connectsmeconnect.in/issues/issue_files/vol3_issue11.pdfconnect mr. t. k. a. nair releasing the sme...

CO NNECT

Mr. T. K. A. Nair Releasing the SME Chamber of

India for 2012-2013 occasion of its 19th Foundation Day of the SME Chamber of India

– Adviser to the Prime Minister

on the

Activity Report of

www.smeconnect.in Volume 3 | Issue 11 | August 2013 | Mumbai | 50`

Editor

Panel of Advisors

Publicity and Marketing

Team

Layout & Graphics

Mahesh Balasaheb Salunkhe

Chandrakant Salunkhe

A. Rameshkumar

Girish Bhagat

Hemant Salunkhe (Director)

Saakshi Kulkarni

Neera Inamdar

Madhuri Khanwalkar

Gandhi Gajelli

V. K. Venkatachalam

Bricks Marketing & Promotion Pvt. Ltd.

CO NNECTVolume 3 | Issue 11 | August 2013 | 44 Pages

Chandrakant SalunkheFounder & President

Small & Medium Business

Development Chamber of India

Email: [email protected]

© SMALL & MEDIUM BUSINESS DEVELOPMENT CHAMBER OF INDIA

(SME CHAMBER OF INDIA). The concepts, activities and events have

been designed by us and are exclusively the property of SMALL &

MEDIUM BUSINESS DEVELOPMENT CHAMBER OF INDIA (SME

CHAMBER OF INDIA). No part of the titles and contents or images

should be used, reproduced, stored in a retrieval system or

transmitted, in any form or by any means or discussed with any third

party without prior written consent of SME CHAMBER OF INDIA.

Views and opinions expressed in this magazine are not necessarily

those of SME CONNECT, its publisher, printer, owner and / or editors.

We (SME CONNECT) do our best to verify the information published

but do not take any responsibility for the absolute accuracy of the

information. SME Connect does not accept responsibility for any

investment or other decision taken by readers on the basis of

information provided herein.

www.smeconnect.in � �03 Volume 3 | Issue 11 | August 2013

Editorial

SMALL & MEDIUM BUSINESS

DEVELOPMENT CHAMBER OF INDIA

SMECONNECT– bi monthly Owner Printer Publisher Mr.Mahesh Balasaheb Salunkhe, Printed at Hindustan Packaging, Unit No1,Kembros Industrial

Estate, Sonapur Lane, Off L.B.S Marg, Bhandup (W), Mumbai - 400 078, Published at 101, Murlidhar Baldev Estate, Near Vikas Estate, Off Aarey Road,

Goregaon (E),Mumbai-400063. Maharashtra. Editor - Mahesh Balasaheb Salunkhe.RNINo:MAHENG/2011/48842

CO NNECTContent

www.smeconnect.in� �04Volume 3 | Issue 11 | August 2013

Release of

ACTIVITY REPORT : 2012 - 2013

Launching of

INDIA - JAPAN SME BUSINESS COUNCIL

MoU Between UK-INDIA BUSINESS COUNCIL & SME CHAMBER OF INDIA

pg

9 - 10

MoU With Kbiz, Korea M&A Investment Association and Asia M&A Association

pg 12Annual Awards

INDIA SME EXCELLENCE AWARDS

pg 29

Chief Guest MR. T. K. A. NAIR

Advisor to the Prime Minister delivering

inaugural address at

INDIA SME BUSINESS CONCLAVE

pg 17

pg 18

SME Manufacturing SectorOpportunities, Challenges and Trends

FEATURED ARTICLES

� STRATEGIC INITIATIVES FOR COMPETITIVE MARKET -----------------------------------pg 14

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GOOD GOVERNANCE + BUSINESS ETHICS = BETTER GROWTH OF SMEs

FACILITATING SOLAR ENERGY GROWTH IN THE NATION

-------------pg 32

------------------------------- pg 36

� SME STOCK EXCHANGE - Opportunities and Challenges ----------------------------------pg 33

MARKETING AND BRANDING : Strategies for growth of SME Business ---------------pg 37

� Top 10 Power Tips to prepare for an Investor Road-Show for VC, PE or IPO --------- pg 39

� Are you using Win XP ? ---------------------------------------------------------------------------- pg 40

� Private Equity enables SMEs unlock limitless prospects -------------------------------- pg 41

International Alliance & Collaborations : Steps to be taken -----------------------------pg 42

CO NNECT Activity of the Chamber

IMPORTANT FEMA PROVISIONS FOR IMPORT & EXPORTorganised on Saturday, 27 July 2013 | Hotel Kohinoor Continental, Mumbai

and

Tuesday, 30

th

thJuly 2013 | Hotel Royal Orchid Central, Ahmedabad


Mr. Harendra Prashar Mr.

Amol Wagle

Mr. Amit Talwar

"Payment Solutions For Importers"

- VP Country Head, Paul Merchants Ltd.,

- Head Operations - India, Western Union Business

Solutions, - Head, Global Remittance, IndusInd

Bank during session on

Mr. Chandrakant Salunkhe - Founder & President, Small & Medium

Business Development Chamber of India addressing the delegates

during seminar

Mr. Amol Wagle

"Payment Solutions For

Importers"

- Head Operations - India, Western Union Business

Solutions addressing the delegates on

Mr. Piyush K. Deshpande - Deputy General Manager, Paul

Merchants Ltd. addressing the delegates

India Japan Global Partnership and Impact on Indian EconomyMonday, 22

ndJuly 2013 | Mumbai


Mr. Chandrakant Salunkhe

Mr. Ashishkumar Chauhan Mr. Madhu Yaskhi Mr. Piyush Goyal

Mr. Amitabh Kant , Prof. Haruo Shimada

Mr. Vibhav Kant Upadhyay

- Founder & President, SME Chamber of India lighting the holy lamp during inauguration of Conference. Other (L

to R) - MD & CEO, BSE Ltd., - Hon'ble Member of Parliament, - Hon'ble

Member of Parliament, - CEO & MD, Delhi-Mumbai Industrial Corridor Development Corporation -

President, Chiba University of Commerce and - Chairman, India Center Foundation


Business Development Chamber of India addressing the delegates


Prof. Haruo Shimada

- Founder & President, SME Chamber of

India with - President, Chiba University of

Commerce

Participation in

Mr. Madhu Yaskhi, Hon'ble Member of Parliament addressing the delegates

CO NNECTActivity of the Chamber

CO NNECT

Volume 3 | Issue 11 | August 2013

Activity of the Chamber

www.smeconnect.in� �07

10 - 12 July 2013 | Tokyo, Japanth th

VISIT TO JAPANof

Founder & President, SME Chamber of India & Chairman, India – Japan SME Business Council

CHANDRAKANT SALUNKHE

INTERACTION MEETINGS

(L to R) - Senior Coordinator, South Asia Planning Department, Japan External Trade Organization (JETRO),

- Executive Vice President, Japan External Trade Organization (JETRO), - Founder &

President, Small & Medium Business Development Chamber of India, - Minister (Economic & Commercial), Embassy of India,

Tokyo Japan, - First Secretary (Commercial), Embassy of India, Tokyo Japan during the interaction meeting on 10th

July 2013 at Tokyo, Japan

Mr. Maoyuki Maekawa

Mr.Daisuke Hiratsuka Mr. Chandrakant Salunkhe

Mr. Arun Goyal

Mr. Tapan Kumar Datta

(L to R) - Manager in Chief International Division, The Japan Chamber of Commerce & Industry, -

Secretary General, ICC Japan, - General Secretary, SME Chamber of India, - Minister (Economic &

Commercial), Embassy of India, Tokyo, Japan, - Project General Manager (International Division), The Japan Chamber of

Commerce & Industry, - Founder & President, Small & Medium Business Development Chamber of India,

- General Manager, External Affairs Division, Honda Motors co. ltd., - Senior Manager, Iron & Steel

Project Department, Investment & Planning Division, Mitsui & Co., Ltd. and - First Secretary (Commercial), Embassy

of India

Mr. Chikara Shimizu Mr. Kiyoshi Yamada

Mr. Maheshkumar Mr. Arun Goyal

Mr. Takeshi Akagi

Mr. Chandrakant Salunkhe Mr.

Hiroshi Mikajiri Mr. Yutaka Kobayashi

Mr. Tapan Kumar Datta

during the interaction meeting on 12th July 2013 at Tokyo, Japan

CO NNECT

www.smeconnect.in


� �08Volume 3 | Issue 11 | August 2013


Mr. Chandrakant Salunkhe Mr. Sanjay Panda– President, SME Chamber of India with - Deputy Chief of Mission, Embassy of India.

during the interaction meeting on 10th July 2013

Mr. Arun

Goyal - Minister (Economic & Commercial), Embassy of India, Tokyo, Japan,

Mr. Chandrakant Salunkhe – President, SME Chamber of India and

during the interaction meeting on 12th July 2013

Mr. Arun Goyal

Mr. Takeshi Akagi Mr.

