Read Conquering the Chaos: Win in India, Win Everywhere for Free Online Page A

fundamentally different approach—a different value proposition, a different
     business model that defeats piracy by delivering software as a service through the
     cloud and offers customers the ability to pay as they go, greater distribution reach,
     partnerships with telecom operators for connectivity, and so on.
    Until Microsoft cracks this proposition, growing much faster than the industry will
     be a challenge. It could also be vulnerable to a competitor like Google, which might
     exploit this opportunity faster with little to lose. Conversely, if Microsoft is able
     to develop a compelling proposition and business model, it could open up large opportunities
     worldwide. However, figuring out the approach to the mass market requires a very different
     mind-set and approach and a very different level of commitment to the Indian market.
     Should Microsoft stay with its standardized model of globalization or double-down
     on India to extend its early advantage? Making that decision will be part of CEO Ballmer’s
     legacy at Microsoft.
    Escaping the Midway Trap
    Once a company gets stuck in the midway trap, one of three things usually happens.
     A few companies like Cummins, GE, P&G, Volvo, and Nestlé dig themselves out of the
     midway trap and relaunch themselves on a high-growth trajectory. For instance, after
     a decade of drift, GE India is growing at nearly 50 percent CAGR under India president
     John Flannery, with the personal commitment of Chairman Jeff Immelt. 3
    Some companies diagnose the slide into the midway trap as a problem with execution
     or leadership. The solution, they assume, is to change leaders and simply better execute
     the global playbook. A revolving door of expats ensues, but the results get worse.
     Reebok India appears to be in this mode. 4 Others, like pharmaceutical giant AstraZeneca, conclude that the India market is
     simply too hard or not yet mature, so they invest elsewhere, vowing to be back when
     the market is more developed, with greater protection for intellectual property (IP),
     more favorable policies, or better infrastructure. In both cases, the Indian organization
     is starved of the investments and attention needed to grow faster, and the company
     will enter a period of drift. Finally, India is consigned to the 1 percent club; the
     company’s market share in India will stay in the low single digits, contributing about
     1 percent of global revenues and profits.
    These companies are implicitly making a decision to cede India to one or more competitors.
     Thinking that they will jump back in when the market takes off is an illusion. It’s
     hard to time the market, and in several industries, quite a few companies will already
     be entrenched. Think how hard it is for Mercedes or Paccar (Kenworth, Peterbilt, and
     DAF) to catch up in the Indian commercial vehicles sector, where Tata, Leyland, and
     Volvo have a combined market share of 95 percent, or for Renault to catch up in cars,
     where Suzuki, Hyundai, Mahindra & Mahindra, and Tata Motors account for 90 percent
     of sales. It’s the same story in many industries, including two-wheelers (motorcycles
     and scooters), cement, construction equipment, power-generation equipment, and so
     on. Digging out of the 1 percent club involves fighting a long and costly battle,
     as Volkswagen and Caterpillar are discovering, or making expensive acquisitions, as
     pharmaceutical companies have found. 5
    The story of GE’s transformation in India shows what it takes to get out of the midway
     trap. GE has had a presence in India for over seventeen years, but for the most part,
     GE India is no better than an outpost. Theoretically, GE has virtually everything
     in its portfolio a growing economy needs, be it consumer appliances, infrastructure,
     or financial services. Yet GE failed to capitalize on India’s economic boom, and its
     revenues are less than $3 billion; it was therefore a founding member of the 1 percent
     club.