A PROJECT REPORT

ON
MNC’S STRATEGY
TO ENTER INDIA

SUBMITTED BY
SONI KHEMANI - 28
TARUNA LADHANI- 30
NEETHU.R.NAIR -37
ARCHANA PARDESHI-41

TABLE OF CONTENTS

SR.NO Particulars Page

 No.
1 01
INTRODUCTION TO MNC

2 02 - 09
ICICI PRUDENTIAL LIFE INSURANCE COMPANY

3 10 – 13

Mc DONALDS

4 14 - 18
HYUNDAI

5 19 – 21
TATA DOCOMO

6 22 – 23
CONCLUSION

INTRODUCTION TO MNC
Multinational corporation (MNC) or transational co-operation. (TNC), also
called multinational enterprise (MNE) is a corporation or an enterprise that
manages production or delivers services in more than one country. It can also be
referred to as an international corporation. The International Labour
Organization (ILO) has defined an MNC as a corporation that has its
management headquarters in one country, known as the home country, and
operates in several other countries, known as host countries. The first modern
multinational corporation is generally thought to be the East India Company.
Many corporations have offices, branches or manufacturing plants in different
countries from where their original and main headquarters is located.

Some multinational corporations are very big, with budgets that exceed some
nations' GDPs. Multinational corporations can have a powerful influence in
local economies, and even the world economy, and play an important role in
international relations and globalization.

Market imperfections

It may seem strange that a corporation can decide to do business in a different

country, where it does not know the laws, local customs or business practices.

One reason is that the use of the market for coordinating the behaviour of agents
located in different countries is less efficient than coordinating them by a
multinational enterprise as an institution. The additional costs caused by the
entrance in foreign markets are of less the local enterprise. According to Hymer,
Kindleberger and Caves, the existence of MNEs is reasoned by structural
market imperfections for final products. In Hymer's example, there are
considered two firms as monopolists in their own market and isolated from
competition by transportation costs and other tariff and non-tariff barriers. If
these costs decrease, both are forced to competition; which will reduce their
profits. The firms can maximize their joint income by a merger or acquisition
which will lower the competition in the shared market. Due to the
transformation of two separated companies into one MNE the pecuniary
externalities are going to be internalized. However, this doesn't mean that there
is an improvement for the society.

-1-

This could also be the case if there are few substitutes or limited licenses in a
foreign market. The consolidation is often established by acquisition, merger or
the vertical integration of the potential licensee into overseas manufacturing.
This makes it easy for the MNE to enforce price discrimination schemes in
various countries. Therefore Humyer considered the emergence of

Multinational firms as "an (negative) instrument for restraining competition

between firms of different nations".
Market imperfections had been considered by Hymer as structural and caused
by the deviations from perfect competition in the final product markets. Further
reasons are originated from the control of proprietary technology and
distribution systems, scale economies, privileged access to inputs and product
differentiation. In the absence of these factors, markets are fully efficient. The
transaction costs theories of MNEs had been developed simultaneously and
independently by McManus (1972), Buckley & Casson (1976) Brown (1976)
and Hennart (1977, 1982). All these authors claimed that market imperfections
are inherent conditions in markets and MNEs are institutions that try to bypass
these imperfections. The imperfections in markets are natural as the neoclassical
assumptions like full knowledge and enforcement don't exist in real markets.

International power

Multinational corporations have played an important role in globalization.

Countries and sometimes sub nations regions must compete against one another
for the establishment of MNC facilities, and the subsequent tax revenue,
employment, and economic activity. To compete, countries and regional
political districts sometimes offer incentives to MNCs such as tax breaks,
pledges of governmental assistance or improved infrastructure, or lax
environmental and labour standards enforcement. This process of becoming
more attractive to foreign investment can be characterized as a race to the
bottom, a push towards greater autonomy for corporate bodies, or both

Multinational Companies In India

Multinational companies are the organizations or enterprise that manages

production or offer service in one or more than one country and India has been
the home to a number of multinational companies. In fact since the financial
liberalization in the country in 1991, the number of multinational companies in
India has increased noticeably. Though majority of the multinational companies
in India are from U.S. however one can also find companies from other
countries as well.

