Indian & Global Challenges
Globalisation of world economy offers both, challenges as well as opportunities to the developing countries. Already, they have lost a lot of time in preparing for global competitiveness. A higher level of world prices, continuing devaluation of their currencies and increase in the quantum of their imports are adding new complexities to their international marketing efforts.
The opportunities that are opening for global marketing are further dampened by rising protectionism, discriminatory government procurement policies, offset requirements, forced technology transfers, local content requirements and other mechanisms used, and the growing trend towards bilateralism instead of multilateral trade agreements.
Key Global Forces Impacting the Indian Economy
The Integrating Role of Technology
The rapid creation and diffusion of new and more advanced technologies, over the last few decades, has not only improved production but also widened the scope for global marketing in goods and services.
Dynamics of Capital Flows
National markets are fast growing into global capital markets because of the large flow of funds among countries. The liberalization of restrictions on capital movements, deregulation of domestic capital markets, and advances in data processing and telecommunications are likely to accelerate further the pace of globalization of financial services in the years ahead.
Production Sharing and Globalisation
The current trend is that global corporations are going in more and more for global manufacturing systems where the production of a single product spans across different countries. This has been made possible because of the technological development, explosion of new products, and removal of barriers to international trade, and improved communication and transportation networks.
Approach towards Globalisation
The Need for Attitudinal Change
The most important challenge facing the country is to boost exports without which it is not possible to achieve the country’s growth objectives.
Customer Driven Philosophy
Management and marketing policies of our business firms should be ‘customer driven’ instead of ‘production driven’ or ‘sales driven’. This would involve greater emphasis on product design, improvement in quality and delivery schedules and better service that would help to build confidence of foreign buyers in Indian products.
Global Finance’s Focus on Rewarding Performance
In India, the percentage of private capital to total foreign flows has increased from 50 percent in 1990 to 80 percent in 1998. Even though in India foreign flows do not account for a significant percentage of the total investment, they set in motion a process of greater transparency and discipline which will reward improved shareholder performance and make it difficult for corporate underperformers to obtain capital. These global forces will have significant influence on all sectors of the economy.
Innovation is the Engine of Growth
There is general agreement that innovation is the engine of long run economic growth. Those who make this argument define innovation broadly to include not just new products, but also new process, new organizations, new management practices, and new strategies.