January 11, 2008

Day Seven: Avery Dennison and Cybermedia
Delhi is more pleasant than I had expected, based on what students that we met at the Infosys campus had to say. We are staying at the Management Development Institute (MDI) in Gurgaon, which after staying at the "Taj Paradise," a Freudian slip on Taj President, has been dubbed the "Monastery of Management" due to the comparative lack of amenities. The facility is excellent by Indian standards, and is warm, comfortable, and relatively clean, although the shower water temperature is a crap-shoot, there was a mosquito buzzing through the room, and the bed is three inches of foam on plywood. I truly enjoyed being awakened by a knock on the door letting me know that a pot of hot water was outside so I could make tea. Brilliant! Breakfast of oatmeal and two unidentified Indian dishes was quite good in my opinion.

Our meeting with Avery Dennison (AD) provided some great insight into the challenges of starting a company in India. We met with the plant manager and managing director (MD) of the Indian operation for a tour and interaction. The Indian subsidiary has a 57% growth plan, which reflects the reliance on developing markets noted in the 10-K. The equipment looked new and employees were polished and actively engaged. The company runs 24/7 producing roughly 150 products based on demand. AD is expanding manufacturing capacity with a new plant in Pune, with additional land to grow into in coming years. A transcript is attached here, but the major takeaways were that understanding a new market takes a lot of time and effort and that a lack of an existing market should mean a major opportunity rather than an impossible sales challenge. The MD spent a full year learning about market transactions and talking to potential customers before beginning any local operations. While previously no one used pressure sensitive labels, the MD decided that they were a better solution than existing options, and has secured a huge market share by moving first.

We travelled directly to CyberMedia, a division of IDC, who publishes several magazines about the IT sector and researches economic and business data. Included in this visit were guest appearances from the CIO's of Bharti/Airtel and Suzuki/Maruti, the largest cell phone service provider and the largest car manufacturer in India respectively. Airtel recently outsourced their entire IT process to IBM, and the CIO declared to us without a moment's hesitation that their core competencies are selling and branding. This is an interesting business model and it has a ton of potential applications to enhance profitability, but foreboding implications for high-cost unskilled labor (e.g. most American workers). The founder and MD of CyberMedia declared that the Indian entrepreneur is a valued commodity in society, which is a new phenomenon. The panel also mentioned that the economy is riding on the back of the IT revolution. I asked whether social entrepreneurs can use IT to impact the bottom of the pyramid (BOP) effectively and profitably. The answer was an emphatic yes. A transcript is found here.
At both offices, the hospitality of refreshments and generous time given to us was puzzlingly generous compared to American standards, but certainly appreciated.

In the evening, our class split in half, with one contingent traveling to downtown Delhi. I chose to accompany the professor to a local shopping mall for a South Indian restaurant. The mall itself was comparable to American quality, although the stores had a cultural flair. Dinner was excellent, cheap, and filling. My stomach and I have become sufficiently comfortable with Indian food to consume American quantities.