25 Years Later – Where Are They Now?

Interesting update in today’s Wall Street Journal on the folks that stuck their necks out in China on 6/4/89.  Click HERE to see and read.

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Barclays Bank by Austen Dilberto and Aliya Zarate

As its many other companies we have encountered so far, Indian culture has played a large role in deciding how thecompany is run. The culture at Barclays is a mixture of the local Indian culture alongwith the corporate culture in UK. In the beginning one of the main challenges Barclays faced was establishing itself in the Indian market.

Barclays handled the trust issue by tackling difficult problems posed by potential customers. As ithelped customers with their needs, word of mouth spread and Barclays gained trust along with additional customers.

Despite rough economic times and depressed markets across the globe, Barclays wealth sought business in India. Its strategy was to get the right people on board in order to become more competitive once markets improved.

Barclays focuses on corporate banking, investment banking, and wealthmanagement. Barclays makes decisions in these areas based on what’s happening globally while considering Indian market trends. As opposed to other competitive banks, Barclays is focused on solutions not products.

They offer investment banking at an individual level because they saw a market opportunity there. Barclays breaks investment banking into three pillars. The first is the investment pillar which focuses on asset allocation. The second is the lending pillar which is based on financial collateral like equity and debt as opposed to a balance sheet. The third is the advisory pillar which helps entrepreneurs and family businesses manage their wealth and pass it along succeeding generations.

We left Barclays with a better understanding of banking. More importantly however, we got yet another perspective from a foreign company learning how to modify its business  to best suit operations in India.”

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Lenovo By Amy McDougall and Bryan deRegt

Before coming to India, what we knew about Lenovo was from our communications professor Cory Grenier. He was stationed in Beijing, where this Chinese multinational was founded and he was able to speak to us a lot about how business was conducted in China.  We were unsure however, how this Chinese technology business model was transitioned into the Indian economy.

From our initial research we knew that Lenovo was in the business of personal computers, laptops, workstations, servers, and electronic storage devices and was even gaining foothold into the tablet and smart-phone market. In 2012, Lenovo was the world’s second largest personal computer vendor by unit sales and had operations in 60 countries and sold in 160 countries. In India, we knew it made up 15.8% market share in PC Sales in India and was on its way to being the number one brand in its market. However, it was recognizing the threat that the demand for smart-phones and tablets would have on its personal computer sales as customers were now torn on how to spend their precious rupees.

We were greeted at Lenovo very warmly and were first given some demographic statistics about the Indian market economy. We found that there are 158 million Internet users, 46 million Facebook users, and even 30 million YouTube users. Although in terms of real numbers that seems quite large, as a percentage of the entire Indian population of over a billion, there lies a large opportunity for computer technology companies. One of the biggest challenges we were told, was that even by the year 2030, unlike its developing nation counterparts, India will only be 40% urban.  Thus as a tech company, it will be the most profitable for the company that figures out how to market to the rural economy. With 35 states, and 22 languages, that will prove to be a difficult feat, but Lenovo seemed optimistic about its prospects.

Lenovo took us through the history of Lenovo in India and we were very impressed with its growth in such a short amount of time. It was launched in India in 2005 and over the next few years it struggled, operating at a loss for many consecutive years. However, talking to an employee that had been at Lenovo from its start, we found that they created a culture of discipline, cutting costs wherever they could in order to stay afloat.  Since then they have been thriving in the Indian economy and was just recognized as a top brand in its market.

We learned that there was even a Global Marketing Headquarters in India, its location chosen because of the innovative highly skilled workforce that had demonstrated strong international marketing capabilities. Working in an economy with so many different people and cultures primed India for being an international hub in many different fields because of its ability to adapt to many different cultures and take each and every challenge as it comes.

