Going Glocal!
Multinationals
have realised the power of global vision and local action
Does
the future of organisations depend on global organisations becoming more local
or local organisations becoming more global? Where do MNCs draw the line
between global standardisation and local customisation? How do MNCs devise a
strategy on Inputs, Products, Technology, Manufacturing, Brands, Marketing and
Distribution for local markets?Are local units free to experiment fearlessly?
What is the price of failure?
The answer to these and many such questions lies in ‘Global Local’ or ‘Glocal’. Even as multinationals play an increasingly dominant role in several sectors in India, they have realised the power of global vision and local action. MNCs today account for nearly all of India’s carbonated beverages market, over 80 per cent of the passenger car market, more than three-fourths of the consumer durables industry and about a third of the pharmaceuticals market, to name a few.
Pepsi India chairman and CEO D. Shivakumar believes “overall, MNCs are held to a significantly higher standard of integrity than anybody else. But an MNC is willing to stand up to scrutiny and win. The same rules do not apply to many people who work with local brands and local markets. We are seeing a two-rule world. The rules for a big global corporation are very different from those for local players, whether in South-east Asia or Africa”.
But whether it is companies such as Abbott, which has been in India for 104 years, or Vodafone, which came just six years back, each global firm has had to devise ingenious ways of winning the local Indian market. If the largest foreign telco Vodafone innovated the Rs 10 credit and the sachet-type Chhota Recharge, Abbott’s Truecare is one of the most unique offerings from a multinational. Truecare (which came with the acquisition of the Piramal pharma business) is an exclusive portfolio for extra-urban India using low-cost distribution and marketing infrastructure.
Glocal is most potent when the local positioning of a brand or a product is vastly different from its global positioning. Not for nothing does a mass-market car in the US such as a Toyota Corolla become a premium vehicle in India. You would say, it is the pricing, stupid (thanks to the high import duty)! Right? Well, what about McDonald’s or Domino’s? How does one explain the mass-market burger and pizza chain sitting on the ‘aspiration’ pedestal in India? Or, take the case of Mexico’s working class beer Corona — it has a premium positioning in every market, including India.
Pepsi believes tapping into the courageous side of the youth is what makes Mountain Dew the fastest-growing Pepsi brand in India. The product is as global as it gets but Pepsi delivers the brand’s global message “Darr ke aagey jeet hai” (there is triumph beyond fear) to its primary target — the youth — with as much local flavour as possible.
But the biggest compliment for Glocal comes when local products, strategies, even advertising get exported to the parent or its international subsidiaries. Corporations that have developed ingenious ways in the Indian market are beginning to reap the benefits globally. Honeywell calls it “becoming the Chinese competitor”. “Take learnings from China and India, translate them to acquire the most competitive edge that you can get in other parts of the world, including developed markets,” says Anant Maheshwari, president, Honeywell India. Even Siemens India revisited its strategy to counter the local players. “These local players have international aspirations and unless we are competitive against them, local for local, we will not be competitive against them internationally,” says Sunil Mathur, CEO, Siemens India.
Says Vanitha Narayanan, managing director, IBM India, “India gives us some of the most challenging problems to solve. We not only have to solve them but also at price points that are locally relevant. When you solve these problems in India, it becomes immediately exportable.”
Honeywell India is replicating, on a small scale, its refinery automation model developed here in industries such as sugar, chemicals and smaller power plants in Brazil, Russia, Mexico and Africa. While that may be so, the biggest export continues to be technology. “The intellectual power of customising and serving other countries around the world is out of India,” says Maheshwari. Vodafone India has not only transposed its Big Data capabilities to its parent, it has even exported the language-neutral zoozoo ads to several markets.
Meanwhile, Standard Chartered Bank is readying a low-cost branch module in India, hoping to slash branch costs by up to 70 per cent. If it does, StanChart India CEO Sunil Kaushal believes the model can be replicated across several markets around the world.
Leaders exhort employees to experiment locally. Google’s Anandan says the company has a philosophy: “fail fast”; IBM’s Narayanan asks for sachet-style innovations; Bosch experiments in-house, rather than acquire companies; while Abbott possesses a voracious appetite for acquisitions.
Last, but not the least, MNCs use the power of technology to spread the message to as local a level as possible — in as short a time as possible. IBM, for instance, uses its MOOC (massive open online courses) platform to make available to every IBMer the ‘Think Friday’ dialogue that its chairman and CEO Ginny Rometty holds with the world’s leading experts on a given topic at the IBM headquarters in Armonk, US. “The chairman, the senior-most leadership and the junior-most person that we might have hired last week access learning at the same time,” says Narayanan.