-2-

Destination In India

The multinational companies in India represent a diversified portfolio of

companies from different countries. Though the American companies - the
majority of the MNC in India, account for about 37% of the turnover of the top
20 firms operating in India, but the scenario has changed a lot off late. More
enterprises from European Union like Britain, France, Netherlands, Italy,
Germany, Belgium and Finland have come to India or have outsourced their
works to this country. Finnish mobile giant Nokia has their second largest base
in this country. There are also MNCs like British Petroleum and Vodafone that
represent Britain. India has a huge market for automobiles and hence a number
of automobile giants have stepped in to this country to reap the market.

One can easily find the showrooms of the multinational automobile companies
like Fiat, Piaggio, and Ford Motors in India. French Heavy Engineering major
Alstom and Pharma major Sanofi Aventis have also started their operations in
this country. The later one is in fact one of the earliest entrants in the list of
multinational companies in India, which is currently growing at a very enviable
rate. There are also a number of oil companies and infrastructure builders from
Middle East. Electronics giants like Samsung and LG Electronics from South
Korea have already made a substantial impact on the Indian electronics market.
Hyundai Motors has also done well in mid-segment car market in India.

Reasons For Multinational Companies in India

There are a number of reasons why the multinational companies are coming
down to India. India has got a huge market. It has also got one of the fastest
growing economies in the world. Besides, the policy of the government towards
FDI has also played a major role in attracting the multinational companies in
India.

For quite a long time, India had a restrictive policy in terms of foreign direct
investment. As a result, there was lesser number of companies that showed
interest in investing in Indian market. However, the scenario changed during the
financial liberalization of the country, especially after 1991. Government,
nowadays, makes continuous efforts to attract foreign investments by relaxing
many of its policies. As a result, a number of multinational companies have
shown interest in Indian market.

-3-

Following are the reasons why multinational companies consider India as a

preferred destination for business:

 Huge market potential of the country

 FDI attractiveness
 Labour competitiveness
 Macro-economic stability
 -4-

ICICI Prudential Life Insurance Company

ICICI Bank

About ICICI Bank: ICICI Bank Ltd (NYSE:IBN) is India's largest private sector
bank and the second largest bank in the country with consolidated total assets of
over US$ 100 billion as of March 31, 2010. ICICI Bank’s subsidiaries include
India’s leading private sector insurance companies and among its largest
securities brokerage firms, mutual funds and private equity firms. ICICI Bank’s
presence currently spans 19 countries, including India.

Prudential Plc
Established in London in 1848, Prudential plc is an international retail financial
services group with significant operations in Asia, the US and the UK serving
around 25 million customers, policyholder and unit holders worldwide. The
company has £290 billion of assets under management and it is one of the best
capitalised insurers in the world with an Insurance Groups Directive (IGD)
capital surplus estimated at £3.4 billion (at 31 December 2009). Prudential is a
leading life insurer in Asia with a presence in 12 markets and have the top three
positions in seven key locations of Hong Kong, India, Indonesia, Malaysia,
Singapore, the Philippines and Vietnam.

The Company

ICICI Prudential Life Insurance Company is a joint venture between ICICI

Bank - one of India's foremost financial services companies-and prudential plc -
a leading international financial services group headquartered in the United
Kingdom. Total capital infusion stands at Rs. 47.80 billion, with ICICI Bank
holding a stake of 74% and Prudential plc holding 26%.ICICI Prudential Life's
capital stands at Rs. 4,780 crores (as of March 31, 2010) with ICICI Bank and
Prudential plc holding 74% and 26% stake respectively. For the period April 1,
2009 to March 31, 2010, the company has garnered total premium of Rs 16,532
crores and has underwritten over 10 million policies since inception. The
company has assets held over Rs. 57,000 crores as on March 31; 2010.For the
past nine years, ICICI Prudential Life has retained its leadership position in the
life insurance industry with a wide range of flexible products that meet the
needs of the Indian customer at every step in life.

-5-

Distribution

ICICI Prudential Life has one of the largest distribution networks

amongst private life insurers in India. It has a strong presence across India with
over 1,900 branches (including 1,074 micro-offices) and an advisor base of over
210,000 (as on March 31, 2010).The company has 7 banc assurance partners
having tie-ups with ICICI Bank, Ratanagiri District Central Co-op Bank, Ballia
Kshetriya Co-operative Bank, Renuka Nagrik Sahakari Bank, Bhandara Urban
Co-operative Bank, Balasinor Nagarik Sahakari Bank Limited, Arvind Co-op
Bank.

Products

Insurance Solutions for Individuals

ICICI Prudential Life Insurance offers a range of innovative, customer-centric

products that meet the needs of customers at every life stage. Its products can be
enhanced with up to 4 riders, to create a customized solution for each
policyholder.