Similarly to many of the other Indian companies we visited, Lenovo talked about the difficulties of business with such strict governmental regulations. In China, businesses that are approved of by the Chinese government have many doors open to them in order to keep their success alive. India often has to wait for governmental policies to be decided upon before it can move forward. For example, Foreign Direct Investment in a specific brand has finally been allowed in India after much political debate. Although there are still strict regulations on this FDI, Lenovo is excited for its new prospects in getting international partners who can invest in the company and help further its success in India. We also found that many politicians who wanted to get elected would often promise technology products to its constituents upon election. For example, one politician promised all college students in his state a laptop computer if he was elected, and when he was elected there was a price undercutting war between tech companies on who would get that large bid. Lenovo got a respectable percentage of that bid, but learned it had to operate at very low margins in order to increase its market share in that region. Thus a tradeoff exists for tech companies like Lenovo between margins and market share, as there is an intense competition for all the market opportunity in India.

Overall we learned a lot about how business is run in India and it was a great opportunity to spend time in India’s version of our “Silicon Valley”. It was evident that India is a prime location for business and it was very inspiring to hear the success story of Lenovo India.

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Puravankara By Elliott Smith and Joshua Bingham

Overview: Puravankara is a residential real estate development company located in Bangalore, India. The company was founded in 1975 in Mumbai, India by the current chairman Ravi Puravankara. During our visit, we met with the joint Managing Director, Ashish Puravankara, and the Chief Executive Officer, Jackbastian Nazareth. Over the past decade, the company has grown dramatically and is on track to continue to do so through its development of affordable apartment complexes catering to the middle class and its luxury apartment complexes catering to those who are already well-established professionals in the Indian economy.

Our Impressions Going In: Elliott and I were both very interested in this company due to our backgrounds in construction. We were curious as to how they operated and their strategies in marketing their properties to Indian consumers. In addition, during our initial research, we learned that there is a lot of concern regarding the Indian real estate market being in a bubble and it potentially bursting sometime in the latter half of 2013. We wanted to know their opinion regarding these predictions and if they had any strategy in place to deal with it.

Our Impressions Coming Out: To say we were impressed with the company would be an understatement. From the moment we walked in we were amazed by the facilities and the incredible knowledge and passion of both Mr. Puravankara and Mr. Nazareth. The company’s subsidiary, Provident, seemed to be the main focus of their presentation and our discussion. The company realized more than five years back that there was an opportunity available in the affordable housing market. With a rapidly rising middle class, there was little in the way of property available to those new Indian working professionals with steady incomes. The creation of Provident, and the subsequent research on the market, has led the company into a new market where they are doing very well. With the global economy still rather sluggish, Provident is providing Puravankara with the perfect opportunity to continue to grow and make a sizeable profit despite economic headwinds.

One interesting aspect of their operations was the focus on scientific research to establish Provident’s strategy. Rather than simply building apartment complexes the way they thought they should be built, and then hoping Indian consumers would be willing to buy them, the company conducted close to three years of research into what the consumers in their target market would actually want in an apartment. This allowed them to make over 450 sales in one weekend for one of their new developments. By catering their offerings to the individual markets, they are proving wildly successful in following this plan.

Lastly, Mr. Puravankara made it clear that one of the reasons they have been so successful is because they strive to make their business as clear as possible. They do not hide anything in regards to their finances or their operating activities. This has established a good amount of trust not only with their clients, but with their suppliers, their investors, and the government regulators they deal with on a regular basis. One of Mr. Puravankara’s quotes was, “I’m not in the business of selling you four walls and a roof…I want to sell you a lifestyle.” The company is proving wildly successful in selling the lifestyle of progress through its excellent business practices.

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Core Jewellery By: Elliott Smith and Joshua Bingham

Overview: Core Jewellery is a jewellery manufacturer in Mumbai, India.  The company was founded by the current Chairman and CEO, Mr. Kamal Bhatsali, and focuses on selling their products to international retailers. Their products range in price from medium to high and include bridal jewellery, rings, necklaces, bracelets, etc.

Our Impressions Going In: Once we knew we were going to the manufacturing facility we immediately had thoughts of Indian sweatshops, however we knew that we would not actually be exposed to that type of environment.  This being a jewellry factory we assumed that the facilities would be nice and hygienic due to the value of the product they are producing. We were interested in how the base level employees were managed, because we wanted to compare them to those in the United States.

Another aspect we were eager to learn about was how the factory was set up and how the product flowed through the process. Josh and I had just finished our course in Operations and we were interested to see if any of the principles we learned in class would be present in India manufacturing.

