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col-vaidTHMB International business and India SMEs - an overview

Col Nageshwant Roy Vaid
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LT. COL. (RETD) Nageshwant Roy Vaid | 16 Jun, 2009

During the last few professional decades for international business there has been a diametrically radical mindset shift in focus to not only provide a product but a better product to stated target audience in the world markets.

The manufacturers today have created a upward gaze and a downward market gaze advantage as they systematically assess the credentials of vendors and create products which satiates the expectations of the buyer fraternity. International business has graduated from profit making as an exercise to stakeholders benefits.

We are rapidly evolving a international business vocabulary which has now emphatically stated that a buyer centric market today does not only champion the cause of market share of world industry leaders but dictates strategic control of international markets by them. Pyhsical assets stand replaced by knowledge assets.
 
The strategic and defined concept of international business has shifted the focus of marketing from maximisation of the profitability curve to managing strategic value oriented partnerships and logically positioning a international firm between its vendors and customers with a defined and explicitly stated aim of creating value and enhancing market value accretions for the customer.

The marketing objectives today are not only simplistic in nature but are also backed by markets ready to experiment and deliver. Today conduct of international business be it through sourcing, exporting, investing or a combination of all three must look at potential country markets, to analyse what are the advantages and disadvantages as also related costs and whether it is well worth the risk for SMEs engaged in exports and still making concerted and diligent efforts in creating viable, profitable and sustainable foreign markets.
 
The first logical step in choosing material export markets is to establish the key factors which diametrically influence sales and profitability of the product in question. Both the merchandiser and service principal in a recessionary market environment must answer a few questions and qualify to understand a few harsh ground realities.

International business for SMEs must appraise vital aspects of viable market potential, potential competition to Indian SMEs, access to various international markets, understand the implications of service requirements, absorb shipping costs and create a international product fit for their chosen wares.

Our domestic currency is weak and therefore it is logical that our SMEs engage in non price competition by improving quality, delivery mechanisms to world markets and improving after sales service. It is imperative for SMEs to improve productivity and engage in well orchestrated methods of cost reduction. SMEs must consider sourcing outside home country as also trim profit margins coupled with marginal cost pricing. SMEs must ensure that all pricing decisions which are a critical element of marketing mix must reflect costs and competitive factors.
 
SMEs while exporting to world markets and creating a viable sales mechanism abroad will undergo risks of credit, currency, carriage and above all country specific risks.

Channel utilitarian advantage by SMEs must be understood in the right context. International business dictates that supply chain management advantage, filling up of distribution pipeline and the purpose of the marketing channels is to create utility for the customers.

In terms of categorisation of channel utilitarian advantage our SMEs must create market advantages in form of place of market operations, time of market operations, form of market operations and above ensure a documented inflow and outflow of market information.

International competitive advantage has implicit guidelines for Indian companies. An ability to understand strengths, weaknesses, vulnerabilities, financial muscle and diversification ability of international competition must be ingrained in our SMEs. Our companies today understand that developing and designing great products are keys to success in international business.
 
In international business the stated aim of market segmentation has always been to create a unique value offer for as many customers as possible.

The digital signature advantage coupled with value accretions of the internet has ensured that our SMEs can address the concerns, expectations and aspirations of the individual customers. The internet viability and availability has opened immense possibilities for creating a relationship with global customers, potential customers, suppliers and channel members.

In a recessionary market it is imperative to create a win-win relationship with the customer. The market relationship orchestrated by our SMEs must be mutually beneficial. We must understand that if market benefits are one sided market relationships can be both marginalised and threatened.
 
Markets are evolutionary. Technology which was earlier considered as a market enabler has now moved to the next level which is that of a market enabler. In a predominantly recessionary setting for international business, firm centric market strategies may not deliver goods. It is essential to create network centric marketing strategies which generate apart from value accretions also market sustainability.

To commence the aspect of international business which must be substantial it must be backed by fierce market commitment. Business conducted beyond the geographical confines of the country has material connotations which are financial in nature and must be handled adroitely.
 
We have market fortitude, an indominatable spirit and while the recessionary clouds have created overcast skies of ill -fortune the industry at large is fighting back. In international business lies the prosperity curve and in creating of more pronounced continental markets lies salvation.