Hiroshi Mikajiri Mr. Yutaka Kobayash

Mr. Tetsuo Harashima

- Minister (Economic & Commercial), Embassy of India,

Tokyo, Japan with - Project General Manager (International Division), The Japan Chamber of Commerce & Industry,

- General Manager, External Affairs Division, Honda Motors co. Ltd., i - Senior Manager, Iron & Steel

Project Department, Investment & Planning Division, Mitsui & Co., Ltd. and - Senior Project Manager (International

Division), The Japan Chamber of Commerce and Industry

(L to R) - Project General Manager

(International Division) The Japan Chamber of Commerce and

Industry, - Manager (Northeast Asia -

International Division), The Japan Chamber of Commerce and

Industry and - Founder & President,

Small & Medium Business Development Chamber of India during the

interaction meeting on 11th July 2013 at Tokyo, Japan

Mr. Kazuo Nishitani

Mr. Kazuto Sasaki


(L to R) - General Sectretary, SME Chamber of

India, - Project General Manager (International

Division) The Japan Chamber of Commerce and Industry and The

Tokyo Chamber of commerce and Industry, and

- Founder & President, Small & Medium Business

Development Chamber of India during the interaction meeting on

11th July 2013 at Tokyo, Japan

Mr. Maheshkumar

Mr. Kazuo Nishitani

Mr. Chandrakant

Salunkhe

CO NNECT




VISIT TO SOUTH KOREAof

Founder & President, SME Chamber of India & Chairman, India – Korea SME Council

CHANDRAKANT SALUNKHE

15 - 17 July 2013 | Seoul, South Koreath th

Memorandum of Understanding

Between

SME Chamber of India and Korea Federation of Small & Medium Business (Kbiz)

The Korea Federation of Small and Medium Business (Kbiz)

SME Chamber of India has signed the MoU with on 16th July,

2013 with the objective of establishing close association and to work together for increasing connectivity between

Indian and Korean SMEs to identify business opportunities for Investment, setting up of industries in both the

countries, Technology Transfer, Contract Manufacturing Tie-ups and various business alliances.

was established in 1962 with the objective of improving the

economic status and support equal opportunities for Korean SMEs. It actively deals with rapidly changing global economy

through making proposals on governmental policies and seeking various systems, while also providing support so that SMEs

can enhance competitiveness.

Kbiz has been supporting overseas marketing through participating in foreign exhibitions for SMEs by leading overseas

business delegations and providing information concerning FTA. 30 Institutions from 17 countries have signed cooperation

agreement with Kbiz. Kbiz works aggressively to enter into overseas market for SMEs through various cooperation projects.

Kbiz provides field-oriented policies and services based on creativity, passion and accumulated experience and expertise to

improve the global competitiveness of Korean SMEs and ensure their SMEs can create a better environment.

Korea Federation of Small and Medium Business (Kbiz)

Mr. Kim Ki Mun Mr. Chandrakant Salunkhe- Chairman, Korea Federation of Small and Medium Business and - Founder & President, Small &

Medium Business Development Chamber of India exchanging MoU on 16th July 2013 at Seoul, South Korea

About Korea Federation of Small & Medium Business (Kbiz)

CO NNECT

www.smeconnect.in



Memorandum of Understanding

Between

SME Chamber of India

and

Korea M&A Investment Association and Asia M&A Association

Asia M&A Association is an international non-government organization for activating cross-boarder M&A and investment

among asian countries and other parts of the world. The representative organizations of Korea, China, and Japan will

strengthen economic cooperation for increasing strategic partnership, setting up industry, Joint venture, increased investment

by sharing information and variety of collaborative activities.

Mr. Alex Lee Mr. Chandrakant Salunkhe

Mr. Jae-Mo Kah

- Chairman, Asia M & A Association and - Founder &

President, Small & Medium Business Development Chamber of India signing and exchanging MoU on 17th July 2013 at Seoul, South Korea. In

the Presence of - CEO, Global Korea Company Limited,

Korea M & A Investment Association and

- Vice Chairman, Korea M & A Investment

Association, - International Cooperation, Korea M & A Investment Association and - Korea M & A

Investment Association

Mr. Prince Chung

Mr. Hans Chung Mr. Han Gye Hyun

(L to R) Mr. Kyung-Sun Min Mr. Ki-Hwa Hong


Mr. Maheshkumar

- Executive Director, Gyeonggi Small & Medium Business Center, - President & Chief Executive

Officer, Gyeonggi Small & Medium Business Center, - Founder & President, Small & Medium Business

Development Chamber of India and - General Secretary, SME Chamber of India during Interaction Meeting on 17th July

2013 at Gyeonggi Excellent Product Showcase at Gyeonggi Province, South Korea

About Korea M&A Investment Association

About Asia M&A Association

Korea M&A Investment Association consists of a lot of excellent professionals and performs M&A and restructures

investment fund. This association is the M&A field executive practice of the Judicial research & training institute(Appoint

judges, prosecutors, and lawyers through training after passing the bar exam) and this is also institute of M&A certificate(M&A

manager) education and issuance an expert group at executing M&A, restructuring, investment sector, management consulting,

education business, policy-related research and academic development

CO NNECT





Mr. Jeon Young Lee Mr.

Chandrakant Salunkhe

- President, Seoul Business Agency

- Founder & President, Small & Medium

Business Development Chamber of India during Interaction

Meeting on 17th July 2013 at Seoul, South Korea


Business Development Chamber of India with Mr. Vishnu Prakash -

Ambassador of India to South Korea during interactive meeting on

16th July 2013 at Seoul, Korea.

Mr. Kim Ki Mun


- Chairman, Korea Federation of Small and Medium

Business and - Founder & President,

Small & Medium Business Development Chamber of India during

interactive meeting on 16th July 2013 at Seoul, South Korea

Mr. Alex Lee


- Chairman, Korea M & A Investment Association and


Business Development Chamber of India during interactive meeting

on 17th July 2013 at Seoul, South Korea.


Mr. Lee Kyoung Bok


Business Development Chamber of India and -

President, B.O.K Co. Ltd. during the interaction meeting on 16th July

2013 at Seoul, South Korea


Mr. Park SungChul


Business Development Chamber of India and -

Team Manager, Seoul Business Agency during the interaction

meeting on 16th July 2013 at Seoul, South Korea

Achieving a balanced and inclusive

macroeconomic growth is extremely

essential for India to emerge as a

stable global economic powerhouse. The

role of manufacturing sector in providing the

necessary balance and inclusive character to

I n d i a' s m a c ro e c o n o m i c g ro w t h i s

undisputed. Now, if we look at the share of

manufacturing sector in India’s Gross

Domestic Product (GDP), it accounted for

15.2 per cent during the financial year 2012-

13 compared to 15.7 per cent during 2011-

12 and 16.2 per cent in 2010-11. This

declining trend is a cause of concern for

India. In Nov. 2011, the Government of India

announced a national manufacturing policy

with the objective of enhancing the share of

manufacturing in GDP to 25% within a

decade and creating 100 million jobs. This is

where Small & Medium Enterprises (SME)

manufacturing segment can play a vital role.

They are the pillars of the Indian

manufacturing sector and will play

significant role in the stable economic

growth of India. The SME sector's

contribution equals 40% of India’s total

exports and 8% of India’s GDP with over 11

million SME units in India producing more

than 8000 products. (Source: FY12 Annual

report of Ministry of MSME) Following is the

snapshot of the key opportunities and

challenges that lay ahead the SME sector in

order to contribute more towards the overall

manufacturing output:

Opportunities: SME manufacturing segment had grownsignificantly over the last decade and had its contribution felt across

sectors. However, there is still a long way to go. We must recognize

and appreciate growing spirit of Indian entrepreneurialism and their

risk taking appetite which is the epicenter of growth of SME segment.

This combined with favorable environment provides an opportunity

for SME manufacturing segment. If we study the Indian business

environment, there are number of factors that facilitate the growth

viz.

Second largest populated country providing sustainable and

growing demand

Geographical diversity with majority of population still living in

villages which can be reached through SMEs

Cultural diversity mandates customized products as well as

differentiated approach to provide customer satisfaction

Increased focus of banking sector towards SMEs

Indian Government provides benefits under various schemes to

provide financial support, marketing support and training and

promote technological up-gradation. Availing such benefits is the

opportunity that Indian SMEs need to exploit.

Shifting manufacturing base of large MNCs in India is opening up

opportunities for supply of ancillary products

At the same time, we should not forget that a large part of the Indian

manufacturing sector is predominantly labor intensive in character

and continues to languish on fringes of competitiveness, thereby,

necessitates the increased use of IT and technology up-gradation.