Our Impressions Coming Out: The first thing that caught our attention was that the factory was located in a secure district.  A secure district meant that regular foot and auto traffic was restricted and there were security measures all around the complex.  We were not allowed to bring in cameras and or any existing loose jewellery.

 Upon our arrival into the facility we were greeted by Mushaf Rahman who would be one of the people showing us around the facility. In a nutshell, the factory uses CAD to produce 3D printed models which are used to create casts to pour gold or silver into. These casts produce the base jewellery which are then refined and stones are added to complete the pieces.

In regards to our initial question about the management of the facilities and the employees, we found similarities and differences between the Core factory and U.S. factories. For one, there is no organization which looks out for the health and safety of workers. In the U.S. we have OSHA, and India either does not enforce any policies like OSHA does, or the organization simply does not exist.  However, in general we felt this facility was clean and safe by Indian standards.  Also the workers have longer work weeks than U.S. workers (they work 6 days, 8 hours a day).  Overall, the practices in India and in the U.S. are very similar with the exception of the standards American companies have to follow.

After our tour of the operations, we gained some knowledge in regards to the sales side of the business. We asked Mushaf to talk about dealing with clients from different countries and cultures.  For him, the most important point when dealing with different cultures is ensuring the product speaks for itself.  He simply stated, “The most important part is the product I’m selling.  If the product is good enough it will sell itself.”  After our brief experience in jewellery manufacturing we both agreed that Core Jewellery’s product is “good enough”.

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Cisco Systems By Amy McDougall and Bryan deRegt

Cisco Systems By Amy McDougall and Bryan deRegt

Cisco systems is a well known company to us from them being a major player in the US market and headquartered in San Jose, California. They design, manufacture, and sell networking equipment as their main line of business. On top of this, they have made a big initiative and new branding to be a company trying to connect the unconnected.

Going into the company visit, we did not know a lot about Cisco India. We new general facts like their software development center is located in Bangalore, it began in 1995, and had gone under a strong period of growth. However, we did not know much about what separated Cisco India from Cisco in the United States that we were used to besides an idea we came across that Cisco India was about driving innovations and products to be taken to other markets not just catering to the Indian market. One project that we found really interesting was Cisco’s Educated Enabled Development program. The idea behind this program kept with Cisco’s “Internet of Everything” theme as they tried to provide two way communications for teachers in India so they could reach students miles away. Hopefully, this would allow more and better education for children of rural areas.

When we arrived at the company, we were very impressed. Our visit began with a presentation on Cisco that focused on their cloud technologies and Cisco wanted to connect everything. When considering people, objects, and things, 99.4% of the world is still unconnected to the Internet. This includes items like the building air conditioning or medical equipment a doctor would use. Cisco hopes to change that and believes there will be fifty billion IP enabled devices by 2020. Cisco even has designs and some demo runs of an entire city being on a network so in the future instead of ever having to look for a parking space, your GPS could direct you straight to the closest available spot.

After the presentation, we got the opportunity to demo and see some of Cisco’s technologies. First, we got to see Cisco’s TelePresence. The idea is to enable conference room meetings between people all over the world. Our group was separated into two rooms but through the video and design of the room, it was just as easy as any meeting around a table. Next, we were able to see a health center that they have available in some clinics. Many medical tools are available there that with a nurse/paramedics help will send your medical readings to the doctor who is video conferencing from anywhere in the world. This new way of providing medical attention allows for people in rural areas to meet with a doctor anywhere and one day we could all never have to leave our house to see a doctor. Finally, we saw a room they designed where as soon as you login or swipe your card, the room will turn on the air conditioning to your set temperature, turn on the lights, load you personal files and pages onto the computer, and even raise the automatic blinds. This new technology was mentioned for in meeting rooms or even possibly in hotels so people traveling can easily have there whole life connected even on the road. Finally, we saw Cisco’s new kiosks that are in New York currently. Instead of just an advertisement, people now can stop at the kiosk and actually shop for the items they see without needing to find and go to that store.

Overall, Cisco’s technologies were very impressive and gave a glimpse into what our future may be in the next decade. Cisco made it clear that their core business is still selling routers but this new technology will definitely allow them to help us have a more convenient, connected life in the future.

