Jul 16, 2007|
Fortune favours the...
Led by strong global crude prices and consolidation, energy (oil, gas and petrochemical) companies lead the roll call on the Fortune Global 500 list. In fact, six of the top ten on the list are energy companies, led by Exxon Mobil (the overall list led by Wal-Mart, the world's largest discount retailer). The highest ranked Indian company on the list is again an energy company - Indian Oil Corporation - ranked 135. The company is also the only Indian representative in the Asian top fifty. The Asian top fifty has 31 Japanese and 8 Chinese companies.
Fortune Global 500: The top 10
Source: CNN Money website
||Sales (US$ bn)
|Royal Dutch Shell
Now, here are some comparisons. The global top 3 almost make up for India's annual gross domestic product. Wal-Mart alone equals the size of the Indian retail market. The top Indian company, IOC, is just 13% of the size of Exxon Mobil, the world's largest energy company. So what does that say of India, which aims to lead the global economic growth in this century, and which aims to be the second largest economy in the world (after China) at the end of the next 43 years? It does say something! It says of the necessity for Indian corporations to go global at a much more rapid space - to tap new markets, new customers and new raw material resources - to emerge as full-grown global corporates rather being only the largest in their local markets. Definitely, localisation (having a strong domestic presence) is a necessity if companies have to succeed as large global companies. However, to grow into near the comparable size of the current heavyweights, Indian companies need a lot more than just concentrating on the domestic market.
They require innovation in their products and practices. They require visionary managements capable of facing off the rough terrain that global competition can bring in. They need to create the competitive advantages that can sustain them in their challenge of the incumbents (the current global leading companies). And they need the hunger to carry on in their pursuit of higher growth, rather than resting on the laurels that they achieve in a few global moves here and there. For example, for it to be truly called a global organisation, Tata Steel cannot be satisfied with one Corus in its bag. Reliance needs to operate at a much bigger scale than what is currently operates at (and still manages to awe us). Banks like SBI need to do more than setting up international branches and taking care of needs of only the NRI community. Ranbaxy and Dr. Reddy's need to be more steadfast in their pursuit of launching patented products rather than continuing to breach patents of global pharma majors. ONGC needs to 'dig deeper into the global waters' and, more importantly, be successful in striking real oil and gas.
The challenges are enormous. However, that is what is required to be big. There is probably no other way! Though some support from the government is definitely required in terms of easing regulations and speed up the execution process. However, the onus lies on these companies to ramp up their global presence, and do that successfully. Simply, they need to be brave. Fortune will definitely favour them!
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