Given todays scenario, Prof Sheth believes that Indian companies need to create scale. Citing the example of the IT sector in India, he said that the combined strength of the top Indian IT companies is minuscule compared to giants like IBM and Microsoft. According to him, the It sector has scored well in the first step which is sending competent people at lower costs but the next step is difficult, for which Indian software companies lack the competencies as well as investments. The next step is creating software products which although a huge opportunity will be challenging for the IT companies, said Prof Sheth. His answer is to build up scale through mergers and acquisitions within the country. Companies like Wipro should acquire second tier companies in the country because one has to be strong on the home turf as foreign companies sooner or later will make a beeline for the country. The companies within themselves should decide the sectors that they have to be present in. Its already happening in banks and cellular industry and a fragmented domestic scene gives the foreign companies the advantage, said Prof Sheth.
Similarly on the organised retailing which is sweeping the sector, Prof Sheth believes that its only a matter of time before American and British retailers come into the country. The laws will change as the players will insist that the market be opened in return for the outsourcing by major retailers, he said. So to counter that, the domestic players have to consolidate on one area rather than spread themselves thin very fast. Prof Sheth feels that the private label programme has become an invaluable weapon in the hands of the retailers against the manufacturers. The retailers can create a niche through private labels, sustain it for three to five years, sell it to the manufacturer and then create another. No manufacturer can match the speed at which the retailer can bring out private labels, said Prof Sheth.
He however sounds a warning to the flux of shopping malls within the country. That there is a collapse in the offing. The first wave will collapse in the next two to three years on account of excess capacity, warns Prof Sheth and the next wave will see more serious players with consolidation as the game plan. Every sector goes through it, he said. And the second wave players will have to encapsulate the four As as the customers going ahead will be more demanding and ruthless in their choices.
He believes that the outsourcing backlash in the US is because of western countries still have the colonial mindset where they feel that only low end jobs are meant for the developing nations. The high paying ones should remain. And as it flies out to countries like India, the resentment grows. Professor Jagdish Sheth has a opinion on variety of issues. From outsourcing to building competencies to organised retailing, Prof Sheth puts forth his viewpoint and also the Four As of marketing.
Job creation is important as the economy grow, said Prof Sheth as he delves on the BPO (business process outsourcing) issue in the US. The fact is that the US economy may be growing but it is not creating enough jobs, He said. And he attributes the domestic backlash to the fact that the western countries still have the colonial mindset. The mindset still runs on the lines that the high paying jobs should stay and the low paying ones should go to others, He said. One can take his views as the man himself has spent close to quarter of a century teaching in US with institutes like Massachusetts Institute of Technology, University of Illinois and Columbia University.