Savings & Wealth Creation Solutions:

ICICI Pru Save 'n' Protect is an ideal plan for those who want to accumulate
funds on a regular basis while enjoying insurance protection.

ICICI Pru Cash Back is a single policy that combines the triple benefit of
protection, savings & periodic liquidity.

Protection Solutions:

ICICI Pru I protects is a term insurance plan that you can buy online at your
convenience at affordable premiums.

ICICI Pru Pure Protect is a flexible and affordable term product, with which
you can ensure your life and provide total security for your family in case of an
unfortunate event.

ICICI Pru Life Guard is a protection plan, which offers life cover at low cost.
It is available in 2 options –level term assurance with return of premium &
single premium.

-6-

ICICI Pru Home Assure is a mortgage reducing term assurance plan designed
specifically to help customers cover their home loans in a simple and cost-
effective manner.

Child Plans:
ICICI Pru Smart Kid Regular Premium is a fixed-term insurance plan that
provides you with funds at regular intervals.

Retirement Solutions:

ICICI Pru Forever Life is a traditional retirement product that offers

guaranteed returns for the first 4 years.

ICICI Pru Immediate Annuity is a single premium annuity product that

guarantees income for life at the time of retirement. It offers the benefit of 5
payout options.

Health Solutions:

ICICI Pru Hospital Care is a fixed benefit inpatient hospitalization plan,

covering various stages of treatment with a daily allowance, ICU, procedures &
recuperating allowance. It covers a range of medical conditions (900 surgeries)
and has a long term guaranteed coverage up to 20 years.

ICICI Pru Crisis Cover is a 360-degree product that will provide long-term
coverage against 35 critical illnesses, total and permanent disability, and death.

ICICI Pru Medi Assure is a reimbursement inpatient hospitalization health

insurance policy that provides guaranteed insurability till age 75 years.

Group Insurance Solutions:

ICICI Prudential also offers Group Insurance Solutions for companies seeking
to enhance benefits to their employees.

Group Gratuity Plan: ICICI Prudential Life's group gratuity plan helps

employers fund their statutory gratuity obligation in a scientific manner and also
avail of tax benefits as applicable to approved gratuity funds.

-7-

Group Leave encashment Plan: ICICI Prudential Life’s Group offers a market

linked and traditional leave encashment plan designed to aid the employer to
build a fund to meet their future leave encashment liability. The contributions
made will be invested as per the chosen investment plans and will be available
for payment of the benefit when it falls due. Additionally, the product also
provides for term cover for all the employees covered under the policy.

Group Immediate Annuities: ICICI Prudential Life realizes the importance of

prudent retirement planning. With this in mind, it has developed a suite of life
and joint life annuities which guarantee periodic payment to annuitant’s up to
death. Further there are options which return the purchase price on death of
annuitants. These annuity options are offered to our existing superannuation
customers, and also to superannuation funds not managed by us.

Group Term Plan: ICICI Prudential Life's flexible group term solution helps
provide an affordable cover to members of a group. The cover could be uniform
or based on designation/rank or a multiple of salary. The benefit under the
policy is paid to the beneficiary nominated by the member on his/her death.

Flexible Rider Options:

ICICI Prudential Life offers flexible riders, which can be added to the basic
policy at a marginal cost, depending on the specific needs of the customer.

Accident & disability benefit: If death occurs as the result of an accident

during the term of the policy, the beneficiary receives an additional amount
equal to the rider sum assured under the policy. If an accident results in total
and permanent disability, 10% of rider sum assured will be paid each year, from
the end of the 1st year after the disability date for the remainder of the base
policy term or 10 years, whichever is lesser.

Critical illness benefit: Critical Illness Benefit Rider provides protection

against 9 critical illnesses to the policyholder when attached to the basic plan.

-8-

News Releases
ICICI Prudential Life launches I Protect – an online term insurance plan –
Mumbai on August 16 2010.
ICICI Prudential Life Insurance Company Ltd (ICICI Prudential Life) today
announced the launch of I Protect - a completely online term insurance plan that
is extremely affordable.

An individual can apply online for I Protect and the payment can be made either
through his/her internet banking account or credit card. The life cover
commences as soon as the premium is paid. Up to a certain limit, life cover can
be bought immediately without the need for any medical tests.  Above this limit
also, the entire transaction can be finished online but the cover will start post a
medical test.