And, Google India’s tie-up with HRD ministry’s NPTEL (National Programme on Technology Enhanced Learning), which puts all classes taught at the IITs on its MOOC platform, has notched up a hundred million views in a week, overtaking most Bollywood channels on YouTube. How’s that for instant Glocalisation?
Rajeev Dubey BW 140407
The answer to these and many such questions lies in ‘Global Local’ or ‘Glocal’. Even as multinationals play an increasingly dominant role in several sectors in India, they have realised the power of global vision and local action. MNCs today account for nearly all of India’s carbonated beverages market, over 80 per cent of the passenger car market, more than three-fourths of the consumer durables industry and about a third of the pharmaceuticals market, to name a few.
Pepsi India chairman and CEO D. Shivakumar believes “overall, MNCs are held to a significantly higher standard of integrity than anybody else. But an MNC is willing to stand up to scrutiny and win. The same rules do not apply to many people who work with local brands and local markets. We are seeing a two-rule world. The rules for a big global corporation are very different from those for local players, whether in South-east Asia or Africa”.
But whether it is companies such as Abbott, which has been in India for 104 years, or Vodafone, which came just six years back, each global firm has had to devise ingenious ways of winning the local Indian market. If the largest foreign telco Vodafone innovated the Rs 10 credit and the sachet-type Chhota Recharge, Abbott’s Truecare is one of the most unique offerings from a multinational. Truecare (which came with the acquisition of the Piramal pharma business) is an exclusive portfolio for extra-urban India using low-cost distribution and marketing infrastructure.
Glocal is most potent when the local positioning of a brand or a product is vastly different from its global positioning. Not for nothing does a mass-market car in the US such as a Toyota Corolla become a premium vehicle in India. You would say, it is the pricing, stupid (thanks to the high import duty)! Right? Well, what about McDonald’s or Domino’s? How does one explain the mass-market burger and pizza chain sitting on the ‘aspiration’ pedestal in India? Or, take the case of Mexico’s working class beer Corona — it has a premium positioning in every market, including India.
Pepsi believes tapping into the courageous side of the youth is what makes Mountain Dew the fastest-growing Pepsi brand in India. The product is as global as it gets but Pepsi delivers the brand’s global message “Darr ke aagey jeet hai” (there is triumph beyond fear) to its primary target — the youth — with as much local flavour as possible.
But the biggest compliment for Glocal comes when local products, strategies, even advertising get exported to the parent or its international subsidiaries. Corporations that have developed ingenious ways in the Indian market are beginning to reap the benefits globally. Honeywell calls it “becoming the Chinese competitor”. “Take learnings from China and India, translate them to acquire the most competitive edge that you can get in other parts of the world, including developed markets,” says Anant Maheshwari, president, Honeywell India. Even Siemens India revisited its strategy to counter the local players. “These local players have international aspirations and unless we are competitive against them, local for local, we will not be competitive against them internationally,” says Sunil Mathur, CEO, Siemens India.
Says Vanitha Narayanan, managing director, IBM India, “India gives us some of the most challenging problems to solve. We not only have to solve them but also at price points that are locally relevant. When you solve these problems in India, it becomes immediately exportable.”
Honeywell India is replicating, on a small scale, its refinery automation model developed here in industries such as sugar, chemicals and smaller power plants in Brazil, Russia, Mexico and Africa. While that may be so, the biggest export continues to be technology. “The intellectual power of customising and serving other countries around the world is out of India,” says Maheshwari. Vodafone India has not only transposed its Big Data capabilities to its parent, it has even exported the language-neutral zoozoo ads to several markets.
Meanwhile, Standard Chartered Bank is readying a low-cost branch module in India, hoping to slash branch costs by up to 70 per cent. If it does, StanChart India CEO Sunil Kaushal believes the model can be replicated across several markets around the world.
Leaders exhort employees to experiment locally. Google’s Anandan says the company has a philosophy: “fail fast”; IBM’s Narayanan asks for sachet-style innovations; Bosch experiments in-house, rather than acquire companies; while Abbott possesses a voracious appetite for acquisitions.
Last, but not the least, MNCs use the power of technology to spread the message to as local a level as possible — in as short a time as possible. IBM, for instance, uses its MOOC (massive open online courses) platform to make available to every IBMer the ‘Think Friday’ dialogue that its chairman and CEO Ginny Rometty holds with the world’s leading experts on a given topic at the IBM headquarters in Armonk, US. “The chairman, the senior-most leadership and the junior-most person that we might have hired last week access learning at the same time,” says Narayanan.
And, Google India’s tie-up with HRD ministry’s NPTEL (National Programme on Technology Enhanced Learning), which puts all classes taught at the IITs on its MOOC platform, has notched up a hundred million views in a week, overtaking most Bollywood channels on YouTube. How’s that for instant Glocalisation?
Rajeev Dubey BW 140407
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