We cannot ignore both the realism of our current surroundings and the shape of world markets. It is now time to stand up and be counted in the league of nations.

Note:

    * The author is the CEO, NGA Consultancy Services and Consultant, Business Development (International Marketing) Orbit Industries Limited.
    * The views expressed by the author in this feature are entirely his own and do not necessarily reflect the views of SME Times.

 
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Right moves by indian SME,s?
Arundhati .S | Thu Jun 25 08:31:17 2009
Debatable because some where along the line our errors in judgement have been very pronounced.Due to significant errors in market reading the impact has been more pronounced.We are not qualifying or quantifying a zero error syndrome but laxity does not help matters. The writer is right. We move in the right direction because we must move in the right direction. There is no place for runners up in international business. Product must speak and so must the Indian SME's.


ARE WE TAXING OURSELVES IN RIGHT EARNEST?
N.Awasthi | Tue Jun 23 12:03:41 2009
It is evident that ploys will not work. Hardcore marketing will.It is essential to do methodical work and not do lip service to problems on hand. magic wands are out.Will power and professional will only work.

  Re: ARE WE TAXING OURSELVES IN RIGHT EARNEST?
Arvind | Tue Jun 23 12:06:15 2009
Iagree. Professionalism in all our facets of functioning will only work


International business saga-A twist
Neelam. M | Tue Jun 23 11:46:42 2009
Practical realism at its best.The author could have also stated the role of the government in his solution package.We require practical measures by all government bodies concerned so that the ailing SMEs/ailing sectors are not bereft of hope and solution packages.


International business for SME's
V. Fernandes | Mon Jun 22 09:20:28 2009
The writer has stirred a hornet's nest.To do practical application for fine tuning response to market recession is desirable. It is essential to dictate trends and not be at the receiving end of world crisis engineered by nations who promise boom times but end up creating recession.The follies of few have crippled the fate line of many and therefore it is essential to contribute national mite to a worthy cause.


WE MUST PROMOTE INTERNATIONAL BUSINESS
Charulata. S | Mon Jun 22 05:51:45 2009
In a chequered game of cash inflow and cash outflow we must maintain a winning momemtum for cash inflow.Our approach to export promotion as rightly stated by the writer must be extremely proactive and above must must keep pace with groung realities.Recession is not a one time occurence but will manifest itself again even after we surmount the current recessionary crisis.The world leaders must categorically take this as the biggest challenge humanity faces as lack of trade will generate adverse effects for which we cannot do corrective actions easily..


Tell tale signs of market realism
Kailash | Mon Jun 22 02:12:59 2009
The writer is right in stating that signs of deteriorating markets are visible and require urgent remedial and corrective action.We must tighen our spending and work on revenue collection.


International Business
Lakshmi | Sat Jun 20 16:19:08 2009
I could not agree more. Stated matter of factly and without pretences the complete aspect of pitfalls in international business. Recession like tsunami may rear its ugly head again even after it is over.


CAN WE DELIVER?
Pranjoy | Fri Jun 19 09:49:32 2009
The gong has been sounded . There is disarray and that as pointed out requires rationalisation of both mind and spirit.Both should be willing. No magic wand will work but commitment will. Even if we slide out of a recessionary hole is there a guarantee that we will not slide into it again? Even a brave man will not hazard a guess.I guess we do what is being suggested i.e fight the impediments .


International business for market credibility
S. Mehta | Fri Jun 19 05:09:06 2009
To trade and to be seen trading at international levels are market imperatives no one can ignore and to ignore is to invite trouble.I agree with the case made out.


Market, segmentation, targeting and positioning
GAYTRI | Thu Jun 18 11:51:17 2009
International business requires a different segmentation, targeting and positioning exercise.The author speaks of the digital signature which has changed the concept of STP in internet marketing.Our conscious endeavour must be to generate quality continental markets as more markets spell more pronounced penetration for sales and new business development.It is imperative to state that widely dispersed marketing arena gives more avenues to enhance business to the Indian exporter and that is a urgent necessity as on date.