The policy can be done bought completely online as no physical

documentation is required. I Protect provide financial security to the family of
the policy holder in the event of his untimely death. In case of such an
eventuality, the nominee will receive the entire sum assured. The entry age for a
customer is a minimum of 20 years and a maximum of 65 years with a
minimum policy term of 10 years and a maximum of 30 years. The maximum
age at policy expiry is 75 years.

Speaking at the launch, Mr.

Madhivanan Balakrishnan, Executive
Vice President ICICI Prudential Life
said, ''India has witnessed a
proliferation of internet usage and e-
commerce. People are increasingly
turning to the internet as a medium to
transact from the confines of their homes at their convenience. The launch of I
Protect will help us to be more accessible to our customers. It provides
unmatched value and allows him to secure the financial protection of his family
in the event of his untimely death. As this is a purely online product, we are able
to pass on all benefits of cost savings to our customers. Given the
uncomplicated nature of the product, ease of purchase and extremely affordable
premiums, we are confident that I Protect will strike a chord with our
customers.

-9-

McDonald’s In India
McDonald’s Corporation, established in 1955, owns one of the world’s most
well-known and valuable brands and holds a leading share in the global branded
quick service restaurant segment. The Corporation has more than 30,000
restaurants in 119 countries serving 47 million customers each day. McDonald’s
entered India in 1996 through joint ventures with two Indian entities, hard
castle. Restaurants Pvt. Ltd. and Connaught Plaza Restaurants Pvt. Ltd.owns
and operates McDonald’s restaurants in western India through a 50-50 joint
venture with the parent company. Through a similar partnership, Connaught
Plaza Restaurants Pvt. Ltd. owns and operates McDonald’s operations in
northern India. There are 54 McDonald’s restaurants in India employing over
2,000 people who serve more than1.5 lakh customers across the country every
day.

India challenges

 Prior to McDonald’s entering India there was no concept of such a food

category. This meant low product awareness and absence of the
infrastructure (cold chain) and supply chain needed for such a business to
be successful. Indian agriculture was tuned to producing for households
and not for the processed food industry.
 While all this necessitated high investments in infrastructure creation, the
consumer could not afford to pay high prices.
 Indians do not consume beef and there is a significant population which is
strictly vegetarian.
 Availability of real estate is crucial for success in the retail business.
Getting quality real estate was an issue. McDonald’s either does outright
purchase or enters into long lease of 25 years. Rent control laws, housing
societies unwilling to enter into long term leases and required clearances
from multiple authorities made acquisition of real estate a difficult
proposition.

-10-
Factors for success
McDonald’s India overcame all these challenges by focusing on its core values
of delivering quality products, served in a friendly environment, in a clean
place, at affordable prices, to set up its growing network of outlets. Several
factors contributed to this:

Global support with local management

McDonald’s India is a joint-venture company managed by Indians
with complete flexibility to run the business. The India team brought local
knowledge into the joint venture. The Indian team also brought in
entrepreneurial drive to make the business a success, given the unique
challenges the country presented. McDonald’s Corporation provided strong
support to the local management in several ways. It trained the Indian
management extensively before commencing operations, in order to ensure
adherence to its commitments on quality, service, cleanliness and value and
enable standardization of the service in sync with the global experience.
International experts in different areas were also sent to establish the business in
India.

Investment in the food supply chain

McDonald’s made large investments in infrastructure and supplier development.
It set up a cold chain, to cut down operational wastage and maintain the
freshness and nutritional value of raw and processed food products. The cold
chain involves procurement, warehousing, transportation and retailing of
perishable food products - all under controlled temperatures. Setting up this
extensive cold chain distribution system took six years and has involved the
transfer of state of-the-art food processing technology by McDonald’s and its
international suppliers to Indian enterprises. McDonald’s identified and
developed local entrepreneurs as suppliers for its India business. Global
suppliers of McDonald have collaborated with them to facilitate transfer of
technology and expertise.

Localisation
McDonald’s carried out significant localization of equipment that resulted in
bringing down fixed costs. McDonald’s suppliers were also brought in to set up
equipment manufacturing plants in India. In addition, products were developed
to suit Indian cost expectations and suitability to the palate. Some products in
the global menu of McDonald’s were adapted for India.

