Management Theory and Practice (15EHSO402)

Assignment – 1

Name: Gaurav.Bolledu

Branch: Mechanical

USN: 01FE15BME051

Case Study – 1

India – A Global Manufacturing Hub

The Hardware Opportunity:

On September 05, 2003, Samsung India Electronics Limited (SIEL), the Indian
subsidiary of the South Korean electronics major – Samsung Electronics
Company Limited, (Samsung) inaugurated its refrigerator manufacturing
facility in Noida in the state of UP in India. The $25 mn, 5,00,000 unit capacity
plant was only the fifth refrigerator facility of Samsung, the other four being
located in South Korea, China, Thailand and Mexico. Since 2001, SIEL has also
established plants for manufacturing air conditioners and washing machines in
India. These moves have helped the company significantly in gaining market
share in the home appliances industry in India. Like Samsung, several global
companies operating in diverse industries have shown growing interest in
setting up world-class manufacturing facilities in India to cater to the domestic
market as well as for the export market. Market Research Firm IDC estimates
that by 2007, the total market potential for the hardware manufacturing sector in
India will be worth more than $150 bn. The hardware products considered
include PCs, servers, hand-held devices, work stations, storage devices,
peripherals and data communications equipment. Since IDC has not taken
account of hardware for consumer electronics and automotives, the figure
inclusive of these is likely to be much higher. The demand for hardware,
telecom and consumer electronics products in India has been rising fast. For
instance, in 2003, there were 28.6 mn mobile telephony subscribers in India, a
244% growth from the 2002 figure of 11.1 mn. It is expected that in 2004, the
figure will reach 36 mn. With vast untapped potential, the Indian market offers
a huge market for global manufacturers such as Nokia, Samsung (mobile
phones); and HCL Info systems, LG, and IBM (PCs). Major global companies
have established manufacturing facilities in India in order to reduce their
manufacturing costs and cater to the expanding Indian market. Expressing his
optimism over the market potential in India, Gopal Srinivasan, CEO, and TVS
Electronics said, “It isn't a question of opportunity here. It is a question of being
able to execute; companies in this space should grow at least two to three
times.”

The Automotive Industry:

According to the 2002-03 Economic Survey published by the Ministry of

Finance, India is well on its way to being one of the world's major automobile
manufacturing hubs. Over the past decade, since the automotive industry was
deregulated and opened to private participation in 1995, the industry has
witnessed tremendous changes, especially in the cars segment, with several
global players such as Hyundai, GM, Ford, Peugot, Mitsubishi, Honda and Fiat
entering the market. From 1990 to 2000, the sale of passenger cars rose from
50,000 to 5,00,000 units. However, in this period, most of the automakers had
been catering to local demand and had not exported their vehicles from
India. This trend has changed since 2000, with several leading automakers like
Tata Motors and Hyundai exporting vehicles from India. Since 2000, the
government has permitted 100% FDI in the automotive industry in all segments
including cars. With the increasing spending power, there is a steady rise in the
sales of automobiles in the country. In December 2002, UK-based automaker
MG Rover Group signed an agreement with Tata Motors to sell Tata's highly
successful Indica model, with some modifications in the design and engine, in
the UK and in Europe. Indica was sold under the City Rover brand name by MG
Rover. This was the first time that an Indian car was being sourced by a global
automaker.

Automotive components:

The automotive components industry in India has also witnessed significant

growth over the past decade. The country is home to many world-class auto
component suppliers. As per 2003 estimates, the auto components industry in
India was worth Rs. 245 bn.

Jewellery:

India has been one of the leading exporters of gems and jewellery next only to
countries like Belgium (Antwerp) and Israel (Tel Aviv). In terms of value,
Indian exports constitute about 55% of the world's polished diamond market.
Rough diamonds sourced from abroad are cut and polished by skilled craftsmen,
after which they are exported. According to the Gems and Jewellery Export
Council, the export of diamonds, coupled with other gems and jewelleries,
contribute to around 20% of India's foreign exchange earnings annually.

