Make in India for Renewable Energy and Electronics

Hardware Industry with Global Perspective.

Student Details
Name: Praveen.S.J
Batch: PGXPM12
ID: PGXPM152PRS

Introduction to India Economy Trends and Why make In India

India is a perfect example of diversified economy as significant as its culture. The contribution
towards the GDP of the economy comes from various sectors. The key note here is not even
one sector contributing more than 25% towards the GDP of its economy. Even the most
matured sectors of the economy contribute only 15 to 20% towards the GDP of the economy.

This clearly shows the scope for growth in each of these sectors is huge and the government
of India has taken vast measures in its efforts to bring up the contribution of each of these
sectors to the GDP of the economy.

Reference: Frost and Sullivan Report Current Sector Wise GDP share of the Indian
Economy.

Key points in Current Economic Indicators

Indias GDP is expected to reach $3.4 trillion dollars by the year 2020,
But with aggressive push to many of the sectors which has the potential to attain
rapid growth India can reach the GDP of $4 trillion dollars.
India could displace United Kingdom and become 5 th largest economy by 2025
Indian economy is currently a services based economy rather manufacturing
economy.
This trend is changing and slowly India will become a Manufacturing through the
impetus for Industries through availability of low skilled labour compared to other
destinations in global market.
Why Make in India

The main aim of this initiative is to increase the contribution of the manufacturing sector
towards the GDP from 16% to 25% by the year 2020. This will ensure that India will have its
vision intact as remaining one of the top 10 economies of the world and has a chance to
become the fifth largest economy displacing United Kingdom by year 2025.

This is not the only reason behind this initiative. Other key factors behind this initiative are

India adds nearly 10 million people to its workforce every year and manufacturing
sector is the only through which the millions could be employed in the middle income
jobs.

According to Justin Lin, former chief economist china will scrap nearly 85 million
manufacturing jobs because of rising wages, so the global market will have to find
newer market to fit in these manufacturing jobs.

India with its stable political environment stands a great chance of attracting these
jobs and there by contributing to the growth of the GDP and as well facilitating job
creation and lifestyle changes to ever growing workforce.

Domestic Requirement

Current Issue:

Electronics hardware Consumption

India imports 65% of current demand for electronic products from china. Indias
requirement for electronic device is projected to be around $400 billion around 2020.
If the increased demand is not addressed the import bill on electronics goods is going
to become more than oil imports.

Power consumption
For a country which is trying to become the 5th largest economy of the world, its
astonishing to note that nearly one third of the Indian population is without power

The only way and the cheapest way the electrification of the village program of
government of India would be possible is through clean solar energy.

This requires lot of manufacturing of Photovoltaic solar cells to meet the power
generation target set by the government.

The government has set a target of 100GW of power target through solar energy.

Even though lot of domestic big players come together the number of PV cells
needed to meet this demand is huge. This industry along with Electronic hardware
industry desperately calls in for a Foreign direct investment from developed
economies who can manufacture at low cost meeting the domestic need and as well
exporting the remaining the global markets.

Introduction to Make in India Initiatives for Renewable

Energy hardware and Electronics Hardware Industry

Solar Power Industry

 India has the fifth largest power generation portfolio worldwide with 271 GW of
installed power.

Economic growth, Increasing prosperity and urbanisation has increased the need for
energy across the various spectrums of the population.

Current renewable Energy stands at 77GW of total installed capacity of 271GW in the
country.

Indias Annual solar Installations to grow over four times by 2017. 10.86 GW of utility
scale solar and grid connected rooftop solar will added by 2017.

Growth Indicators

India is the fourth largest importer of oil and 15 th largest importer of petroleum and
natural gas products. The increased use of locally manufactured renewable resource
is expected to decrease our dependence of our imports.

Government is providing lot of incentives which includes GBI (generation based

Incentives, concessional finance and fiscal incentives towards renewable power
Industry.

Prices of the solar modules have declined by 80% since 2008 and the government
has created a liberal environment for foreign investment in the renewable energy
projects.

Foreign Direct investment of 100% is permitted under automatic route under

renewable energy generation and distribution projects subject to provisions of the
Electricity act of 2003.

Electronics hardware Systems

India has a consumer electronics market of $29 Billion by 2020.

Global demand estimated around $94.2 billion.
Skilled manpower available in abundance in semiconductor design and embedded
software.
ESDM(Electronics system design and Manufacturing) industry was estimated to
worth USD 68 billion dollars.

Growth Drivers

Rising manufacturing costs in alternate markets such as china and Taiwan.

