UNIVERSITY OF PETROLEUM AND ENERGY STUDIES

PROJECT REPORT

ON

Global business outreach-Strategic outlook for SC integration

Submitted to:

Prof. Siddhartha Mathur

LSCM

CMES

Submitted by:

Swapnil Singh (R600209117),

Priyanaka Kumar (R600209078),

Siddharth Somani (R600209112),

Vikas Mittal (R600209123),

Sandeep Kedarisetty (R600209096)

MBA - LSCM

Table of Contents
1. Paint Industry 1

1.1 Organization System 3

1.2 Business Process Re-Engineering 3

1.3 Asian Paints: Postponement for Managing Product Variety in the Chain 6
1.4 Eco Friendly Paint a Healthy Choice 7

1.5 Future of Paints Industry 8

2. Stone 8

2.1 Natural Stones in construction 8

2.2 Significance of Stone Sector 8

2.3 New Drilling Technology 8

2.4 Technology for fracture detection 9

2.5 Technology for repairing fractured blocks 9

3. Tiles
9

3.1 History 10

3.2 Different Types of Tiles 10

3.3 Key Players 18

4. Marble Industry 19

4.1Types of Marbles 20

4.2 Production areas 20

4.3 Production Technology 21

4.4 Factors affecting the demand and supply of marbles in India 21

4.5 Impact of Government Policies on the Industry 22

Introduction:

Collaboration as a method of solving problems has been practiced for many years across a whole
range of different disciplines. Real collaboration requires participants to truly engage and
believe that together more can be achieved than working as individuals.

In business, collaboration has not always been universally adopted. In the past organizational
units often existed as silos with little interaction between business functions.

Successful organizations achieved collaboration in two ways: first, by leveraging a partner’s

superior capabilities (i.e., know-how that the firm did not possess internally); and second, by
accessing a partner’s contextual knowledge (i.e., knowledge that the partner possessed by
virtue of its local position). In combination, these benefits comprise the “3C’s” of a global
collaboration strategy

3C’s of a Global Collaboration Strategy:

Source: Innovation through Global Collaboration: New Source of Competitive Advantage

Benefits of Collaboration:

Source: Innovation through Global Collaboration: New Source of Competitive Advantage

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1) Mergers and Acquisitions:

Biggest Mergers and Acquisitions deals in India

Year Acquired By Acquired Transactional Value ($) in bn

2007 Tata Steel Corus 12.2
2007 Vodafone Hutch-Essar 11.1
2007 Hindalco (Aluminum &copper) Novelis Inc 6
2008 Ranbaxy Daiichi Sankyo 4.5
2009 ONGC Imperial Energy Plc 2.8
2008 NTT DoCoMo Tata Teleservices 2.7
2008 HDFC Bank Centurion Bank 2.4
2008 Tata Motors Jaguar and Land Rover 2.3
2009 Sterlite Industries Ltd Asarco LLC 1.8
2007 Suzlon Energy Repower 1.7

Expected M&A in the next year in India

Acquired By Will Acquire

Fed Ex AFL
Mahindra & Mahindra Ssangyong Motor
Gail Advent Enegry
Venkateshwara Hatcheries P Blackburn Rovers
Ltd (Venky’s)

Ineffective management of cultural differences that may be the main reason for the high failure
rates of international acquisitions. MNCs consider the need to successfully combine different
cultures in order to improve the performance of these transactions. The framework depicted in
suggests that cultural due diligence, cross-cultural communication, connection, and controls are
the key determinants of successful cultural combination that, in turn, constitutes a key driver of
international acquisition performance. Cross-border acquisitions involved more obstacles,
problems, and risks than domestic acquisitions, and therefore were less likely to be successful
when compared to domestic acquisitions.

In the context of acquisitions, two dimensions of culture are particularly important: national
culture, relevant for international acquisitions, and organizational culture, relevant for both,
domestic and international acquisitions.

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 Source: Successfully Managing International Mergers and Acquisitions: A Descriptive Framework

2) Joint Ventures:

Reasons for forming a JV:

• Reducing 'entry' risks by using the local partner's assets

• Inadequate knowledge of local institutional or legal environment

• Access to local borrowing powers

• Perception that the goodwill of the local partner is carried forward

• In strategic sectors, the county's laws may not permit foreign nationals to operate alone

• Access to local resources through participation of national partner

• Influence of local partners on government officials or 'compulsory' requisite (see china

coverage below)

• Access by one partner to foreign technology or expertise, often a key consideration of

local parties (or through government incentives for the mechanism)

• Again, through government incentives, job and skill growth through foreign investment,
and

• Incoming foreign exchange and investment.

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Selecting the partner:

While the following offers some insight to the process of joining up with a committed partner to
form a JV, it is often difficult to determine whether the commitments come from a known and
distinguishable party or an intermediary. This is particularly so when the language barrier exists
and one is unfamiliar with local customs, especially in approaches to Government, often the
deciding body for the formation of a JV or dispute settlement.

