Till not very long ago, multinationals were considered the elite among companies in India: They paid the best salaries, posted the biggest profits and their scrips were the darlings of the stock markets. But with the unfurling of the India growth story over the past decade or so, most of them have been overtaken by their home-grown counterparts that have wowed the world by their scorching growth and expansion and creation of phenomenal wealth for their promoters and shareholders in just a few years.
How have these MNCs managed to do that and what would be their strategy going forward as India targets a growth rate of 9 per cent over the next five years and will need to furiously build its infrastructure like rail, roadways, power and communications to sustain that kind of growth? Let’s find out:
Until recently, peter loscher had heard aplenty about India but never got the chance to see it. But when work presented him with the opportunity—he was recently elevated to the position of president and CEO of German engineering giant Siemens AG—he came calling with a definite purpose and mission: to set new goal posts for his company’s India operations.
He not only unveiled plans to double Siemens India sales but also let everybody who needed to know how important India was in the company’s global growth strategy: On par with China.
Siemens has a sizeable presence in the country. With 18 manufacturing plants and three under construction and 18 subsidiary companies, Siemens India is a leading infrastructure and industry solutions provider with total sales of Rs 9,000 crore. It is pretty confident about growing two-fold in the next three years and believes this will come from the 9 per cent growth India is aiming for in the next five years and the concomitant activities in the public transport, power, infrastructure and healthcare sectors.In fact, Siemens India will soon finalise a ‘triple strategy’ for growth. As per this strategy, the company will first tap the domestic market by penetrating into newer sectors and geographies. Secondly, it will explore additional avenues of growth in the export market and further leverage on India’s competitive advantages by sourcing products and services for the global markets.
Endorsing the global CEO’s vision for Siemens India, J. Schubert, Managing Director of Siemens India, explains: “In the last few years, the company has deployed local strategy to move ahead of our competitors. Our strategy has largely been local R&D, local products and local manufacturing.” The Indian market is different from the European market, he points out, explaining: “The Indian market demands price sensitive, quality and robust products with basic features. Thus, having the right product for the right market has led to the development of local products for local markets.”