Indian entrepreneur’s challenges

Indian Entrepreneurs Strive To Price Their Products Very Low to Make It Affordable For All Income Groups

To bring new products to market in India, entrepreneurs have to take different view from entrepreneurs in western world because of underlying different market conditions. The innovation strategies adopted are as results of underlying market conditions in India are much different to the ones in western countries. The playability of Indian customer segment is very low due to low incomes in India.

Indian entrepreneurs strive to develop products for the masses by creating new business models that enable them to offer rock bottom prices. Usually in business, there are standard practices for achieving operational excellence. The Indian entrepreneurs develop new practices that enable them to make their products affordable to masses rather than top two population segments. For example higher quality of product usually means the users will shell out higher price. There are some visionary business leaders who come and change the rules of business and in so capture the market. Toyota build business model around lower prices and higher quality. In fashion, Zara sells fashionable clothes at an affordable price. Business enterprises build with such thinking, with operational excellence, capture the market. There are many Indian businesses, like Zara  and Toyota, are changing the rules of business and so capturing the markets.

Indian entrepreneur have to reconfigure their business models to enable drastic reduction of prices. It is a dream of Indian entrepreneur to make his products affordable to the all Indian customer segments.

Indian entrepreneur have designed product which cost a very small fraction of equivalent product cost in western countries:   Rs 1lakh  Tata Nano car (compared with prices starting at Rs 3 lakhs for car) , 50 paisa per minute call (Equivalent cost of Rs 5.00 in America) , Rs 1500 for cataract eye surgery (Equivalent costs of  7,50,000-10,00,000 in America).. Faced with shortage of resources, and small R&D Budget Indian entrepreneurs have developed innovative solutions to work around these constraints. A potent combination of constraint and ambitions has ignited new breed of entrepreneur.

By conventional thinking, if an activity gives you annual revenue of $500-700 Million assured, such an activity should be done in-house. Bharti   did not want to run the Telecom infrastructure in-house despite the fact that Telecom Infrastructure subcontract was in the range of $500-700 Million.  Bharti realized that it had no ambitions in IT infrastructure space as their future lay in developing the business of telecom. Time was testament to their thinking that their future laid in telecom services and not IT infrastructure. Bharti’s outsourcing of IT infrastructure was in stark contrast to standard practices of Telecom companies in those days – all other telecom companies managed the IT infrastructure in-house.