IT and Hardware:

It is widely believed that India's IT hardware industry has not performed well as
compared to its renowned software industry. However, over the past couple of
years this trend has been changing. India is slowly emerging as a manufacturing
hub for IT hardware as well. India has already acquired a good reputation in the
hardware and IT appliances segments.

Looking Ahead:

By achieving global recognition in several manufacturing based industries, India

is well poised to emerge as a global manufacturing hub. In the automotive
industry, the Tata demonstrated that world class cars can be both designed and
made by Indian firms in India. In the auto components industry, companies like
BFL and SFL have demonstrated that Indian firms can make world class auto
components at a much cheaper rate. In the IT hardware sector, India is slowly
picking up. Moreover, in several other industries as well, like the pharmaceutical
industry and the medical care industry, Indian companies are acquiring world
class competencies and offering stiff competition to other developing countries
like China, Thailand and Brazil and Mexico.

Solution of Case Study:

1] Keywords:

Manufacturing Sector in India, IT Hardware Industry, Automotive Industry,

Automotive Components, Bharat Forge Limited, Diamond and Jewellery
Industry, TVS Electronics Limited.
2] Facts:

1. Appreciate the potential of India to emerge as a premier IT hardware

destination in the world.
2. Understand the opportunities as well as challenges for Indian companies
in diverse industries including automobiles, IT hardware and Gems and
Jewellery.
3. Understand how companies within each industry can grow through
continuous up gradation of technical and managerial skills.

3] Conclusion:

The report discusses the potential of India to emerge as a major global

manufacturing hub. It highlights the growth of four industries including
automotive products, automotive components, IT Hardware and Gems and
Jewellery. Automotive companies like Tata Motors and Hyundai are leveraging
on their capabilities to manufacture and export good quality automobiles in
India. The report discusses how Indian automotive component companies like
Bharat Forge Limited and Sundaram Fasteners have emerged as major Original
Equipment Manufacturers for several leading automobile majors in the world.
In the gems and jewellery industry, particularly in cutting and polishing of
diamonds India possesses a major advantage over other developing countries
engaged in this business. In the IT hardware industry, the report discusses how
companies like TVSE electronics have carved a niche for themselves in
developing innovative products for the domestic and international markets. It
also highlights the challenges faced by these companies in their respective
industries.
Case Study – 2

E-Governance in India

In August 2003, Chamravattom village, a small backward hamlet in Kerala,

South India, earned a unique distinction. It became the first village in India to
become 100% information technology (IT) literate. At least one person in each
of the 850 families of the village was provided computer training on basic word
processing skills and browsing, under the 'Akshaya' project.

The project was launched by the government of Kerala with an aim to make the
entire state computer literate. This was only one of the projects launched by
various state governments in India (Refer Exhibit I for the e-governance
projects in India) to make available the benefits of IT to citizens. Several state
governments have initiated innovative e-governance projects. Some of the most
successful projects include Gyandoot (Madhya Pradesh), Akshaya (Kerala),
Bhoomi (Karnataka), eSeva (Andhra Pradesh) and HP-Kuppam (Andhra
Pradesh). These projects earned widespread appreciation, primarily for their
ability to change the lives of citizens. Through Gyandoot, farmers got access to
data relating to market prices of their agricultural produce and land prices as
well, enabling them to sell these on their own rather than going through
unscrupulous traders. The Akshaya project provided rural inhabitants of Kerala
access to PCs and the Internet, an opportunity they had never dreamt of before
and which helped them to easily communicate with their relatives abroad. The
Bhoomi project provided farmers instant access to important land records,
which would have otherwise taken them months to obtain. It also protected their
land records from manipulation by corrupt government officials. Through
eSeva, busy urbanites could pay their bills for 36 public services offered by the
state government at a single counter, and in some cases, even pay their bills
online – another first of its kind facility in India. The common benefit for all
these remarkably innovative projects was the convenience it brought to the
citizens who were targeted. According to the estimates of Gartner Inc., an
internationally reputed consultancy firm, of the total spending on IT in India in
2002, the contribution of the Government of India was 9% ($1.008 bn), making
it the fourth largest spender on IT in India. The spending included hardware,
software, telecom equipment, and IT services (excluding salaries of IT
employees). This put India in the league of countries in the Asia Pacific region,
including China, Japan, Malaysia and Philippines, which had similar budget
outlays for e-governance. However, this was meager compared to the advanced
countries in the world, which spent much larger amounts of money on e-
governance initiatives. The Federal government in the US had decided to spend
$52 bn in 2003 on different e-governance (G2C and G2B) projects.