65% of current domestic needs is met by imports.
Global Outlook on Renewable Solar Energy Industry

Analysis of Venturing into Global Markets with study on

below factors
Culture, demography, FDI ( Easy policies and procedures, Corruption free Govt and
bureaucrats, Availability of technology and , presence of technological clusters , ease
of doing business, Talent and Skill availability, peoples culture, preference, local
geography, climate, political stability, Political alliances , Economy , Govt regulations ,
Electric vehicles

Project Synopsis:

MSN Search and Relevance is a suite of Applications developed jointly by developers from
and Microsoft. This middleware component is a suite of independent modules whose main
aim is to increase the relevancy of the content that is shown on the MSN Home page and
other partner pages. It also supports Microsofts search applications like BING, MSN Videos
Live Search etc.

Past Relationship of the Parties

Wipro and Microsoft have a long standing partnership in several

engagements across the various online service divisions of Microsoft.
Wipro has jointly participated in lot of Development, Integration,
Testing and Delivery operations along with Microsoft in online services
space in the past.

Microsoft has to identify a service provider who can perform

end to end automation testing of their newly developed
Relevance Engine which will act as a Middleware component
for MSN.COM.

Seven Key Elements from both parties:

Parties:

Microsoft Technologies Owner of MSN.COM and online Relevance

components

Wipro Technologies Ltd IT Solutions service Provider

Interests - Microsoft:

Microsoft has to hand over the project to someone who

already has expertise in online services division.

Microsoft has to engage with someone with whom they have

comfortable working relationship.

Microsoft also has some budget constraints on the

online services Division (OSD) which would play a huge
role in deciding service Provider for the testing project.

Microsoft has to engage with someone who has expertise

on Automation testing to effectively test the component.

Microsoft has to select a service provider who can act as long

time partner and upgrade automation test suites and cope
with the evolution that happens to product.

Interests Wipro Technologies Ltd:

Wipro has jointly developed the middleware component along with

Microsoft. If they enter into automation testing space as well they
will have end to end control of the product and long standing
customer base.

Wipro is interested in getting into Automation testing Space and

this will act as a flagship project if they successfully finalize the
deal.

Wipro doesnt want a different vendor to handle Automation testing

project which would affect the working relationship with Microsoft in
terms of Delivery.

Value - Microsoft: Cost in US$

Target Price: $70 per hour.

Opening Price: $60 per hour.

Final Price: $90 per hour.

Market Price: 75$ per hour.

Price increase was accepted because of the commitment that Wipro

developers will work closely with Automation testing team to
enhance them with Knowledge transfer and solutions.
 Wipro
developer
Target Opening Final Market s will help
Price Price Price Price in
knowledg
e transfer
$70/Hr $60/Hr $90/Hr $75/Hr +$20

Value Wipro Technologies Ltd: Cost in US$

Target Price: $110 per hour.

Opening Price: $120 per hour.

Final Price: $90 per hour.

Market Price: $75 per hour

Final Price Agreed upon providing additional support by Wipro

developers to Automation testing team of Wipro.

Final Price
agreed
Target Opening Final Market upon
Price Price Price Price support
from Wipro
developers
$110 per $120 per $90 per $75 per
hour hour hour hour $90 per hour

Other terms and conditions agreed by both parties.

Successful delivery of first three sprint releases without any

delay.
Addition of several team members to the automation team
upon good performance and growth to the product.
Prefer Wipro over other vendors for other automation testing
engagements in online services division (OSD) upon
successful flagship delivery.

BATNA-Microsoft:

HCL Technologies (Alternate service provider): 75$/hr with

Automation testing experience.

Infosys Technologies (Alternate service provider):80$/hr with prior

Automation testing experience.

BATNA-Wipro Technologies Ltd

 Wipro is already in negotiations with Retail clients (Sears for $80/hr
automation testing engagement.

Barriers for Wipro:

Wipro didnt have huge expertise in Automation testing space

in Microsoft.

Wipro doesnt want to lose end to end Hold over the Project by
allowing another vendor.

Wanted to showcase this project as flagship project in their

Automation space with a big client like Microsoft.

Barriers for Microsoft

Microsoft has a budget constraint on Online Services Division (OSD)

because of the recession of 2009 and budget cuts.

Microsoft has to engage with someone who has expertise on online

Services Division and prior working relationship

Microsofts wants the sprint releases to be faster so needs someone

who has prior product knowledge.

Power-:

Wipro is the joint developer of MSN search and Relevance

Middleware component and they have complete knowledge of the
product which other vendors might not possess.