Enhancing productivity on the shop-floor with efficient supply chain

management and innovation are the key to unlocking profitable

growth across a large section of the manufacturing

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CO NNECTArticle

Opportunities

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Entrepreneurship abilities

Wide domestic market

Government support

Technology upgradation

Challenges

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Cheaper Imports

Availability of timely and lowcost credit

Improvement in governancepractices

Red tape and governmentbureaucracy

Inadequate qualityinfrastructure

Intellectual property right

Trends

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Government support

Bank Credit

Improving quality focus

Increasing use of Credit Rating

Clusters

D.R. Dogra, MD & CEO, Credit Analysis & Research Ltd. (CARE Ratings)

SME Manufacturing SectorOpportunities, Challenges and Trends


ArticleCO NNECT

Trends: Despite all these challenges, Indian SMEmanufacturing segment has been flourishing. Various trends that

have been observed include:

– Increased budgetaryallocation towards government schemes for SMEs, Mandatorypurchase of 20% by PSU’s from SMEs etc.

– RBI had directed banks toincrease their lending to SMEs and reduce credit gap. (As onMarch 31, 2012 outstanding bank credit to MSME’s stood atRs.5.07 lakh crore compared to Rs.4.64 crore as on March 31,2011)

– Credit rating provides ease of access to debtfunds by addressing information asymmetry and trust issues.Credit Analysis and Research Limited (CARE Ratings) had tied upnation’s major leading banks including State Bank of India, Bankof Baroda, Bank of India, Punjab National Bank, Corporation

Bank, Allahabad Bank, Canara Bank and Indian Overseas bank toprovide interest rate subsidy to MSE rated units under NSIC-CARE MSE Rating Scheme.

– SMEs are now focusing more onquality aspects. The trend of getting quality certifications like ISO,CE marking, GMP, BIS compliance are common among SME todistinguish themselves from other SMEs.

– Steps are being taken by FICCI, CII andother federation to provide training and spread awarenessamong SME’s with collaboration with Credit rating agency, NSIC,Banks and government departments.

- Indian SMEs are increasingly organizing themselves inclusters, which improve their access to business associations aretechnical assistance providers. It also helps in building inter-firmcooperation that adds to productivity and innovation. Ministry ofMSME also have cluster Development Programme for enhancingproductivity.

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Increased government support

Facilitation of Bank lending

Credit Rating

Increased Quality focus

Increased awareness

Clusters

Challenges: The road towardsgrowth of SME manufacturing segment isfilled with hurdles. With globalization, theworld had become a small town, therebySMEs also find themselves competing withcheaper imports especially form China.India's trade deficit with China is $40 billion2012-13, up from just $1 billion in 2002 tellsus the story. The major sector affected by thisincludes processed foods, engineeringgoods, chemicals, pharma (API) and metalproducts. Not to survive but thrive in thiscompetitive market is the primary challengefor Indian SME manufacturing segment.

At the beginning of the 12th Plan period, theoutstanding credit gap for the MSME sectorwas estimated at 62% and the interest ratecharged from SME are as high as 14%-15%compared to 11%-12% charged from bigborrowers indicating another majorchallenge for SMEs in terms of timelyavailability of credit and that too atcompetitive rates. On major issue pointedout by lenders in their support is governanceissue in SMEs marked by under-reporting,unavailability of timely information, lack ofMIS and information asymmetry.

A report on "Doing Business 2013, SmarterRegulations for Small and Medium-SizeEnterprises" published by the World Bankand the International Finance Corporation(IFC), highlighted the red tape andgovernment bureaucracy faced by Indianentrepreneurs. In the list, India ranks verylow at 132 position out of 185 economiessurveyed, faring particularly poorly on someof the sub-indices such as starting a business(173), dealing with construction permits(182), getting electricity (105), paying taxes(152), trading across borders (127),enforcing contracts (184), resolvinginsolvency (116).

The report states that Indian SMEs have tocomply with 12 procedures that take onaverage 27 days to start a business. Similarly,dealing with construction permits involves34 procedures and a 196-day waiting period,getting electricity involves 7 procedures anda 67-day waiting period, registeringproperty requires 5 procedures and a 44-daywaiting period. All this obstructs the growthof the startups. Also, to avail the benefitsunder various schemes involves lot ofpaperwork and permissions from various

government authorities which not onlyresults in delay in receipts of benefits as wellas led to underutilization of the schemes.This age old red tape and governmentbureaucracy still poses a major challenge tothe SMEs.

Further, if we look structural issues, Indiastill lacks the quality infrastructure; be it asupply chain, storage, roads or power supply,India still faces problems in all these faucets.Recently, Indian manufacturers have startedfacing labor shortage and this has alsoincreased the labor cost. Keeping themanufacturing overheads under control tobe competitive is a big challenge for SMEs.

Last but not the least, challenge in front onSMEs is the Intellectual Property Rights(IPR), as SMEs do not realize the importanceof IPR in the business to protect their ideasand innovation of their product as they aremore concerned on production andoperation of raw material. If these SMEs holdtheir knowledge on IPR, then they woulddefinitely create an asset and huge profits ontheir ideas and innovation.

Global TrendsGermany:

Italy:

In Germany SMEs, locally known as Mittelstandcompanies includes units having less than 500 employees and anannual revenue below EUR50 million. Mittelsand companies accountfor nearly 50 per cent of the country’s GDP employing approximately70 per cent of the workforce reflecting significant quantum of theircontribution to the economy. Their success is remarkable, mainlybecause they constitute 99.7 per cent of the companies in Germany,and have enabled the country to emerge as the world’s second largestexporter of manufactured goods in spite of a strong euro and withone of the world’s largest wage pay scales.

According to the President of Federazione dei Distretti Italiani(Association of Italian Clusters), SMEs concentrated in clusters haveplayed a major role in helping Italy to overcome the economic crisisof 2008. Italian exports from these units grew 10.5 per cent duringJanuary–September 2011 and the industrial clusters grew at aslightly faster pace of over 16 per cent compared to non-clusters

(15.6 per cent) – a trend seen after many years in Italy’s industrialhistory. The clusters have achieved this success mainly due to themodification of organisational strategy by the SME units who hadrevamped business model and named it “triple A”, which stood for“adattativo, affidabile, alternative” (adaptable, reliable, alternative).This enabled sectors such as engineering, apparel, furnishings,textiles, leather and pottery to restore their export business, and thuscontribute to the country’s economy.

Thus, globally, successful instances of SMEs witnessed in countrieslike Germany and Italy provide motivation for the Indian SME’s. Thegrowing importance of SMEs in manufacturing segment is alreadymanifesting itself in various quarters of the economy. India’s SMEmanufacturing segment is well equipped to grow, and thefundamental drivers are in the right place. Continued empowermentof SMEs will enable them to attain high and sustainable growth in thelong-run.


CO NNECTArticle

Acompetitive advantage is an

advantage gained over competitors

by offering customers greater

value, either through lower prices or by

providing additional benefits and service

that justify similar, or possibly higher,

prices.

For growers and producers involved in

niche marketing, finding and nurturing a

competitive advantage can mean increased

profit and a venture that is sustainable and

successful over the long term.

This fact sheet looks at what defines

competitive advantage and discusses

strategies to consider when building a

competitive advantage, as well as ways to

assess the competitive advantage of a

venture.

To begin, it may be helpful to take a more in-depth look at what it

means to have a competitive advantage: an edge over the

competition. Essentially a competitive advantage answers the

question,

For some ventures,

particularly those in markets where the products or services are less

differentiated, answering this question can be difficult.

A key point to understand is that a venture that has customers has

customers for a reason. Successfully growing a business is often

dependent upon a strong competitive edge that gradually builds a

core of loyal customers, which can be expanded over time. With the

advent of product differentiation and niche and direct marketing,

that reality has changed, and now there are niche markets in which

both individual and wholesale buyers are looking for products with

very specific characteristics or special services.

These characteristics often use strategies that don’t focus on costs

and volumes exclusively; rather the product or service may be of

premium quality, be differentiated from other products and services

available in the market or have a value-added component.

Successful ventures perform a combination of business activities

well, including marketing, production, distribution, finance,

customer service, and/or other activities important to the

enterprise. However, a competitive advantage is often a single key

element that gives an edge to a business beyond what the

competition has or does.

“Why should the customer purchase from this

operation rather than the competition?”

The Essence of Competitive Advantage


STRATEGIC INITIATIVESFOR COMPETITIVE MARKET

Pramthesh Pandya - Parikh Packaging

ArticleCO NNECT

Product Features and Benefits

Operating Procedures

Price

Brand Name Recognition

Goodwill

Value-Added Products / Services

Customer Experience

Quality

What makes the product unique anddesired? Consider product characteristicssuch as style, handling, taste, qualityingredients, comfort, production methods,and certification and so on. Are the productcharacteristics significantly different fromthose of currently available products? Canthe venture provide these features orbenefits effectively?