The need for E-Governance:

In the late 1990s, India's population was estimated to be about one bn, 50
percent of which lived in villages. More than 70 percent of the people living in
villages were illiterate. These people earned their livelihood primarily from
farming, trading and other allied activities. Agriculture accounted for
approximately 25 percent of India's gross domestic product (GDP) and
employed nearly 65 percent of the population in villages. A majority of villages
in India have neither a telecommunication network nor a proper public transport
system.

Innovative E-Governance Projects:

Gyandoot:

The MP state government launched several e-governance initiatives. The one

which got maximum recognition was the Gyandoot project. The government
received the prestigious Stockholm Challenge Award for having successfully
implemented the project.

Akshaya:

Kerala, a relatively small state in south India, was renowned as one of the most
literate states in the country. However, it failed to catch up on the IT literacy
front, owing both to the government's inability to promote IT literacy and the
lack of interest of the public to embrace IT as a part of their lives. The Kerala
government, however, made a serious attempt to correct this mistake by
launching the Akshaya project in November 2002. Within a year, the project
attracted significant attention both in India and abroad. One of its most recent
achievements was to become one of the finalists in the prestigious Stockholm
Challenge award for 2004.

Bhoomi:

Bangalore, the capital of Karnataka state, is a renowned IT destination in India,

with top global companies like GE, IBM, HP, and Dell having established their
IT bases there. The Government of Karnataka launched several e-governance
initiatives, out of which the Bhoomi project earned widespread appreciation
across India.

Eseva:

Another state in India which has been aggressively trying to project itself as an
IT destination is Andhra Pradesh (AP). AP is known for its keenness in
implementing several e-governance projects, prominent among them being
eSeva and CARD.

Hp – Kuppam:

In February 2002, the GoAP tied up with US-based hardware major – HP, to
launch a program that aimed at achieving socio-economic development of rural
people using the ICT.

The Flip Side:

Though various e-governance initiatives in India received widespread

recognition for the way they transformed the lives of people, analysts felt that
meeting citizen needs through e-governance required a strong political will to
execute the projects as per the plan and in time.

Solution of Case Study:

1] Keywords:

E-Government, E-Government Initiatives in India, Gyandoot Project, Akshaya,

Bhoomi, ESeva, HP-Kuppam, HP i-Communities, Need for E-Governance,
Drawbacks of E-Governance.
2] Facts:

1. Understand how IT could be effectively used by the public machinery to

serve the citizens.
2. Understand the importance of active participation, both from the citizens
and for the government in the success of e-governance projects.
3. Study the experiences of consumers availing e-governance services and
examine how e-governance initiatives can transform the lives of citizens.

3] Conclusion:

The report examines the need for e-governance initiatives in India and describes
a few innovative e-governance projects in the country. It discusses in detail five
successful e-governance projects including Gyandoot (state of Madhya
Pradesh), Akshaya (state of Kerala), Bhoomi (state of Karnataka), eSeva (state
of Andhra Pradesh) and HP-Kuppam (state of Andhra Pradesh). It studies the
impact of these projects on the lives of citizens on whom they were targeted.
The report describes the benefits of these projects to the citizens and the
governments who implemented them.