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Infosys CEO Muses on Globalization

How are India-based tech companies trying to win U.S. customers, dealing with high turnover, and globalization?

Gopalakrishnan, CEO of the India-based outsourcing company Infosys talk about some issues his company is facing. Some highlights:
*The tech-services industry continues to evolve rapidly. While India-based companies made their names offering low-level programming at a low price. The one tactic to expand its margin Infosys would like to buy small consulting firms in countries.
*Tech companies in India have high attrition rates because there’s so much demand there for experienced engineers. One way that Infosys is combating the problem is transferring employees to facilities in smaller, more remote cities in India–where there are fewer competitors to try to steal its workers. To encourage workers to move, Infosys pays the same regardless of whether someone is in Bangalore, the city at the heart of India’s tech boom, or Jaipur, a city in the rural state of Rajasthan where the cost of living is substantially lower.
*Infosys is sensitive to immigration concerns in the U.S., but the tech sector is evolving makes further globalization inevitable. India graduates 450,000 engineers each year and China 650,000. The U.S. only graduates 150,000. With numbers like this, U.S. companies will have little choice but to hire engineers from abroad or open development centers overseas.

Gopalakrishnan points out that globalization is a two-way street: U.S. products from corn flakes to California wine are now widely available in India, which is hurting the 70% of the population there that works in agriculture. “These people are the poorest of the poor and they are losing jobs,” he tells us.

My opinion
This article seems very similar our case study article in someway. They both use same strategy which is to buy small firms to expand its market and deal with troubles. I realized that how marketers take advantage from small business companies or globalization especially if those companies were placed in developing countries with low expense, and low labor cost. In one hand it seems unfair. Because those small firms product have same quality and acceptable to the market like big brand company. But they cannot sell it under own name with same price as big companies. Once professor mentioned that Samsung had sold under the name of Sony in U.S. In fact customers get same value of both those products.
On the other hand, both companies can take advantage from this commitment, could be mutually lucrative. Even though small firm sells its product with lower price, their market share has high potential to increase rapidly. In this case if small firms indeed can produce high quality or high tech product it has high potential to increase its market and make high profit. After that probably small firm could separate its business and sell its products under own name or evolve brand.
Also, I see that how marketers prevent from competitors by building invisible wall between them
– move high experienced employers to countryside. In addition, it is very astute and deceptive decision to move workers in lower cost of living area. Even though company pay same salary as it did before, because of lower cost of living this same amount of salary could be incentive.
Reference: Infosys CEO Muses on Globalization
http://blogs.wsj.com/biztech/2008/06/05/infosys-ceo-muses-on-globalization/
June6, 2008 author name was not written.