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IBM India By Elliott Smith and Sam Kligman

Overview:

IBM India is one of the largest branches of the IBM “empire”. It has offices all around India, and earns a large portion of the global IBM profits. The Indian Branch went through a major reorganization in 2006 where it changed its business line to focus on four main sectors of growth.  Those sectors are: Business Transformation Outsourcing, Application Management Services, Business Solutions, and Small/Medium Business Solutions.

Our Impressions Coming In:

To be honest we had no idea what to expect coming in.  We knew we were headed to a large IBM office in the heart of the Mumbai commercial sector and we knew we were meeting with a country manager, Mr. Goyal.  Aside from that, we made no assumptions on what we might be allowed to see or learn about the company. However, there were several topics that we wanted to learn more about if given the opportunity. The first was how IBM India interacted with their large head office in America. We felt that the relationship between these two branches would be very interesting, particularly how the branches deal with the cultural differences between one another. The second was how IBM planned to adapt to the new cloud based trend that has been seen in the tech industry. Were they going to stick to brick and mortar system implementation or had they come up with something new to provide the businesses they usually serve?

Our Impressions Coming Out:

Initially we were taken aback by the level of security we had to navigate through in order to physically get into the office. To be frank, it was extensive! However, once we gained entry, we were greeted with a very cordial welcome from Mr. Goyal who informed us that he would be talking about IBMs new platform termed “Social-Business” that combined aspects of social networking sites into business software we realized just why the level of security was high. This was a new technology most of us had never seen before and a trade secret to be closely guarded.

Mr. Goyal explained that IBM developed the new software to act like a dashboard.  He also noted that, every program you would normally use in your day to day business activities takes time to open up and toggle back and forth between.  In fact, he said studies showed that workers spend upward of 45 minutes a day doing so. So IBM’s software was an attempt to take this into account and eliminate much of this wasted time. It did this by being customizable, and allowing a company to pull all of its programs into the previously mentioned user-friendly dashboard.  We predict that this idea new idea, born from the social networking site style and design, will most likely replace much of the old style business management systems currently in use.

After Mr. Goyal went through his presentation we continued into a question and answer period were we asked him to explain the challenges that come with being a branch of a large foreign company.  His answer was colorful, filled with stories, and multifaceted but had the one core takeaway – IBM has developed a large company culture which spans all of its branches. Mr. Goyal stated that dealing with different branches in different countries isn’t as big of a problem as one might think because this large company corporate culture was strong and had the effect of pulling everyone together to be “IBMers”. He noted several IBM sponsored team events he had experienced and claimed that they developed many deeper level IBM connection and mutual respect for the talents of others in the company. We learned that activities like these translated directly to effective collaboration and workers continued growth. His ending note was essentially that even if IBM encompassed many regional cultures its company culture trumped all else.

Overall:

We were impressed that the culture of IBM and its ability to transcend geographical boundaries.  Moreover, we were blown away by the new BusinessSocial technology that it was already using and would be rolling out to customers because we had never seen such seamless integration of social and business before!  As we departed the office we believe our entire group had a deeper respect for the flexibility of the IBM business model and the uniqueness of its culture thanks to Mr. Goyal.

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eBay India By Sam Kligman & Chester Hiu

Background:

eBay India’s mission is to provide a global trading platform “where practically anyone can trade practically anything”. It does this by providing a user-friendly platform to facilitate transactions. In general though, eBay is a great platform for small retail sellers, who would otherwise not be able to reach a larger consumer market due to restraints such as location and costs associated with renting a brick and mortar location.

eBay India is a relatively new entrant into the eastern market. On top of that, it is widely known that the amount of credit card penetration in India is near 5%. This means that most Indians are accustomed to purchasing goods with cash. Furthermore, the bazaar style of purchasing, where the buyer can interact directly with a product, has historically been the most common method. Although the credit card penetration is quite low in India, eBay India still manages over 4 million registered users across all states and territories The average buyer income profile is of grade A or A+ standing. Moreover, the majority of the items listed on eBay India are fixed-price. By putting in place activities like this as well as facilitating customer purchases through PaisaPay eBay India has been mitigating the low use of credit and gaining customer trust.

