General Motors (GM) and Ford, both American automobile giants have never occupied a double digit market share in India. GM has recently even announced an exit plan by the end of the year from the country. This and the exits of other American multinationals such as Mary Kay raises several questions about why certain American companies are failing in this market which now attracts greater FDI than China even. Generally speaking, European and East Asian brands seem to have greater presence in India. Yet, several American companies have been successful such as PepsiCo, Coca-Cola, Cisco, Boeing, GE, Cummins, HP, Google, Dell and McDonald’s. Certain key reasons exist for this lopsided success ratio. First of all, a consistent leadership over time is crucial in this market as India is a complex one consisting of a mix of Western and Asiatic values. GE for example has had a single leader over the last fourteen years as opposed to the constantly shifting leadership at GM. Local leaders need autonomy to even tweak products or servicing suited to the market as done by PepsiCo in launching Kurkure snacks, Whirlpool during their campaign to attract hand washers to washing machine and by Western Union for partnering with the national postal services. Since GM’s competition is expected to be India-centric, the corporate strategy too needs to be centred around such a philosophy as done by Japan’s Suzuki and Korea’s Hyundai. GM is a mass player, and thus their focus should not be limited to the top of the pyramid but also reflect towards the middle of it to truly take advantage of the market. Finally, every entrant into India must recognize that there will be no instant gains, but only long-term thinking ought to succeed. PepsiCo and Boeing both followed this approach.


Uploaded Date:29/06/2017

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