What policies, processes, and standardscould be employed to smooth operations,create value, and offer a positive customerexperience?

What fundamental cost advantage does theventure have which would just i fypermanently low prices? Most venturesoperating in the same industry in a locationwill tend to have pretty much the same coststructure, meaning that when onecompetitor cuts price, others usually follow,thus erasing whatever advantage the firstcompetitor gained by reducing prices. Waysto achieve a fundamental cost advantagemight be through lower overhead orshipping costs (perhaps through geographiccloseness to markets), cheaper labor, and/or

low-priced raw materials (perhaps throughlong-term purchase agreements).

A carefully conceived and executed

marketing plan with a focus on the customer

is a major contribution to business success. A

good marketing strategy can be enough to

differentiate one business from the rest, all

other things being equal. Brand name

recognition is reliant upon a good marketing

strategy and a consistent, reliable product

and venture. Ventures who do not have the

resources available to market themselves as

their own brand may want to consider

joining an alliance or cooperative to market

their product under a recognizable brand

name.

Is the business venture recognized within

the community as a contributor and a

valuable member?

Does the venture offer a further service or

more developed product? These value-

added aspects may often be free with the

purchase of a product, such as free

installation or delivery.

Providing customers with additionalinformation about the farm/ranch is a wayfor clients to connect to the physicaloperation. This connection can bestrengthened through identifying with thefarmer/rancher or visiting the farm/ranch(or the website and making a connectionthere), as well as through educationalresources such as recipes and informationabout the history of and people associatedwith the farm or ranch (the “farm/ranchstory”).

With all of the above potential sources ofcompetitive advantage, quality is anunderlying factor. Successful ventures offerconsistent quality, so an importantconsideration for any venture is how qualityis going to be perceived and measured. Insome cases quality may be related to value-added strategies, such as obtaining thirdparty certification for organics, kosherproduction, etc. In other cases, quality maybe related to the fact that the product beingoffered is of a higher physical quality thanthe competitor’s product, or from providingexcellent customer service.

© CARGULLO / ALRROYA

The following strategies may be helpful in differentiating a product or service from those of the competition. It is important to keep in mind

that a venture’s most effective differentiation-the one that will bring the venture the most success-will likely come from just one or two

strategies.

Potential Strategies for Differentiation


10 Reasons for successful business1. The experience and skills of the top managers. Over half of business failures are directly related to managerial incompetence.

2. Energy, persistence and resourcefulness (the will to make the business succeed) of the top managers. Many business owners have

failed or come close several times before their “instant” success. Don’t give up.

3. A product that is at least a cut above the competition and service that doesn’t get in the way of people buying. There must be a

compelling reason to buy; the product is great, the people love to provide service, the buying experience is easy and fun, etc.

4. The ability to create a “buzz” around the product with aggressive and strategic marketing. Make scarce marketing resources

count. Do as much homework about your customers and their choices as you can before investing your marketing dollars.

5. Deal-making skills to sell the product at the highest possible price given your market. It comes down to your customers’

perception of the value of your product and sometimes the power of your personality.

6. The ability to keep developing new products to retain and build a customer base. Consider gradual product development based

on improvements to the current product line and sold to the current customer base.

7. Deal-making skills to work with resource suppliers to keep costs low. Keeping costs lower than competitors’ and continuing to

look for cost reductions even when the business is profitable is key.

8. The maturity to treat employees, suppliers and partners fairly and respectfully. Trust and respect result in productivity increases

in ways that may be difficult to see and quantify.

9. Superior location and/or promotion creating a connection between your product and where it can be obtained. Studies have

shown it can take seeing your product or name seven times before a customer is ready to buy.

10. A steady source of business during both good economic times and downturns. Over the long term, develop a product mix that

will include winners during good economic times and other winners when times are tough.

“Building sustainable competitive advantages revolves around differentiating a product from the competition along

attributes that are important and relevant to customers.” (Barone and DeCarlo, 2003)

CO NNECTArticle

Make Sense of it AllIn the end, building a competitive advantage will involve understanding the needs of the market (customers), and devising a strategy to make

use of the resources that are available (or can be obtained) to set the business apart from the competition.

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Are the business and the target market clearly defined?

Who is/are the business’ competitors?

What is the business’ specific strategy for success?

Are the competition’s moves being tracked regularly?

Is the business taking advantage of the competition’s weaknesses

and/or any competitive opportunities?

What has been learned from competition’s mistakes / strengths?

How do the business’ prices and products compare with the rest of

the industry?

Who are the customers? Does the business have (or can it build) a

loyal base?

Are the employees trained in customer service?

What trends are ahead, and can the business take advantage of

them?

The strategy will need to take into account the target market, the business’ strengths and weaknesses, the business’ goals, the

product/service the business has developed, and the strategies of the competition. Key questions to address include:

Keeping the Edge SharpCompetitive advantages don’t tend to stay competitive advantages without significant effort. Over time the edge may erode as competitors try

to duplicate a successful advantage for themselves and as the market changes. Half the battle is establishing the competitive edge, while the

other half is maintaining it. Continual analysis of the venture’s product offering and management will help the venture to stay current with the

situation.


Competitive Advantage Evaluation Process

Evaluate Resources

Clarify Goals

Define Customers

Examine Competitors

The basis for a competitive advantage often

lies in the resources and abilities that are

already available, even though the resources

may not initially be recognized. Begin by

taking a critical look at the existing resources

and product/service offerings. What does

the venture have that could be used as an

advantage? Reading through the potential

options for competitive advantage above,

which of these resources are already

available and which does the venture need to

obtain in order to focus one or more of the

strategies?

Has a clear idea of what the venture seeks to

accomplish been established? Businesses

with specific and achievable goals tend to

have better and more consistent growth.

Challenging, but realistic goals should be

written out to help clarify what the business

will do for itself and its customers in the

future. These goals will become benchmarks

for success and will help maintain focus

among all involved parties.

Determining the products and services

customers want and cannot get from the

competition is a first step toward defining

the business’ potential customers. Once the

needs and wants of the potential customers

have been established, the characteristics of

those customers can be examined in an effort

to identify commonalities. For instance, the

development of salad mixes came from the

realization that for convenience, some

consumers needed a pre-washed and mixed

salad alternative, rather than bunches of

greens that needed to rinsed and spin-dried.

When developing a hypothesis about what

potential customers will buy, speaking to

potential customers will provide an

understanding of their needs. This may help

the venture to learn about what features

customers need and what they will pay for,

and provides an opportunity to ask them for

additional suggestions. Additionally, there

are many research sources available through

publicly available sources, and venture-

specific research can be organized through

surveys, focus groups, questionnaires, and

observation. Such research can help the

venture to be sure that there is a large

enough market for the product/service.

With an understanding of what customers

want and an idea of how this can be provided,

it is important to take a look at other

ventures that might be targeting the same

market. First, look at the direct competition.

Once the competition has been identified,

compare the strengths and weaknesses of

the competition to the strengths and

weaknesses of the venture. This will provide

more insight as to where the venture’s

competitive advantage lies.

Mr. T. K. A. Nair Mr. A. Rameshkumar

Mr. V. S. Krishnakumar Mrs. V. R. Iyer Mr. Richard Heald

Mr. Chandrakant Salunkhe Mr. K. Venkataramanan

Mr. Ajai Kumar Dr. R. Seetharaman

– Adviser to the Prime Minister delivering the inaugural address. Others (L to R) – MD &CEO, Asia Pragati Capfin Pvt. Ltd.,

Executive Director, Canara Bank, – Chairperson & Managing Director, Bank of India, – CEO, UK -

India Business Council, UK, – Founder & President, SME Chamber of India, – CEO & MD, Larsen and

Toubro Ltd., – Chairman & Managing Director, Corporation Bank and – Group CEO, Doha Bank Group, Qatar

–

19th Foundation Dayof the ChamberCelebration

India SME ExcellenceAwards - 2013

and

It is amazing to note how the entrepreneurs form SME sector is going

around and doing business with boundless energy, efficiency and

enthusiasm.

On one hand there are many engineering graduates idling without jobs and

on the other, the industry is struggling to get skilled manpower and it is really

a paradox. There is an urgent need for mass scale skill development to meet

the industry need in years to come. Government is taking all necessary steps

to train the youngsters in developing their skills.

Partnership between employers and employees will go a long way in

creating mutual trust and better productivity.

In the globalised world even a small change in the economic scenario will affect the entire world and our labour force working abroad is not an

exception. Interaction, co-operation and co-ordination of various agencies such as Academia, Industry, Chambers, Association and banks etc.

should be strengthened. The initiatives of the SME Chamber of India will open other windows of global business opportunities in UK and

other countries and the SMEs should take advantages of it. The PMO is taking keen interest for up-gradation of skills and updating

technologies both in manufacturing and service sectors to see that the economy gross faster.

