Professional Documents
Culture Documents
The Future of International Business Reduction of Protectionism European Union NAFTA Impact of Cultural Differences Global Dependency
1. 2. 3. 4. 5.
Economic experts agree that such practices will hurt the global economy as it is all interconnected. APEC is the fastest growing trading group and largest trading bloc in the world and engages in protectionism practices by imposing tariffs and other trade barriers on countries outside of APEC.
27 European countries represent a single market in Europe All but the UK and Denmark have adopted a the euro as the single currency to be used in member states It has its own elected government EU court rulings over rule individual country court rulings and/or laws. Citizens of member states may travel, move, and work freely in each others countries. other Population is currently about 370 milion.
Evolution of NAFTA
Will NAFTA emerge into a union similar to the EU where citizens of Canada, Mexico, and the US would be able to move freely into each others countries where one other currency would be used for all three countries?
Cultural Differences
In order to do business with differing cultures, much market research is needed to help companies understand various similarities and differences even when dealing with everyday cultural norms dealing with people such as: Punctuality Greetings Nonverbal communication signals Good Manners Decision making
1. 2. 3. 4. 5.
Punctuality
Punctuality Norms in North America? People are expected to be on time Rely on books, calendars and even pay a fee sometimes for missed appointments
Punctuality Norms in Other Countries Time is considered flowing, flexible, beyond beyonds people control
Greetings
Shaking hands differs from one country to the next Eye contact made in some countries, not in others Bowing before an elder acquaintance versus not bowing at all
Considered rude in Asian cultures to refuse someones someone request, so an Asian business person may not give a direct no answer to a sales request no A nod means yes to North Americans but no to a nod yes no Bulgarian. Shaking the head side to side means no to North side no Americans but yes to Bulgarians. yes The sign okay with ones hand is a symbol for money in Japan and is an offensive gesture in Brazil. Personal space interpretations also differs from place to place.
Good Manners
In North America, getting down to business is the norm when to business people meet. In other Asian and Latin American countries it would be considered rude not to discuss family, friends, and favours first to establish a personal relationship before business.
Decision Making
In some cultures, decisions are made from the top down approach, in others, from the bottom up approach. approach.
Henry Kissinger
Frank Wisner
Macroeconomics at a Glance
Price Rise is
Unlegislated Tax,
says BJP
Others
With May 2009 National Elections in the Offing Political parties are scrambling to forge alliances
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250,000
Hard Disk Capacity (MB) 0.001 Cost per MB '56 '80 '81 '87 '88 '95($) '98 '99 '00 '02 '03 '04 '96'97
Source: Historical Notes about the Cost of Hard Drive Storage Space; www.littletechshoppe.com
14
'98
3
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2
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'89
'92
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Source: Growth in the New Economy: U.S. Bandwidth Use and Pricing Across the 1990s, Douglas A. Galbi
Moores Law
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1.79
'28 '31 '34 '37 '40 '43 '46 '49 '52 '55 '58 '61 '64 '67 '70 '73 '76 '79 '82 '85 '88 '91 '94
Source: The New Economics of Distance: Long Term Trends in Indexes of Spatial Friction; William A. Ward, Madhusudan Bhattarai, & Pei Huang
0
U.K. -17 U.S. -3 France -2 Italy -2
Russia -1 Republic
Czech
-6 China
Pakistan
2
Turkey
-10
-9
Japan
19
5
Mexico
4
Egypt
47
Bangladesh Vietnam
5
Philippines Malaysia
India
Brazil
4 5
Indonesia
Note: Potential surplus is calculated keeping the ratio of working population (age group 15 59) to total population constant Source: U.S. Bureau of the Census International Data Base; BCG Analysis
Has huge implications on labor cost Surplus Demographic Dividend or Social Tensions ?
2002
US
2050
US
China
Japan
India
China India
Brazil Russia Italy
As per GOI statistics Indian GDP growth is 7.5% in FY 2005 8.4% in FY 2006 8.6% in FY 2007
0 India China Hong Kong Korea Thailand Malaysia Indonesia Philippines Singapore Taiwan
Source: CLSA - an investment banking and private equity group headquartered in Hong Kong
SCORECARD ON REFORMS
Progress
250
Insurance FDI up to 26% Telecom up to 74% Oil/Gas, Roads, Ports up to 100% Real estate opened to 100% Open Skies: Boeing Sales
GDP Growth Rate > 8% Patents Act -IPR Protection: Re-entry of Merck Re Retail (Single Product): Wal-Mart Entry Wal Civilian Nuclear Cooperation 123 Agreement ?