In terms of competition, eBay had to face many smaller rivals upon entry into India, but none of these smaller competitors were established enough to prove much of a threat. Its largest competitor in the US, Amazon, has also recently broken some ground in India. Given all these facts, we went into eBay with many questions that we will cover next in the initial impressions section.

Meeting:

When we arrived at eBay, we were met by Shivani Suri Dhanda, the head of eBay India’s Brand and Acquisition Marketing, Ratul Ghosh, the head of Strategy. They gave us a brief overview of the company as it currently stands, similar to the background that we have provided above. We prepared several questions before the meeting, including, but not limited to: 1. With such low credit available online, how would they be able to continue to grow?, 2. How were they able to overcome the Indian bazaar style of purchasing goods?,  3. Where did they see themselves and their competitors going in the near future?

 

Their responses were interesting to say the least. The first was that they only acted as an intermediary between users, which were typically b2c (small businesses to customers), so growth was only a function of how much people wanted to sell online. Since, they mitigated any sense of potential risk by providing their standard 100% guarantee, many people did want to sell online so this was not a problem.  They also mentioned that with the trust they were developing they saw large potential for growth; viewing the current market as a blue ocean. In response to the second, they said that the bazaar market would most likely be taken care of through the growth in mobile sales. Since it has already been growing significantly they thought this was a good bet to make. Finally, in response to the third they stated that their competitors are not as well organized and the ones that are somewhat organized with large user bases did not pose a threat since the projected market was huge. Any success of competitors only stood to legitimize their value proposition and convert transacting online into a more standard purchasing practice for consumers.

Impressions Coming In & Out:

Before going in we thought that eBay India might not be well situated for success. We were concerned about its model being able to surmount cultural and financial barriers. However, after our meeting we felt that eBay India is doing a great job taking the conservative route and are not overextending their capabilities. The people running eBay India have a good grasp of their potential and current markets and are happy to be working for eBay although many could have higher paying salaries in other lucrative tech businesses. What they do, they enjoy, and they also get a feeling that they are helping their fellow Indians. The rapid pace of development within the digital sales landscape makes every month of progress seem like 3 months of experience so they really are getting an overall enriching experience. The fact some have gone on to find their own entrepreneurial success only further validates our belief that they are on the right track. Overall, we commend them on their company culture of accepting people of all backgrounds, and truly believe they have set up a sustainable model for fostering Indian entrepreneurs from the ground up.  The best thing about their model is that everyone seemingly wins. Ultimately, eBay India has introduced a better Pareto equilibrium point to India.

Overall:

Overall, eBay India has shown us as MBA students that we have the potential to perform similarly. Furthermore it gives us confidence that we can be successful if we apply ourselves to any local market and understand its people and culture. The great challenge we face, much like eBay, is how to stay true to its mission while conforming to the local cultural, societal, and financial needs.

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Big Bazaar by Austen Dilberto & Aliya Zarate

After meeting with MET officials we were gathered in a nice hall to have an interactive session with Mr. SandipTarkas – CEO of Future Media, who was kind enough to spend some time with us and talk about Future Group and Big Bazaar in particular and their business practices in India.

We started off the session with determining what we thought were the differences and similarities between Big Bazaar and any other U.S. Supermarket. One of the differences we pointed out was that merchandise was stored on the floor in Big Bazaar which we don’t see very often in the United States. Another difference was the store’s layout. In the beginning when Big Bazaar was introduced to Indian customers, the floor layout was very similar to the one we see in Wal-Mart today.  However, Indian customers were confused and therefore could not properly locate the products they were looking for. Big Bazaar needed a layout that would be suitable for Indian people. They created a new store layout that allowed customers to go through the entire store. For us, US consumers, the store seemed a bit confusing and many times it was difficult to locate a desirable product without asking for help. However,  that was not a problem at all.  Big Bazaar as well as most of the stores in India seem to have plenty of staff who were ready to help. Big Bazaar in particular had 4-5 employees per each department. We received quite a lot of attention once we entered the store however this might be because the store expected us and did it best to provide us with everything we need. As we were informed, normally help is provided when it is asked for.