The Task Force set up by PMO is initiating policies for the improvement of the MSME Sector with the main thrust on providing affordable,

timely and adequate finance from the banking sector and provide continuous supply of skilled manpower. Creating gainful employment to

youngsters and providing better standard of living are the major priorities.

In the years to come, the only employment generators are SMEs and not the Corporate and therefore the SME Sector should be given priority

by Government Agencies, Corporate and the Banks.

In conclusion, Shri Nair shared his experience about his recent visit to Japan along with Prime Minister of India where he found that the

Japanese Government especially SMEs are more keen to connect with Indian SMEs and companies for strategic business alliances and

investment and therefore I had suggested to Shri Salunkhe to set up an exclusive platform -“India-Japan SME Business Council” which will

bring together Indian and Japanese SMEs for identifying business and investment opportunities. I am happy today that he has accepted my

suggestion and proudly launching the Council in the presence of all of you. Shri Nair also promised his support and will encourage other stake

holders to support this Council to accomplish the objectives

CHIEF GUEST ADDRESS

MR. T. K. A. NAIR

Advisor to the Prime Minister

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INDIA SME BUSINESS CONCLAVETheme: Empowering SMEs for Global Competitiveness

Annual Flagship Activity

organised on Saturday, 15th June, 2013 | Hotel Sofitel, Mumbai

Release of

ACTIVITY REPORT : 2012 - 2013

Mr. T. K. A. Nair Releasing the SME Chamber of India for 2012-2013 occasion of

its 19th Foundation Day. Mr. A. Rameshkumar Mr. V. S. Krishna Kumar

Mrs. V. R. Iyer Mr. Richard Heald

Mr. Chandrakant Salunkhe Mr. K. Venkataramanan

Mr. Ajai Kumar Dr. R. Seetharaman Mr. Dilip Chenoy

– Adviser to the Prime Minister on the

Dignitaries (L to R) – MD &CEO, Asia Pragati Capfin Pvt. Ltd.,

Executive Director, Canara Bank, – Chairperson & MD, Bank of India, – CEO, UK - India Business Council, UK,

– Founder & President, SME Chamber of India, – CEO & MD, Larsen and Toubro Ltd.,

– Chairman & MD, Corporation Bank, – Group CEO, Doha Bank Group, Qatar and – CEO

& MD, National Skill Development Corporation

Activity Report of

–

Launching of

INDIA - JAPAN SME BUSINESS COUNCIL

Mr. T. K. A. Nair INDIA-JAPAN SME BUSINESS COUNCIL initiated by SME Chamber of India,

jointly with Maharashtra Industrial and Economic Development Association (MIEDA) and India international Trade Centre (IITC-

INDIA) with the objective - connecting Indian and Japanese SMEs for Strategic Partnership, Joint Venture, Technology Transfer and

Investment Promotion

– Adviser to the Prime Minister launching

UK-INDIA BUSINESS COUNCIL & SME CHAMBER OF INDIA

Mr. Richard Heald Mr. Chandrakant Salunkhe

Mr. T. K. A. Nair Mr. K. Venkataramanan

Mrs. V. R. Iyer Mr. Ajai Kumar Dr.

R. Seetharaman Mr. V. S. Krishna Kumar Mr. A. Rameshkumar

– CEO, UK - India Business Council, UK and – Founder & President, SME Chamber of India

Signing and Exchanging MoU. In the presence of – Adviser to the Prime Minister. Others (L to R) –

CEO & MD, Larsen and Toubro Ltd., – Chairperson & MD, Bank of India, – Chairman & MD, Corporation Bank,

– Group CEO, Doha Bank Group, Qatar, – Executive Director, Canara Bank and

– MD &CEO, Asia Pragati Capfin Pvt. Ltd.

Signing of MoU Exchange of MoU

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Awards Presentation Ceremony

BEST BANKER AWARDS

Mr. T. K. A. Nair Awarded for

"Exemplary Contribution In Banking Sector” as well as for the putting efforts to enhance the connectivity of Indian SMEs in Gulf Region

– Adviser to the Prime Minister presenting Award to Dr. R. Seetharaman – Group CEO, Doha Bank Group, Qatar.

Mr. T. K. A. Nair – Adviser to the Prime Minister presenting Award to –Mrs. V. R. Iyer Awarded for "Exemplary Contribution In

Banking Sector” as well as for the growth of Industry & SMEs

CMD, Bank of India.

APPRECIATION AWARDS

Mr. T. K. A. Nair Appreciation

Award to Mr. Naval Gupta

Awarded for "Supporting SMEs for Better Growth”

– Adviser to the Prime Minister presenting

– General Manager (SME), Indian Overseas Bank.

Mr. T. K. A. Nair Appreciation Award to Mr. Ajai Kumar Awarded

for "Supporting SMEs for Better Growth”

– Adviser to the Prime Minister presenting – Chairman & MD, Corporation Bank.

Mr. T. K. A. Nair Appreciation

Award to Mr. V. S. Krishna Kumar

Awarded for "Supporting SMEs for Better Growth”

– Adviser to the Prime Minister presenting

– Executive Director, Canara Bank.

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Introductory & Welcome Address

Keynote Speech

Shri Chandrakant Salunkhe – Founder & President, Small & Medium Business Development Chamber of

India addressing the delegates at the Conclave

Mr. K. Venkataramanan –

“Strategies for Empowerment of SME’s from Manufacturing Sector”

CEO & MD, Larsen and Toubro Ltd. delivering the Keynote Speech on

Mr. Chandrakant Salunkhe observed that

finance is the major problem of the SME

Sector. He expressed concern about the non-

inclusion of 92% of the SME by the banking

sector. The Task Force set up by the Prime

Minister also focused on providing adequate

and timely finance to the SME Sector. The

second problem is the steady supply of

skilled manpower. Due to the constant and

relentless efforts of the SME Chamber of

India, the SME Stock Exchange and the

National Skill Development Corporation

have came into force and he urged the

entrepreneurs to take full advantage of these

Institutions.

The Chamber has set up many SME Councils

in various countries to promote bi-lateral

trade and investment. The Chamber also

plans to conduct SME related events in other

States of India like MP, Haryana, Karnataka,

Goa etc. He also urged the Government to

increase the limit of collateral free loans to

Micro and Small Enterprises from Rs. 1 crore

to 2 crore. The Chamber will be taking SME

Business delegation to UK and China shortly

to facilitate technology transfers, joint

ventures, contract manufacturing, trade and

investment opportunities.

The company has grown to a 75000 cr

corporate from a humble beginning with 10

cr about 4 decades ago. This would not have

been possible without the support of SME.

SME and corporate should work together

formally and informally as partners in

progress for mutual benefits. All over the

world the Governments encourage local

manufacturing sector and their exports. For

a decade we witness in India reduced

manufacturing and more of trading

activities. India should regain its rightful

place in manufacturing.

T h e N a t i o n a l M a n u f a c t u r i n g

Competitiveness Council and the National

Skill Development Corporation can influence

this change. Huge top end engineers are

available in India and still highly employable

workforce remains a problem. Periodical

Internal training programs within the

company and external training programs are

to be undertaken on priority.

In every region, there should be training

hubs with the participation of Capital goods

manufacturing corporate, local colleges and

Industrial Training institutes. This can bring

out steady flow of “Ready to absorb”

workforce on a continuous basis with

subject matter expertise and certification.

Seed funds can be made available by the

government agencies.

SME should strive to upgrade to next higher

level with more emphasis on latest

technology, IT, higher skill sets and better

management. Quality, Productivity and

Safety should be accorded top priority if we

want to grow in domestic and global

markets.

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Out of the entire industries in UK, 99%

constitute Small and Medium Enterprises.

The perception of the UK SMEs about the

Indian SMEs is positive. There are plenty of

scopes for both Indian and UK SMEs to come

together for trade and investment in the

areas of Technology Transfers, Joint

Ventures, Infrastructure Development,

World Class R&D, Life Science Engineering

etc. There are cases of small companies in UK

who are well established and expanding in

India. Many UK SMEs are looking for export

opportunities and seeking partners in India.

This provides incredible opportunities to UK

SMEs who want to network and navigate in

India, which is an unfamiliar geographical

area.

The Government of UK also encourages

continuous and seamless cooperation with

India. Knowledge enhancement, training

and intelligence sharing are the key to

success. There is a golden triangle

comprising of the Government, Industries

and Universities which are striving for the

skill development in UK. Oxford and

Cambridge Universities are also taking active

steps in this regard.

Highlighting the significance of signing an

MoU between the SME Chamber of India and

the UK-India Business Council, he expressed

confidence that this initiative will bring

mutual benefits and betterment of the SMEs

in both the countries.

