Ten invaluable lessons that can help any company, irrespective of the size and industry which is keen to enter or expand in India.

Many of these lessons are unique to India, while a few may apply to other emerging economies. So let’s get started.

Lesson #1 – Assume You Know Very Little

When crafting or re-crafting a market entry strategy, wrong assumptions are a hundred times worse than plain ignorance. This especially rings true for a country with a size diversity like India, where stereotyping or generalization can lead to major miscalculations. Different regions within India vary not just in terrains, temperatures, languages, food and cultures but also in taxation, the spread of industries, infrastructure, logistical strengths, and business cultures. So doing a thorough assessment and testing hypotheses can save a great deal!

Lesson #2 – Set Up on Your Own

As much as possible, going on your own is undeniably the best way, opposed to tying up with an importer-distributor. A company-owned structure out-performs a third party distribution set-up by a fraction of anywhere between 4 to 7. This is due to the low trust put in by a customer in the distributor’s technical proficiency and ability to provide the after-sales services. Companies, on the other hand, not only lose money but also suffer a dent in reputation by tying up with distributors who don’t do justice to their products. Many of these distributors lack a robust business plan or access to large key customers limiting them from winning turn-key assignments. Not surprisingly, it is challenging for a foreign player to conduct thorough due diligence initially and then to control business model and distributor’s operations at a later stage.

Lesson #3 – Forget About a Joint Venture

Traditionally Joint Ventures have a failure rate of 90% over 3-5 years run. A 100% subsidiary will out-perform any joint venture over that duration. Having said

Lesson #4 – Be Prepared to Walk Away From an Acquisition if in Doubt

An acquisition strategy is only as good as the targets available. Most acquisitions are over-priced and often end up as a can of worms. So make sure you do thorough due diligence – a 360-degree round-up preferably! In India, family-owned businesses (usually attractive acquisition targets in various industries) prove extra tricky to crack a deal with. Also, don’t set your eyes on deal closure as the final destination. More than half of all acquisitions face post-deal challenges and need additional and expert measures to ensure 100% integration.

Lesson #5 – Plan for It

Establishing your business in India needs a solid plan – that can help you counter the initial losses and to leverage early profits. A medium to long term strategy based on realistic numbers and forecasts is a must to ensure you reap the fruits of the attempts – instead of diving into the water to find you hit the shallow end! To be concluded in the next part. We hope that these lessons prove useful to you.

Lesson #6 – Hire Hands-on Competent Leaders

In choosing a CEO or Country Manager, find someone who has the execution and operations experience and not someone who is an expert in strategy. The most effective lot includes the talent at the 2nd or 3rd rung in your competitors, who apart from the experience and network possess the much-needed fire in the belly to establish a new brand and the hunger to be in the driver’s seat.

Lesson #7 – Innovate, innovate, innovate!

Be its localization of the product or a unique route-to-market or an out of the box marketing plan – be ready to be innovative. The challenges posed by India are unique, but the opportunities are manifold too – egging you to devise equally unique and new solutions and approaches.

Lesson #8 – Leverage the India Advantage

Focusing on India only as a Consumer market can blind-side one to miss out on the huge potential that lies in linking it to your global operations. Availability of raw materials and skilled English speaking workforce makes India a Hub for global R&D, a center for a.) sourcing components and materials, b.) IT development and support and c.) HR and finance services. Additionally, India is a hub for entry into the Asia Pacific as well as the growing Middle East.

Lesson #9 – Push above the Line Marketing

Corporate and product branding is often the most effective source of competitive advantage in the Indian marketplace. Strong brand image backed by credentials and performance works like magic – across consumers, potential vendors and partners.

Lesson #10 – Create a Market if it doesn’t Exist

As the momentum for manufacturing picking up and the purchasing power of the middle class growing, the consumer take on new technologies and products is also on the rise. Whether your customers are in the B2B or B2C segments – the potential for introducing performance-backed and superior products is immense. So don’t be afraid to drive and create your own market and buyers. Grab the opportunity like never before. We hope that these lessons prove useful to you. If you have questions or would like to reach us – write to insights@tecnovaglobal.com