73,000 Software Solutions 65,000 Start to finish Software 27,000 More Workers in India than U.S 22,000 India-based Credit/Stock Analysts India20,000 R&D, Software Design 18,000 Engineering/Design 7,000 Engineering/Manufacturing
Wipro Technologies
One of the world s leading information technology companies. companies. HQ in CA and local experts in 14 offices across the United States. States. Will open software development center in Atlanta in 2008, 2008, creating 500 new jobs. jobs. Wipro helped a major American railroad operator track its cargo delivery across the country more efficiently. efficiently.
MANUFACTURING
Automobile Components - Worth $15 bn 20 % Annual Growth in Exports
Ford ramping-up to 60,000 units General Motors ramping-up to 60,000 units Boeing - $12.1 bn sale of civilian aircraft to Air India
Mahindra USA
Arrived 1995. Manufacturing plants in TX, GA, CA Sells 10,000 tractors a year via 300 dealers in 40 states. 100 direct employees; 2,000 jobs at dealerships; 500 indirect jobs; $5.1 million in salaries. More US Jobs: Loaders made in KS; Backhoes in IA; Wheels and Tires in IA and SC; Seats in MI; Roll-bars in KS; RollBatteries made in GA; Implements TN
Essar Group
Company runs steel, power, shipping, oil and gas, telecom, Business Process Outsourcing (BPO) and industrial construction and engineering businesses. $110 million in sales. 8,500 employees by 2009. Presence in TX, CO, AZ, MO, WV, FL, NY, NJ, MN. Essar Group bought Minnesota Steel Industries, in Hibbing, Minnesota and is pumping $1.6 billion into plant upgrades.
World Worlds largest fullfullservice steel forging company. In 2005 acquired bankrupt Federal Forge, Inc. in Lansing, Michigan. Protected the jobs of 150 skilled American auto workers.
AEROSPACE PARTNERSHIP
Indian Space Program 5th largest after U.S., Russia, Europe, China
Jet Airways
Arrived 2007 Flights from NJ, NY and CA. 120 direct employees at offices in NJ, NJ, CA, IL, TX. Hundreds of indirect jobs: caterers, ground handlers, travel agents. Custom furniture for firstfirst-class cabin made in Phoenix by BAE Aerospace. Jet Airways helping keep the US planeplanebuilding industry aloft: 70 Boeing planes purchased to date.
HCL America
Arrived 1989. $550 million in US Sales Operations in 21 US locations. 3,000 US employees. Boeing hires HCL to design software for its new 787 Dreamliner Dreamliner aircraft. HCL nose-to-tail HCLs nose-to-tail impact:
State-of-the-art landing State-of-thenavigation Mid-air collision Midprevention software In-flight entertainment Intechnology
Ranbaxy USA
Arrived 1994. Generics help contain $2 trillion in healthcare expenditures. 600 jobs and $35 million in salaries. 600,000 square feet of manufacturing and distribution space in NY, NJ, FL. 142 FDA-approved FDAproducts. Works with CDC to keep meds at the ready in case of national emergency.
Arrived 2003. $5 million sales, up 80% annually. Presence in 29 states at 4,000 outletsincluding outlets Giant, Safeway, Albertsons, Kroger, Harris Teeter, and Whole Foods. Company employs 12 direct salespeople, 20 food brokers and 50 local distributors. More than $2 million in payroll.
Arrived 1939. 1939. Operates 16 companies in nearly 100 locations around US: US: luxury hotels, beverages, manufacturing, telecom and IT consulting. consulting. Nearly 19,000 19, employees in USA. USA. Acquired NJ-based Eight NJO Clock Coffee for $220 million dollars in 2006: 2006: 105 union jobs and nearly 60 managers jobs protected. protected. More than $2 billion invested in US economy. economy. TwoTwo-thirds of profits to charity. charity.
WHY INDIA ?
Coherent democracy; Pluralist/Secular 1/5th Worlds Population; 2nd largest military in the world Common Law Judicial System 1.8 mil Americans of Indian Origin 2nd largest number of Doctors, Engineers, PhDs in the world 100,000 Students to U.S. Each Year Politically significant; Politically integrated 54% of Indian Population is under the Age of 25