-11-

Suitable pricing
McDonald’s incurred high fixed costs in infrastructure and supplier creation in
India. However, keeping in mind the price sensitivity of the customer,
McDonald’s adopted a large volume, low realization model of business. The
company has taken a long-term view and priced its products appropriately.

Product customization
McDonald’s developed a menu especially for India with vegetarian selections to
suit Indian tastes and culture. McDonald’s does not offer any beef and pork
items in India. McDonald’s has re-engineered its operations to address the
special requirements of a vegetarian menu. In India, separation of vegetarian
and non-vegetarian food products is maintained throughout the various stages of
procurement, cooking
and serving.

Structured process for real estate acquisition

Based on the initial experience, McDonald’s India put in place a structured
process for acquiring real estate space in the country. This has resulted in
accelerating the process of acquisitions. As McDonald’s brand image grew in
the local market, housing societies became more willing to rent their premises
to McDonald’s. Lately, development of large malls all across the country
mitigated to a large extent the real estate challenge for McDonald’s.

Leveraging the India Advantage

India has become the source for all vegetarian items for McDonald’s
worldwide. Some examples of products developed in India and rolled out in
other countries are Pizza McPuff, McAloo Tikki burger
and McCurry Pan.

-12-
Future plans
While India is viewed as a tough market with limited scale (McDonald’s is
opening 150 stores a year in China against 15- 20 in India), India’s outlook is
positive and is considered a
growth market. Currently,
McDonald’s has 54 outlets in
more than 10 cities in India.
The company plans to add 15
outlets a year at an investment
of US$ 8.7 million (per 15
outlets).McDonald’s is
expected to double its
investments from US$ 87
million that it has already
invested to US$ 174 million by
2005. Fresh investments will be
for expansion of McDonald’s India’s supply chain, refurbishing its cold chain,
and setting up more outlets. McDonald’s is planning tie-ups with oil marketing
companies for setting up McDonald’s outlets at gas stations. Currently, there is
one McDonald’s outlet at a BPCL gas station and it is aiming at more such
outlets with alliances with other companies as well. McDonald’s is also eager to
set up more outlets at places like railway stations, and is working on new
product offerings like a fruit drink and desserts.

-13-
Hyundai Entry In India
Hyundai Motors India Limited

The South Korean automobile manufacturer of India, Hyundai Motors is

ranked as sixth biggest car maker in the world. Its subordinate, Hyundai Motor
India Limited (HMIL), is the second biggest car producer in India with popular
brands such as Getz, Sonata Embera, Santro, Elantra, Accent and Tuscon under
it. The firm has been certified under ISO 14001 for entailing sustainable eco-
friendly administration practices.

About Hyundai Motors India

Initiated in the year 1967, Hyundai Motor Company (HMC), has its
headquarters at the capital of South Korea - Seoul. HMC is a segment of
Hyundai KIA Automotive Group and administers the world's biggest
incorporated vehicle service at Ulsan situated in South Korea. Hyundai Motor
India Limited (HMIL) , currently has more than 30 modifications of passenger
cars in six sections. The various cars feature in different divisions such as
Santro is B type car; Getz a B+ type car, Accent C type, Elantra D type, Tucson
SUV type, etc. In the financial year 2006, the company registered joint sales of
252,861 units with a steady expansion of 17.26%. In a span of 7 and half years,
HMIL launched 1,000,000 passenger cars and is recognized as the chief
exporter of cars with an annual export turnover of Rs. 1,800 crores. To expand
its business network, HMIL has entered into retail joint venture with many
financial organizations in India like Sundaram Finance, Mahindra Finance,
HDFC Bank, Punjab National Bank, etc.

Hyundai Motors India - Products

Hyundai Accent - Set with improved engine machinery, high-tech design and
security features, Hyundai Accent spells style, opulence, control and top
performance.

Hyundai Tucson - 60,000-mile basic guarantee, multipurpose interior, revamped

2005 Kia Sportage, five doors, etc are some of the features that Hyundai Tucson
boast of. A compact intersect SUV, Tucson can be altered between two-wheeled
drive and four-wheeled drive.

-14-
Hyundai Sonata Embera: A fifth generation Sonata car, Hyundai Sonata Embera
is efficient, chic and has an advanced suspension system. The car is famous for
its superb pick-up and speed.

Hyundai Getz - recognized for its European appeal, Hyundai Getz is an

amalgamation of comfort, expertise and functionality.