After we picked all the items we were looking for we proceeded to the check out counter. Big Bazaar does not have self check out stands to which we are so used in the United States. Standing in line in Big Bazaar was quite an experience. The sense of personal space in India is very different from ours. Indian shoppers tend to stand very close to the person in front of them.  As we found out later on if there is enough space between two people, someone will spot it and cut the line, which is very common in India. Standing in line also takes longer that it normally does in the United States where we are so used to the fast service. Indian employees were very helpful and customer service was exceptionally excellent, however they seemed to take their time while providing it. Indian shoppers find solutions to all these challenges. Since most Indians shop in groups, many times one will stand in line while others shop and by the time they find all the necessary products the person in line will be very close to the checkout stand. There is an interesting term we learnt from Mr. Tarkas – “jugaad”, which means “making it possible”.  For every problem or challenge that Indians face they manage to find a solution.

Finally when we reached the cashier, we encountered another problem – change. Smaller bills were preferred to the large ones.  As we found out later from Mr. Tarkas’ for small purchases Indians pay with cash, however if the purchase is quite large, the cards are being used. Debit/credit cards are becoming more popular in India; however as of today only 3 % of the total population uses them.

As for the similarities, some were pointed out as well. For example the promotions were quite similar to the ones we have in the United States. However even here we noted some differences.  As we learnt from Mr. Tarkas most Indians shop in groups as opposed to Americans who prefer shopping alone. And therefore promotions like “Buy 3 get 2 free” are very popular in India.

Mr. Tarkas also talked a lot about India and Indian culture.  He emphasized the fact that India is a multicultural nation with different countries within one. It makes it challenging for companies to satisfy all of their customers’ needs. There is a special approach that is needed to make sure all the cultural aspects are taken into account when doing business in India. Big Bazaar was created to change the way Indians shop and make it affordable for the majority of the population to have access to a better shopping experience.

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Mumbai Educational Trust By Austen Dilberto & Aliya Zarate

The Cal Poly MBA team met its warmest welcome upon arrival at MET. Many of the students, leaders, and staff took time out of their days to display their smiling faces as we arrived. We were first brought to the top floor to visit the corporate level and board room. There we were greeted by the chairman, Mr. Bhujbal, and his wife and discussed some of the characteristics of the school. MET has some impressive stats and a wide variety of course offerings. Additionally, all of the students and staff were very professional and proud to belong to the MET community. We were all impressed by the number of institutions and offerings fit under one roof along with the school’s reputation. The school itself was unlike any we had seen because it broken up into nine floors of an urban building rather than being spread out across a campus like Cal Poly. Although we weren’t there long enough to get a true sense of the culture, the school seemed to be united. This probably comes naturally simply because everyone is learning and maturing in the same building together.

Later in the visit we gathered in a large room to listen to the BigBazaar presentation. After the presentation we filled up on a generous buffet provided by MET. During this time many of the Cal Poly students broke apart and connected with MET students. During my conversations I found that everyone was interested in the differences between cultures. We spoke about differences in courses, our hometowns, and future intentions. It was refreshing to hear about their big plans and hopes for the future. MET students and Indians in general are a driven group of people. They aren’t going to settle for less if they can get more. India is still very much a developing country, but it was interesting that all of the students I talked to weren’t interested in leaving. They want to travel and visit other countries, but they want to live and work in India. I think this is their way of giving back to build their home country and make it more competitive in the world market. Given the attitude and intelligence of this group of people, I would say that India has a bright future ahead of it.

The highlight of this visit was the cricket game we played on the back driveway. We all had the opportunity to connect with the Indian students and try out something that is important to their culture and patriotism. We all went in expecting to be terrible, but surprisingly we contributed some good hits, bowls, and outs. It was really fun to be a part of the game and the connection we formed with the Indian students felt genuine. Americans and Indians come from vastly different cultures, but it’s easy to instantly work as a team to reach a common goal. The common goal on my team was to win and in the end we prevailed. If there was more time available, I’m sure everyone would have been up for more games, but the sun was setting and it was time to go.

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