Topic1-AmartyaGhosh

Topic1-AmartyaGhosh

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Unformatted text preview: these regions have the advantage of either being close to Western nation who do major business with us or similar strengths like low cost innovation, low cost human resources, etc. However, Indian companies have realized this threat and are expanding operations to these regions as well. • Weak government policies – Although Indian government has made decisions which have helped the Indian companies, there are still some concerns. One of this is the coalition politics. Similarly, corrupt practices in policy making like 2G spectrum distribution has been one of the bane points. • Tarnishing of India and Indian’s image – There have been recent events which have been tarnishing the image of the country and its people. o Unethical Business Practices – Ramalinga Raju and Satyam scandal o Attacks on foreigners – In recent times, attacks on foreigners have been increasing which would lead to racial backlash in the West, lack of quality exchanges and in flow of labour and capital o Weak Project Management – The recently concluded CWG at Delhi gave an impression of poor execution skills, poor budgeting and corrupt practices We can see that Indian companies have lots of factors which would help them dominate the world and at the same time they can be brought down. These factors add the qualitative dimension of the analysis. For quantitative analysis, a new model – The “Me Today You Tomorrow” Model has been proposed to understand how exactly few companies which have recently entered the market can go on for global domination. The model has been explained through a case study on Bharti AirTel’s M&A activity. Page 6 of 18 Me Today You Tomorrow Model The “Me Today You Tomorrow” Model (MTYT) has been proposed by seeing the example of AirTel. This is a model where an Indian company sells its stake or continuously sells its stake to global player(s) and after establishing in the domestic market, the Indian company goes after companies from other markets. The functionality of the model is shown below: A domestic company sells stakes to global , players Domestic company establishes itself in the domestic market Plans to expand and goes for other global players AirTel becomes the market leader in GSM segment with over 20% market share AirTel decides to add 100 million subscribers and targets emerging markets. Already acquired Zain, Warid Telecom. AirTel sold its stakes to companies like Vodafone and SingTel Figure 1: The MTYT Model Description and Example This model is based on double acquisition strategy. First is to raise capital to ensure domestic success which results in enough cash reserves, confidence among investors, global players and financial institutions. This confidence raised would help in global acquisitions and enter the emerging markets. The reason this strategy could be the game changer as rather than an established player selling its stake, a new player sells its stake to raise money. Thus nobody expects that a long term plan...
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This document was uploaded on 01/14/2014.

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