Hyundai Santro Xing: Recognized for its power competence and consistency,
Hyundai Santro Xing, is an improved version of Hyundai Santro that comes
with added characteristics for Indian families

Hyundai Motors India - Latest Launches

Hyundai I-Series

Hyundai i10 Kappa

Hyundai i20

Hyundai i10 Diesel Variant

Hyundai Genesis Coupe

Hyundai's Entry in India

One of the major players that entered the Indian car market was HMC through
its subsidiary HMIL. Before making its move, the company closely studied the
industry for a year. The company's officials talked to vendors, dealers and
customers to get a thorough knowledge of the industry...Marketing Santro
received an encouraging feedback from customers who appreciated its unique
design that gave more headroom and facilitated easy entry and exit.

-15-
The Challenges Ahead

During the period January to June 2004, Santro lost its leadership status in the B
segment. Established in year 1996, Hyundai Motor India Ltd. is a sub division
of the giant South Korean multi national, the Hyundai Motor Company. It is
Korea's top automobile manufacturer, capturing the Indian market and giving a
strong competition to its rivals in the same segment. The company success story
is based on a profitable Indian - Korean partnership where Indian skills and
workmanship combine with Korean design and technology to produce one of
the best cars.

In the year 1997, its sales revenue had touched 8.24 billion. The Hyundai Santro
is giving tough competition to other segments and has been designed in India at
the integrated auto-manufacturing unit at Irrungattukatoi near Chennai. This
plant is capable of producing 1,20,000 cars, 1,30,000 engine and transmission
systems annually.

It is planned to invest another $1 billion in manufacturing more critical

components by the year 2001. Equipped with latest technology, machinery,
international quality press, and body and paint shops all across the world, the
company has set more than 70 dealer workshops. The company has
incorporated state-of-the-art manufacturing plant near Chennai that tells about
some of the most developed production, quality and testing potentials in the
country.

According to a company release, the rise in production will help the company
increase its export destinations to 95 countries by the end of this year. Apart
from offering global technology products, Hyundai motors has also been
appreciated with the benchmark ISO 14001 certification for its sustainable
environment management practices. To cater with the differing and growing
needs of the market, company hopes to increase its presence in the Indian
market with coming up new models.

On January 10, 2008, Hyundai Motor India Ltd.'s (HMIL) i10 was awarded the
'Car of the Year Award 2008' in the seventh edition of the CNBC-TV18 Auto
car Auto Awards.1 The i10 was described as a great success with the company
claiming that 25,000 units had been sold since the time it was launched in 2007.

-16-
Hyundai posted a growth of 39 percent in sales in the Indian market due to good
sales of the i10 in 2007. The growth witnessed at HMIL was in the face of a
drop in the sales of its rival Maruti Suzuki India Ltd.'s,2 entry level car M800
from 7,021 to 5,470 units (22 percent drop).HMIL is India's largest exporter of
passenger cars and had shipped more than 125,000 cars in 2007 and accounted
for about two thirds of India's annual exports.

In July 2008, Hyundai emerged as the second largest passenger vehicle

manufacturer in India with a market share of 16.91%.HMIL was incorporated in
India in the year 1996 and its first car, the Santro, was launched in the year
1998. At the time of the Santro's launch, Hyundai was an unknown brand in
India and Korean products were associated with inferior quality in the minds of
the Indian consumers.

After an in depth study of the Indian market and the Indian consumer's psyche,
HMIL signed up Shahrukh Khan, an Indian cinema star, as its brand
ambassador to promote the Santro. According to analysts, HMIL also reduced
the engine output of Santro to provide better fuel efficiency, priced its spares
reasonably, and modified the product specifications to suit Indian conditions.

The car went on to become a great success and provided HMIL with a firm
foothold in the Indian automobile industry. Analysts felt that it was HMIL's
strategy of providing state of the art technology cars coupled with aggressive
pricing which ensured its success. The Santro was followed by a range of cars
such as the Accent, the Elantra, the Getz, the Sonata, the Verna, the Terracan,
and the Tucson, each positioned in a different customer segment and at a
different price point. The range of cars introduced by HMIL enabled it to ensure
its presence in almost all the segments of the market and to capture market
share.

According to analysts, Hyundai Motor Company's strategy with reference to

India as of 2008 was to convert its Indian operations into a key design,
manufacturing, and export hub for its global operations while expanding its
presence in India. This strategy was expected to enable the company to capture
a large share of the global car market.

