Globalisation’s offspring

‘The Economist’, April 7, 2007 has these insertions in an article captioned as above.

A pack of fast-moving, sharp-toothed new multinationals is emerging from the poor world.

So far this year, Indian firms, led by Hindalco and Tata Steel, have bought some 34 foreign companies for a combined $10.7 billion. Indian IT-services companies such as Infosys, Tata Consultancy Services and Wipro are putting the fear of God into the old guard, including Accenture and even mighty IBM.

These are very early days, of course. India’s Ranbaxy is still minute compared with a branded-drugs maker like Pfizer

Infosys rightly sees itself as more agile than IBM, because when it makes a decision it does not have to weigh the opinions of thousands of highly paid careerists in Armonk, New York. That, in turn, can make a difference in the scramble for talent. Western multinationals often find that the best local people leave for a local rival as soon as they have been trained, because the prospects of rising to the top can seem better at the local firm.

A firm like Tata Steel, from low-cost India, would never have bought expensive, Anglo-Dutch Corus were it not for its expertise in making fancy steel.

IBM now has over 50,000 employees in India and ambitious plans for further expansion there. Even as India has become the company’s second-biggest operation outside America, it has moved the head of procurement from New York to Shenzen in China.

It has a special report too ‘Hungry tiger, dancing elephant’.

The annual investors’ day (of IBM) is usually held in New York, though it once took place in faraway Boston. By going to Bangalore, the technology giant was sending a strong message. With 53,000 employees, India is now at the core of IBM’s strategy. With other big developing countries, including China, Brazil and Russia, it is fast becoming the firm’s centre of gravity.

Mr Palmisano announced that IBM would invest a further $6 billion in India over the coming three years, up from $2 billion in the previous three. That sum does not include any acquisitions of Indian companies. (It has already struck some big deals, notably buying Daksh, an Indian outsourcing company, in 2004.) Some locals wondered how IBM would manage to spend all that money. But booming demand is pulling wages higher in India and costly training is now needed to lure workers being courted by other companies.

IBM’s Indian adventure highlights three overlapping themes. Emerging economies increasingly count as a threat to established global firms, as well as an opportunity. Indian services firms such as Infosys and Wipro are starting to give IBM-and its old rivals, Accenture, EDS and Hewlett-Packard-a run for their money. As globalisation accelerates, this is forging a new vision of what it is to be a successful multinational company.

And the issue also have an article on the Chinese exertise on piracy: The sincerest form of flattery

COPYING in China goes far beyond fake DVDs, watches and handbags. “We can copy everything except your mother,” goes a saying in Shanghai. Soy sauce with fizzy water passed off as Pepsi, fake Cisco network routers (known as “Chisco’s”) and mobile phones that look like the latest offerings from Nokia can all be easily found. So, too, can fake blood plasma.

And now comes cars of all brands..

What was once a trickle has since become a stream. Toyota’s badge, Honda’s name (which became “Hongda” for motorcycles) and Nissan’s bumpers have all been the subject of legal wrangles. Shuanghuan Automobile got into trouble for copying Audi’s famous four-ring logo a few years ago. It then copied the design of Honda’s CR-V, called it the SR-V and appears to have won the subsequent legal tussle. Last month the firm won an export licence, and it plans to start shipping another model, the CEO (pictured)-a sport-utility vehicle with a striking resemblance to the BMW X5-to Romania and Italy.

Perhaps this is the strength of China.
The story of India Inc’s deal mania

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