Case study : Accenture William D.

Green, chairman and CEO of Accenture, recently made what for an American IT CEO is an extremely bold statement: India will pass the US as Accentures largest geography in terms of headcount in August. What it means is this: in four months, when the New York-headquartered IT consulting-outsourcing services giant closes accounts, it will have 35,000 people on its India rolls 5,000 more than what it will have in the US. Green, who was in Bangalore this January on his first India visit, also indicated that the gap would widen over the next six years. During this period, he expects the India workforce to grow at 30-40 per cent year-on-year. By 2012, when Accentures global headcount hits an estimated 230,000, India will constitute about 40 per cent. Growth in the US, on the other hand, will be incremental. The headcount flip is critical for achieving Accentures big target $30 billion (Rs 1,32,000 crore) revenues by 2012. So, when the 53-year-old Green took charge as chairman last September, in addition to his CEO role, the first thing on his list was a visit to Bangalore, the firms India headquarters. India will be a big driver of the 2012 road map and getting acquainted with the workforce here is an imperative, he told BW when we caught up with him. The message is clear: to remain relevant in the global IT services business, Accenture will have to find new moorings in India and Asia even as it remains an American company. It is the single most critical move it will have to push through to parry the damage that Indias rising dominance as an outsourcing powerhouse has inflicted on its armour. At $16.64 billion (Rs 73,216 crore) revenues in August 2006, Accenture will have to grow 80 per cent in six years to touch $30 billion. And it will still lag well behind the market leader, Armonk, New York-based IBM. Big Blues services business, IBM Global Services, is already $48.2 billion (Rs 2,12,080 crore) in revenues (December 2006) and is projected at $85 billion (Rs 3,74,000 crore) by 2010. Like Accenture, IBMs services workforce in India will drive much of this growth estimated to grow from the current 50,000 to 92,000 by 2010. Now, it may not be entirely fair to pit companies of such disparate sizes against each other. But while IBM is certainly in a league of its own in the global arena, the fact that Indias repository of low-cost, skilled knowledge workers holds the key to both their future growth strategies begs the comparison.

Case of McDonalds McDonalds is a good example of a company that followed a multidomestic strategy. This strategy resulted in: 1. Local need is taken utmost care. Here the customer of each nation will get according to their needs. 2. More autonomy to the subsidiary It enables individual subsidiaries of a multinational firm to compete independently in different domestic markets. 3. Act as SBU Each subsidiary behaves like a strategic business unit that is expected to contribute earnings and growth proportionate to the market opportunity. 4. Innovation from local R&D For Example McDonald's put in eight years in India before its first restaurant came up in 1996. At that point, the odds were heavily loaded against it. For, it had already decided not to launch its beef-based core product - the hamburger - in India so that it didn't hurt religious sentiments of the Hindus. The company knew that the key to its survival here lay in acceptance by the government and the customer. It meant figuring out the right menu -- substituting mutton for beef, something it has never done in any other market, choosing names like McAloo or Maharaja Mac, adding variations and dishes that don't appear in any other McDonald's chain anywhere in the world. Finally, it meant getting the pricing just right. The Maharaja Mac ensured that McDonald's main offering was competitively priced. No wonder "McDonald's has established itself as the family's favorite quick-service restaurant. Finally, it meant getting the pricing just right. The Maharaja Mac ensured that McDonald's main offering was competitively priced. No wonder "McDonald's has established itself as the family's favorite quick-service restaurant," beams Amit Jatia, managing director of Hardcastle Restaurants, the Mumbai Franchisee of McDonald's. The KFC experience couldn't have been more different. It paid enough attention to its main raw material supplies -- by working with Venkateshwara Hatcheries for the right chicken. It also got its cold chain in place. But then it slipped up by not paying enough attention to the cultural context in which Indians consume food. It offered too few choices -- with less than a dozen items on the menu to start with compared with 35 at McDonald's. Larger proportions of Indians are vegetarians, which meant a smaller market. A smaller menu simply cut out a lot of potential consumers.