Deciphering the Indian Business Space

Managing a Business activity in India is not the easiestdefinitely undergoing a transformation, with a
of tasks. In fact it is one endeavor where evensignificant quantum of earnings being spent on
some of the world's biggest organizations have failed.'discretionary' items such as entertainment, consumer
The single reason for this is the flawed perceptionsdurables, books and so on. Yet this class is not
most business concerns have about the Indiannecessarily 'brand' driven and therefore evaluates
Business space. The media in a certain way hasevery product and service purchased, in terms of
contributed to these perceptions. There are certain'value for money'. It does not have any qualms in
cities in India that seem to have hogged the limelightshifting to a non branded offering if the offer were
with the Western press and they include Bangaloreperceived as better value. The 'value' perception in
and Hyderabad. But remember the realities are notmany cases is 'price' sensitive. India's individual
necessarily what you read about, in these mediapurchasing power may climb from $2149 in 1999 to
stories.Some of the 'must know' realities about India,$16500 in 2040. The brand driven culture in India can
which can help any Business concern wanting tobe limited to a few metropolitan cities, such as New
make an entry, are -Land of DiversityDo not everDelhi, Mumbai, Bangalore, Chennai and a few other
assume India to be one big homogenous mass. Thatsmaller cities that have attracted a migrant crowd
is, the consumers cannot be slotted as one singlebecause of the growth in services sector in them.
huge entity. Unlike most western countries whereThey include Pune, Hyderabad and Gurgaon.The
elements such as language and religion couldstates that promise a burgeoning middle lie to the
contribute to a certain homogeneity that could existsouth and west of the country. These states show a
in society, in India there are myriad factors thatpromise of a huge middle class community with the
contribute to unbelievable diversity. Take languagenecessary purchasing power at least by the year
for example, the constitution of India has stipulated2020. Contrasted against these states would be the
the language for official communication as English andstates to the east of the country that include Bihar,
Hindi. In addition, it classifies a set of 22 scheduledUttar Pradesh and Orissa which will take even more
languages which are languages that can be officiallytime to develop this 'middle class'. Add to this the
adopted by different states ( there are 22 StatesNorth eastern states,and the picture is not too
and 7 Union territories ) for administrative purposes,rosy.BureaucracyThe bureaucratic system that is
and also as a medium of communication between thefound in India is stifling slow, problematic and corrupt.
national and the state governments. Though HindusimIn the words of Mr. T N Seshan, former election
is the religion that is practiced by majority ( 81% ),commissioner and Cabinet Secretary, ( quote ), "We
Islam, Christianity, Sikhism, Jainism, Buddhism andhave the largest number of laws covering and
Zoroastrianism, are practiced too. Food Habits toouncovering almost every aspect of human life. But
change from region to region. Religion, Castethe inside out of Indian democracy today is that law
restrictions, geography, weather, and influences fromis obeyed more in circumvention and defiance than in
other countries ( invasions and occupations ) have alleffect...All that we built to enshrine freedom has been
contributed to the diversity in Food Habits.All of thiseroded by a plethora of decrees, laws, rules,
points to a diverse population that cannot be paintedordinances which serve a few; it serves the State,
with the same brush in terms of characterisations.but not the citizens. Today it has become
Doing business in India almost stipulates andesperately difficult for the citizens to defend
understanding of this diversity. Some Businessthemselves against the onslaught of laws, rules and
Concerns have understood this very well and haveordinances, and against the overpowering destruction
therefore ended up being successful in their venturesof individual freedom and dignity...there is palsy at the
in India.The best example of this is McDonalds. Thecentre and paralysis at the periphery...We have
primary reason for their success apart from theirpracticed socialistic principles for 46 years or more. At
'competitive' pricing which made the burger extremelythe end of it, today, 20% of India's population takes
affordable, is their menu. The menu at McDonalds25% of its gross national income and 40% of the
hase been customised for the Indian palate. 'Beef'population takes 2% of the national income."Just
does not feature on the Menu, due to religiousrecently, the visiting Singapore Prime Minister, Lee
considerations. The customised Menu, features itemsHsien Loong commented on the Indian Bureaucracy
such as 'McAloo Tikki Burger, Maharaja Mac andand called it a stumbling block to investment by
McCurry among other Indianised dishes. ContrastSingapore companies in India. He remarked that
McDonalds with Kelloggs which failed to understandSingapore companies wanted to invest in hotels in
the Indian palate and so found the going tough inIndia but the Indian bureaucracy was "too
India with its offerings.What also needs to be bornecomplicated" and outsiders took a long time to
in mind is that at times, customisations should notunderstand it.An example of the difficulties posed by
just be restricted to the country, but must also bethe Indian Bureaucracy is the case of American Agro
extended to specific regions. In the business of FoodBusiness Company, Cargill Corporation. In spite of a
and Beverage the Menu items must differ fromgo-ahead from the central government for a $15
region to region. For example, to the south of India,million Salt processing Venture, problems from the
where vegetarianism prevails, this aspect must beState of Gujarat, where the plant was to be located,
reflected in the Menu Items. Similarly Coffee as aforced Cargill to shelve the project.Prof. Ray Titus is
beverage finds greater favour in the south of thea faculty Member at the Alliance Business Academy,
country.The Great Indian Middle ClassThe IndianBangalore, India. He specialises in the area of
'Middle class' seems to be the favorite target forStrategic Management. He also actively trains and
almost all Multinational businesses and their offerings.consults for the Industry.
The consuming patterns of this class of people is