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Israeli Purchasing and Logistics Managers Association
Telecom ForumMeeting 4
Purchasing in India Tips for the NegotiationProcess & Using Indian Suppliers to ImproveCompetitiveness
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Agenda
BDO-I2I at a Glance
India - Culture
India - Business Culture
India - Intercultural Communication Aspects
India - Telecom Industry
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BDO-I2I Background
BDO-I2I is Israels leading India focused business consulting firm
Joint venture between BDO Consulting Group and I2I Ventures
Combining forces of Israel's leading consulting group and theleading Indo-Israeli business group
Leveraging on BDO international expansion and leadership
Provides Israeli and Indian companies with Business Developmentand professionalOne Stop Shopsolutions
Providing our customers end to end coverage of the servicesrequired for operating cross border
Business and Market Research Strategic and Business Planning
M&A and JV Leadership
Access Strategic Customers and Partners
Setting Sales and Distribution Channels
Complementary Services
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BDO-I2I Executive Management Team
P. Sriganesh Mumbai PartnerA Fellow member of the Institute of Chartered Accountants of Indiaand Institute of Company Secretaries of India. Sriganesh has over 30years of experience in the IT and ITES industry and NBFC sector
having set up several Companies in India. Between 1986 and 2000 heworked in senior financial positions in Citigroup India. He was aPromoter-Director of Citicorp Information Technology (now known asI-Flex) and co-founder and Honorary Treasurer of NASSCOM. AsTreasurer of NASSCOM in the initial years was involved with theGovernment to set up regulations for the then nascent industry.
David Keynan
Founder and CEODavid is heading BDO-I2I. David was a member of the Intel CapitalIndia team since 2003, managing Intels investments there. David hasrelocated to India after spending three years in Intel Capital Israel,leading Intel investments in the telecom space.David was Vice-Chairman of the Israel-India chamber of commerce.He previously joined TiE as a chartered member in the Bangalorechapter. David earned his B.Sc. in Mathematics and Philosophy from
the Hebrew University in Jerusalem.
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BDO Ziv Haft Consulting Group - Business Activities
CorporateFinance &M&A inGeorgia
M&A andInvestmentBanking - US
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Agenda
BDO-I2I at a Glance
India - Culture
India - Business Culture
India - Intercultural Communication Aspects
India - Telecom Industry
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Flag & Emblem
The saffron stands for courage, sacrifice and the spirit ofrenunciation
The white is for purity and truth
The green is for faith and fertility
The navy blue wheel denotes the continuity of the nation's
progress which is deemed to be as boundless as the blue skyand as fathomless as the deep blue sea.
Truth Alone Triumphs
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Geography
Area: 3,287,590 sq km
World 7th largest
Natural hazards:
Droughts
Flash Floods
Widespread and Destructive
Flooding from MonsoonalRains
Severe Thunderstorms
Earthquakes
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Fact Sheet
Demographics
Population (billion) 1.13
Population growth (%) 1.6
Labor force (million) 516
Less than 30 years (%) 52
Urbanization (%) 28
Economy
GDP (nominal, US$ billion) 1171
Inflation (%) (Aug. 08) 12
Fiscal Deficit (% of GDP) 5.6
FDI (US$ billion) 32
Forex reserve (US$ billion, Jul 08) 307
Social/Developmental
Literacy (%) 61
Unemployment (%) 7.2
Infant mortality (per 1000) 34.6
Life expectancy (years) 68.5
Transport/Telecom
Passenger cars (million) 13
Two wheelers (million) 53
Mobile users (million) 295
Internet users (million) 52
Trade
Exports (US$ billion) 159
Imports (US$ billion) 240
Top 3 export markets US (13%)UAE (10%)China (7%)
Top 3 import partners China (11%)Saudi Arabia (8%)UAE (6%)
FY08 unless indicated otherwiseSources: IBEF, EIU, RBI, CIA fact book
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Geographic Division
Mumbai
South
Center
North East
Kolkata
Delhi
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Population
Ethnic Groups: Indo-Aryan 72%
Dravidian 25%
Mongoloid and other 3% (2000)
Religions:
Hindu 81.3% Muslim 12%
Christian 2.3%
Sikh 1.9%
Buddhist, Jain, Parsi 2.5% (2000)
Languages:
English
Hindi (the national language )
14 other official languages: Bengali, Telugu, Marathi, Tamil, Urdu,Gujarati, Malayalam, Kannada, Oriya, Punjabi, Assamese, Kashmiri,Sindhi and Sanskrit
Hindustani
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History & Religion
Indus Valley Civilization- one of the worlds first great urbancivilizations.
Worlds first university in Takshila 700 B.C
Ayurveda- earliest school of medicine known to humans
OM - The first sound of the Almighty, oneness with the
supreme.The Trinity:
Generates-Brahma
Observes-Vishnu
Destroys-Shiva
Yoga Made in India 5000 BCKalarippayat - Origin of Martial Arts 200 BC
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Culture Fundamentals
Non-Violent Religion
Never invaded any country in her history
The British influence inspired western education and thoughts:
Created a new educated class.
