berger. He mainly advises companies in the automotive, industrial and chemicals/energy sectors on operations, strategy and innovation. Prior to joining Roland Berger, Aulbur served as CEO India for a European automotive group. Besides holding numerous roles in Indian industrial bodies, he is also a lecturer for Harvard Business Publishing and a mentor for the University of Chicago's International Innovation Corps.

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