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Outsourcing Product Design for India Entry - A Strategic Approach

It was a Friday evening when Roger Little, an engineering divisions head for a mid-sized enterprise, was about to leave for the day. It had been a particularly hectic week and Roger was looking forward to the welcome weekend break to be with his family. Just then, he caught sight of the sales manager Carl Mayes, rushing towards him almost as if he held a billion dollar business deal on the point of closure. Roger, I simply must speak to you at once! Carl, protested Roger, its Friday evening and Im on the point of leaving for the day! Ive havent exactly had a particularly relaxing week as you very well know. Cant it wait till Monday? As Carls face fell, Roger smiled and found himself softening involuntarily. Okay, whats it about? You remember our discussion about entering an emerging market like India? What about it? With renewed enthusiasm now that he had his engineering heads full attention, Carl explained how he had through his extensive research, identified sizeable business opportunities in India. These opportunities needed discussions of their feasibility and the support required from Roger to pursue them. Roger knew he was already running his engineering team on full capacity, on a constrained budget which was becoming increasingly difficult to handle. He found himself thinking why not give Carls strategy more serious thought? However, at the same time, he also asked himself would this really pay dividends? How on earth would he address and overcome the practical difficulties. Without directly voicing his thoughts, Roger instead asked Carl the details of the challenges and risks associated with venturing into a strategy like this. With a sound grasp on the facts and fundamentals, Carl explained to Roger the resounding success of many foreign companies that had entered the Indian market and how they had achieved success by introducing, sustaining and selling their products in the subcontinent.

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Quoting from a reputed business journal (http://news.yellowpages.co.in/danfoss-ramps-up-for-growth-in-india), Danfoss announced the launch of India 2015, a growth strategy that outlines how Danfoss plans to tap further into the fast growing Indian market aiming to triple its turnover by 2015. As part of the strategy, Danfoss expects to invest 500 Million DKK over the next four years in a new R&D and manufacturing facility and simultaneously expand its sales effort throughout the country. Referring to another article in Business Today, an equally reputed journal, (http://businesstoday.intoday.in/story/priming-a-difficult-market/0/11161.html), If there is one market that has tested Grundfos adherence to its core values, it is India. Eleven years later, today, its products have created a Rs 500crore market for premium pumps, of which Grundfos controls half. Carl substantiated further by quoting a few more successful examples of companies like Caterpillar, Emerson and Vestas. If you are an influencer or decision-maker faced with similar challenges, this article will suggest some strategies to achieve your business goals. In our last article Product Design Challenges for India Entry , we cited various perceived barriers for organizations in the area of product design. This article on Outsourcing Product Design for India Entry will highlight some points that will help organizations to pursue the emerging market opportunity. When the product design is carried out for entering an emerging market like India, the outsourcing has to be much more strategic; identifying and choosing a partner well-versed about the market from various aspects narrated as six key points in the article Engineering Design for the Indian Market . Outsourcing product design has to be strategic due to the complexity and risk associated with it is dependent on the organizations core knowledge and business assets. Unless it is planned in advance, this will end up in tremendous effort to transfer the knowledge to the vendor. Though the reasons for outsourcing product design were primarily to reduce costs, improve time-to-market, increase innovation and to focus more on core capabilities, its purpose becomes more evident when it is for designing for entering the Indian market. The advantages and benefits can be multi-fold; from reducing or eliminating the effort and cost in setting up the initial infrastructure for market-study, research survey, competitor analysis, deploying an engineering team to incorporate these into the product for arriving at a product specification for localizing the product to the native market. Engaging a right product design partner can not only minimize the investment cost and risk associated in this project but also can accelerate the product launch time to a greater extent. BWIR had assisted many customers in the industrial machinery and equipment space to design, develop, manufacture and introduce their products in the Indian market. Look for our study in the upcoming article on how a Europe-based manufacturer designed a product for entering the Indian market and realized the benefit of cost and speed-to-market.

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The writer is handling the business operations for the European Market and provides engineering and design consultancy for th e countries strategizing to enter emerging markets like India. You can reach him at vivek.maladkar@bwir.com or the below contact number for any queries. About Barry-Wehmiller International Resources Barry-Wehmiller International Resources (BWIR) is a global provider of business and technology solutions to the mid -market manufacturing domain. With headquarters in St. Louis, Mo., and global delivery operations strategically located to meet customer needs throughout the U.S., Europe, Southeast Asia and South America, BWIR offers world -class engineering services and enterprise consulting solutions that enable its clients to achieve a competitive edge in their marketplace.

Vivek Maladkar Manager Business Development Europe Email: vivek.maladkar@bwir.com Office: +44-11-58882522 www.bwir.com

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