ECON 634 – Case Study #2

Section-504, Team 9
- BY NAGARJUN CHANNEGOWDA (@04293243) – ABHISHEK VENUGOPAL (@04293228) –
MOHAMMED OMAR ARAB (@04314781) – JYOTHSNA JAIRAGHU HOSOOR (@04275839)

Indian-origin businesses Suzlon and Bharat Forge have sketched out the pinnacle of global

success. With limited local resources at its disposal, Bharat Forge and Suzlon developed their

plans and implemented effective resource allocation and planning to succeed on a global

scale. The study discusses how both companies differ in their approaches and their

similarities in expanding internationally. Suzlon is a textile manufacturing company, whereas

Bharat Forge is a prominent player in the Indian automobile industry.

Given that Bharat Forge and Suzlon are both well-established in both home and international

sectors, there are some significant parallels between their strategies for achieving global

success.

1st Similarity:

The first similarity between the two businesses is their goal of becoming global enterprises.

Bharat was driven to become a local forging industry pioneer and develop its company

abroad by the enormous and growing middle-class market in India as well as the nation's low-

cost manufacturing base. Suzlon, a small textile manufacturing company, came up with the

creative idea of creating and installing wind turbines to solve the issue of electricity; as a

result, it is India's top indigenous wind technology company that is realizing international

business expansion.

2nd Similarity:

The method of entry into the global market is the second similarity between the two

companies. Both businesses employed international acquisition strategies to increase their

technological and product potential. Bharat Forge made a risky acquisition abroad and a

sizeable investment in the creation of advanced forging technology. Suzlon investigated new

markets by acquiring companies abroad in addition to the traditional markets for wind

energy.
3rd Similarity:

The third significant similarity between the two businesses is the acquisition of technical

competence in the relevant industries. The key to Bharat Forge's international success has

been its acquisition strategy, which involves making global acquisitions to expand not just its

product line but also to incorporate regional technological know-how into its production

methods to attain higher precision. The goal of Suzlon's global acquisition strategy was to

expand its position as a supplier of essential windmill components. In a brilliant move for its

international endeavours, Suzlon bought companies with experience in the production of

particular key components and combined them under a single company. As a result, Suzlon

not only installed windmills but also manufactured and maintained them.

4th Similarity:

Their emphasis on clients and their needs was the second commonality between the two

businesses. By moving the company's facilities closer to its clients, Bharat Forge was able to

improve its user interface, which encouraged client participation. Suzlon attracts more client

collaborations by not only producing and installing windmills but also taking on the duties of

operating and maintaining windmills for their customers.

The last thing that businesses have in common is that they use cost-cutting techniques to

lower production expenses. Suzlon's goal of lowering the cost of wind energy was always its

goal, and it was accomplished by combining knowledge from numerous sectors with a solid

engineering foundation in India. Indian engineers are more affordable than any other, which

lowers the overall cost of production. To lower production costs, Bharat Forge also employed

Indian engineers for technological research and operations. Even though both businesses took

different approaches, hiring Indian engineers as the core technology team helped them

achieve their main goal of lowering production costs.

1st Difference:

There were several fundamental contrasts between Bharat Forge and Suzlon's approaches in

expanding their businesses internationally, but there were also some parallels. The

"innovation" component is the first and most significant difference. As a domestic forging

and automotive industry pioneer, Bharat Forge has grown its business internationally, making

it the second-largest forging company in the world. Although there was a significant

technological advancement involved, there was no innovation in the process used by Bharat

Forge as they expanded their business abroad in the same industry in which they were

pioneers, namely forging. In contrast, Suzlon, a textile company, wanted to install windmills

to solve the electricity issue. The founder understood the need for inexpensive wind power as

a solution to power (electricity) problems, so the production of wind power became the

company's goal and the company debuted on the international market as a manufacturer of

wind turbines. Suzlon's strategy included an innovative component.

2nd Difference:

Government intervention in the expansion of both enterprises is the second difference.