Created a common language English
Inspired freedom and exchange of ideas
Religious tolerance and freedom of worship: Hindus and Muslims live side by side but inter-religious marriages are
rare
Gandhis Non-Violence Movement for freedom appealed to thecivilized world
Caste System Brahmins: Highest caste, most privileged - lawyers, doctors,businessmen
Ksatriyas: Warriors and rulers had to give their lives to protect theBrahmins and sacred animals (cows).
Vaisyas: Farmers and traders. Encouraged to give money to Brahmins& build temples
Sudras: Serve the other three classes. Weavers and carpenters
The Untouchables/Dalit Caste
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Meals, Drink & Snack
Varies from region to region Hindus do not eat beef
Muslims do not eat pork or drink alcohol
Vegetarian Cuisine
Meat for the non-vegetarians
(mainly lamb, chicken, and fish) Ingredients: mainly use herbs and spices
Curry Pan -Asian Dish
In favor of tea (most famous: Chai)
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Local Culture Essentials
Respect elderly and touch their feet for blessing Right Hand
Eat with fingers and always use right hand to eat
Wash their hands immediately after and before eating a meal
Believed that food tastes better when eating with ones hands
Can't Say No
Take your footwear off when you enter a private house or temple
Indian names vary based upon religion, social class, and region of thecountry
Frangipani and white flowers cannot be the gifts
Yellow, green and red are lucky colors
Strong bonds with family members as well as relatives (Respect the elders)
Sons are always more preferred than daughters
Most marriages are still arranged by parents Extremely low divorce - rate with only 1.1%
Woman Status
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Agenda
BDO-I2I at a Glance
India - Culture
India - Business Culture
India - Intercultural Communication Aspects
India - Telecom Industry
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Business Dress Code
Normal Business Dress Code for Man Suit and Tie
Due to a warm climate, often full-sleeved shirt and tie arealso acceptable
Business Dress Code for Woman Pantsuits and skirtswhich cover the knees; neckline of the blouse and topshould be high and sleeves should cover the shoulders
Select neutral colors that are subdued and not very bright
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Greeting
Greeting
When doing business in India, business etiquette requires ahandshake
Indians among themselves use Namaste the palms are broughttogether ant chest level with slight bow of the head
Using Namaste is a sign of Indian Etiquette understanding
Business Cards
Business cards should be exchanged at the first meeting
Be sure to receive and give with the right hand
Make sure the card is put away respectfully and not simplypushed into your shirt/trousers pocket
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Meeting
Meetings
Meetings should be arranged well in advance in writing and confirmedlater on by phone
Avoid meetings near national holidays Independence Day, Diwali, etc.
Punctuality is expected however being late usually will not have disastrousconsequences
Flexibility is paramount
Last minute cancellations are possible and not a sign for anything
Meetings Flow
When entering a room always greet the most senior figure first
Start from commencing a a conversation latest business news,stock exchange and sports (mostly, cricket)
Avoid talking about:
Personal matters
Poverty/beggars
Politics, caste system & religion issues
Woman rights
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Agenda
BDO-I2I at a Glance
India - Culture
India - Business Culture
India - Intercultural Communication Aspects
India - Telecom Industry
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Most Important
In India,Relationship Comes Before
Business
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India Top 10 Business Principals
Time is measured by years, not weeks Long term approach will create significant impact
Partnering and win-win is were it all starts
India and its people are very diverse
Need to adjust to the right people/team
Listening is much more appreciated than talking The land of good enough
Nois never said
Government/official relations are important
Business India is corruption free
If you are asked, you are in the wrong place Regulations are simple, but very strictly enforced
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India Geographic Business Corridors
80% of IndiaGDP
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The Land of Good Enough
India has very interesting view on brand and technology Brand representshardvalues:
Reliability, complexity, cost, suitability for multi-user
With very few exceptions, luxury and Name are lessimportant
Example Nokia cell phones: Reliable and hard working
Though much more expensive than Chinese brands
>60% market share in India
Another example - fashion brands:
Very low penetration of global brands
Very strong local brands
Opposite to China
Reason no value inGlobaltags
