Mudambi, R., Saranga, H., Schotter, A.,
2017, "Mastering the Make-In-India Challenge", Sloan Management Review (MIT), Summer 58(4): 59 - 66.
Abstract: India will soon be the world’s most populous country. Today, it boasts a sophisticated service sector with a highly trained, English-speaking workforce. What is less well known, is that India has also developed a large number of supplier firms in the manufacturing sector, many of which are capable of integrating into the most advanced supply chains in the world. However, India’s undoubted challenges have ensured that it is so far largely untapped by foreign multinational enterprises. Many executives still dismiss India due to insufficient scale in their target customer segments, which is needed to support more complex value-adding activities. By so doing, they perhaps miss the biggest opportunity of the coming decades. Those foreign firms that have entered India have mainly adopted one of two distinctive strategies. Some, like Unilever, have focused inward and developed capabilities for making money through low cost, locally embedded processes and products. Others, like IBM, have primarily used India as an offshore source for low cost skilled-service labor to complement global operations. Our research suggests that combining these two approaches offers the key to unlocking India’s enormous economic potential. By interweaving these two strategies, multinationals can create what we call a mutually reinforcing Make-In-India Helix that generates superior returns locally and globally. Creating the Helix involves simultaneously taking advantage of local sourcing, manufacturing, and marketing activities in conjunction with local adaptation of global products to generate mutually reinforcing advantages. The Helix enables firms to achieve local/global product-portfolio ambidexterity for reaching successfully across all of India’s income segments, while at the same time developing a springboard for global exports. The result is the necessary localization required to achieve scope and scale advantages in India, while leveraging these advantages in form of cost-effective solutions for global markets.