The ideal process of selecting a JV partner emerges from:

• Screening of prospective partners

• Short listing a set of prospective partners and some sort of ranking

• ‘Due diligence’ - checking the credentials of the other party

• Availability of appreciated or depreciated property contributed to the joint venture

• The most appropriate structure and invitation/bid

• Foreign investor buying an interest in a local company

Dissolution:

The JV is not a permanent structure. It can be dissolved when:

• Aims of original venture met

• Aims of original venture not met

• Either or both parties develop new goals

• Either or both parties no longer agree with joint venture aims

• Time agreed for joint venture has expired

• Legal or financial issues

• Evolving market conditions mean that joint venture is no longer appropriate or relevant

6 important Aspects of Global Mergers & Acquisitions

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Global Thinking

The foremost requirement for a corporate looking to go global, to start with, is to change the old
technocrat mindset and think big and global. Companies working in overly competitive
environment have to change fast as per the evolving dynamics in their industry of operation.

Bharti Airtel’s take-over of Zain Telecom is a case in point. Even as Bharti holds a numero uno
position in the growing telecom markets of India, the company’s management whiffed saturation
of the urban markets in India along with regime of intensifying price wars.

Without being content with their current market share and stature, the company initiated a bold
step of acquiring African assets of Kuwait’s Zain Telecom in a whopping $10.7 billion deal,
inviting wrath of analyst’s community over valuations.

As per an estimate only one in two Africans hold mobile phone and with Zain having strong
presence in most of the countries in Africa, Bharti has taken a lead in diversifying its risks
involved in domestic markets.

Pricing and Valuations

Pricing and valuations at which the targeted firm is being taken over is the most crucial decision
to be taken while contemplating a global acquisition move. Preferably, both the CEO and the
CFO of the company needs to figure out the net cost-benefit analysis involved in acquiring an
overseas company.

At the same time, it must be kept in mind that merely pricing and valuation should not form a
base of final decision. Even long term impact of the deal should be taken into account. In most of
the mega-deals, the valuations are often touted as being overtly expensive in terms of pricing.

But, if the deal is likely to be earnings accretive over the longer duration it may be worth it to go
for a bold move. Similarly, if the move is likely to give the company a quick head-start within a
given market, it could be worth it rather than going for slow organic growth process unless the
valuations demanded are above realistic levels. The example of Bharti Airtel provided above fits
perfectly well under this heading too.

Abiding Local Laws

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An overseas company targeted to be acquired is governed by specific local laws and policies.
Different countries are governed by diverse set of jurisdiction processes. It could be in the form
of local land acquisition laws or even local labour laws with different set of trade union rules.

Take the case of Tata Steel’s acquisition of UK’s Corus, where the initial strains have begun to
show through labour issues and could likely result in labour strikes on account of Tata Steel’s
decision to mothball its Teesside unit in northeastern England.

The regulatory issues of overseas destination have to be tackled in conformation with local
jurisdiction laws and rules under the recommendations of local legal experts.

Flexible Decisions & Adaptability to Change

Companies have to ensure that their business decisions and mandates are flexible and adaptable
to change in the overseas markets. A product which is an instant hit domestically need not
necessarily be as much viable in a foreign market.

Take the case of same company Bharti Airtel. The telecom company played well its cards related
to low-cost, high-volume game in the growing markets of India. In fact, it got a firm foothold
through this strategy as India’s premier telecom operator.

And now the company is looking to replicate the same model in Africa’s too. It is not necessary
that the same model would work over there too. If the volume game does not work over there,
the company needs to be ready with a Plan B to quickly adapt to the diverse trend of local
consumers.

Diverse Tactics of Marketing

An acquisition abroad is like marrying with an entity with distinct features and characteristics
altogether, even though the new entity becomes a part of one’s own company post-takeover.

While on the marketing front, it could entail relating to diverse tastes of consumers situated in
the destination country. It could be more sensible to hire employees from local state who are
more acquainted of the local environment conditions and trend dynamics.

Availing services of the local employee expertise in production and marketing aspect could be
seen as a game clinching aspect for going along with overseas ambitions. Employing local
people would attract less stiffness from local people on issues related to employment concerns.

Higher levels top executives, preferably even on the board seats, would act as an added boost for
an able aid to top management in working our local business strategies for the company.

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Serving to Social Causes of Local Destination

A foremost most rule that drives any top class company is to serve the social causes of the
society. Whatever you give, comes back – goes the saying. A responsible and accountable
company would be better-off to part away some small portion of its earnings as a give-back to
the local country and its people.

Companies can initiate a number of societal objectives like adopting responsibility for improving
infrastructure of a specific area or a location. It could be donations to charity organization and
leprosy hit people.

It could as well be any other social cause which spreads awareness among the people. Taking
part in rehabilitation of areas hit with natural disasters. Most of all, the companies should also
take accountability about the environmental aspects and welfare of the local country.

Bibliography:

1. Dholakia, Viral. 6 important aspects of Global Mergers & Acquisitions. Retrieved

fromhttp://trak.in/tags/business/2010/04/22/6-important-aspects-mergers-acquisitions/

Loader, Jordan (2010, Sep 20) what’s driving the need for increased collaboration in business?
From http://www.avaya.com/blogs/archives/2010/09/whats-driving-the-need-for-increased-
collaboration-in-business.html
MacCormack, Alan. Innovation through Global Collaboration: New Source of Competitive
Advantage. Retrieved from www.hbs.edu/research/pdf/07-079.pdf
Rottig, Daniel. Successfully Managing International Mergers and Acquisitions: A Descriptive
framework. International Business: Research Teaching and Practice, 2007.

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