-17-
In February 2008, HMIL opened a second manufacturing plant near Chennai.
The new plant increased the company's production capacity to 600,000 cars a
year.6 The opening of the plant made Hyundai Motor Company's Indian
production base the biggest outside South Korea. The company aimed to make
its Indian operations the global manufacturing hub for all of its small car
models.

HYUNDAI’S PRICING STRATEGY

With the launch of Maruti Swift recently a price war was expected to kick in .
Immediately after maruti raised prices on its debutante Hyundai Motor India hit
back with a Rs 16,000-19,000 markdown on three new variants of Santro Xing.

The company has introduced the XK and XL variants at a lower tag of Rs

3,26,999 and Rs .3,45,999 respectively.The new price variants are likely to give
Maruti’s existing B-segment models, Zen and WagonR a run for their money.
Hyundai has also launched a new non-AC variant of the Santro at Rs 2.79 lakh,
a tad higher than what the existing non-Ac Santro costs. The next offensive is
due from Maruti. With the Santro’s new price positioning, Zen and particularly
WagonR may be due for a correction, or at least a limited-period subvention. If
that happens the domino effect will kick in across the B-segment.

Hyundai is positioning its new variants on the tech platform. Strapped with 1.1
litre engine with eRLX Active Intelligence technology, the new variants also
come with new colour-coordinated interiors, a new front grill and a 4-speed AC
blower that makes the air conditioning more efficient.

-18-
 Tata DOCOMO
Tata DOCOMO is Tata Teleservices Limited's (TTSL) telecom service on the
GSM platform-arising out of the Tata Group's strategic alliance with Japanese
telecom major NTT DOCOMO in November 2008under which DOCOMO will
acquire 26 per cent of TTSL’s stock for approximately Rs 13,070 crore (US
$2.7 billion). Tata Teleservices has received a pan-India license to operate GSM
telecom services, under the brand Tata DOCOMO and has also been allotted
spectrum in 18 telecom Circles. TTSL and has already rolled out its services in
various circles.The launch of the Tata DOCOMO brand marks a significant
milestone in the Indian telecom landscape, as it stands to redefine the very face
of telecoms in India. Tokyo-based NTT DOCOMO is one of the world's leading
mobile operators-in the Japanese market, the company is clearly the preferred
mobile phone service provider in Japan with a 50 per cent market share.

NTT DOCOMO has played a major role in the evolution of mobile

telecommunications through its development of cutting-edge technologies and
services. Over the years, technologists at DOCOMO have defined industry
benchmarks like 3G technology, as also products and services like the i-
modeTM, mobile payment and a plethora of lifestyle-enhancing applications.
Today, while most of the rest of the industry is only beginning to talk of LTE
technology and its possible applications, DOCOMO has already started
conducting LTE trials in physical geographies, not just inside laboratories!

DOCOMO is also a global leader in the VAS (Value-Added Services) space,

both in terms of services and handset designs, particularly integrating services at
the platform stage. The Tata Group-NTT DOCOMO partnership will see
offerings such as these being introduced in the Indian market under the Tata
DOCOMO brand.

Tata DOCOMO has also set up a 'Business and Technology Cooperation

Committee, comprising of senior personnel from both companies. The
committee is responsible for the identification of key areas where the two
companies will work together. DOCOMO, the world's leading mobile operator,
will work closely with the Tata Teleservices Limited management and provide
know-how on helping the company develop its GSM business.

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Despite being a late entrant, Tata Indicom, TTSL's CDMA brand, has already
established its presence and is the fastest-growing pan-India operator.
Incorporated in 1996, Tata Teleservices Limited is the pioneer of the CDMA 1x
technology platform in India. Today, Tata Teleservices Limited, along with
Tata Teleservices (Maharashtra) Ltd, serves over 37 million customers in more
than 320,000 towns and villages across the country offering a wide range of
telephony services including Mobile Services, Wireless Desktop Phones, Public
Booth Telephony and Wire-line Services.

About NTT DOCOMO

NTT DOCOMO is the world’s leading mobile communications company.

DOCOMO serves over 53 million customers, including 46 million people
subscribing to FOMAM, launched as the world’s first 3G mobile service based
on W-CDMA in 2001. DOCOMO also offers a wide variety of leading-edge
mobile multimedia services, including i-mode, the world’s most popular mobile
e-mail/Internet service, used by 48 million people.

With the addition of credit-card and other e-wallet functions, DOCOMO mobile
phones have become highly versatile tools for daily life.

