View
360
Download
2
Tags:
Embed Size (px)
DESCRIPTION
Guest Speaker & Presentation - Alagappa University College of Management - Sep 09
Citation preview
Presentation to Alagappa University College of Management
by
- Cecil M Sunder M.S, MBA, PMP
Introduction Target Growth Sectors for MNC’s Socio-Economic Impact Recession After effects Indian Market Conclusion
Target - Emerging markets BRIC & Asia Pacific Expected GDP growth better than
developed economies Sectors to monitor
Bio-Tech – low R&D cost & quality Infrastructure – need is the pull Automobiles – growing middles
class Insurance/Finance Telecom IT & ITES – ODC’s and Knowledge
Centers Real Estate – Direct FDI’s Aviation Other sectors to think??
Why Indian retail sector is not a free market? Barriers to entry - Wal-Mart
Emerging Market Drivers Liberalization & Free Market economy Globalization Minimal regulation FDI inflow – Investor confidence Creation of SEZ (Tax holidays), Clusters to
simulate local economy and investment FOREX reserve growth Growth of credit market Infrastructure development – Airports,
Communication, Roads, metros etc Availability of skilled labor and raw
material @ cheap Note - North American and Europe
Markets are flat
Aggressive Global Marketing aided by Media, Migrants, Immigrant upper middle
class Brand awareness – BMW, GM, Toyota,
Apple, Dell, Levis, L’Oreal, eBay, Samsung, Sony, UBS, Morgan Stanley etc
Is free market good for the economy & nation building?
Jobs - Outsourcing and Offshoring Value to buyer or seller? Quantity over Quality Creation of new jobs in the emerging
markets Quality workforce at affordable costs –
Impacts SGNA and Opex Stimulates seller economy Migration of skilled labor Attrition – Supply Vs Demand
Wealth – Inequality On demand pay Largest middle class with huge PPP in
BRIC Extraordinary bonuses in the financial
sector for ‘Extraordinary Risks’ Growing inequality – ‘haves & have-
nots’ Sourcing – Global supply chain
Sourcing from any part of the world optimal/cheap (raw material, skill, and labor)
“Goldman Sachs Group Inc. is on track to pay out as much as $20 billion this year, or about $700,000 per employee. That would be nearly double the firm's $363,000 average last year” – Wall Street Journal
Recession is the economy shrinking for 2 consecutive quarters with a decrease in the GDP.
If the recession continues for next quarter, (>6 months) then the economy goes through “DEPRESSION” Triggered by severe financial crisis
in developed economies Reliance on Market forces and
absence of regulatory and monitoring mechanism
Stock market meltdown across the globe and FIIs’ pulled out
washout of investors confidence.
In India BSE Sensex crashed Jan 2008 -21000 points Oct 2008 – 8701 Points Wealth lost by all shareholders -
$52 billion (Rs 210,000 crore)
Bankruptcies & Collapse of Financial Institutions Lehman Brothers, AIG, GM, Freddie Mac
and Fannie Mae etc Freddie Mac plummeted from $63 on
October 8, 2007 to $0.88 on October 28, 2008
Severe Credit tightening Absence of cash flow Slump in Housing, Automobiles, Retail,
Services etc Majority SMBs’ went out of business
Lay-offs Citigroup - 59,000 layoffs Bank of America - 35,000 layoffs HP Electronic Data Systems - 24,500 and still occurring
Bankruptcies & Collapse of Financial Institutions Lehman Brothers, AIG, GM, Freddie Mac
and Fannie Mae etc. Freddie Mac plummeted from $63 to
$0.88 on October 28, 2008 Severe Credit tightening, absence of cash
flow –Housing, Automobiles, Retail, Services etc.
SMB’s went out of business Lay-offs
Citigroup - 59,000 layoffs Bank of America - 35,000 layoffs HP Electronic Data Systems - 24,500
and still occurring Economic Stimulus Act of 2008 & The
American Recovery and Reinvestment Act $800 billion earmarked and spend started Coordinated effort by countries G8, G20
etc to infuse money Jobs & Infrastructure creation
Impact of Recession in India?
Services and Exports - Demand issues Absence of external demand for
sometime tied up with developed economies
Exports stagnant – Protectionist measures
Inventory piling up in housing sector Credit default rate and squeeze Short term Currency devaluation
‘Light at the end of the Tunnel’ Emerging markets not likely to face
recessionary trend – swings and panic attacks in short term.
Strong local consumers and demand irrespective economic conditions
FIIs’ will return to market – other places for ROI and stability?
GDP 6-8% projected better than expected Excellent Foreign Currency reserve. Better Regulatory & Government Control
INR Vs $
Change in landscape forever Agile, lean and trim – Flat structure Metrics, measurement & ROI based
investments Networking and reference markets JV & partnership
Innovation economy Knowledge based IP protection and patent Out of the box thinking - What value
addition can you provide ? Merger & Acquisitions
System Integration Process oriented, Process
reengineering Sectors at glance
Healthcare, Bio-tech Infrastructure IT & ITES Program Management