Getting adequate and timely finance is a

great problem for the SME sector. The sector

also faces acute skill shortage, lack of

infrastructure and technology related

problems. The high cost of finance is a matter

of concern.

There is an urgent need for an On-going

dialogue between SME, NGO and the

Chambers of commerce. The growth of the

SME sector is heterogeneous with their great

variety of products and services. A cluster

development approach is required and the

banks should encourage more cluster based

finance. Banks and local organizations

should identify the industry specific needs

and support the entrepreneurs.

He has suggested that Banks, IBA and the

Chambers should join hands to understand

the contemporary problems of the MSME

sector and offer suitable products and

solutions.

The quality of life is improving and the

growth has only just started. There is a long

way to go and the success can be achieved

only with the joint efforts of all concerned.

Mr. Richard Heald "Bi-lateral Trade

and Investment Opportunities for SME Sector”

– CEO, UK - India Business Council, UK addressing the delegates on

Mr. Ajai Kumar – Chairman & Managing Director, Corporation Bank addressing the delegates

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A new world order is emerging which brings

new opportunities for entrepreneurs across

the world. India is becoming a very

attractive investment destination due to its

natural resources and highly skilled

manpower. Apart from the financial

investments, human capital investment

should be accorded priority in order to

maintain the growth. With the availability of

cost effective labour, India is in a very

advantageous position and can collaborate

with SMEs in other countries. The Doha Bank

can assist the Indian SMEs to connect with

their business counterparts in Korea, Japan

etc. for more business opportunities and a

sustainable future.

Dr. R. Seetharaman Supporting

SMEs to Enhance Business Connectivity in Gulf Region”

– Group CEO, Doha Bank Group, Qatar addressing the delegates on "

The significance of the SME Sector need not

be overemphasized. The Banks, Financial

Institutions, Government Agencies, Industry

Associations and the Chambers of

Commerce should work together for

supporting this vibrant sector for their

growth. 53% of the SMEs are still operating

with promoters fund and there is a long gap

in financial inclusion. All the stake holders

should address the enormity of the issues

and to take measures to tackle them.

With big corporate, the Banks have no issues

as they are well organized and managed,

whereas the SMEs lack transparency and

good governance. Most of the SMEs are

f a m i l y o w n e d a n d t h e y l a c k i n

professionalism. They also go in for reckless

expansion, once they are successful and later

get into trouble.

SMEs should consider banks as their partner

in progress and should be transparent in

their activities and documents. In the

globalised world, SMEs should adopt better

internal management, create brand value,

upgrade technologies, innovative marketing

techniques and enhance their visibility.

They should not shy away from inducting

professionals into the management teams.

Another point is to obtain credit ratings from

reliable third party rating agencies to

improve the credibility of the enterprise

amongst the stake holders. They should also

pay attention to minor details in creating

world class brochures and websites. Finally,

they should manage the cash flow effectively

in order to sustain and grow.

Mrs. V. R. Iyer – Chairperson & Managing Director, Bank of India addressing the delegates

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One of the major problems of the Industry is

the non-availability of skilled manpower. In a

competitive world, it is important to produce

high quality products and services at lowest

cost. Therefore, to address these challenges

faced by the Industry NSDC was set up. He

suggested that the academic Institutions and

the Industry should collaborate with a view

to develop the work force with skills related

to the current needs of the industry. A

cohesive and collaborative model of skill

development will go a long way in meeting

the needs of the industry. The students

coming out of the Institutions should be

readily employable.

The Corporate should also invest in skill

development activities of their employees.

The curriculum in the schools and colleges

should not be outdated and should be

suitably modified in accordance with the

industry needs. There is an urgent need to

identify the skill gaps at the district level too.

The NSDC will provide funds with a nominal

interest, longer duration for payment and

with two to three years of moratorium. The

boarding and lodging expenses of the

students absorbed by the industries in

manufacturing sector will be borne by the

NSDC.

The young entrepreneurs should be

encouraged to start their own ventures as

also the woman entrepreneurs. The family

businesses should be supported for their

growth. As the attrition rate is high in certain

sectors, a refined training model should be

worked out collectively.

In his theme presentation Mr. Rameshkumar

mentioned that India has entered the era of

globalisation several years back but the

Small and Medium Enterprises have not

really been able to take off as global

competitive entities in the new era of

competition and opportunities. For this

SMEs need to understand what globalisation

is and what are the challenges and

opportunities it is real sense.

While in the developed economy there could

be value addition, in the developing economy

the space is really available in the global

value chain, which the SMEs should take

advantage of by adopting to the new change

by upgrading to latest technology and R&D

for new innovations. New concepts should

also be developed for marketing cross

borders. Collaborative approach is

inevitable to accomplish this.

There are good opportunities for joint

ventures and outsourcing in various fields.

Though some SMEs have utilised these

opportunities especially in the Automobile

sector effectively, SMEs should look for

opportunities in other sectors also through

Joint Ventures, exchange of know-how etc.

Public policy needs to help local, regional

and national level policies. Trade barriers

need to be eased and we need to work with

the Government to the see that these are

addressed. We need to ensure that there is

continues learning process for skill

development in SME Sector

As the former Banker he experienced that

SMEs require more handholding especially

on financial management and governance so

that timely and adequate finance is available

for acquiring new technologies for

development. Unless SMEs come forward to

adopt the new technologies, they will not be

able to compete locally and internationally.

Mr. Dilip Chenoy

"Strategies & Initiatives for Generating Skilled Manpower for SMEs"

– CEO & MD, National Skill Development Corporation addressing the delegates on

Mr. A. Rameshkumar – MD &CEO, Asia Pragati Capfin Pvt. Ltd. addressing the delegates




India is the 2nd largest growing economy in

the world with 300 million middle class

population. While big Corporate produce

capital goods and mass products, it is the

SMEs who generate employment in the

economy. They are techno savvy, very

innovative, flexible and efficient and are

ready to face competition from the

Corporate. Therefore there is no doubt that

today’s SMEs can become tomorrow’s

corporate. The major challenge of the SME

Sector is non-availability of funds. Their

asset base is small. They are unable to

provide collateral to avail the bank finance

due to limited funds at their disposal.

Another major problem is that the big

companies do not pay on time to the SMEs. It

seriously affects their cash flow and is one of

the major reasons for sickness.

The SMEs are to invest in new technologies

and marketing activities to access Global

markets. If SMEs want to emerge as a

Corporate they should concentrate on

quality of products and services and timely

delivery. They should also spend on R&D for

improved products and processes. In

essence , they should dif ferentiate

themselves. They should not depend only on

a few customer or a few suppliers which will

be detrimental. They should pay their

employees well and share the wealth with

them in order to create loyalty which will

ensure faster growth of the organization.

Due to globalization the whole world is

looking to India and China for mass

manufacturing of various goods. A trilateral

relationship between India, China and

Russia will make the Asia, the Global

Assembly Line.

Still there exists a trade deficit between India

and China. In order to reduce the trade deficit

there are three possibilities. First, India

should encourage partnership with Chinese

companies to manufacturer goods in India.

Second, Chinese and Indian companies

should manufacture and sell products

exclusively for third countries. Third, Indian

companies should invest in China and

operate with a local partner.

India currently exports iron ore, cotton and

other raw materials to China and other

countries. They should try to up-grade and

supply value added goods instead of

exporting only raw-materials.

With political leaders coming together, India

and China with 34% of the world population

can capture the lion’s share of the world

market, if the SMEs in both the countries

develop good relationship and cooperation.

Therefore, there are plenty of opportunities

for SME in both the countries for Joint

Venture, Technology Transfer and Contract

Manufacturing for mutual growth.

Mr. Kewal Handa – Promoter Director, Salus Lifecare Pvt. Ltd. & Erstwhile MD, Pfizer India Ltd.

addressing the delegates

H. E. Dr. Liu Youfa

"Bi-lateral Trade and Investment Opportunities for SME Sector”

– Consul General of People’s Republic of China, Mumbai addressing the delegates on

Plenary Session on

“STRENGTHENING SMEs TO BECOME EMERGING CORPORATE”

Panelists

H. E.

(L to R) Mr. Naval Gupta Mr. P. H. Ravikumar

Mr. Kewal Handa H. E. Dr. Liu Youfa

Mr. Richard Bale

– GM (SME), Indian Overseas Bank, – MD, Money Matters Financial Services

Ltd., – Promoter Director, Salus Lifecare Pvt. Ltd. & Erstwhile MD, Pfizer India Ltd., – Consul

General of People’s Republic of China, Mumbai and – Consul General, Consulate General of Canada

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Canada and India have had a close

relationship since 1947 with a strong people

to people ties. Canada considers India as an

important business partner. There are four

major areas for collaboration. Energy

security, Food Security, Infrastructure and

Human Resource Development. Canada is a

reliable and cost effective supplier of energy

with huge production capacities in oil and

natural gas. Canada is also a major supplier

of pulses to the Indian market. Canadian

infrastructure companies will be playing an

increasingly important role in India’s

infrastructure development. Canada has got

some of the world’s best Universities,

Colleges and Research Institutes and already

more than 300 MoUs have been signed

between Canadian and Indian Educational

Institutions. Canada is also a great

destination for Indian SMEs to invest and

expand their activities in the North American

market for their growth.