About Tata Teleservices limited

Tata Teleservices is one of India’s leading private telecom service providers.

The company offers integrated telecom solutions to its customers under the Tata
Indicom brand and uses the latest CDMA 1X technology for its wireless
network. Tata Teleservices, alongwith Tata Teleservices (Maharashtra) Ltd,
operates in more than 6,700 towns across 20 circles—Andhra Pradesh, Gujarat,
Karnataka, New Delhi, Maharashtra, Mumbai, Tamil Nadu, Orissa, Bihar,
Rajasthan, Punjab, Haryana, Himachal Pradesh, Uttar Pradesh (E), Uttar
Pradesh (W), Kolkata, Kerala, MPCG, ROWB and Assam. Tata Indicom brand
has a customer base of over 30 million.

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Press Releases
TATA DOCOMO launches Industry First ‘Free Air Time Rollover’ plan
for Postpay subscribers

TATA DOCOMO, the GSM brand of Tata Teleservices Limited—the country’s

youngest and fastest-growing pan-India dual-technology telecom service
provider—has launched yet another first in the industry; ‘Free Air Time
Rollover’ (FAT) offer for its potential postpay customers. The offer is a unique
one where potential customers can roll over their current unused free air time to
next month! What makes this further compelling is that Tata DOCOMO allows
the roll over of free air time for a period of 6 months. The Free Air Time roll
over plan is available under the most lucrative 20 options of their popular Diet
299 and Diet 499 plans In other words, the offer allows the customers to choose
amongst different combinations that suit their usage pattern, under each plan.

This offer is yet another first in the Telecom industry and is true to our core
values of honesty and transparency wherein we give our customers the
opportunity to roll over their unused airtime to the next month. We are
confident that this will come as a delight to our customers as it will liberate
them from the pressure of exhausting the free airtime within the same month
and will also significantly increase the value provided in the plans.” Mr.
Gurinder Singh Sandhu, Head Marketing, Tata DOCOMO said.

If customers are unable to use the complete FAT Rollover offered in the plan in
one month, the same is carried forward to next month along with the regular
monthly FAT Rollover. The cumulative FAT Rollover will be available for a
period of 6 months. Post the sixth month; the cumulative un-utilized FAT
Rollover will be forfeited.

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 CONCLUSION
The majority of successful foreign firms in India have been highly aggressive
by putting forth a large amount of funds into the initial investment. Korea's LG
and Samsung have managed to gain a huge share of the Indian market in a very
short time by their use of a large scale initial investment. The advantages of a
large scale initial investment include not only the quick attainment of brand
image, but also the ability to gain an upper hand in negotiations with local
government bodies. The recent investments of Mitsubishi Chemicals (an
exception among Japanese companies as it chose India before China for
investment) and Korea's largest iron manufacturer POSCO show this quite
clearly. With a massive proposed investment of around US$12 billion, the local
government in Orissa state has become eager to create a model for further
investment among large foreign firms and gave extremely favorable conditions
to these two corporations.

A firm commitment from the top-level management makes this kind of large
scale initial investment possible. In 1983, when Suzuki entered the Indian
market, it dominated the market share for a period of time. The decision for this
entrance into the market was made possible by Mr. Osamu Suzuki himself, who
was willing to shoulder the risk and take personal responsibility for the
investment, despite rejection of such proposals by many other companies. GE's
Jack Welch's personal liking of India which prompted an aggressive entrance
into India, as well as Oracle's Larry Ellison's decision to enter the India market
well before the explosion of the IT market in the US, are other examples of top
management's commitment to make large scale investments in India.

Examples of failure among foreign firms in India that made large initial
investments include Enron (which later became bankrupt) and Daewoo Motors.
However, besides these two well known examples, it is actually difficult to find
companies that have not found success in India's market after making large
scale commitments.

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On the other hand, corporations which have made more conservative and lower-
scale investments have run into trouble as their products fail to meet the needs
which are unique to the Indian market. Even companies which make industry-
leading products such as some of the Japanese electronics manufacturers have
met with failure by choosing a more modest investment strategy.

When India's Commerce and Industry Minister Kamal Nath visited Japan, his
delegation made the statement, "We don't want Japanese companies to wait on
their investments until the environment in India becomes absolutely perfect."
The minister can be seen to be comparing Korean companies who make the
initial investment and work through problems that come up while achieving
growth to Japanese firms that hold back on making large commitments to the
Indian market while waiting for conditions to improve.

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