Because Bharat Forge was growing its business in the forging industry, the government did

not step in to offer financial incentives or anything else. Suzlon was engaged in the

construction, operation, and maintenance of wind turbines, all of which required significant

financial inputs. When wind power generation was still relatively new in India, the

government stepped in to encourage the company's expansion and entry into the international

market by offering financial incentives.

3rd Difference:

Their strategy for corporate growth is the third difference. Suzlon discovered that although

wind power had enormous potential, Indian consumers were unaware of its technology, how

it operates, or the benefit it promotes. Suzlon developed a novel idea known as the "concept

of commissioning" as a result of extensive research, which meant that they would serve as

both a supplier and custodian of wind power generation. Unlike other companies, which

would not provide sales service after the product was delivered to the clients, Suzlon would

take care of the management, installation, and operation of its wind turbines, allowing its

clients to focus on their businesses. As a result, wind turbines were accepted as a viable

alternative energy source, which enhanced the company's reputation. By going public with an

IPO in 2005, Suzlon entered the top 25 Indian manufacturing companies and began making

their spare parts cheaper. The HRM strategy adopted by Bharat Forge was low-tech and

focused on practical solutions. To reduce the amount of time needed for training and to

concentrate on high outputs, they began hiring a white-collar workforce. They completely

rely on local management, placing a high level of trust in teams where employees were

retained as part of integration strategies. An operation team visited each acquired entity every

6 to 8 weeks to make sure it was operating as a parent company. The business development

and finance departments underwent the same procedure. Bharat Forge took great care to

make sure that its staff members shared its objectives. They ensured that the management of

Bharat Forge and the end employees were in constant contact.

Analysis:

We may conclude from analysing the two cases that Bharat Forge’s primary business plan

was to expand internationally and enhance production quality through technological progress.

The transformation of the workforce from brute force to cerebral power at Bharat Forge led

to enormous success through export-driven domestic growth. Acquiring technological

competence was the main goal, and other key success factors included quick time to market,

excellent quality, large volume, cheap cost, and customer-centricity. The company's global

strategy principally concentrated on increasing its product line, forging deeper client

relationships, and providing more effective client logistics. To gain new customers,

companies made acquisitions abroad. This led to production taking place all over the world,

which enhanced supply logistics. Bharat Forge made an investment in brand-new workshops

with cutting-edge automated press lines, which reduced manufacturing variable costs and

lengthened the life of dies. The most fundamental strategy was to get support of the

workforce. Kalyani's unwavering faith in HRM as a "people's system" demonstrates his

practical outlook. Local management teams were included in Bharat Forge's integration

approach because of its high level of trust in them.

Suzlon developed and become a world leader in wind energy from a tiny textile factory with

only 20 workers. While attempting to address its electricity issue, the corporation made its

entrance into wind energy an experimental blunder. The placed windmill operated as a "trial

and error product". They eventually became fully aware of what their clients needed from

them, and this knowledge was to their advantage in subsequent plans. Going global would

help wind power repay its early costs, which required a very significant investment. Since the

international business community regarded Indian companies as unreliable, it was essential to

invest in new technology to boost the firm's reputation. For pertinent technology, they bought
market leaders internationally. The company reduced its overall expenditures by utilizing the

cheap labour available in India and the learnt knowledge. According to market research,

Indian businessmen were unaware of how Suzlon's renewable energy technology operated.

They came up with the concept of "Concept to Commission" to solve this issue. The project

required the selection of the site, wind measurements, budgeting, construction of the

substation and grid connections, as well as 20 years of product maintenance. This allowed

their clients to focus on their own business while also raising the eyebrows of other clients.

Additionally, the product's initial price was too exorbitant, which turned away customers

from this idea. Tanti also came up with a creative solution to address this. The client would

be responsible for providing 25% of the funds, and a Suzlon executive would go with him to

the bank to persuade the managers of the benefits of their product to receive 75% of the

remaining funds. Future customers were more at ease dealing with the high costs as a result

of this action. Suzlon raised money through an IPO, placing them among the top 25 Indian

corporations in terms of market capitalization. This was excellent. In India, Suzlon

established a market for wind energy, expanding the nation's energy supply, which in turn

enhanced living standards and productivity.