February 21, 2008

The Oceans of Business - A Global Company

The nature has always been all powerful. The laws of nature do apply to the laws of business as well. The water bodies on planet earth are a perfect example. To maintain perfect balance in nature, water flows from one place to another. Similarly, lakes get dried faster than rivers because they are not connected to the seas.

This is the very way businesses work today. Gone are the days when companies could rely on operations based out of one geography. Today, the most talked about word in the world of business is "being a Global company".

Companies who have relied on operating in a single geography are similar to the lakes...they have high chances of drying up! The weather is similar to the economy. When the weather gets hotter and rains become scarce, lakes dry up. Similarly when the economy in a particular geography goes haywire, the company faces the real problem.

Similarly, looking at the world of mergers and acquisitions (M&A), it will remind one of the rivers and oceans. Smaller companies are acquired by larger companies with a business footprint spanning across geographies. The smaller companies are like the rivers, which eventually flow into the oceans either by the process of M&A or by being a key stakeholder of the bigger company's supply chain.

Well, I was reminded of the above when I read the news about Indian companies investing $10 Bn in the United States. When the United States faces a tough economy and a talks of a possible recession is going on, Indian companies have created 30,000 jobs for Americans... Thats BIG!
India is investing twice as much in the US as the US does in India
- Amit Mitra, Secretary-General

Indian companies had invested $45 billion worldwide with the US accounting for $10.25 billion last year. India's Commerce and Industry Minister Kamal Nath launched a road show here Tuesday around the theme "Investing in America: The Indian Story" under the joint leadership of the US-India Business Council and the Federation of Indian Chambers of Commerce and Industry (FICCI)

The next two to three years is going to see a vast change in the way businesses operate worldwide. The early bird always gets to set the tune!
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