March 21, 2006

Globalizing and Innovating versus expanding in India

A few weeks back I wrote about a meeting I had with someone from Tata while touring the facility over in Mumbai India. My host elaborated a theory that there was no way that IBM/Accenture etc could not ever compete with their Indian competitors like TCS. Listening to him I totally bought it, IBM and large comanies in North America were in fact in big troubles. The whole argument is that the cost structure of American co several managemement layers and head office costs, can't be offset by expanding in India even if done in bulk.

Well yesterday I read something else in eweek India 2.0 from Stan Gibson he argues that their might be more competition than we think to the whole story. His point is simple how difficult is it for a global company like IBM to expand in India, ie one country, when they have been expanding in other countries for the last 60years. Expansion, multi-cultural, global workforce is part of IBM's DNA. Another thing really strong within companies like IBM is their innovation cababilities. Compare this with India's companies challenge, expand in every industrial country in the world at the same time, and learn to innovate.

I hate not to have an answer, it's one of those where I think we'll have to play it by ear.

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