Microsoft needs the sprint release to be on time so that Relevance

engine is deployed against MSN.COM. This can be accomplished
only with someone who has prior knowledge of the product. Since
Wipro is the joint developer of the product this can be established
through their working relationship.

Ethics by both parties:

Right thing to do

Microsoft Wipro working relationship has been good so far, the new
assignment should not cause any discomfort in the engagement.

Wipro: Maximize value proposition where in Wipro can take ownership in

delivering the Microsoft sprint releases on time.

Important 5 STEPS in Negotiation Process:

Assess Microsoft BATNA

 HCL Technologies (Alternate service provider): 75$/hr with
Automation testing experience.

Infosys Technologies (Alternate service provider):80$/hr with prior

Automation testing experience.

2. Microsofts RV

$100 per hour with Additional support from Wipro developers in

initial ramp up stages.

3. Assess Wipros BATNA

Wipro is already close to signing a deal with Retail Suppliers

(SEARS) for automation testing engagement of $80/hr

Market price $75 per hour

4. Wipros RV

$75/hr without additional support from Wipro developers. As this

would allow them to get into automation space as a flagship project.

5. ZOPA

$90/hr - Final Deal

Process Map:

Wipros
BATNA Aspiration
Resistanc SEARS Final Wipr
e Retail Deal o
$75/h $80/h $90/h $110/h $120/h
r r r r r

Anchori
ZOP
$60/hr $70/hr $75/h $90/h $95/h $100/h ng
A11
r r r r
BATNA
Anchori Microso Resistance
HCL
ng ft Bargaining Point/value
Tech
Aspirati Range

Microsoft (Value
Process in $) Wipro(Value in$)
Initial Offer 60/Hr 120/Hr
 RV 100/Hr 75/Hr
BATNA 75/Hr 80/Hr
Target value 70/hr 110/Hr
Final/Deal value 90/Hr 90/Hr

Detailed plan of Negotiations:

5W & 1H Model

WHO Microsoft and Wipro Technologies Ltd.

WHAT Service Provider for automation testing of Microsofts new

Middleware.

WHEN For a initial period of 3 years from 2016 - 2019

WHERE Wipro Technologies Ltd, Microsoft Business unit.

WHY To get into automation testing space and also take complete
ownership of the component and not to lose out to other vendors.

HOW - Based on negotiations with Microsoft partners.

Pre Negotiation Stage-Preliminary Home Work

Bundling the Wipro product developers support so that the

deal would be instantaneously advantageous towards Wipro.
Convincing Microsoft that the on boarding of the automation
resources and delivery would be instantaneous compared to
competitors, whose ramp up time would be more since their
knowledge on the product is less.
Wipros working relationship of developers with their testers would
be much better compared to other vendors.

During Negotiation Stage-Initiate the dialogue with

homework

1. Wipros developer support would be there for the automation

resources
2. It was received positively by Microsoft because they saw a huge
advantage in it.
3. Promised Immediate On boarding of automation resources.
4. Again Microsoft received it positively and agreed to move ahead in
negotiation.
5. With homework on Microsofts BATNA and Wipros resistance value
prices were discussed.
6. Microsofts Resistance value of $100/hr and Wipros Target
value of $110/hr were out of sync
7. Through another round of negotiation established the ZOPA range
of $75-$100.
 8. Final price of $90 was negotiated successfully with additional
developer support to automation resources.

Post Negotiation Stage

1. Committed on time delivery for the first three sprint releases

without any delay.
2. Committed towards Additional support and on boarding help from
developers at all instances.
3. Committed Taking ownership end to end product from development
to automation testing and delivery.

Value creation, Maximization and Value claiming

Got a commitment from Microsoft that more automation and

developer resources would be added upon successful
completion of sprint releases.

Wipro would be preferred partner for other automation

testing engagements if this flagship project is delivered
successfully.

New deals for longer terms would be signed making Wipro one of
the more important partners in Microsofts Online services division
(OSD).

Actual experience while comparing to previous preparations

The experience during this negotiation was very professional, since both
the parties clearly did the homework and was more focused on a win-win
situation for both.

Both of the parties Resistance values, BATNA and Risks, fears and other
factors were respected and due diligence was done.

Emotions handled during this negotiation

Microsoft had lot of apprehensions and fear about Wipros

expertise on automation testing and delivery.

Since Wipro is new to this automation space Microsoft rightfully had

some doubts and was analysing the risks of failure.
 As a representative from Wipro I and the team managed to
remove the apprehensions and establish confidence through
support from expert developers.

Overall all the emotions were handled very professionally through thought
out negotiations and maximizing the value for both the parties.

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