http://images.google.com/imgres?imgurl=http://mall.coimbatore.com/giftvouchers/allensolylogo.jpg&imgrefurl=http://mall.coimbatore.com/giftvouchers/allensollyoutlets.html&usg=__gYubf4SA6lVxuilwVScIiF9frbA=&h=115&w=188&sz=21&hl=en&start=3&sig2=Le6dZiVAtSe5e217d842Ng&um=1&tbnid=Bl4qSXE0mjvGGM:&tbnh=62&tbnw=102&prev=/images%3Fq%3Dallen%2Bsolly%26hl%3Den%26rlz%3D1T4GGLL_enIL316IL317%26sa%3DX%26um%3D1&ei=SAgTSpveNY-T_QaYjYS9Dwhttp://images.google.com/imgres?imgurl=http://www.stick-stan.com/images/shop/filebrowser/Image/levis.png&imgrefurl=http://www.stick-stan.com/brands.html&usg=__-77Bz35AocrMroVx_WaAOH1PwZw=&h=413&w=843&sz=21&hl=en&start=4&sig2=ngY5IHNTegJG9SSAIR3oBg&um=1&tbnid=liQGVvy4ykynhM:&tbnh=71&tbnw=145&prev=/images%3Fq%3Dlevis%26hl%3Den%26rlz%3D1T4GGLL_enIL316IL317%26um%3D1&ei=_QcTSoLLPI-E_AaOwui1Dwhttp://images.google.com/imgres?imgurl=http://www.groupe-procab.com/blog/wp-content/uploads/2008/07/new_iphone.jpg&imgrefurl=http://www.groupe-procab.com/blog/index.php%3Ftag%3Dinternet&usg=__tJAWEoynvP2J2VybK64ZIyosKbA=&h=401&w=300&sz=18&hl=en&start=14&sig2=hn1oJ9PA2TGqYDn2mDQ9hw&um=1&tbnid=uyQzwqF1HVM1wM:&tbnh=124&tbnw=93&prev=/images%3Fq%3Diphone%2B3g%26hl%3Den%26rlz%3D1T4GGLL_enIL316IL317%26um%3D1&ei=cgcTSojpIMKD_Qa9ze22Dwhttp://images.google.com/imgres?imgurl=http://fonearena.com/blog/wp-content/uploads/2006/11/n2626_03_lowres.jpg&imgrefurl=http://www.fonearena.com/blog/2006/11/28/nokia-announces-6300-6290-6086-and-2626.html&usg=__HBTu-T57EkF9xA_dc5navdrzOyE=&h=550&w=300&sz=54&hl=en&start=9&sig2=ilnLeW_aWYMSXIr8E3GZEQ&um=1&tbnid=HEJW-89_txsz3M:&tbnh=133&tbnw=73&prev=/images%3Fq%3DNokia%2B2626%26hl%3Den%26rlz%3D1T4GGLL_enIL316IL317%26sa%3DX%26um%3D1&ei=NwcTSp7ZE8uv_AbepMS4Dw8/22/2019 Ieici - Israeli Purchasing
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Negotiations - How to Start?
Send a detailed product overview in advance
Prepare your initial offer to allow bargaining later on
Respect Indian Business Hierarchy
Hospitality is part of the business culture accept anyhospitality offers (tea/coffee/snacks)
Presentations are generally accepted to start a discussions
Declare long term, and mean it Learn first, talk later
Tough issues:
Learn first
Raise when discussed, resolve last
The time between raising and resolving is reserved torelationship, internal contemplations andproduct/technology international presence
Indians tend to take larger risks with person they trust -> Credibility and Trustworthiness are Critical
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Decision Criteria
It is all personal
The business reason is key
Technology is being looked at from business perspective
Innovation per se is a mixed bag
Risk aversion - major issue
In Indian organizations, size matters As many employees, as good
Automation is Necessary to deal with scale
Product/Technology WW Spread
Trust relationship
Relationship/Emotions
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CEO Role
In India:
CEO, Managing Director, Promoter
All alternate names to same function
CEO - Potential Decision Maker
The most superior company executive -> Respect
Must be addressed with appropriate title -> Mr. Exhibit positive traits -> Honor, Trustworthiness
Being most senior -> Must be greeted first
Concentrate efforts on building relationship with the CEO
You should leave space for escalations
Chairman, Large share holder etc.
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On the Discussion Table
Silence is blessed
Let the VP talk, CEO to close
Listen to the music
Dont push
Dont insist on any commitment at the first meetings
Do not use strict expressions
Nois not being said,Yesis hardly used
Indians value flexibility during negotiations
Express disagreement openly considered rude -> We willdiscuss this issue later on
Disturbances during the meetings doesnt show lack ofinterest or respect
Be prepared for questions/enquiries that seem not related
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Business Hierarchy
One of the most significant influences on Indian BusinessCulture
Mostly One decision maker in the company
Managers and executives still will wait for approval byCEO/owner
Sometimes decisions are maid by people who are not presentduring negotiations
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Agenda
BDO-I2I at a Glance
India - Culture
India - Business Culture
India - Intercultural Communication Aspects
India - Telecom Industry
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India Technology Boost Present
Israeli TechnologyExport
RevenuesIndian
IT industry
U
S$
bn
CAGR: 27 per cent
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India Technological M&A Trend - Telecom
3
5
12
18
0
2
4
6
8
10
12
14
16
18
20
2007 2008 2009 2010
No.
ofDe
als
Year
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Electronic Manufacturing Services are among the mostrapidly growing industries in India, with the capacity forfulfillment of large series of orders
Indian manufacturers started to operate in quantities andqualities which can easily compete with the Chinesemanufacturers.
Two major players:
Vinyas Innovative Technologies Pvt. Ltd
Centum Electronics
India is one of the biggest target market for telecomequipment. Close to 15% of all productions are sold to India.
Using an Indian EMS company lower your costs and bringyou closer to your final customer
India Electronics Manufacturing Services
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David Keynan
CEO
BDO-I2I India Business Consulting
Menachem Begin Road 46-48Tel Aviv, Israel
Israel (O)+972-3-6382508Israel (F)+972-3-6374801India (O)+91-80-4330-1999
Thank You !
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]