SMEs have high aspirations to grow. By and

large, SMEs are small concerns with low

asset base. They have to create a minimum

critical mass in order survive and grow. It is

not advisable and desirable to remain a nano

or micro unit forever. Many SMEs face

payment problems when they supply to

Government Companies and big Corporate.

They have to improve their payment

collection in order to maintain the desired

cash flow. Till 1990 the assets of a company

were considered more important. But today

the cash is considered the most important

aspect of the business. The quicker the

realization, the better the profitability. Any

company with an EBITA less than 15% will

be in great problem as they will find it

difficult to service the interest burden. With

investment in Plant and Machinery as the

Criteria for defining SMEs in India, we cannot

expect a meaningful discussion and

partnerships with the SMEs in other

countries whose definition is based on

turnover and employees. The technology

changes very fast and they become obsolete

within a shorter period. Therefore, SMEs

should invest in new manufacturing

technologies and also information

technologies to improve productivity and

efficiency. They should also have a judicious

mix of debt and equity to maximize profits.

H. E. Mr. Richard Bale –

"Investment & Bi-lateral Trade Opportunities for Indian SMEs in Canada”

Consul General, Consulate General of Canada addressing the delegates on

Mr. P. H. Ravikumar "Strategies

for Strengthening SMEs to become Emerging Corporate”

– MD, Money Matters Financial Services Ltd. addressing the delegates on

The Bank is very much focused on MSMEs and have more than 50 specialised branches to cater

to the need of the Micro, Small and Medium Enterprises. The Bank also exceeds the limits set up

by RBI for lending to SME Sector. Indian Overseas Bank has special products for the benefit of

Doctors, Chartered Accountants and Women Entrepreneurs. The Bank also provide in certain

cases collateral free loans upto 2 crore as against 1 crore under the CGTMSE Scheme.

E-tracking of the various proposals are introduced to understand the exact status online by the

clients. The Bank continuously train their employees to understand the needs and problems of

SME entrepreneurs as well as organize many promotional campaigns for better interaction

between the bank officials and the customers.

Mr. Naval Gupta – General Manager (SME), Indian Overseas Bank addressing the delegates

Delegates Interaction with Dignitaries

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Corporation Bank is more than hundred

years old and the major thrust area of the

bank is to focus its attention on Micro, Small

and Medium Enterprises. The bank provides

all possible assistance to the MSME sector

with appropriate products and services. The

other area of concentration is the retail

sector. In the last 5 months, the bank has

established 16 SME loan centres to provide

adequate, hassle free and timely funds to its

SME clients. Relationship Managers are

assigned to service the clients as

.

SME face many problems. The major one is

the liquidity crunch. Their valuation and

documentation need to be realistic. They

suffer a lot due to non receipt of payments

from their customers that too predominantly

from Government companies and PSU. In

order to sustain and grow the entrepreneurs

should introduce Business process re-

engineering practices and strengthen their

marketing and promotional activities.“One point

contact”

Despite the directions from RBI to support

the MSME sector, banks in general perceive

Micro enterprises as high risk clients. Many

SME provide shadow balance sheets which

are not transparent. The cost of opening a

branch and operating it is very high to the

banks when compared to a branch being set

up by a Non-Banking Financial Companies

(NBFC). Hence NBFC can offer loans to their

clients on attractive terms and the process is

also quicker. We can find a number of NBFC

engaged in Automobile business and give

loans for buying trucks.

Banks are not doing any favour by lending to

MSME sector because, first it is mandatory

and second it is becoming increasingly an

attractive business opportunity. Timely

delivery of funds is of utmost importance.

For an SME cash flow is much more critical

than profits. Therefore

Banks do have constraints by way of many

regulations by RBI and the SME market is so

huge that both banks and NBFC can co-exist.

SME should take note that the

Hence their

concentration should be more on quicker

collection of Payment Receivables. By doing

so the enterprise can add value to its

customers and its stakeholders.

“Money has no

value if not made available in time”.

“Profit =

Receivables – costs – Loss”.

Mr. K. Rama Murthy

"Empowerment of SMEs - Role of Corporation Bank"

– General Manager (SME), Corporation Bank addressing the delegates on

Mr. Arvind Hali – "MSME – A

priority sector lending opportunity in India”

COO, Money Matters Financial Services Ltd. addressing the delegates on

Plenary Session on

“BUILDING SUSTAINABLE AND COMPETITIVE BUSINESS MODEL FOR SME GROWTH”

Panelists (L to R) Mr. Ashwin Mittal Mr. K. Rama Murthy

Mr. Ajit Nair – Mr. Arvind Hali

Mr. Pankaj Bhandula Ms. Khyati Shah

– President, Blueocean Market Intelligence, – General Manager (SME),

Corporation Bank, Founder Director - Knowbility Corp, – COO, Money Matters Financial Services Ltd.,

– Executive Vice President, Lodha Group and – Chief Manager - SME, National Stock Exchange

CO NNECT

www.smeconnect.in



After the “Industrial revolution”, now we areseeing a “Data Revolution”. The huge volumeof data generated in the last 1 year is greaterthan the data generated in the last 100 years.Cost of storing and harnessing the data hasdrastically come down. “Data depends on3Vs. - Volume of data, Variety of data andVelocity of data”. Again “Information +Intuition = Decision”. SME can takeadvantage of the social media to promote andgrow their business. There are plenty of lowcost hardware and software solutionsavailable in the market. There is social media

explosion all over the world. Date leads toInformation which leads to knowledge andthat leads to Wisdom. There are 3 types of ITengagement available – Hourly based, Fixedprice contracts and the new one - BusinessOutcome model. In this model, theentrepreneur shares the profit with theservice provider who takes care of hardware,software and people. SME should adopt CEM(Customer Experience Management) andVOC (Voice of Customers) principles tounderstand the customer needs and toachieve success.

SME should unlock their value through sheertransparency and operational efficiency.There are lot of innovations happeningaround and new innovators coming out withbrilliant business ideas. Funding cycleconsists of owner’s fund, Venture capital andAngel funds. Next stage of growth comesfrom capital infusion. SME Exchangesplatforms play a major role for SME to raisethe required capital for expansion andgrowth. SME need not spend huge money oncostly advertisements and printing forms.The informed investors will also find itprofitable and will be happy to invest in

innovative and well managed SMEbusinesses. When an SME choose NationalStock Exchange (NSE), the vetting of theproposal is done by NSE itself and there is noregulatory formalities from SEBI. NSEdecides the listing details and public issues.In order to reap the benefits of raising capitalthrough the NSE, the SME need to be crispand clear in their presentation of businessplans. Second, they can approach a merchantbanker who can guide properly to adhere toformalities. NSE is an ideal platform and agreat opportunity for SME to access capitalfrom the market in a vey short time.

Mr. Ashwin Mittal – "Harnessing

the power of Data Analytics and Social Media in business”

President, Blueocean Market Intelligence addressing the delegates on

Ms. Khyati Shah "Advantage

of Capital Markets for Growth of SMEs”

– Chief Manager - SME, National Stock Exchange addressing the delegates on

There is exponential growth in businessactivities and personal life of people. Thereare no outputs without inputs. We have tolive with the nature and any effort to tamperwith it will result in disaster. The nature isself governing and self balancing and weshould adopt the same in our life. We have totake care of environmental aspects. Productsand services are to be offered in the market

which will improve the life of the customers.An element of spiritual and ethical principlesneed to be integrated into all businessactivities. If the inputs are right then theoutputs will be automatically become right.The businesses should take into account theneeds of the bottom of the pyramid people.Profits should be ploughed back intobusiness for the benefit all stake holders.

Mr. Pankaj Bhandula – "Implementing spiritual

principles to achieve exponential growth”

Executive VP, Lodha Group addressing the delegates on

In 1600 AD, India’s share of world tradestood at 51% whereas today it is a meager2%. The success of any business depends to agreater extent on 3 major elements – People,Process and Technology (PPT). We live in aknowledge based economy and especiallySME need to adopt aapproach to grow. They should adoptinnovative practices not only in the areas ofmanufacturing and services, but also inmanagement. In pre reform era only bigcompanies could think of launching

innovative new ventures and take risk. Todayby leveraging the IT, many SME start e-commerce ventures and flourish. The worldeconomy has become borderless. SMEshould adopt good business plan, qualitymanagement systems, effective riskmanagement, and induce transparency andaccountability in business operations. By2023 there will be millions of people whowill be ready for employment and only theSME sector can provide employment tothem.

