Emerging Markets Institute, Student Insights

Course reflections: Competition from Emerging Market Multinationals

competition-from-emerging-market-multinationals

Rahul Kumar, Two-Year MBA ’20

My decision to pursue an MBA wasn’t unique in and of itself. Like many of my peers, I wanted to be back in an academic environment to pursue new subjects, develop myself further as a professional through leveraging the unique perspectives my peers would bring to the table, and taking advantage of world class faculty all while expanding my network. My decision to pursue an MBA at Johnson though, was indeed unique. Out of all the other schools that I had visited, Johnson felt like home away from home. I had visited the campus twice prior to my application and absolutely fell in love with the school and Ithaca. Even though I wasn’t a student when I made my first visit, the strong sense of community was palpable. Suffice it to say—I made the right decision.

As the fall term started, classes went into full swing. Prior to business school I had briefly operated a business between the United States and India, and I thus decided to follow this passion for international markets with the course Competition from Emerging Market Multinationals taught by Professor Lourdes Casanova. The course helps students navigate the economic and financial challenges of emerging markets, formulate business strategies for emerging markets, and learn about internationalization drivers and preferred modes of entry. Professor Casanova, a recipient of the most influential Ibero-American intellectuals award, is one of the world’s leading authorities on the topic of emerging market multinationals.

In one of the classes, we dissected the growth of Indian e-commerce platform, FlipKart. FlipKart is the largest e-commerce company in India, with 45 percent market share based on gross merchandise value and operates a hybrid business model, which incorporates online retail and a marketplace that brings together buyers and sellers.

As it is important to understand the geography within which a business is based, students first ensured a comprehensive understanding of the country and the business landscape.

Points discussed about India included:

  • Modern historical timeline from the British imperial rule to the recent implementation of the Goods and Services tax
  • Demographics breaking down India’s population of 1.3B
  • Base economics which took a deeper look at India’s $2.6T GDP
  • Industry highlights including agriculture, services, and manufacturing
  • A broad look at the various multinationals in India, including:
    • Tata
    • Rain Industries
    • Airtel

A deeper analysis followed with a look at India’s economy, policies, FlipKart specific points and even competition that FlipKart faces in India. Students highlighted India’s rapid GDP growth, expanding working age population, innovation ecosystem and then moved into policy changes such as the regulation of Foreign Direct Investments, and the Reserve Bank of India’s recent demonetization act.

Students next dissected FlipKart’s business through the lens of:

  • Macroeconomic drivers such as changes in the value of currency
  • Internal and external growth factors
  • SWOT analyses
  • Future growth opportunities

Through an in-depth presentation, students were also able to learn how the platform grew by means of internal and external factors such as:

  • Internal
    • Customer focus as differentiation
    • Rise of mobile phones, music & movies
    • Cash-on-delivery (COD)
    • Proprietary supply chain and delivery networks
    • Increase in brand advertisements
    • Entry into fashion and lifestyle
  • External
    • Increase in FDI
    • Increase in youth and working age
    • Rising GDP
    • Global shift to e-commerce
    • Indians embrace e-commerce
    • Innovative ecosystem

The SWOT analysis is a common strategic planning technique employed in many business school programs and serves to understand a target by looking at the target’s internal factors: (strengths and weaknesses), and external factors: (opportunities and threats). The technique is one of the “tried-and-true” tools employed within strategic analysis. FlipKart’s SWOT detailed the following:

  • Strengths
    • Experienced founders
    • Acquisition activities
    • Fundraising abilities
    • Walmart acquisition
    • Logistics pioneers
    • Problem solving culture
    • Own payment gateway
    • Exclusive and wide product range
  • Weaknesses
    • Limited distribution channels
    • High CAC due to competition
    • Limited product differentiation
    • Website prone to malfunction
    • Lack of independent board members
    • Not profitable operationally
  • Opportunities
    • Rise in youth and working age
    • Expansion into emerging markets
    • Indians embrace e-commerce
    • Supply chain improvements
    • Expand product categories
  • Threats
    • Competition from Amazon
    • Competition from e-Bay
    • Competition from China
    • Future policy changes
    • Government regulations

And even how the business can improve going forward, with strategies such as:

  • Improving supply-chain management practices
  • Becoming leaner, with lower costs and increased efficiency
  • Improving customer satisfaction
  • Capturing more sellers in India and natural markets
  • Refreshing the value proposition to merchants and adding additional services
  • Uniting forces to fight off Amazon
  • Leveraging Snapdeal’s Freecharge to enter the payments space and countering PayTm and Alibaba’s threat of entry

Competition from Emerging Market Multinationals has been one of my favorite classes thus far, and I would highly recommend the class to anyone who gets the opportunity to learn under Professor Casanova.

Although I could most certainly speak indefinitely about how much I am enjoying and learning from the program, I will end this post with an idea that has had a profound impact on me. It is often said that we end up becoming the average of the people that we surround ourselves with. I recognize how fortunate I am in being able to say, I’ve surrounded myself with the best—those with a hunger to improve the world around them, those with insatiable intellectual curiosity, and most importantly, those with compassion for all.

Link to learn more about the Emerging Markets Institute


About Rahul Kumar, Two-Year MBA ’20

Rahul Kumar is a first-year MBA candidate at the Johnson Graduate School of Management. Rahul also holds a BS in finance from the NYU Stern School of Business. Prior to Johnson, Rahul was a consultant with IBM, product manager at Everyday Health Inc., and founded Elements Digital Health, a designer of hardware diagnostic tools for underserved markets.

 


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