Indian companies on an acquisition rampage - luxury brands up for grabs

I thought I'd post a follow up to a recent email I sent out to a few friends a couple of weeks ago (some of you may find this familiar):

Interesting turn of events as Indian companies are on a acquisition rampage around the world. Some of you may have heard of the Hinduja Group's (Gulf Oil) acquisition of Saudi Arabia's commercial lubricant maker, Petromin (formerly owned by Saudi Aramco and Exxon). In late November WSJ mentions that Tata Motors and Mahindra & Mahindra are the leading candidates in line to acquire Jaguar and Land Rover (in case Ford decides to divest its interest in them).

A quote from the article: "...representatives concluded after the meetings that Tata is "the only company" among the final bidders "with enough money, clout and experience in our industry" to successfully manage the brands, according to a labor official who attended the meetings."

Interestingly, the US Jaguar dealers seem to be against the deal, citing:

"I don't believe the U.S. public is ready for ownership out of India" of a luxury-car brand such as Jaguar, Mr. Gorin said in an interview. "I believe it would severely throw a tremendous cast of doubt over the viability of the brand."
...
"Mr. Gorin said he wasn't judging the management capabilities of Tata or Mahindra. "My concern is perception [in the marketplace], and perception is reality," he said. "It's about saying there are unique image issues with two of the bidders that the other one doesn't have.""

The perception issue is whether US consumers are ready to associate Indian brands with luxury products. I wonder if the same concerns were raised when Japanese manufacturers entered the luxury auto-segment with the Lexus and Acura? I also wonder what visitors to the Taj Boston feel when they stay at the ultra luxurious Boston land mark hotel? The former Ritz Carlton hotel was acquired by the Taj group [part of the same Tata group] for a staggering $170 million in 2006. I wonder if the visitors who pay $500 on an average per night have the same issues of perception that Mr. Gorin speaks of.

Perception may be reality, but is perception something that can be changed over time? In a flat world, the only true constant is change, the survivors will be those who can embrace this change.

Environmentally conscious consumers - a Euro-centric phenomenon?

Some friends and I were discussing the surge in popularity of environmental consciousness in consumers. European customers, my seasoned supply chain management consultant friend mentioned, are far more conscious of the carbon footprint of products they purchase. Volvo for one, has a carbon neutral, Co2-free truck manufacturing factory in Belgium. Why doesn't Volvo market that to sell more cars in the US? Do US consumers not care? As a 'Sushi-eating, Latte-drinking, Volvo-driving' 'liberal' - a tag a good friend of mine branded me with, I would be encouraged to repurchase a Volvo knowing that they are a more environmentally conscious company.

On the topic of environmentally conscious US companies, my wife recently bought two pairs of shoes from Timberland. On the box, I noticed a 'Green Report Card', that identifies the carbon footprint for the product. They include the energy spent to produce their product as well as produce a score card that displays the 'Green Index' of the product. Here is a press release on the topic:

http://www.timberland.com/corp/index.jsp?eid=8500007242&page=pressrelease

Incidentally one of her shoes had a Green Index score of 3 and another pair had a score of 6.5 - the factors feeding into the score being:

1. Climate Impact
2. Chemicals Used
3. Resource Consumption

One of the shoes took 3.1 kWh of energy to produce. I am not sure if they include the carbon footprint of their supply chain - post production - factory to customer, though. Way to go Timberland!

Education key to maintaining the position of the United States in a flat world

Its been a long while since I blogged here, but this article resonated with me, especially after attending a panel discussion on Knowledge Process Outsourcing today morning (organized by the Midwest chapter of the Pan-IIT Alumni organization)

This quote from DuPont's CEO, Chad Holliday's keynote at University of Delaware sponsored report on 'Creating Knowledge based Partnerships' exemplifies the importance of investment in technical education in the United States.

"... [Chad] told the audience he was jogging in South Korea at around 6 a.m. one day and noticed a large group of young people massed around a building. Holliday assumed that tickets to a rock concert were about to go on sale and the young people were lining up to get good seats. When he returned to his hotel he asked what was going on. The hotel staff told him the building was the public library and young people gather there every morning so they can get a good seat to study all day. “That’s the kind of [attitude] being developed in South Korea, which is one of our competitors.”"

According to the report, "Declining scientific research and development expertise threatens to undermine the competitiveness of U.S. corporations and erode the nation’s standard of living, according to the chief executive of DuPont Co."

IT outsourcing is only the tip of the iceberg. With the growing outsourcing of other 'Knowledge' functions, the United States needs to encourage technical education and invest more money into research. Encouraging the assimilation of the best and brightest minds from around the world is key to the future of the US. Opening up of immigration opportunities for these minds is a step forward in this direction.