“Hi-Tech & Hi-Touch”

Mr. Ajit Nair – Founder Director - Knowbility Corp addressing the delegates

CO NNECT




“India SME Excellence Awards - 2013” were presented at the hands of Mr. T. K. A. Nair – Adviser to the Prime Minister

Mr. Hitesh Doshi - Chairman & MD, Waaree Energies Pvt. Ltd.,

Receiving the Award

WAAREE ENERGIES PVT. LTD.

Mumbai

Awarded for

“EXCELLENCE IN TECHNOLOGY & INNOVATION”

�

�

�

Business Activity:

Turnover:

Special Achievements:

The Company is manufacturer of Solar Power

Generating Products and Solutions and solar mobile chargers

Rs 302.19 Crore

The Solar plug and play power pack

systems replace the costly Diesel generators completely resulting

in considerable cost saving . They are also equipped with Battery

back-up.

Awards Presented by Annual Awards

organised on Saturday, 15 June 2013 | Hotel Sofitel, BKC, Mumbaith

INDIA SME EXCELLENCE AWARDSSMALL & MEDIUM BUSINESS

DEVELOPMENT CHAMBER OF INDIA

Awards Sponsored by

Mr. Ganesh Kumar S – Managing Director, Ayoki Fabricon Pvt.

Ltd receiving the Award

AYOKI FABRICON PVT. LTD.

Pune, Maharashtra

Awarded for

“SERVICE SECTOR”

�

�

Business Activity: Engineering Project contractor for fabrication

and erection of Cement, Sugar and Power Plants.

Turnover: Rs. 189.12 Crore

Mr. Ravindra G. Sapkal – Chairman, KCT’s Sapkal Knowledge

Hub receiving the Award

KCT’s SAPKAL KNOWLEDGE HUB

Nashik, Maharashtra

Awarded for

“EDUCATION SECTOR”

�

�

Business Activity

Special Achievements

: Education Institute

: The Orchid International School for ICSE

system is operating in Nasik with world-class boarding facilities.

EMMBI POLYARNS LTD.

Mumbai

Awarded for “WOMEN ENTREPRENEUR

IN MANUFACTURING SECTOR”

�

�

�

Business Activity:

Turnover:


The Company is manufacturer of polyethylene

and polypropylene products

Rs 147 Crore

The Company is one of the pioneers in

production of Flexible water tanks & woven Geo-textile in India

Mrs. Rinku Appalwar – Executive Director, Emmbi Polyarns

Ltd. receiving the Award


Activity of the ChamberCO NNECT

Mr. Nikhil Nanda – Managing Director, JHS Svendgaard

Laboratories Ltd. receiving the Award

Mr. Siddarth Rastogi – Executive Director, MVS Engineering

Ltd. receiving the Award

Mr. B. B. Sen – Managing Director, Asha Penn Color Pvt. Ltd.

receiving the Award

Mr. Vinod Patel – Partner, ISK Bearings Industries, receiving

the Award

JHS SVENDGAARD LABORATORIES LTD.

Himachal Pradesh

Awarded for

“EXCELLENCE IN MANUFACTURING SECTOR”

MVS ENGINEERING LTD.

New Delhi

Awarded for


ASHA PENN COLOR PVT. LTD.

Mumbai

Awarded for


ISK BEARINGS INDUSTRIES

Rajkot, Gujarat

Awarded for


�

�

�

Business Activity:

Turnover:


The company manufacturers Oral care

products and FMCG products.

Rs. 93 Crore

JHS is India’s only integrated Oral care

facility located in Tax Free Zone of Himachal Pradesh.

�

�

�

Business Activity :

Turnover:


The Company is turnkey supplier of Gas E-

Generators, Gas purifiers, Air & Liquid dryers and Air & Gas

Heaters since 1977.

Rs. 43.54 Crore

Largest manufacturer of Nitrogen and

Gas Generators with collaboration from German & American Co’s

�

�

�

Business Activity :

Turnover:


Manufacturer of specialty pigment

dispersions for digital inks, automotive Coatings & ceramic inks.

Rs. 43.53 Crore

The companies R & D initiatives are well

recognized by Department of Scientific and Industrial Research

(DSIR), a part of the Ministry of Science and Technology.

�

�

�

Business Activity:

Turnover:


The Company is manufacturer & exporter of

Automobile Bearings

Rs. 4.26 Crore

The Company has innovated 3rd

Generation Wheel Hub Bearing Units for Three Wheelers which

will increase fuel efficiency to a great extent.

Volume 3 | Issue 11 | August 2013 www.smeconnect.in� �30

Activity of the Chamber CO NNECT

“SME Chamber of India will provide all kinds of support to Small & Medium

Entrepreneurs from Rajkot and other parts of Saurashtra for business

growth and promotion of their products and services at National and

International level” said Shri Chandrakant Salunkhe.

Shri Salunkhe also said that SMEs are manufacturing quality products, playing very important and remarkable role for economic growth of

Gujarat state and providing large number of employment. For enhancing their development, SME Chamber of India has decided to provide

support and assistance to local SMEs on market development, export promotion, technology transfer, joint venture and contract

manufacturing tie-ups with International companies, quality consciousness, preparation of marketing and branding strategy, empowerment

of young entrepreneurs and to take up their issues and problems with State and Central Governments. He has also encouraged the Heads of

local organizations to come together for the growth of local business and offer handholding support from the Chamber for the promotion of

their members.

Shri Jamanbhai, Shri Rameshbhai Tilala, Shri Shirishbhai Ravani, Shri Narendra Patel, Shri Gokulbhai Patel and Shri Dhansukhbhai Vora have

jointly requested Shri Salunkhe to look into the possibility of setting up an International Expo Centre at Rajkot with Gujarat or Central

Government as well as with private investors. Shri Rajesh Swami, Regional Manager, State Bank of India, Shri Sukumar Patel, DGM Bank of

Baroda, Shri D C Kar, Senior Regional Manager, Indian Overseas Bank, Shri D Prasad, Regional Manager, Central Bank of India and other

dignitaries interacted with SMEs and industrialists. Shri Vinod Patel, Director ISK Bearing Industries and Shri Dinesh Khanpara, Khedut

Agrotech Pvt Ltd have put efforts for organising this program and 200 SMEs from various sectors attended this meet.

Rajkot SMEs

will be given handholding

for their better growth

Dignitaries (L to R) – President, Greater Rajkot Chamber of Commerce & Industry, –

Partner, Khedut Agro Engineering Ltd, – President, Rajkot Engineering Association, –

President, Shapar Veraval Industrial Association, Managing Partner, ISK Bearings Industries,

Partner, ISK Bearings

Industries, – President, G I D C (Lodhika) Industrial Association and – Vice President, Rajkot

Chamber of Commerce & Industry

Shri Dhansukhbhai Vora Dinesh Khanpara

Gokulbhai Patel Rameshbhai Tilala

Vinod Patel

Haresh Hadvani

Jamanbhai Bhalani Narendra Patel

Shri

Shri Shri

Shri Shri Chandrakant

Salunkhe Shri

Shri Shri

–

- Founder & President, Small & Medium Business Development Chamber of India, –

Keynote Address by Shri Chandrakant Salunkhe - Founder & President, Small & Medium Business

Development Chamber of India


RAJKOT SME MEETorganised on Tuesday, 2 July 2013 | Hotel Imperial Palace, Rajkot

nd


Article CO NNECT

GOOD GOVERNANCE+

BUSINESS ETHICS

BETTER GROWTHOF

SMEs

We all live in an ageof globalizationand innovation.New technologies,

roles for government, andplayers on the global sceneo f f e r c h a l l e n g i n gopportunities, demands, andconstraints. More peoples

and nations are working together to spread freedom and democraticprinciples, to nurture free markets, to protect individual propertyrights, and to encourage respect for human rights, the rule of law, andthe environment.

With increasing urgency, market and social forces are rewriting theroles and responsibilities of business as well. Though the profitmotive of business is understood and accepted, people do not acceptit as an excuse for ignoring the basic norms, values, and standards ofbeing a good citizen. Modern businesses are expected to beresponsible stewards of community resources working toward thegrowth and success of both their companies and their Communities.

In the current globalization scenario, the importance of businessethics is greater than ever. Business needs to be truly acting in a waywhich goes beyond purely profit-based motivations, towards a modelwhich works for everyone - Like: People, Planet, and Profit.

Businesses around the world are designing and implementingbusiness ethics programs to address the legal, ethical, socialresponsibility, and environmental issues they face. By addressingthese issues in a systematic way, enterprises can improve their ownbusiness performance, expand opportun

connectsmeconnect.in/issues/issue_files/vol3_issue11.pdfconnect mr. t. k. a. nair releasing the sme...

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