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Microfinance In India

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CASE :XYZ Electronics

Scripting the 2nd edition of their India strategy

After a very successful stint in India, Williams, the Managing Director of XYZ's

Indian operation during 1998-2001 was ready to relinquish the position to Raj.

Williams was leaving India as a satisfied man, not only because he was promoted

as Vice President of global sales and marketing of XYZ's display products, but

also for having setting XYZ India on a firm foundation. XYZ India had just

completed another year of stupendous progress. It closed the calendar year

2000 with a turnover of Rs. 2,000 crore, from last year's turnover of Rs 1,400

crore. Net profit during the year was up from Rs 30 crore to Rs 45 crore. In 2001,

XYZ India projected a turnover of Rs 2,900 crore with a net profit of Rs 85 crore.

By 2003, XYZ was aiming to be one of the top three electronics companies in

India with a turnover of Rs 5,075 crore (5 percent of XYZ Electronics global

turnover). Understandably Raj was quite upbeat as he took the reins of XYZ's

Indian operations heading both XYZ Electronics India Limited and XYZ

Electronics India IT & Telecom.

Most interesting was the fact that all of these achievements and targets were in a

market, which had not been looking so promising. Consumer durables market

was going through a rough patch with slower sales off take, general price erosion

and tough competition. Sluggish domestic demand and a slowing global

economy coupled with slower exports, lack of spending on infrastructure and

political uncertainty affected overall industrial growth. The forecast of the

economy was not very encouraging. Any immediate upturn was unlikely. Then

why was Raj's XYZ India setting such ambitious targets and looking confident?

XYZ's Position in the Indian Market

By 2001, XYZ Electronics emerged as a truly global company having 20

production bases, 30 marketing subsidiaries and 19 overseas offices in 40

countries around the world. XYZ's global strategy involved seven main regions:

North America, Europe, Southeast Asia, Central Asia, China and Latin America.

XYZ launched its operations in India as a consumer electronics and home

appliances company in the name of XYZ India Electronics Ltd in 1995. Since then

XYZ had set up a number of operations such as the R&D center in Pune in 1996,

XYZ India software operations unit, and finally, XYZ Electronics India IT &

Telecom, it's wholly owned subsidiary for IT and Telecom products, formed in

May 2000.

The flagship company

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