Products for international markets.
Ramesh | Thu Jun 18 08:59:36 2009
The writer hass rightly stated that product marketing holds the key.Competitive advantage neccesitates a better product on tne international shelf vis-a vis what the competition can place.Adherence to rigid quality guidelines and above all constant quality monitoring is the key to success of international business.


International business for indian companies.
Shyamal | Thu Jun 18 07:21:37 2009
Thought provoking and factual.I did get the impression that SME's have their work cut out and saddled as we are with both a currency stability situation and a weakened export sector the corrective measures as outlined must be studied.


MARKETS TODAY
Yogendra | Thu Jun 18 06:09:32 2009
A conscious,deliberate and well articulated series of statements are contained in the article.The writer has given both a theoretical insight as well as a practical recommendation list to audience at large.We must not forget we live in difficult times and with people clutching the proverbial last straw, hope as the writer rightly has stated lies in market fortitude.


INTERNATIONAL BUSINESS
Dolly | Thu Jun 18 03:29:17 2009
Aptly conveyed.Business reels under onslaughts which have tentacles beyond comprehension.We are today moving in a direction which more powerful nations have gone through.In our sustained desire to make a place for ourselves in the comity of nations we are forced to take into account the fortunes of other nations as international business as rightly suggested by the author will be impacted if cumulative fortunes across the spectrum are not in sync.I could not agree more to extremely professional and logical deductions and market suggestions documented.


International business is nation's lifeline
Ashish | Wed Jun 17 14:52:01 2009
I enjoyed both the contents as also the significant message the author wants to convey.Our endeavour in a international business environment is to ensure promotion of Indian exports and management of Indian imports.Unless we generate viable import substitution and create a fruitful environment for exports we will not promote international business.The pink slip culture and poor sectoral growth in most export oriented sectors has stated emphatically that we are not looking at market happenings with optimism. Our currency as rightly pointed out is moving at times in a negative cycle vis-a vis more hard currencies and that is not helping matters any.We must get our act together and if that implies tightening our fiscal belt so be it.The game is on and even if we get out of a recessionary environment where is the guarantee that foolhardy practices will not land us in a pit again? No one has the answers.



Mansi Fadnavis | Wed Jun 17 11:05:59 2009
The modern day businesses have evolved from a typical product selling approach to a relationship building approach to sustain their customers for life. As rightly pointed out by Col.Vaid, a fierce market commitment is necessary to sustain business in an international market keeping realism in mind. International markets have a different way of approaching where the focus is mainly curbing costs to ensure that profit margins are justified. Improving on the quality of delivery and ensuring the optimum usage of resources to conserve costs can help in fighting the recessionary market leading to a long-term stability.


SME.s in dire straits
Preity | Wed Jun 17 01:13:58 2009
The article gives noteworthy inputs primarily because it states measures which if practically implemented would do a world of good to ailing fortunes of indian exporters. It is evident that markets are fickle both in behaviour and in stating the customer expectation today. The customer also reels under the recessionary onslaught and has to be harnessed.The writer states the shift in currency value which is correct and would have a bearing on the fortunes of both the importers and exporters either in form of market dividends or market losses. A well stated ground realism by the writer.


International business by SME's
Vaishnav B | Tue Jun 16 14:12:34 2009
Having perused an extremely erudite and intellectually stimulating article i am convinced that for SME's in a recessionary environment markets are offering challenges which some of them are incapable of meeting today. The writer has rightly pointed to a environment where the fittest would logically survive.Cost cutting, understanding international pricing dictates and above all creating a credible statement in the market are compulsions the marketer faces. The writer has rightly stated that international business requires market commitment of the highest order and if continuity of market operations fail so shall the business.Recession is eating into the vitals of the organisational structure and therefore SME's should guard against market failures.I feel that export markets must look for new markets and that should be done in countries where market recoveries are not an issue. Makes little sense to sell and not realise the value of sales.


International business
Pradeep | Tue Jun 16 10:53:11 2009
The article is topical, well illustrated and highlights corrective methodology at a macro level .Recession is a dirty ground reality and international business must wriggle out of a precarious situation.The author is professional in approach and has given a viable solution package.


Opinion
Ram Narayan | Tue Jun 16 08:47:53 2009
Article is very theoritical and does not make much sense


 
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